On September 28, FAIR released an alert about ABC News reporter John Stossel’s one-hour news special, titled “Is America # One?.” By comparing several countries, including the U.S., India and Hong Kong, Stossel’s September 19 broadcast sought to show that laissez-faire economic policy is “what makes a country work well for its people.” FAIR found that the program was filled with so many factual inaccuracies, Limbaughesque distortions and unsubstantiated claims that it called into question whether ABC News applied any sort of journalistic standards to the broadcast.
On November 6, FAIR received a reply to its critique from John Stossel “and some of his staff,” in which they attempt to defend the accuracy of their broadcast against FAIR’s criticisms. On each point, Stossel either changes the subject, avoids the issue, or produces new erroneous claims.
This is FAIR’s response:
* Stossel’s “America” erroneously claimed that Hong Kong is the only country in the world that runs a government budget surplus. FAIR pointed out 11 industrialized countries, including the U.S., that ran budget surpluses last year.
In his response, Stossel does not defend the accuracy of his show’s claim. Instead, Stossel makes a different claim: that Hong Kong is the only country which usually runs a budget surplus. “Hong Kong is unique in chronically running a surplus… while most other countries have regularly run deficits,” Stossel wrote. “In 1992-1996, for example, all but two of the countries FAIR cites had budget deficits every year. It would be unfair to dismiss Hong Kong’s consistent performance based on rare good years among its competitors.”
Whether or not Hong Kong has demonstrated “consistent performance,” Stossel’s original broadcast was still inaccurate. But even on his new point, Stossel is wrong: Hong Kong ran a sizable $4.4 billion deficit in 1998, according to the International Monetary Fund. And the government forecasts a $4.7 billion deficit this year (Agence France Presse, 3/3/99). Even when he moves the goalposts, Stossel is unable to score a goal.
* One important part of “America” contends that the U.S. enjoys a unique degree of economic mobility. Conservative author Dinesh D’Souza says: “If you are an ordinary guy, without connections, you’re best off coming to this country. It’s a very mobile society in which lots of people who start out at the bottom can find a place at least in the middle, and some will rise to the top.” FAIR pointed out that a major OECD study comparing earnings mobility in eight countries found that low-paid workers in the U.S. were the least likely to rise to the middle or upper level of earnings.
Again, in his response, Stossel does not challenge FAIR’s assertion that his broadcast was inaccurate. Instead, he pleads that “most” of the nations compared in the OECD study are “small, homogeneous nations that have less distance between the highest and lowest earners.” Yet Stossel devoted a significant portion of his “America” broadcast to expounding the idea that the U.S. has the greatest degree of economic mobility in the world. If he recognizes that claim is questionable, why did he make it so vehemently, and without opposing viewpoint, in his broadcast?
* In “America,” Stossel portrayed China as a country that has become “stagnant” because of its government’s interference in free markets. FAIR pointed out that, according to the Treasury Department’s Larry Summers, “China has been the fastest growing economy in history since reform began in 1980.” (See www.ustreas.gov/press/releases/pr2808.htm)
Stossel responds: “In a Communist nation where millions have often found themselves on the brink of starvation or beyond…it doesn’t take much to look like a comparative boom — just as a very clumsy bowler may be more likely to win the ‘most-improved’ award.” As people living in much of Latin America and Africa could tell Stossel, it’s not easy for a poor country to grow quickly. It’s simply inaccurate to describe a country whose growth rates average more than 8 percent per year as “stagnant.”
* At one point, “America” cited “the Federal Reserve’s wage data.” FAIR pointed out that the Federal Reserve does not collect wage data. Stossel responds that “the Federal Reserve has all sorts of economic data. The compensation statistics featured in ‘Is America #One’ came from the Board of Governors of the Federal Reserve.”
Stossel is mistaken. The compensation data featured in his show are collected, analyzed and published by the Commerce Department’s Bureau of Economic Analysis, as part of a statistical program called the National Income and Product Accounts. The Federal Reserve may reprint some of those data in its publications, or Stossel may have obtained the data from a member of the Fed’s staff, but the data are not produced by the Fed. Many institutions use the Commerce Department’s data, including FAIR. That does not mean the data come from FAIR.
Stossel is correct in a single point he makes about our action alert: His broadcast did note the time frame for his claims about compensation growth. He did not mention it himself, but it appeared onscreen.
* “America” claimed that U.S. workers’ compensation, rather than declining, has actually risen by 20 percent since 1973. FAIR pointed out multiple inaccuracies in Stossel’s discussion of this subject, and showed that hourly compensation for a typical worker has actually declined.
Every part of Stossel’s rebuttal to this point is erroneous, casting grave doubt on Stossel or his staff’s comprehension of the statistical issues involved. In his original broadcast Stossel apparently was calling into question conventional statistics that he does not understand.
Stossel says in his response that “about a third of the working population, most of them high earners, no longer fall within FAIR’s ‘hourly workers’ category, biasing FAIR’s compensation downwards.” That statement is completely false. The numbers FAIR cited–like all statistics on median wages–are based on wage data from the Bureau of Labor Statistics’ Current Population Survey. That survey includes both hourly and salaried workers. Stossel seems to have this survey confused with the BLS’ Production and Non-Supervisory Workers survey, which excludes managers and supervisors. (The BLS numbers are analyzed and published in the Economic Policy Institute’s “State of Working America,” a standard reference source for wage and income data.)
Stossel claims that FAIR’s criticism “only holds true by artificially restricting the debate to hourly workers’ compensation at precisely the juncture in history when more and more high-earners are getting their compensation in the form of commissions, bonuses and other non-hourly forms.” That is also false. The BLS’s survey counts all bonuses, commissions and other premium pay earned by salaried workers.
Stossel contends that “the great rise in real buying power (caused by increased productivity and improved technology) has greatly enriched the average worker and dwarfs subtle changes in [the] mere dollar amount of hourly compensation.” FAIR’s figures on hourly compensation were adjusted for inflation, and were clearly labeled as such. Therefore they were not “changes in mere dollar amounts.” Stossel appears either not to have noticed that our figures referred to inflation-adjusted hourly compensation, or he does not understand that adjusting for inflation is the technique used to compare real buying power at different points in time.
* In “America,” Stossel misrepresented the views of University of Texas professor James Galbraith, a prominent liberal economist, in order to make it appear as if Galbraith agreed with Stossel’s views about Europe’s employment policies.
Just before quoting Galbraith, Stossel criticizes Europe’s generous labor regulations, claiming that these policies are responsible for unemployment rates that are much higher than those in the United States, where regulations are looser:
Stossel then says: “Many economists who once argued that we could learn from Europe, like James Galbraith, have now changed their minds.” James Galbraith’s sound-bite follows: “There might be a moment for the Europeans to learn from us, rather than for us to be studying them,” Galbraith said. Stossel continues: “OK, so Americans have jobs…” and then moves on to another topic.
Galbraith’s soundbite–stating that the Europeans have something to “learn from us”–is clearly intended to appear to refer to the looser U.S. labor policies that Stossel has just finished praising. Yet Galbraith has long been one of the most determined and outspoken critics of the view that Europe’s labor and social-welfare are responsible for their high unemployment rates.
In fact, the current issue of the British journal New Left Review (9-10/99) contains an article co-written by Galbraith that elaborates his position on the issue. Galbraith refers to the “widely held view” that “high unemployment rates in Europe are due to that continent’s generous social welfare systems and ‘rigid’ wage structures…. In this view, low unemployment in the United States is credited to that country’s ‘flexible labor markets,’ [and] willingness to tolerate increasing wage inequality.”
“This view is strikingly inconsistent with the facts,” Galbraith concludes. He then elaborates on his own view that Europe’s higher unemployment rates are actually caused by over-zealous anti-inflation monetary-policies — as contrasted with Alan Greenspan’s more relaxed recent policies — as well as Europe’s lack of continent-wide redistributive programs like Social Security.
In his response, Stossel says that he “did not intend anyone to think he endorsed every statement made in the hour.” This evades the fact that Galbraith’s soundbite was positioned as if he endorsed the views outlined just before his appearance.
Stossel’s use of Galbraith is a classic example of quoting a source out of context. The attempt by Stossel to redefine the context after the fact does not change that.
* In “America,” Stossel claimed that poor Americans enjoy the same access to medical care as the wealthy: “Our system does sometimes fail poor people, but the truth is that when someone is denied care, it makes headlines because it’s so unusual. Most of the time, even the poorest person going to the emergency room gets the same high-tech, cutting edge treatment that lures foreign leaders like Jordan’s King Hussein to American hospitals.”
FAIR countered with a 1995 article (3/95) from the American Journal of Public Health that found that in one year, 945,000 people in the U.S. needed but could not obtain emergency medical treatment.
Stossel’s response does not address FAIR’s criticism at all. His broadcast claimed that poor people receive equal medical treatment, but he gave no evidence and cited no sources. His response to the data we cited is a string of non-sequitors and vague platitudes.
* In “America,” Stossel contended that hunger is not a significant problem among poor Americans.
FAIR pointed out that the Census Bureau’s 1995 Food Security Survey classified 13.8 percent of Americans as either hungry or “food insecure.” Food insecurity is defined as “having a limited or uncertain availability of nutritionally adequate and safe foods or limited or uncertain ability to acquire acceptable foods in socially acceptable ways.” (81 percent of households in this category said that sometime in the last year the food they bought “just didn’t last” and they “didn’t have money to get more.”)
Stossel responds that “a nation is doing relatively well when the closest thing to hunger that can be found is some degree of uncertainty amongst a small subset of the population about how long food in the refrigerator will last.”
While it is possible that Stossel did not understand the definition of food insecurity — which has nothing to do with food going bad — we suspect that he did understand it and is making a joke at the expense of the poor. In any case, it is surprising to find Stossel belittling evidence about the extent of hunger in the U.S., when his own broadcast apparently made no attempt to determine how prevalent hunger actually is in this country — besides asking people in line at a food pantry whether they own microwave ovens.
Links:
FAIR’s original report
Stossel’s response to FAIR
Read the transcripts of the ABC special:http://abcnews.go.com/onair/ABCNEWSSpecials/stossel990919_scriptA.html
ABC‘s e-mail address: netaudr@abc.com
