Thursday, June 19, 2008

Why We’re Gloomier than the Economy

That was the question posed in the headline of a Washington Post Analysis on page A-1, on June 18, 2008, ( The Washington Post and the rest of main stream media need go no further than a mirror to get the answer to their question.

Virtually, every day for the last six months has featured an above-the-fold, front-page stories with headlines that include words or phrases like “recession”, “slumping economy”, “inflation fears”, “sub-prime mortgage crisis”, “housing bust”, “oil at all time high”, “jobless rate up”, and “job creation down”. And, oh, did I mention “recession”! When job creation exceeds expectations, or reports indicate the housing slump may be over, those stories are relegated to the bowels of the Business Section.

A recession is defined as: A period of general economic decline; specifically, a decline in Gross Domestic Product for two or more consecutive quarters. When the media started using the term “recession” 6-8 months ago, we had not yet experienced two consecutive quarters of declining GDP. But, in typical fashion, it has become a self-fulfilled prophecy.

What mainstream media fails to recognize is their enormous power to affect public sentiment and the social responsibility that goes with that power. I am not suggesting that the media ignore real economic news or portray the economy through rose colored glasses. But, they should give positive news equal footing and avoid their propensity for prognostication.

Every time the front page of the newspaper predicts a higher price for oil or gasoline at the pump, they create an expectation. It is like sending an engraved invitation to raise the price to the predicted level. Nobody is surprised, because after all, they were told it would be so.

The Post analysis correctly points out that gasoline costs affect everyone irrespective of economic or social order and those impacts are felt daily. However, I believe that part of America’s fixation on gasoline prices is a direct result of gas stations posting their prices in 18 inches letters that can be read blocks away from the stations. Most prices for consumer goods are much less conspicuous. In fact, it often takes higher than fourth grade math to figure out the unit cost of many items we buy on a daily basis. Imagine if grocery stores posted the price of milk just like gas stations post gasoline prices. Instead of the weekly radio “Pain in the Gas” price survey, we would have to suffer the “Pain in the Jugs” report on prices for skim (regular), 2% low fat (premium) and whole milk (super premium)!

I can only hope that the mainstream media begins to feel the effects of their own public opinion manipulation, and that as home and auto sales decline, so will the advertising dollars from those industries that support the media. I look forward to hearing about the “Pain in the Ads” survey!

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