The Christmas shopping season culminated a strong year for the U.S. economy. But instead of ringing out the old year and toasting the success, 43 percent of Americans think we’re in a recession. And that’s a crying shame. Call it Boo-Hoo Economics.
According to the American Research Group, the public is split over the notion we’re in a recession. It’s no wonder almost half of the public thinks things are bad, because most people only know what they’re told. For 43 percent of the population to believe something so wrongheaded, there can be only one culprit — the major media.
Journalists describe the economy as “strong, but with serious weaknesses” when they are being positive or focus on the “housing bubble” bursting instead of dwelling on the 55 percent gains home prices have made since 2000. They’ve even discussed a possible recession.
CNN reporter Soledad O’Brien described her economic view on the Dec. 5 “American Morning,” that “how Americans are feeling, frankly… is scared. I mean, the war goes on, I look at my heating bill. It may be triple what it was last year.”
Of course Americans are scared. The media have been telling them to be scared. In the Dec. 4 This Week, columnist George Will said there were two reasons for bad media coverage including media insistence “All economic news is bad.”
That certainly was the mindset in 2005. The year was filled with numerous examples of media misstatements, wildly incorrect predictions and good economic news either downplayed or ignored. Journalists cried over every new bit of money news and warned of disaster at every turn.
In the real world, unemployment is a mere 5 percent. Gross domestic product is growing by a whopping 4.3 percent. Inflation is low. We have had 30 straight months of positive job growth.
Now take a look at one of the biggest news stories of 2005: Hurricane Katrina and its sister storm Rita. The hurricanes that devastated the Gulf clearly had a powerful economic effect, but that doesn’t mean they were reported rationally. At the time of Rita’s landfall, CNN showed more than 20 mentions of the possibility of $4 or $5 gas from at least 12 different reporters in just five days. The average price never exceeded $3.06. What’s a 63-percent exaggeration among friends? Just another familiar cry from the gang at CNN.
Joel Havemann of the Los Angeles Times took a similar doom-and-gloom approach with a Sept. 3 piece, saying Katrina would “probably end the economy’s 27-month streak of job gains.” He added “Katrina’s effects — not only on the Gulf Coast regions where it struck but also on the national economy via higher energy prices and disrupted ports — could result in the loss of as many as 500,000 jobs in September, analysts said.”
Sure, Mr. Havemann added “analysts said,” but that isn’t a get-out-of-jail free card. The prediction he wrote about was soon downgraded, though Mr. Havemann didn’t say so when he discussed it about a month later. In his Oct. 8 article, he said: “The Labor Department reported Friday that the economy lost a net 35,000 jobs in September, far fewer than the widely predicted decline of 130,000 to 200,000.” When the final statistics were in, the economy actually gained jobs in September.
It wasn’t just the big stories. Economic and business issues were poorly reported across the board. Inflation, consumer confidence, housing and taxes were substantially misreported.
Now the latest example of this crying wolf involves the Consumer Price Index, a measure of things we all buy daily. It comes out monthly and is used to track the cost of living.
On Oct. 14, CNN’s Lou Dobbs — the network’s own Howard Beale — discussed the September CPI report, warning: “Tonight middle-class Americans and those who aspire to the middle class face a growing cost-of-living crisis. Inflation last month up at the fastest pace in 25 years, while wages are falling.”
But when the Labor Department released numbers last week showing inflation declined by the greatest percentage in 56 years, Lou was nowhere to be found.
Now you know the true origin of the word “de-pressed” — to have the media lament news about the economy. Only this isn’t just the media version of the little boy who cried wolf. This is an ongoing, consistent attempt to depict a successful economy as a failure. It’s time we put away our hankies, got mad and demanded the media do a better job.
Dan Gainor is the Boone Pickens Free Market Fellow of the Media Research Center and diredtor of the Center’s ‘s Free Market Project.