Sunday, January 22, 2017

It's all in the spin

The Trump Presidency has begun and we see once again that the way news is presented is much more important than the actual news.

One of Mr. Trump's first actions as President was to rescind a cut in the mortgage insurance rate for FHA mortgage loans. Here is an editorial reporting Mr. Trump's initial actions. The editorial is presented with a proposed narrative (Trump is becoming a "Radical Conservative", which appears to mean pro-business, anti-people).

After reading this editorial, when did this insurance rate cut go into effect? About the 5th paragraph says:
The Obama administration had said last week that the Federal Housing Administration would drop the cost of mortgage insurance it sells by almost a third to 0.60 percent.
This statement is actually a bit clearer than most articles on the rate cut -- from some it sounded like a change in longstanding FHA policy. Instead, this rescinds a rate cut announced January 9 to take effect January 27.

But we see here an emphasis on Mr. Trump taking something away. The exact same action could have instead been headlined "Donald Trump Reverses Last Minute Obama Administration Action." This alternate headline presents exactly the same facts but spins it in more positive manner.

We've been seeing many examples of the press spinning Donald Trump in a negative way. Expect to see a lot more.

NOTE: Whether the FHA insurance rate should be cut is a valid question. On the one hand, the rate cut has been anticipated. On the other hand, FHA insurance rates rose during the 2008 mortgage crisis. One can argue that the insurance rate shouldn't be cut too much because it will then jump up during the next downturn (when foreclosures will increase) making it harder for those FHA is supposed to help to afford a mortgage.

Is this Mr. Trump becoming a "Radical Conservative" or is it the incoming administration wanting to make sure it knows all the facts before taking an action. Or perhaps the new administration restoring the rate cut in a few months so it can take the credit.

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