04 August 2011

Does "The Hill" have no fact-checkers?

Dow plunges after debt deal, raising anxiety over economy - The Hill's On The Money:
"After morning trading on Thursday, the Dow had lost more than 1,000 points since July 25, the first day of trading after talks between President Obama and Speaker John Boehner (R-Ohio) on a big debt deal broke off.

By comparison, the Dow lost 819 points on Oct. 6, 2008, when the House failed to approve the Troubled Asset Relief Program (TARP)."

First, the House of Representatives did not reject TARP on October 6th. President Bush signed it into law on October 3d. The House rejected the bill on September 29th, and while stocks dropped more than 700 points that day, they recovered 500 the very next day. Most of the drop on the 29th, in fact, preceded the final vote, which many had assumed would result in passage of the bill. Its rejection was a surprise.

Second, beginning on October 1st, when the Senate passed a new version of TARP, stocks began a steady fall. During the week following enactment of TARP (October 3-10) the Dow fell by over 2000 points. As noted by The Hill, this included a one-day drop of 819 points on October 6th.

I recognize that rises and falls in the market can always be interpreted more than one way, but let's at least get the facts straight before we get to the interpretation: the market dropped temporarily, recovering most of its losses the next day when the House rejected TARP. It reacted far more adversely after TARP was passed, and signed into law.

So when we look at the market's reaction today, it seems to fit a pattern: when politicians claim to have solved a problem, Wall Street doesn't doesn't buy it.

UPDATE: The Hill has now (2:32 PM) revised the story to note the September 29th date, and the 777 point drop. However, they have not included any mention of the recovery on the 30th, nor of the much larger crash which followed passage of TARP. Instead, they imply that the only market drop was due to Republican rejection of the TARP bill, which they compare to this week's debt deal, also attributed to Republicans alone, despite strong bipartisan support. The original story might have been dismissed as carelessness. The revised version cannot be explained as anything other than deliberate dishonesty in pursuit of a partisan message.

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