Julia A. Seymour
Business & Media Institute
Thursday, Dec 17th, 2009
When Treasury Secretary Hank Paulson retooled the $700 billion bailout known as the Troubled Asset Relief Program (TARP) in 2008, the news networks found outrage.
In 2008, reports attacked Paulson, stacking “angry House Democrats” against him on CBS “Evening News” and “World News” Nov. 18. In one case, a Democratic politician called it a “bait-and-switch” second only to the Iraq war.
But now that President Obama is calling for a new purpose to the program, the same outlets are barely concerned, downplaying Republican anger over Obama’s attempt to turn money repaid by banks to the TARP fund into a “slush fund.”
In a speech Dec. 7, Obama proposed more government spending to combat double-digit unemployment, and even suggested spending TARP money that had been repaid by many of the big banks on the effort.
ABC’s Charles Gibson bought into the administration’s talking points Dec. 7 when he described the $200 billion in TARP money as a government “windfall.” CBS “Morning News” merely reported Obama’s proposal matter-of-factly and without mentioning any criticism of the idea on Dec. 8.
NBC’s “Today” also ignored critics on Dec. 9, when Savannah Guthrie explained the government program would have to be extended for Obama’s plan to be enacted.
“Now to do all of this, the president intends to ask today that the TARP money be extended until October 2010. That was the program that stabilized the financial system. The idea is to take unused TARP funds and use those, potentially, to fund these jobless initiatives,” Guthrie reported.
Guthrie, and ABC’s “World News” failed to remind people that the midterm elections will be held less than a month after TARP expires. According to The Wall Street Journal, the Democratic majority looks “wobbly” going into those elections with double-digit unemployment.
In the Journal, Neil King explained that unemployment is likely to keep rising into 2010: “Economists generally predict that the number of people out of work will continue to inch up next year, even if the economy begins to rebound. Most see the jobless rate peaking at around 10.5% in the summer.”
King also quoted pollsters and strategists who argued that jobs are the biggest vulnerability for the Democrats in 2010.
Unlike the uncritical networks, CNBC’s Larry Kudlow was suspicious of the “found money” from TARP on Dec. 7. “It strikes me as very odd that all of a sudden on the eve of another stimulus package and expansion of government, suddenly $200 billion of TARP is found.” Kudlow said on “The Kudlow Report.”
He asked his guest, Sen. John Thune, R-S.D., if the Democrats desire to use the “leftover” TARP funds for a jobs package was a “slush fund.”
“Absolutely and this is what we were afraid would happen,” Thune replied. “It’s found money Larry, it’s Washington, D.C. and there’s free money around. In this news today that came out it’s actually gonna cost $200 billion less than what they expected has now presented an opportunity for all the people in town who have designs about how to spend that money.”
According to Nexis, ABC was the only one of the three networks to include former Mass. governor Mitt Romney’s criticism that this would basically be a Democratic “slush fund.”
Despite the way the networks framed it, Republican politicians weren’t the only people upset with Obama’s plan. Glenn Hall, editor in chief of TheStreet.com, also criticized the “TARP-for-Jobs Nonsense” on Dec. 9, calling it “classic political slight of hand [sic].”
TARP’s Reinvention Gets Paulson in Trouble, Not Obama
In 2008, after the TARP had been authorized with the intent of using it to buy up toxic mortgages then Treasury Secretary Hank Paulson changed his mind and decided the money would be loaned to banks in order to fix the credit crunch.
As ABC’s Charles Gibson reported on Nov. 12, 2008, “today, the treasury secretary said they’re not going to use the money to buy up bad mortgages, none of it. Instead, he said, the money will be used to get new credit flowing in the economy again.”
A few days later, on Nov. 18, 2008 CBS quoted several angry House members who were “grilling” Paulson. One of them, Rep. Gary Ackerman, D-N.Y., called Paulson’s attempt to redirect the TARP money “the second largest bait-and-switch scheme that history has ever seen, second only to the reasons given us to vote for the invasion of Iraq.”
Many people are upset about Obama’s idea to spend $200 billion on additional stimulus to boost job creation, especially since only about 20 percent of that $787 billion has been spent, according to Recovery.org.
But the networks haven’t gone after Obama like they did Paulson. Both the Dec. 8 CBS “Morning News” and Dec. 9 “Today” entirely ignored critics of the proposal.
“World News” did a little better job. At least it included two proponents and two opponents of the plan in its Dec. 7 report, including Rep. Mike Pence, R-Ind., who said “For this president or this Democratic Congress to propose using TARP funds for anything other than deficit reductions is simply a violation of the law.”
But in that same report Gibson called the $200 billion a government “windfall.” It was no such thing, since the entire TARP was financed by debt.
Downplaying or ignoring criticism of a new Obama initiative to spend billions of taxpayer dollars has been the media’s M.O. in 2009. From the original $787 billion stimulus package to a trillion-dollar health care reform package, the Obama agenda has had the support of many journalists each step of the way.
This article was posted: Thursday, December 17, 2009 at 5:26 am