Money For Nothing and Your Checks Fact Free

Fairy Godmothers, Leprechauns and the Federal Reserve.

What do they have in common? Obviously, the magical ability to create something out of nothing. In the Fed's case, it's cold hard cash. Don't believe me? Just ask PolitiFact:

Image from PolitiFact.com (Arrow added)

In this case, for once, PolitiFact deals relatively fairly with Kucinich's statement, and provides a decent analysis of what transpired regarding how the Fed created the money and how and to whom it was passed out to. For that reason there's no need to get into the details of their fact check.

The problem with this rating is their acceptance of the liberal dogma that the money is just simply created out of nothing without any tangible cost. PolitiFact even gives a "Hells Yeah!" to the success of the operation-

Eventually, all the money was repaid, with interest. But according to [Walker] Todd, rather than wipe the money off its books, the Federal Reserve chose to use much of it to further stimulate the economy by purchasing Fannie Mae and Freddie Mac mortgage-backed securities on the open market. So that money remained in circulation.

Hooray! It worked so well the magic money created even more money, and then went to support housing programs for the poor! Heck, it makes you wonder why the Fed doesn't just print a gajillion quadzillion dollars every day. Goodbye debt and deficit, helloooo Easy Street.

The reality that PolitiFact is evading is this money actually does come at a cost. It's not created out of nothing, but rather at the expense of the money that's already in circulation. This my friends, is the evil known as inflation.

To individuals, inflation is a lot like getting mugged, but not at the point of a gun in the streets. Inflation is the slow theft of your property by the very people charged with protecting it. Jonathan Hoenig has a simple explanation:

One need not be an economist to understand inflation. If you started writing checks with no money in your account, they'd throw you in jail. Yet when the government does it, at least for the time being, it's called "stimulus" and rewarded with high approval ratings, that is, until the bills come due. And they always do.

...

The law of supply and demand cannot be conned. And as the supply of money increases, prices rise, and the dollars you and other productive members of society have worked so hard to save decrease in value.

PolitiFact doesn't tell its readers that inflation, created by government tomfoolery, hurts those who save and the poor the most. And if there's any doubt about the destructive nature of inflation, Hoenig wrote another article about the chilling yet very real case of Zimbabwe:

In 2008, the Los Angeles Times reported how a beer in the Zimbabwe capital that cost 100 billion Zimbabwe dollars on July 4 had already risen to 150 billion an hour later. A few months after that, Zimbabwe issued the 100 trillion-dollar banknote, then worth about $30 (U.S.).

...

In 1980, the Zimbabwe dollar was actually worth more than the U.S. dollar. What deteriorated over those 29 years wasn't the weather or the water, but the political philosophy. Once known as Africa's breadbasket, government destroyed the currency to the point where even "billionaires" were starving in the street.

Frankly, I haven't spent $150,000,000,000 on beer since I hung out with these guys one morning in Green Bay. I can't imagine paying that for a single can of sudsy goodness.

The bottom line is PolitiFact did a serious disservice to their readers by ignoring the real cost of the Fed's magic money. It's not created out of thin air. It's a tax on income you've already earned and a tax you had no chance to vote on. Inflation devalues the wealth you have labored so hard to produce, its worth destroyed by the whim of political expediency.

History is littered with examples of the evils of inflation. Unlike magic money, inflation is real. Kucinich should be allowed a license for hyperbole. He's a politician and was speaking in a condensed television format. But PolitiFact promotes themselves as the arbiters of truth and likes to squawk about giving readers the whole story. The act of ignoring such a relevant component of this story proves they're inclined to pick and choose which facts they want their readers to know.


After Hours: I actually have a few Zimbabwean hundred trillion dollar bills that I purchased on Jonathan Hoenig's website, along with some other cool things. You should go there and buy stuff.

Perry on Barry: PolitiFact Picks Paraphrase To Promote President's Policies

Ever since GOP candidate Rick Perry announced he's running he's been a lightning rod for attacks from the left and even a few on the right. It's no surprise then that PolitiFact had to get in on the action-

Clipped from PolitiFact.com

Yup. Out of all the claims made by the wily Texan our fearless fact-checker-outers decided to sort out the truth of whether or not Rick Perry faithfully paraphrased something President Obama said. PolitiFact felt it was important to point out that, despite being the largest fact checking effort in history, they aren't actually going to rate what the President actually said:

For this item, we're not evaluating whether the border is safer, but whether Perry is accurately characterizing what Obama said.

Brave journalism indeed.

Make no mistake: This is intentional and it serves several purposes.

For one, it gives PolitiFact carte blanche to reprint Obama's talking points without challenging their veracity. Which happens to be exactly what they did (emphasis in original):

So did Obama actually say the border with Mexico and the United States is now "safer than it ever way (sic) in history"? Let's review Obama's words:

He said there is more border enforcement than ever: "They wanted more agents at the border. Well, we now have more boots on the ground on the southwest border than at any time in our history."

He said seizures and apprehensions are up: "Over the past two and a half years, we've seized 31 percent more drugs, 75 percent more currency, 64 percent more weapons than ever before. (Applause.) And even as we have stepped up patrols, apprehensions along the border have been cut by nearly 40 percent from two years ago."

He said violent crime is down: "Violent crime in southwest border counties has dropped by a third."


He said El Paso and other border cities are safe compared with other U.S. cities: "El Paso and other cities and towns along this border are consistently among the safest in the nation."

Glad we got that settled. Here's another Obama gem in the article, with plenty of fact-checkable claims, including one that's possibly ridiculous. PolitiFact threw this into the rating despite it not having any bearing whatsoever on the Perry statement being checked:

"We have gone above and beyond what was requested by the very Republicans who said they supported broader reform as long as we got serious about enforcement. All the stuff they asked for, we've done. But even though we've answered these concerns, I've got to say I suspect there are still going to be some who are trying to move the goal posts on us one more time.

"You know, they said we needed to triple the Border Patrol. Or now they're going to say we need to quadruple the Border Patrol. Or they'll want a higher fence. Maybe they'll need a moat. (Laughter.) Maybe they want alligators in the moat. (Laughter.)

Thanks for letting us know when the audience laughed in approval. Keep in mind this recitation of Obama's Greatest Hits is coming under the guise of a non-partisan fact-check.

Another purpose of rating Perry on this specific statement is two-fold. The statement itself won't offend the liberals that are PolitiFact's core audience. It's a statement they tend to agree with. Putting Obama's comments in quotes, even if they're being repeated by Perry, right next to a big "Mostly True" sign gives the impression that what Obama said was itself true. This only reinforces the talking point. An additional benefit that certainly isn't lost on PolitiFact's editors is they earn brownie points for being balanced. The next time you hear someone making the case that PolitiFact isn't biased because they rate both sides, keep this rating in mind. "Heck! They even gave Rick Perry a Mostly True!" A quick glance at PolitiFact's Facebook page provides a few examples of this theory in action:

Images from PolitiFact's Facebook page

PolitiFact: Mission Accomplished.

Aside from the subtle campaigning done on Obama's behalf, PolitiFact's troubles with basic fact-checkering exist in this piece as well. Consider that PolitiFact didn't even provide a transcript for Perry's comments. The first hint of trouble comes from their version of what Perry actually said on August 13th, at the Greenland, New Hampshire house party:

Clipped from PolitiFact.com

I'm not sure what the Pulitzer Stylebook says about it, but considering PolitiFact's dubious use of ellipses (not to mention their failure to use them) should leave readers wondering if Perry was accurately quoted quoting Obama accurately. Unfortunately, despite their principle of publishing "a list of sources with every Truth-O-Meter item" so a reader can "judge for themselves whether they agree with the ruling", PolitiFact provides no source for Perry's statement. If you don't think providing a source is a big deal, see if it passes muster with a sophisticated and reputable group of people with high standards of integrity without hearing the ubiquitous "got a link?" reply.

What PolitiFact does provide as sources are three articles written at different dates about different events in different cities with Perry making similar claims.

From an ABC News Radio post, we get this Perry quote, made during a business roundtable event on August 17th in Nashua, N.H.:

"Six weeks ago the president went to El Paso and said the border is safer than it's ever been," Perry said. "I have no idea, maybe he was talking about the Canadian border."

PolitiFact also links to a Tulsa World article quoting Perry during a press conference in Oklahoma on the 29th:

"The president of the United States came to El Paso earlier this year and made the statement that the Texas-Mexican border was safer than it had ever been," Perry said.

"I have no idea who briefed him, but they need to come to Texas and spend some time with Democrat sheriffs along the border and they will find out that we have a war going on in places and citizens on both sides of that border are in jeopardy for their safety," Perry said. "We have a major issue with the security of our borders."

These articles are instructive in that both* of them show Perry not only accurately paraphrasing the president (even in PolitiFact's judgment), but also immediately refuting Obama's claim. PolitiFact had to have known about this because they used these articles as sources!

It's also interesting that PolitiFact dropped Perry down from a solid "True" on their scale because he flubbed the specific date of Obama's comments. But in the Tulsa World quote Perry used the much more vague "earlier this year" time frame as opposed to the "4 weeks ago" PolitiFact judged him on. Can we assume if they had rated the Tulsa quote Perry would have been granted a True? What do the Tulsa and ABC Radio quotes have to do with Perry's statement on August 13th? What value do they have as sources? How can you fact-check a statement without fully quoting the actual statement? Why ignore the most important aspect of Perry's comments (that the borders are not safe)?

The real truth is that PolitiFact wasn't interested in sorting out the truth of anything. What PolitiFact offers us is a classic bait and switch. The readers are presented with what appears to be a serious review of a statement made by the most controversial (legitimate) GOP presidential candidate regarding his position on the even more controversial topic of border control. Instead, readers are given a stinky rehash of Obama's same old tired talking points. Talking points, I might add, that could use a legitimate fact-check of their own. But don't expect to find that at PolitiFact.

The bottom line is this isn't so much a fact-check as much as it's spreading Obama's message on border enforcement. PolitiFact is more pep rally than it is non-partisan. And a pretty shameful one at that.


After Hours:

So how did we get to our final rating? I'll let PolitiFact answer for themselves:

Obama did not actually "pronounce that the border with Mexico and the United States was safer than it ever was in history." His time references were primarily for recent years. Still, Obama's tone and his examples definitely supported the overall point that the border is safer now than it was before. We rate Perry's claim Mostly True.

In short, while PolitiFact couldn't find any instances of Obama using those exact words, they determined Perry did provide a fair characterization of Obama's comments, and rated him Mostly True. I wonder how George Will feels about that. Check out this long forgotten rating:

Clipped from PolitiFact.com

Doh! It seems poor Will made the mistake of accurately paraphrasing Obama over something that doesn't sit too well with PolitiFans. NO TRUE FOR YOU!

Check out this post at Ace of Spades for a tear down of the Will rating.



*The third article cited, like PolitiFact, has a gripe with Perry's timeline as well as other gaffes, but doesn't offer any information regarding Perry's statement on August 13th.