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FOX Business Panel Bashes European Economy, Neglects to Mention NYSE Euronext

Reported by Marie Therese - April 11, 2007 -

The business talking heads at FOX News routinely enjoy taking potshots at the Europeans. They point out what they perceive to be flaws in their system, rail against continental "socialism" (meaning that everyone has cradle to grave health coverage), gloat that we have almost full employment while Europe's unemployment rate is almost double ours and excoriate Europe for refusing to bow down and worship at the feet of George Bush. What they don't tell their viewers - because the news might make them question the American economic hegemony - is that the volume of business on the European stock exchange has overtaken the New York Stock Exchange and that on April 4, 2007 NYSE Euronext opened in an effort to take a bite out of the European economic apple.

According to the April 4th edition of The Independent:

The value of European stock markets has eclipsed that of the US.

The moment slipped past unnoticed last Thursday, but make no mistake, it was a historic occasion. Totting up the value of all the companies on the 24 stock markets of Europe, from west to east and taking in Russia and Turkey, you get $15.73 trillion. That's a nudge ahead of the total of US-listed companies, and you probably can't have said that since the end of the First World War.

Did Neil Cavuto cover this last week?

No way!

Instead, he and his crew of obfuscating stock analysts spent their time vilifying the Europeans for daring to sue Microsoft and win. They snickered at Europe's 8-9% unemployment rate and derided their "socialist" ideas.

In a rah-rah chorus, they touted the latest U. S. unemployment numbers, which showed the rate is now 4.4%.

NEIL CAVUTO, April 6, 2007: "FOX News Alert! Once again the financial media in America getting it wrong, very wrong! Still warning of a sluggish economy, still saying things stink, the numbers telling a very different story. News today that 95.6 percent of us are working. Another 180,000 jobs created last month alone. The jobless rate now at 4.4%. I want you to compare that to some of our harshest critics. France's unemployment at 8.4% [February 2007]. 9.2% [March 2007] in Germany. 9% in Venezuela [October 2006]. And get this. 15% in Iran. [2007]"

FOX News business correspondent Rebecca Gomez piped up to say that the EU is "lagging behind" the United States in "productivity growth" and "competition" and added that "they just have way too much regulation." Dagen McDowell, also a FOX Business Correspondent, added that "this was incredibly reassuring about the economy ... and that will keep Americans spending and help make up for the housing slump." Tracy Byrnes of the New York Post (a Murdoch-owned newspaper) noted that "part of the problem with the media is that we are on a little bit of a bell curve. This is Economics 101. What goes up must come down. And we are on the down, but it's not sluggish by any stretch. It's just part of the natural way the economy moves."

Guest Adam Lashinsky, Senior Editor of Fortune Magazine, eschewed talking about Iran and Venezuela (probably because he realized that those employment numbers were merely thrown into the mix by Cavuto in order to take a political potshot and not to make an economic point).

"If you're at the lower end of the pay scale in the United States, you're barely scraping by," he pointed out. "A job isn't necessarily a job. Over there you've got basic health care. You've got basic retirement. And there's a lot of people in our economy who don't have that. And by the way almost all of the job gains were in the service sector. Manufacturing was down. That's high quality jobs going down, lower quality jobs going up."

And how did Neil Cavuto respond to this?

CAVUTO: "Adam, by the way did you say this ten years ago when Bill Clinton was President, when the same ratio was the same, 'cause you strike me as a Communist."

Comment: "When the same ratio was the same." What on earth does that mean?

Tracy Byrnes rushed right in to say "Service jobs were actually down. The professional jobs were down. They weren't hiring as many accountants and engineers."

N. B. Click the link to read a copy of the Bureau of Labor Statistics April 6, 2007 analysis (boldfaced print is mine): Download file

Dagen McDowell did admit that Europe's economy is improving. "We need to love each other," she said, which is quite a change from the talking points that FOX's business experts had been spouting for the past three years. However, she never quite got around to mentioning that the NYSE had opened its very own European stock exchange two days prior.

Rebecca Gomez jumped in to insult Adam Lashinsky and thereby downplay his comments: "Hey, Neil, the quality of jobs? Is Adam a smoker or something? I know you can smoke on the job out in Europe but, you know, as far as qual - I think any job, Adam, is better than no job at all. I mean some figure that I saw is that 95 million out of the 500 million there in the EU - out of jobs. Even though you're saying some of thes are low-paying, maybe at McDonalds, a lot of these jobs are also, also stepping stone jobs here in the U.S."

Rebecca, what have YOU been smoking?!

Lashinsky countered by noting that there's no better place to be a high-wage earner "like a financial journalist" than in the United States. However, he wasn't allowed to finish his statement as Cavuto tossed out another insult, disguised as a joke, saying "Actually, Adam, in your spare time you should consider Pravda, but, go ahead, explain your ridiculous position."

I keep wondering why serious, intelligent analysts like Lashinsky continue to appear on Cavuto's shows.

Not one to give up Lashinsky said "You've got somebody like President Bush's ex-economic advisor Ben Bernanke talking about income equality in the United States. You guys and gals are ignoring that. You don't want to talk about it just because we have a number of jobs being up."

Dagen McDowell talked over Lashinky to say that "wages are growing faster than inflation so that is changing."

According to the BLS website, the average hourly wage was $17.00 in 2006 with an average weekly income of $575.73. In 2007 that increased to an hourly of $17.16 and a weekly of $580.58. This represents a 2.72% annual increase. Technically this is higher than the rate of inflation generally used by market experts who want us to all believe that everything's just hunky-dory. In the delusional realm of CavutoWorld, American workers are just using these jobs as "stepping stones" to bigger and better things!

Reality check ...

In my own business I pay RETAIL for most of my supplies, utilities, etc. That means I am more impacted by retail inflation than wholesale inflation. My average annual inflation has been over 10% and my income has definitely NOT kept up with that inflation number.

So McDowell's comparison is not applicable to my situation - or the situation of anyone except a big manufacturing company trying to negotiate for raw products. I keep waiting for someone to acknowledge this and to start basing their economic projections using numbers that are real for a service economy.

If they did that, we'd all realize that the average American "service provider" is staggering (and in many cases faltering) under the increasingly onerous burden of double-digit inflation.

Adam Lashinsky is right. Europe does have a better system. I know. Several of my friends don't have the "safety nets" of health insurance and retirement because they cannot afford them or they got sick and therefore are uninsurable.

In CavutoWorld, little things like that don't matter. As Rebecca Gomez said last Friday, we can all go live somewhere else if we don't like it here!