December 22, 2005
Boo-Hoo Economics
By Dan
Gainor
The
Christmas shopping season culminated a strong year for the U.S.
economy. But instead of ringing out the old year and toasting
the economy’s 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 that
we’re in a recession. It’s no wonder almost half of
the American 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 view of the economy on the December
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. Why? Because the media have been telling them to be
scared. In the December 4 “This Week,” columnist George
Will said there were two reasons for bad media coverage including
the media’s insistence that “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 ever new bit of money news and warned of disaster at every
turn. In the real world, unemployment is at a mere 5.0 percent;
GDP growth is at a whopping 4.3 percent; inflation is low and
we’ve 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 impact, but that doesn’t
mean they were covered in a rational way. 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 September 3 piece, saying Katrina would “probably
end the economy's 27-month streak of job gains.” He added
that “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, Havemann added
“analysts said,” but that isn’t a get-out-of-jail
free card. The prediction he wrote about was soon downgraded,
though Havemann didn’t say so when he discussed it about
a month later. In his October 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.” Once 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 subject to substantial misreporting.
Now the latest example
of this crying wolf involves the Consumer Price Index, a measure
of the things we all buy in our daily lives. It’s comes
out each month and is used to track the cost of living. On October
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 that inflation had
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 and 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 a career journalist and The Boone Pickens Free Market
Fellow. He is also director of the Media Research Center’s
Free
Market Project.
