Dobbsing for Bias
‘Lou Dobbs Tonight’ Continues Assault on Free Market Policies

By Charles Simpson
Free Market Project
October 13, 2005

     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.