Summary
It was another unconventional night for fact-checkers at the truncated Democratic National Convention that has been forced to go virtual because of the coronavirus pandemic.
But we found a few statements to write about, including a misleading claim about the U.S. unemployment rate and auto industry bailout claims that don’t tell the whole story.
Analysis
On the night the Democratic Party formally nominated former Vice President Joe Biden as the party’s 2020 presidential nominee, two former U.S. presidents spoke — Bill Clinton and Jimmy Carter.
Clinton’s Misleading and Meaningless Unemployment Claim
Clinton, who uncharacteristically spoke for less than five minutes, made a misleading claim when he said that the U.S. is “the only major industrial economy to have its unemployment rate triple” because of President Donald Trump’s handling of the COVID-19 pandemic.
It’s true that the unemployment rates listed by the Organization for Economic Cooperation and Development show the U.S. jobless rate nearly tripling between January and the most recent month on record. The next-largest increase was a near-doubling of the rate in Canada.
But his comparison is meaningless — rather like comparing apples to kumquats. That’s because the U.S. counts a laid-off worker as “unemployed” even if the layoff is expected to be temporary — while many others do not. In July, those on “temporary layoff” accounted for 56% of all those counted as “unemployed” in the U.S., according to the Bureau of Labor Statistics.
Clinton referred specifically to one of the countries that doesn’t include those temporarily laid off in their count of the jobless, saying the U.S. rate is “two and a half times the United Kingdom’s.”
It’s true that the U.K. Office for National Statistics currently lists its unemployment rate as only 3.9% compared with the U.S. rate of 10.2%. But, unlike the U.S., the U.K. doesn’t count those on temporary layoff as unemployed.
U.K. Office for National Statistics, August: Workers furloughed under the Coronavirus Job Retention Scheme … have a reasonable expectation of returning to their jobs after a temporary period of absence. Therefore they are classified as employed.
And that’s not the only factor making Clinton’s comparison misleading. Other countries — such as Germany — have met the COVID-19 crisis by subsidizing employers to keep workers on the payroll even when there is less work to do. In the U.S., the main approach has been to increase benefits paid to laid-off workers through unemployment insurance.
The OECD Employment Outlook 2020, which was released in July, notes that the U.S. has had a far higher unemployment rate during the COVID-19 pandemic compared with other OECD countries, saying the difference in rates “reflects fundamental differences in countries’ policy mix to cushion the economic and social effects of the crisis.”
“The United States are strongly relying on unemployment insurance benefits to secure the income of workers who lose their jobs, even in the case of a temporary crisis,” the report said. “Meanwhile, other OECD countries, not just in Europe, are making heavy use of job retention schemes, which allow companies to cut hours of work, or even halt work entirely, while keeping their workers attached.”
Auto Bailout
Michigan lawmakers praised Biden for his role in helping to rescue the auto industry after the Great Recession. It’s worth noting that while this remains a signature accomplishment of the Obama administration, the effort began under former President George W. Bush.
In a keynote address featuring several young Democratic politicians, Michigan state Rep. Mari Manoogian said: “When the auto industry was going under, Joe stuck his neck out to protect it and helped save 1.5 million auto jobs.” Later, during the roll call of the states, Michigan U.S. Sen. Gary Peters said, “Michigan auto workers are the best in the world. But we’d be nowhere without Joe Biden. And a lot of folks wanted to let Detroit go bankrupt. But Joe Biden believed in us, and together we fought to save our auto industry.”
As we’ve explained before, the auto industry effort began on Dec. 19, 2008, when then-President Bush announced that his administration would provide General Motors and Chrysler with $13.4 billion in loans under the Troubled Asset Relief Program, with another $4 billion to GM to come once Congress approved releasing the second half of the TARP money. The money came with strings, most notably the requirement that the automakers come up with a long-term viability plan by March 31, 2009.
Fast-forward to March 30, 2009, when then-President Barack Obama rejected the companies’ viability plans, but then announced a bankruptcy plan for Chrysler on April 30 and a GM bankruptcy plan on June 1. Those plans allowed the automakers to restructure and get more federal aid.
In the end, the Treasury Department invested about $80 billion in the industry and recouped most of it. Treasury says the rescue of the industry ended up costing the government $9.3 billion.
As for Manoogian’s claim that Biden “helped save 1.5 million auto jobs,” that’s backed up by an estimate from the Center for Automotive Research. The group’s 2013 report said the auto bailout saved 1.5 million jobs in 2010, including those at GM, Chrysler, auto suppliers and “spin-off employment losses” due to “reduced spending in the U.S. economy.”
The report credited both the Bush and Obama administrations.
“Two consecutive executive administrations in Washington decided in late 2008 and early 2009 that the consequences of the potential losses and outcomes to the U.S. economy and people described above were worth avoiding through a federal intervention,” the report said. “CAR is confident that in the years ahead, this peacetime intervention in the private sector by the U.S. government will be seen as one of the most successful in U.S. economic history.”
Trump and the New Hoax
In welcoming viewers to the second night of the convention, Milwaukee Mayor Tom Barrett said of the Democrats, “Unlike the president, we’ve never called COVID-19 a hoax.” As we have written, it is true that Trump said the novel coronavirus was the Democrats’ “new hoax.” But the president has said he was talking about the Democrats’ criticism of how he had handled the pandemic, not the disease itself.
At a political rally on Feb. 28 in South Carolina, Trump said, “Now the Democrats are politicizing the coronavirus, you know that, right? Coronavirus, they’re politicizing it. We did one of the great jobs. You say, ‘How’s President Trump doing?’ They go, ‘Oh, not good, not good.’ They have no clue.”
Then the president, who often dismissed special counsel Robert Mueller’s Russia investigation as a hoax, made his “new hoax” remark.
Trump, Feb. 28: One of my people came up to me and said, “Mr. President, they tried to beat you on Russia, Russia, Russia.” That didn’t work out too well. They couldn’t do it. They tried the impeachment hoax. That was on a perfect conversation. They tried anything. They tried it over and over. They’d been doing it since you got in. It’s all turning. They lost. It’s all turning. Think of it. Think of it. And this is their new hoax.
Democrats quickly seized on the remark. Joe Biden, now the Democratic presidential nominee, described the president’s comments as “absolutely bizarre.”
“Look, this is a serious, serious problem,” Biden told MSNBC on Feb. 29. “It’s able to be solved, but it requires us to be absolutely level-headed and let the scientists have the lead in all of this. But for him to start talking about it being a hoax is absolutely dangerous. It’s just not a decent way to act.”
In the wake of the criticism, Trump said at a press conference on Feb. 29 that he used the term “hoax” to refer not to the coronavirus itself but to Democrats’ criticism of how his administration had responded to it.
Asked if he regretted using that particular word, he replied: “No, no, no. ‘Hoax’ referring to the action that they take to try and pin this on somebody, because we’ve done such a good job. The hoax is on them, not — I’m not talking about what’s happening here; I’m talking what they’re doing. That’s the hoax. That’s just a continuation of the hoax, whether it’s the impeachment hoax or the ‘Russia, Russia, Russia’ hoax. This is what I’m talking about. Certainly not referring to this. How could anybody refer to this? This is very serious stuff.”
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Sources
Organization for Economic Co-operation and Development. “Short-Term Labour Market Statistics: Monthly Unemployment Rates” Data accessed 18 Aug 2020.
US Bureau of Labor Statistics. “Impact of the coronavirus (COVID-19) pandemic on The Employment Situation for July 2020” 7 Aug 2020.
US Bureau of Labor Statistics. “Table A-11. Unemployed persons by reason for unemployment” 7 Aug 2020.
UK Office for National Statistics.”Employment in the UK: August 2020” 11 Aug 2020
Asen, Elke “A German Export for Times of Crises: The Short-Time Work Scheme” Tax Foundation. 25 Mar 2020.
Robertson, Lori, et. al. “Obama ‘Road’ Film Takes Some Detours.” FactCheck.org. 21 Mar 2012.
“Fact Sheet: Financing Assistance to Facilitate the Restructuring of Auto Manufacturers to Attain Financial Viability.” Press Release. White House. 19 Dec 2008.
Sanger, David E., et al. “Bush Aids Detroit, but Hard Choices Wait Obama.” New York Times. 19 Dec 2008.
Stolberg, Sheryl Gay and Bill Vlasic. “President Gives a Short Lifeline to Carmakers.” New York Times. 30 Mar 2009.
Rutenberg, Jim and Bill Vlasic. “Chrysler Files to Seek Bankruptcy Protection.” New York Times. 30 Apr 2009.
Vlasic, Bill and Nick Bunkley. “Obama Is Upbeat for G.M.’s Future.” New York Times. 1 Jun 2009.
U.S. Department of the Treasury. Auto Industry, Program Overview. treasury.gov. last updated 8 Jan 2015.
McAlinden, Sean P. and Menk, Debra Maranger. “The Effect on the U.S. Economy of the Successful Restructuring of General Motors.” Center for Automotive Research. 5 Dec 2013.
Rieder, Rem. “Trump and the New Hoax.” FactCheck.org. 3 Mar 2020.
Trump, Donald. Charleston, S.C., Rally. Transcript. 28 Feb 2020.
Farley, Robert. “Trump’s Mixed Messages on Russian Meddling.” FactCheck.org. 23 Jul 2018.
Gregorian, Dareh. “Democratic candidates hit Trump’s coronavirus ‘hoax’ claim.” MSNBC. 29 Feb 2020.
“TODAY.” NBC. 29 Feb 2020.
Trump, Donald. Coronavirus Update. Transcript. 29 Feb 2020.
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