"House Rejects Financial Rescue, Sending Stocks Plummeting," screamed the double-decker headlines that occupied two full inches across the top of the front page of The Washington Post on Tuesday, September 30, 2008.
Only when whipping up war fever have America's major news organs been so propagandistic. Their dishonest reporting, even more than their opinion pieces and their editorializing, tell you that this massive daylight burglary of the U.S. Treasury is something that they, or whoever pulls their strings, badly want. Why else would they slant the news so much?
One doesn't have to be a particularly keen observer of the either the stock market or the American economy to recognize the deception in this headline, or its intent. In the first place, one should always be skeptical when they say on the news that stocks rose or fall because of any one particular event. It's almost never that simple. But in this case, the contradicting evidence to the headline is actually right there on The Post's front page, in a line chart of the trajectory of the stock market during the day Monday. There readers can plainly see that if there was some propelling event sending the stock market falling precipitously, it had already occurred before the surprise mid-afternoon defeat of the $700 billion cash-for-trash bank-bailout package by the House of Representatives. That's because the market had already lost almost 500 of the record 778 points that it would lose by the end of the day. The market even rallied briefly after the news of the defeat had made the rounds, only to resume its plunge in the day's final hour.
The most obvious candidate for the propelling event was clearly the prospect of the bailout itself. The Congressional leadership had not agreed to the raid on the Treasury until Sunday, when the New York Stock Exchange was closed. Monday morning was its first chance to react to what the mainstream media have taken to calling a "financial rescue," and the market apparently reacted very negatively.
The story line of the government and its media megaphone is that the country's financial system, and, thus, its economy is in dire peril, making the radical government "rescue" absolutely essential. Traders in stocks must see it the same way, so if the bailout is thwarted, the stock market must go down.
If that is the case, the acid test was on Tuesday, when the market had had time to digest the House rebuff of the bailout. So what happened? The market recovered 485 of the 778 points that it had lost on Monday. Keeping the story line going would require quite a bit of work, but The Post was equal to the task.
"Lawmakers Revise Rescue Plan," said Wednesday's headline. Below it was the subtitle: "Stocks Rise." The juxtaposition was clearly meant to suggest cause and effect. In case that was too subtle, just below the fold, beside large arrows showing the change in the the direction and magnitude of the Dow Jones average on Monday and Tuesday was this small headline, "Stock Market Bounces Back," with this brief explanation, "U.S. investors appeared wary but hopeful yesterday that a bailout deal is still possible, as the market regained much of the losses it suffered on Monday."
So the prospect of the bailout passing, which on Monday morning had been accompanied by a plunge in the stock market, is now presented as the cause of the market going up by about the same amount. The notion that investors might have been encouraged by the defeat of the bailout is simply not entertained.
The deception did not end there. The lead article begins, "Prodded by a wave of angry calls from constituents, congressional leaders dialed back partisan bickering over the $700 billion Wall Street rescue plan yesterday and advanced modest changes to the legislation in an effort to win over House Republican holdouts."
Yes, there have been lots of angry calls, letters, and emails from constituents over the bailout, but all indications are that they have been overwhelmingly opposed to it. And if the Congress ever did anything in a bipartisan manner, it was to vote down the bailout. It was the Republican administration's proposal, after all, and only 65 House Republicans voted for it, compared to 140 Democrats.
For those who might not be buying the prospective-bailout explanation for the stock market's Tuesday recovery, the business section of The Post had this old standby explanation in a headline, "Bargain Hunters Set Stocks Soaring."
When the media have no explanation for a stock market increase, it's always the work of these bargain hunters. When the market falls for no apparent reason, "profit takers" are the cause.
On Friday, when the House approved a revised, even more expensive version of the bailout, a reporter for the NBC Nightly News was right on message, "Many members changed their votes from nay to yea because of constituent complaints over the loss in the value of their retirement accounts (invested in the stock market)."
The Washington Post was completely at a loss to explain what happened to the stock market on Friday, though. Their headline was, "Bush Enacts Historic Financial Rescue," with this sub-headline: "House Passes Plan by Wide Margin, but Stocks Keep Falling."
Indeed they did, which should not have been any surprise at all to an objective observer of the market over the past week. The market declined 157.47 points on Friday, The Post tells us. What they do not tell us is that the market had been up by over 300 points earlier in the day and the decline after the passage of the bill was a lot more than 157.47 points. In its article, The Post noted simply that the market went down by that much "despite the measure's passage, and gloom lingered over credit markets."
David Martin, October 5, 2008