The Good, the Bad & the Ugly
ABC features rational personal finance advice pertaining to gas prices; CBS blames gas prices in GM closures, disregards expensive union labor; ABC predicts suicide rates will go up, just like during Great Depression.

June 11, 2008

The Good
     Gas prices got you down? Don’t go out and trade your older automobile for a brand-new hybrid vehicle, because the savings don’t add up.

     While it’s en vogue to own hybrid – as they get better fuel economy and their supporters claim they are supposedly better for the environment – when you look at the bottom line, the savings don’t quite add up, according to radio host and Fox Business Network host Dave Ramsey.

     “Well, it would be better for the overall economy if we reduced the consumption, but as a personal financial guy, helping a single mom trying to make ends meet and those kind of things, you don't want to do that,” Ramsey said. “The average family, if you buy a new car to save on gas and spend $10,000 more for the gas – or for the car, only save $10 a week on the gas as the average, that's not going to work out. You got to drive the thing to the moon and back to make that work.”

     Ramsey appeared along with radio host Clark Howard on ABC’s June 10 “Good Morning America.” Howard agreed with Ramsey’s analysis.

     “I agree completely,” Howard said. “The only strategy I have and the – we just heard about in Mississippi where people drive enormous distances in vehicles that get terrible fuel economy, if somebody bought another car that was an extremely inexpensive car, maybe a $2,500 car, that would probably work out over time, but to throw the baby out with the bath water getting rid of a fairly new car and then buying a fuel efficient one, the math never works.”

     Morning show hosts have been asking what the government can “do” about the economy, but Ramsey pointed out personal behavior can have more of an impact on your finances than who is elected president.

     “I think what happens at your house is a lot more important than what happens in the White House,” Ramsey said. “None of these guys have ever sent me any money. Even the guy who sent money this time was my money he sent back.”

The Bad
     High gas prices strike again, says the "CBS Evening News."

     The June 3 "Evening News" blamed surging gas prices on General Motors’ reluctance to produce "more fuel-efficient vehicles" and closure of several plants, including one in Janesville, Wis.

     "It's not just here and it's not just GM. Since 2005, the big three – GM, Ford and Chrysler – have had 70 plants and supplier shutdowns with a total loss of 149,000 American jobs," CBS correspondent Cynthia Bowers said. "At the same time, foreign automakers selling more fuel-efficient vehicles are building five new U.S. plants that will employ 24,000 workers over the next three years."

     But Bowers omitted one detail: GM (NYSE:GM), Ford (NYSE:F) and Chrysler all have ties to the United Auto Workers (UAW) union, which forces those manufacturers into collective bargaining agreements with very expensive labor costs.

     And the foreign automakers that sell "more fuel-efficient vehicles" – which include Toyota (NYSE:TM) (opening a plant in Tupelo, Miss.), Honda (NYSE:HMC) (Greensburg, Ind.), Volkswagen (FRA:VOW) (to be determined - but Alabama, North Carolina and Tennessee are in the running) and KIA (SEO:000270) (West Point, Ga.) – are building their new plants in places where the UAW doesn't have a presence and won't make them less competitive by raising overhead costs.

The Ugly
     Talk about a merging an economic depression with the meaning of a psychological depression.

     ABC’s June 10 “Good Morning America” featured a segment titled “Recession Depression.” Reporter Chris Cuomo explained personal finances have people so stressed, they are developing health problems. But he didn’t leave the report there.

     “The link between financial troubles and psychological problems is well documented,” he said. “In the U.S. the seminal example is the Great Depression, when the suicide rate jumped from 14 to 17 for every 100,000 Americans,” stated Cuomo. “And today, with the threat of recession looming large, the price we pay physically may skyrocket as well.”

     Despite the fact that the economy is nowhere near the terrible state it was in during the Depression, ABC continued to make comparisons between the two. This time, ABC used the reference to suggest that suicide rates will increase.

     “A rising tide of distress is going to be manifest in mental health problems, suicide rates, heart disease,” said Dr. Redford Williams.

The Good, the Bad & the Ugly tracks the best and worst media coverage of business and economics. Readers are invited to submit suggestions or news tips to Staff Writer Jeff Poor at jpoor@mediaresearch.org.