Sanity Injection

Injecting a dose of sanity into your day’s news and current events.

Do the media *want* the economy to go to hell?

Posted by sanityinjection on June 30, 2008

If not, why do they keep posting inflammatory stories like CNBC’s latest news video, “Worst June Since 1930”? Yes, I’m sure there is some economic indicator that is worse than any time since June 1930, but the fact is that technically the US is not even in a recession yet, much less a depression. In fact, economists continue to express suprise that the economy has been relatively stable despite the very serious pressures on it.

Do these dimwits not understand that the economy is very susceptible to speculation? The more they sensationalize the extent of the economic problem, the worse they will make it, because people will believe they are right and act accordingly.

How about more stories like this one from Reuters posted today – “The U.S. economy continues to bump along at a slow level of growth but has probably not fallen into recession…the United States is managing to stay in the positive growth column.”

I am not for one moment suggesting that anyone engage in inaccurate reporting or trivialize the seriousness of the economic situation. It is entirely possible that we may go into recession given the inflationary pressure of oil prices. (It’s actually amazing that we haven’t seen widespread inflation yet – maybe because companies know only too well what will happen to the economy if they try to pass along all the extra costs to consumers and are doing their best to absorb the oil shocks for as long as they can. See if they ever get credit for that bit of enlightened self-interest.)

And yet, the media act as if a recession is the harbinger of Armageddon itself. We have had a few recessions in the last 60 years or so. None have done permanent damage to the economy, and after each we came back stronger than ever.

So ladies and gentlemen of the Fourth Estate, it is time to do what you hate most of all: accept some responsibility for the role you play in affecting the course of events, and stop spinning every economic indicator as if it means the sky is falling. You are not going to get any medals for being prophets if we do end up in recession, so stop trying to predict it over and over again, lest your predictions come true, and just report what is actually happening, whether good or ill.

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3 Responses to “Do the media *want* the economy to go to hell?”

  1. Links said

    “In fact, economists continue to express suprise that the economy has been relatively stable despite the very serious pressures on it.”

    It’s called cognitive dissonance. Either the data is bad, cooked or falsified, we are in new territory AND OR everything is occuring in slow motion. As for the American people, my family and the people I deal with they believe this is a recession. They feel like they are in one as they are afraid of losing their jobs and finding work, full time work not part time high school student jobs. People who held on after the dot.com and kept their jobs are now afraid they will lose their place in society as their laboer is highly over priced because of global market arbitrage. If you get kicked into the gutter and are a working stiff it will be very difficult to get out, especially now that the credit spigot is off.

    I said it years ago and I will say it again. You better get on top of the dog pile very quickly otherwise you will probably be living near poverty. The America that knew prosperity is dead because of Wall Street, The Fed, Big Business and Politics. It may take a few years but it is obvious to anyone who has been paying attention. You can’t have market arbitrage with wages in other countries that are a fraction of our markets without a consequence. Though the credit boom allowed Americans to feel wealthy the responsible Americans saw no benefit and actually have had their burdens increased through inflation and massive price hikes like medical, housing and now food and oil. This has yet to even really begin. Banks are not even foreclosing on people who have stoped paying several months into delinquency as they don’t want their balance sheet damaged any more than it is.

    Basically we have major banks that are insolvent. The American people even paid to buy a Wall Street firm for another through the Fed. I’m not sure what is next but wages won’t catch up and will actually go down as more people are forced into the market who can no longer live off the credit boom.

    But if you are a business owner you must think the world is great. You have a bunch of highly qualified people running around wanting to work dirt cheap. This is a great time for the wealthy as they continue to destroy the ability for labor to gain any ground. In fact the expansion of credit and the free market dogma (market arbitrage) go hand in hand. It allowed inflation to be kept in check while there was massive creation of wealth for the super rich.

    And one more fun fact. This is the first of the largest consumer led global recessions we have ever faced. We are in new territory as well. I sure hope those people in China and India get a big wage increase, otherwise we Americans are going to have to take a big pay cut. Unless of course we can find a way to expand credit yet again.

    As for big business that is global and Wall Street, who cares. Wall Street, and especially big business could do well even while the American people are nearly impoverished. After all, cheap labor just means cheaper items for everyone, right?

  2. rideronthet said

    Economic performance in the short run is always 90% mental, but in the long run we must look at fundamentals, and America’s economic fundamentals are today 100% horrible. Read a short essay called “Gold and Economic Freedom” by Alan Greenspan, for a little insight into what’s wrong with the economy today.

    The Federal Reserve is anti-American. Money is money, and paper is paper. Our economic outlook sucks because the U.S. currency is no longer as good as gold.

    I would like to see the economy go to hell, if only because it is inevitable anyway, and the sooner, the better. Then free market advocates who have long predicted the demise of American socialism might get some air time. I think the media has different reasons than mine–they probably want to make our economic situation just scary enough to convince the people they need more “regulations” (exactly the sort of regulations that caused this mess in the first place). Do not trust the corporate media.

  3. sanityinjection said

    Wow, I don’t even know where to start…Frankly sir, you frighten me. You would happily see our country descend into chaos, economic ruin and destruction just to prove a philosophical point? I hope that you’re just blustering because you like the sound of your own voice.

    Your statement that “America’s economic fundamentals are today 100% horrible” is pure hyperbole; there are no facts to support this charge and you know it. In fact, as I write foreign capital is pouring back into the US because investors trust that in the long run, the US economy will be (as it has been for decades) more stable than that of any other nation.

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