Nonprofit Newswire | Reality Need Not Apply: Fox Continues to Deny Aid to Poor is Stimulative

October 7, 2010; Source: Media Matters for America | We regularly watch Fox & Friends with co-hosts Steve Doocy, Gretchen Carlson, and Brian Kilmeade for their political and economic commentary—as well as that of occasional guests such as blogger Michelle Malkin. Like the website, Media Matters, we watched on the morning of October 7 to hear Malkin and Doocy make fun of House Speaker Nancy Pelosi’s contention that food stamps and unemployment insurance are significantly stimulative expenditures.

According to Doocy, “she’s promoting some strange multiplier effect study to argue this,” and Malkin added, “the only thing that these programs stimulate, of course, is bigger government.” This is hardly the first time that Fox News anchors and guests have questioned the stimulative nature of food stamps and extended unemployment benefits.

Watch it here:

Truth be told, economists generally agree that food stamps are stimulative, making Doocy and Malkin pretty much well, wrong. The very well respected economist Mark Zandi – who provided advice to the McCain presidential campaign in 2008 said at the time in written testimony to the House Committee on Small Business that extending food stamps would be among “the most effective ways to prime the economy’s pump.” Zandi’s 2008 testimony included a table that showed that a dollar spent in a temporary increase in food stamps would generate an increase of $1.73 in real GDP compared to $1.64 from a dollar in extended unemployment insurance benefits, $1.59 for infrastructure spending, and $1.36 for aid to states (see table).

We don’t have quite the obsession with Fox News that others do. It’s important to hear different opinions on matters of politics and economics, and with Steve Doocy and Michelle Malkin weighing in, you certainly get opinions that aren’t heard very much because they’re so clearly out of the mainstream of economic thought. Doocy and Malkin (and others on FOX such as Stuart Varney and Newt Gingrich who also deny the stimulative effect of food stamps, Gingrich questioning the entire concept of economic multipliers actually) could argue that they don’t like food stamps or unemployment insurance for other reasons, much like the debates pro and con concerning welfare reform during the Clinton Administration.

But their arguments were less about economics and more sociological and behavioral. And from among the list of potential economic shots in the arm that might be pursued in an economic stimulus program, food stamps do provide a significant GDP boost, or in Speaker Pelosi’s words, “the biggest bang for the buck.”

Nonprofits need to understand how social safety net programs such as food stamps and unemployment insurance and others, seen by opponents as simply feeding big government, are truly positive stimuli in a recession economy. Since nonprofits played an important role in carrying out the nation’s stimulus spending component, they should be aware of what the critics are saying and what the facts are behind the debate.—Rick Cohen