Dobbsing for Bias
‘Lou Dobbs Tonight’ Continues Assault on
Free Market Policies
By
Charles Simpson
Free Market Project
October 13, 2005
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For the media, Hurricane Katrina has been a story of zeroes – the
more, the better. While reports before the hurricane’s landing
incorrectly warned of tens of thousands of deaths, one prediction
that has panned out is the gargantuan cost of the storm. Katrina
wrought tens of billions of dollars in destruction and set in motion
a $250-billion rebuilding effort.
    While not as visible of a step, freeing the market of
government intrusion is almost as important as the endless zeroes in
the relief budget. One broadcaster who has given these new policies
serious attention is CNN’s Lou Dobbs. Unfortunately, he disregards
free market solutions on a regular basis. Even raising the minimum
payments for credit cards is a “mindless” step engineered by “idiots
at the U.S. Treasury Department.”
    Through two weeks of business coverage, from September
21 to October 5, “Lou Dobbs Tonight” devoted 14 stories to bashing
everything from the state of the economy to the Bush
administration’s application of free market policies in the
rebuilding process. Stumping against everything from the suspension
of the Davis-Bacon Act to the “woes” of the middle class, Dobbs’s
coverage was grossly skewed.
Vouching for Public Schools
    In an October 4 story on federal vouchers for private
schools, Dana Bash followed a Katrina transplant, Jude Fitzmorris,
through the halls of Georgetown Prep, an exclusive boarding school
outside Washington, D.C. The school graciously accepted 14 pupils
from the region, free of charge. As Bash pointed out, “in tuition
alone, that’s more than $400,000.” Bash also noted that the “Jesuit
school doesn’t expect federal dollars, but if Congress made money
available for helping Katrina victims, [they would] accept it.”
    Bash said that “25 percent of students in Louisiana
attend private school, more than double the national average.”
Fitzmorris’s father then claimed, “The reasons we have such a large
percentage of people in private schools … is that the public school
system has been so under-funded.” According to the
Heritage Foundation, Louisiana’s public schools spend just under
$7,000 per pupil and have a 15-to-1 student-teacher ratio;
comparable to states like Tennessee, Kentucky and Texas.
    Louisiana’s Catholic heritage also has sustained
several parochial schools in New Orleans and other municipalities.
Regardless, the viewer was given the impression that giving
hurricane victims $7,500 vouchers would be, in Mr. Fitzmorris’s
words, an “attack on the public school system.”
A Middle Class Economy
    In a September 28 broadcast, Dobbs opened his report
with his usual “assault on the middle class” rhetoric before
claiming that “record high fuel costs and rising interest rates are
leading to mounting debt and leaving too many families unable to
make ends meet.”
    Pilgrim documented the “juggling act” of “higher gas
prices, higher borrowing costs, and the prospect of higher home
heating bills.” Not only did the “percentage of overdue credit card
payments hit a record high,” but “more people were late on auto
loans, home equity loans, and other kinds of consumer loans.”
Pilgrim checked off a butcher’s bill of consumer confidence lows,
bank-busting energy and housing costs, and dwindling sales in the
retail and housing sectors. All Pilgrim needed for her trip was a
hand-basket.
    After Pilgrim interviewed Mike Sullivan from Take
Charge America, a credit-counseling firm, Dobbs called the officials
at the U.S. Treasury Department “idiots” for “suggesting raising
minimum payments on credit cards at this point when so many families
are strapped in this country.” Pilgrim answered, “Many of the debt
experts are saying this is the perfect storm. This is a disaster for
middle America.” By contrast, it’s generally accepted in the
consumer advice field that debtors who pay just the current low
minimum payment rarely ever pull themselves out of debt.
    An earlier
FMP study chronicled the media’s selective reporting of consumer
confidence figures. That Dobbs and Pilgrim would opportunistically
hype the declining figures amidst two devastating hurricanes wasn’t
surprising. It painted a skewed picture of an economy that has
produced consistent job and GDP growth with little inflation.
    During the October 4 broadcast, Dobbs described how the
“middle class in this country is already under assault, before
hurricanes Katrina and Rita. Now record high energy prices and a
fast approaching change in our bankruptcy law have created a
desperate situation for many of our working families.” In that
story, reporter Kitty Pilgrim detailed how the new bankruptcy rules
“will bar people with above average income from completely wiping
away debts.”
    Dobbs concluded that, “with record bankruptcies, the
pressures on the working family in this country just intensify.” He
didn’t consider other possible reasons for increasing bankruptcies,
such as an abundance of consumer credit and poor lending decisions.
Dobbs simply used the trend to buttress his arguments against the
administration. Pilgrim’s report amounted to little more than a
consumer advice piece clothed in middle class misery.
News with a Straight Face
    While Dobbs purports to be a watchdog for the middle
class and common laborer, the policies he crusaded against bring
relief to those very people. With self-righteous indignation, he
scolded President Bush’s response to Katrina as “in effect, the
looting of the treasury, the rolling back of worker protection in
this country...” His September 21 broadcast was a buffet of bias
against everything from “disaster bonds” to price gouging.
    In his piece on oil and gas prices, reporter Bill
Tucker warned about the pending impact of Hurricane Rita on energy
costs. He then found Senator Maria Cantwell (D-WA), of the Senate
Transportation Committee, who was “not going to wait for the market
to correct itself while people go bankrupt and lose their pensions
and jobs and the American economy is ruined,” another cynical view
of the economy.
    Tucker continued, “Eight Democratic governors are
demanding an investigation into why the price of gasoline has risen
so sharply.” He then quoted Wisconsin professor Donald Nichols
asking, “Who pocketed the money? Is that the way the system has to
work?” It never occurred to Tucker to answer Nichols’s question:
yes. As FMP advisor Gary Wolfram addressed in
this column, the “system” must work that way or else there will
be widespread shortages in disaster areas.
    As Wolfram wrote, “When prices rise, it helps get
resources to the places they’re needed most.” The question of “who
pocked the money” was also addressed by this
item from FMP. Both Dobbs and Tucker neglected to mention that
“prices aren’t determined by the opinions of either side, but by how
much gas is available and what consumers are willing to pay for it.”
    In that same broadcast, Dobbs also continued to skewer
the administration’s decision to suspend the Davis-Bacon Act, a
labor regulation held over from the days of growing labor unions and
segregation. The act was originally passed to preclude unskilled
black and minority workers from Northern labor markets by
implementing “prevailing wages” that priced them out of the market.
Previous
FMP articles have addressed this issue as well.
    Dobbs appeared uninterested in the economic benefits of
suspending Davis-Bacon, but he went further. Leading into a report
by Lisa Sylvester, another reporter who has totally ignored the
history of Davis-Bacon, Dobbs stated, “The Bush administration says
it can cut red tape and inefficiency in the disaster region by
denying construction workers there the prevailing wage.” After
giving a report that completely omitted the economic benefits of
removing the artificial wage rule, Sylvester claimed, “There really
doesn't seem to be any explanation, other than what they have said
before, which is the standard line that they want to try to reduce
and cut down on the red tape and bureaucracy. But ultimately, it's
going to be the workers who will be hurt, Lou.”
    To grasp the convolution of the Davis-Bacon Act, one
need not look any further than the language of the statute.
Part 36 of the law has at least 7 subparts and over 70 attendant
clauses and rules. As Slate’s Mickey Kaus put it, “Davis-Bacon
doesn't just boost wages. It creates lots of "archaic red tape" and
wastes much more money than just the increase in workers' pay.”
    The time it would take to comply with such complicated
regulations is not a comforting notion for the victims of Katrina
who are either housed in a trailer park or have fled to a foreign
part of the country. For some reason, Dobbs and Sylvester fail to
appreciate the urgency of making these victims whole again.
Conclusion
    For those familiar with
Lou Dobbs’s coverage of trade issues, his omission of the
benefits of free market principles is consistent. In his September
29 broadcast, he even went as far as to criticize Senator David
Vitter (R-LA) for claiming “he was a free trader, and he said it
with a straight face as he asked for $250 billion in taxpayer
money.” Of course, Dobbs’s criticism arose while asking the Senator
if he found it “unconscionable that the White House has rolled back
the Davis-Bacon Act.”
   Free Market Project studies have shown
that inaccurate assessments are a prominent part of Lou Dobbs’s
tonight. His viewers would not only benefit from both sides of the
story, but a little patience with the free-trading “idiots” who are
trying in earnest to rebuild the houses and economies of the Gulf
Coast.
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