Like a Mama Bear, Networks Protect Obama from His Down Market

Julia A. Seymour
Business & Media Institute
Tuesday, March 17, 2009

On Election Day 2008, as people anticipated Obama’s victory, global news agency Agence France-Presse (AFP), called the biggest Election Day rally since 1984 an “Obama effect.”

Look at the market now: The Dow Jones Industrial Average fell more than 3,000 points from 9,625.3 to 6,547.05 between Election Day and March 9. From Inauguration Day to March 5, the Dow fell 20 percent – the very definition of a bear market. Although the market rallied on March 10 by nearly 400 points, credit for Obama was noticeably absent from stories that evening.

Obama has been criticized from the right and the left for advocating policies that helped cause the markets’ dive, yet the networks shielded him from much of the scrutiny. NBC called it “partisan bickering,” and other network news programs just never mentioned that Obama had a bear market to call his own. ABC also gave Obama credit for a March 4 market rally during “Nightline” and “World News with Charles Gibson,” the day before the overall plunge hit bear territory.

Meanwhile, the financial press connected the dots.

• A d v e r t i s e m e n t

Networks Safeguard President, While Others Fault Him

The network news shows didn’t it call it Obama’s bear market on March 5 despite the fact that the the Dow had fallen 1,353 points just since Inauguration day. In fact, during that period the Dow closed down 21 days and up only 14 days.

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ABC’s Charles Gibson remarked that Wall Street didn’t seem impressed by Washington. CBS acknowledged the 25 percent drop for the year, but not one of the three networks negatively linked the president to the stock market that night.

NBC’s “Today” featured debated the question, “does he [Obama] deserve the blame for this [Dow decline]?” But Matt Lauer downplayed the possibility by calling it “partisan bickering” in his March 9 tease.

While the networks sought to shelter the president from critics, cable and print media did not spare him.

“President Barack Obama now has the distinction of presiding over his own bear market,” Bloomberg’s Eric Martin wrote on March 6. The same day, CNBC’s Larry Kudlow said “Obama qualifies for a bear market,” and one of his guests, economist Jerry Bowyer agreed and explained why investors were reacting so negatively to the president.

“The recession is Bush’s of course, but this bear market has Obama written all over it. I mean its, the bear market has intensified under Obama. The market tends to react very directly when President Obama speaks or when Treasury Secretary Tim Geithner speaks. When they uh, when they uh, put their plans out. When Giethner announced his bank rescue plan we got a 400 point drop-off,” Bowyer said. “And why wouldn’t we? Barack Obama is raising taxes on the two ways we make money in the stock market. There are only two ways you make money in the stock market. Either you get a capital gain or you get a dividend. And he is raising taxes on both of them.”

Even Chris “I get a Thrill” Matthews, admitted during his March 8 NBC show the market was “reacting” to the president’s initiatives: “The big question, Trish, he wants to do these big things. He was elected on them. He wants to be a transformative president. Energy, health care, education. Why is the market, Wall Street, reacting so badly to his big plans?”

Media outlets like Associate Press and BusinessWeek were also asking the question. The business magazine’s March 5 cover story asked, “Did Obama Cause the Stock Slide?” and asked “a wide array of investment professionals” for their input. “Many said the first six weeks of the Obama Administration have soured their outlook on the stock market.”

According to that BusinessWeek article, “The impact of Obama’s proposals are easy to see in particular segments of the market. In a speech to Congress on Feb. 24, Obama pledged a “substantial down payment” on health-care reform. David Chalupnik, head of equities at First American Funds, points out that, since then, stocks in the Dow Jones U.S. Health Care Providers Index (IHF) are down 16%. Health-care stocks had been a relative safe haven in the market, because medical spending tends to hold up even in recessions.”

Liberals like the “Oracle of Omaha” Warren Buffett, CNBC’S Jim Cramer, NY Times’ Paul Krugman and left-wing publication The Nation are criticizing Obama for his handling of the economy. The Nation called Geithner possibly “Obama’s biggest mistake.”

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