March 23, 2013

Press Ignores, Minimizes Concerns in Fed’s Beige Book About ObamaCare’s Effects on Sales, Employment, Health Care Costs

Today, on the third anniversary of the enactment of state-managed healthcare, aka the Patient Protection and Affordable Care Act (ACA), aka ObamaCare, it’s worth noting a precursor of what we can expect from the establishment press as the law’s implementation presses on. It can be summed up in eight words: “Hype the alleged good. Ignore the obviously bad.” Distilled in four words: “Toe the administration line.”

Two examples of how the press is ignoring the obviously bad came from the Associated Press, aka the Administration’s Press, in its March 6 caoverage of the contents of the Federal Reserve’s “beige book” released that day. The Fed’s report contained five specific comments, four of them negative and one neutral, about the current and imminent impact of ObamaCare. None made it into either AP report. Many other outlets also ignored or minimized those comments.

Here are the direct and indirect citations of the ACA contained in the Fed’s report (bolds are mine throughout this post):


Consumer Spending and Tourism

… Many District contacts commented on the expired payroll tax holiday and the Affordable Care Act as having restrained sales growth.

Employment, Wages, and Prices

… Employers in several Districts cited the unknown effects of the Affordable Care Act as reasons for planned layoffs and reluctance to hire more staff.

… (the) Atlanta (District) noted a lack of compliance specialists due to heavier regulations in the healthcare industry.


Labor Markets

Labor market activity was little changed since our last report. Hiring remained flat across most sectors, although there were some exceptions. Employers across the District continued to cite the Affordable Care Act and its unknown impacts as reasons for planned layoffs and reluctance to hire more staff.


Nonfinancial Services

Reports from staffing firms were mixed. One contact noted sharp declines in demand for services across the board, while another reported stellar demand that broke direct- hiring records. Outlooks were cautious. Some contacts noted concern that client companies are hiring the absolute minimum to get by due to uncertainty about the Affordable Care Act.


… Current demand for health-care services remained relatively weak, but contacts projected rising demand as additional components of the Affordable Care Act are implemented.

In his district-by-district rundown of the Fed’s report, the AP Martin Crustsinger never even hinted that the Affordable Care Act came up at all. Oh, but he did claim to have found an important comment about Washington’s fiscal mess:

CHICAGO (includes Iowa, Wisconsin, Michigan and parts of Illinois and Indiana):
Economic activity expanded slowly. Many business contacts expect growth to stay weak in the first half of 2013, partly because of uncertainty over federal spending cuts. But they expect activity to rebound in the second half of this year.

The trouble is that what Crutsinger wrote is not what the section of the report about the Chicago, the Sevent District, actually said:

Economic activity in the Seventh District continued to expand at a slow pace in January and February. Many contacts expected that growth would be weak in the first half of 2013, partly because of uncertainty over federal fiscal policy, but that activity would rebound in the second half of the year.

Consumer Spending

Looking ahead, retailers expressed concern that potential fiscal policy tightening would continue to have a negative impact on consumer sentiment and retail sales throughout the remainder of the first quarter.

Business Spending

… Several manufacturers noted that they plan to make capital expenditures this year only as necessary, delaying investments because of heightened uncertainty surrounding fiscal policy.


Growth in manufacturing production picked up in January and February. The auto industry remained a source of strength, with light vehicle sales expected to increase throughout the year. Specialty metal manufacturers reported increases in new orders and order backlogs; but many expressed concern about the increased volatility of their customers’ orders, citing heightened uncertainty over the regulatory and fiscal environment. Inventories at steel service centers were noted to be below desirable levels.

Only one of the four bolded sections could conceivably interpreted as “federal spending cuts” — except that, as been explained umpteen times by dozens of pundits and analysts, there are no overall spending cuts. Instead, if we’re lucky, sequestration will only slow the rate of projected federal spending growth. If federal spending is indeed continuing to grow, it can’t legitimately be cited as a negative economic growth factor. Crutsinger twisted the Chicago comments to fit the establishment press “(awful, terrible, horrible, draconian) spending cuts” template.

The other AP report, an unbylined item (“Federal Reserve ‘Beige Book’ says economy on fairly steady ground”), also failed to the Affordable Care Act’s presence in the Fed’s report, and brought up the mythical “spending cuts” twice.

At USA Today, Paul Davidson strangely cited “the health care law” without giving it a name three separate times. In his first usage of the term he called it “new.” Since ObamaCare is three years old, it would not be unreasonable to assume that Davidson was referring to some other more recent law. But from all appearances, he wasn’t.

A Reuters report Alister Bull went USA Today one better with misdirection, citing “new healthcare laws.”

There were exceptions to the avoidance of mentioning ObamaCare (e.g., CNBC, Business Insider), but they were rare.

As the ObamaCare disaster unfolds, expect to the press to continue to hype the alleged good, ignore the obviously bad, and toe the administration line.”

Cross-posted at


1 Comment

  1. Tom, you might want to check on ObamaCare effects on Senior Citizen costs like Assisted living facilities. We just experienced a 10% increase in monthly cost for my mother.

    Comment by dscott — March 23, 2013 @ 5:19 pm

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