The recent decision by Standard & Poor's to downgrade the U.S. credit rating to AA+ from AAA upset many on the left, especially those within the Obama administration. The White House lashed out at S&P and some in the news media did too. So Business & Media Institute decided to look back at six years of network (ABC,CBS and NBC) coverage of S&P.
BMI found out that bulk of network criticism of the ratings agency came AFTER the Obama administration went on the attack and that the networks relied on S&P experts three times more than they criticized them.
- Media Back Democrat Push Against S&P: The decision by Standard and Poor's to downgrade the U.S. credit rating was met with harsh criticism from the left, and the news media reacted by asking whether they have the power or "expertise" to rate the U.S. economy.
- Most ABC, CBS and NBC Criticism Came After Democrats Raise Issue: The media went after S&P soon after the ratings agency met with the White House and the Obama administration tried to prevent S&P from downgrading the U.S.
- Networks Depend on Standard & Poor's for Expert Commentary: In the past six years the networks have interviewed S&P experts more than 3 times as often as they have criticized the company (70 stories vs. 23 stories). On CBS alone, they interviewed S&P analysts more than 10 times as often.
Network reporters have been critical of Standard & Poor's in the aftermath of the firm's downgrade of the U.S. credit rating. That's surprising since journalists counted heavily on S&P experts despite the rating agency being wildy wrong with its credit calls during the housing collapse.
And most of that media criticism of S&P came only after the firm ran afoul of the Obama administration's push to keep American credit AAA rated.
The recent downgrade of the US's credit rating from AAA to AA-plus was met with harsh words from the White House and the news media despite the fact that everyone knew it might happen if the debt ceiling deal wasn't big enough.
Obama's Treasury Secretary Tim Geithner attacked S&P over the downgrade calling it "terrible judgment" and "a stunning lack of knowledge" according to Marketwatch. The Daily Caller reported that the Democratic National Committee's communications director launched a twitter assault on S&P by introducing the hashtag #DowngradeSandP on Aug. 5. That was the same day S&P made their announcement.
George Soros-funded media groups including Center for American Progress, Democracy Now! and others have also gone on an offensive against S&P.
The White House claimed that S&P's action was based on flawed accounting and the media rapidly followed suit criticizing the group themselves. The three broadcast networks responded to the downgrade by trying to downplay Standard & Poor's decision to lower the nation's rating by criticizing them for past mistakes, especially their failure to anticipate the housing bubble and crash.
Yet that criticism also revealed hypocrisy on the part of the network news media which have interviewed S&P experts for years. More than 60 percent (14 out of 23) stories critical of S&P were since April 2011 when the ratings agency downgraded their outlook for long-term U.S. debt to negative.
But in the six years between August 2005 when the housing market was in decline and August 2011, the networks interviewed experts from S&P in 70 stories about a range of topics including housing, retail sales, the possibility of recession and other economic issues. That's more than 3 times as many stories as were critical of the company during the six years since the housing drop.
CBS was by far the most reliant of the three networks on S&P analysts for economic predictions and information with 53 of those interviews on their morning and evening news programs. CBS criticized S&P one-tenth that often (5 stories).
Media Criticism Followed Behind the Scenes Attempts by White House to Bully S&P
It is the timing of recent criticism by the networks that is suspect. According to the July 15, 2011, Washington Post "The Obama administration has mounted an intense behind-the-scenes campaign to keep the nation's major credit rating companies from issuing threats that they might downgrade the United States over the swelling size of the federal debt."
In fact, according to that article "officials summoned four Standard & Poor's analysts to a meeting with nearly every senior member of President Obama's economic team at which Treasury Secretary Timothy F. Geithner made an impassioned plea against any action raising doubts about U.S. credit."
Shortly thereafter the network news media began including criticism is reports mentioning the ratings agency, beginning with ABC on July 27. That morning George Stephanopoulos said that "some people question whether or not the rating agency should have this kind of power at all and whether they have enough expertise to make these kinds of judgement."
On July 31 "World News," ABC's Bianna Golodryga (who is married to former Obama budget director Peter Orzsag) said S&P (and other ratings agencies) were "trying of course to regain their reputation after the huge miss from that mortgage debacle."
In April 2011 there were a few other network reports critical of S&P. Those began April 19, 2011. One day after the White House reacted to S&P actions on the long-term debt outlook.
In the April 18, 2011 press briefing (transcript available on White House website) White House press secretary Jay Carney responded to questions about S&P's decision to downgrade the U.S. long-term debt outlook to negative. Carney used S&P's move to argue that "timely bipartisan cooperation and action on fiscal reform" was necessary. He also used the S&P analysis to claim "the American economy is strong, it's growing, it's diversified, it's dynamic …"
Carney also said the Obama was "committed" to reach a $4 trillion deficit reduction target. But the recent deal reached by Congress didn't come close to $4 trillion in deficit reduction.