Dave’s Strange and Unusual World

May 6, 2008

The Sneak’onomics of the Media

Filed under: Knee-Slappingly Funny — dangrdave @ 5:15 pm

So, I’ve been thinking a lot about all of the negative reports in the media, which continually tell us that we’re in the midst of a recession and that all is doom and gloom. My thinking led me to wonder whether it is actually possible to cause an economic downturn based upon nothing more than mass media pessimism that is intended to sway voters into the open arms of the Democrats in the upcoming elections.

Fox News and American Thinker published some interesting stories regarding the media’s apparently biased coverage of the economy. People, I believe, can many times be motivated more by the sentiments of a reporter or a politician than by the actual data being reported. So that I’m not accused of only getting my information from conservative media, I will admit for the first time that I listen to NPR (somebody get Thomas an oxygen mask) and I hear the negative economic coverage quite often.

Anyway, the GDP grew during the first quarter of this year, but the media coverage calls it a “pathetic” growth or a “snail-paced” growth or some other descriptive term. In my mind, growth is growth and, as such, it should be reported without negative descriptors. Sure, the economy has gone through some pretty rough stuff lately, including the home mortgage mess and rising fuel and food costs, but the fact that we keep “chugging” along shows the resiliency and strength of the U.S. economy.

I wonder if the negative economic data that we have been hearing for a very long time now is not part of a larger attempt to influence people’s political perceptions. We know that we are in an election year and we also know that we are not in a recession, so this causes me to wonder who really benefits by the negative reporting? It’s pretty much a fact that most media outlets lean to the left in their coverage.

Also, there is the idea that many people bail out of the markets right before an upswing, which ensures a loss. Fearing continued losses, people start selling on the cheap, which is right where the savvy buyers come in. I wonder if there are not forces at work providing the public with biased information or misinformation in order to buy things on the cheap and profit from the ignorance of the public. My recommendation is to start buying when you hear that the sky is falling (note: this market tip is provided as a courtesy).

I’m no economic expert, but I would wager that there are forces, either financial, political, or some combination of the two, working to make you believe that we are worse off than we really are. Here’s an interesting final thought: Our growth was .6 percent last quarter despite these bad media reports; what might our growth have been if our media had simply reported growth as growth instead of adding negative commentary to its reports?

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4 Comments »

  1. Very well written, Dave. Kind of reminds me of “A Good Year.” 🙂 The psychology of the power of suggestion can be a scary thing, when the majority buys into it.

    Comment by Amber — May 6, 2008 @ 9:04 pm

  2. Wow, you are officially a conspiracy theorist. I don’t have to look to the media to know the economy is in really bad shape right now. I just look at my wallet, my 401k, the stock market, the ridiculously high number on the gas pump and most importantly the declining value of the American dollar.

    Here’s an interesting final thought: The economy has continued to decline for several months while Faux News and republicans claim it’s doing fine; what might the economy be like today if they had focused that energy on pressuring Congress to actually do something about it instead of sticking their fingers in their ears and screaming “I can’t hear you”?

    Comment by Thomas — May 7, 2008 @ 2:13 pm

  3. Thomas, my recommendation would be to look beyond what you may see. The stock market has almost made back all of the gains that it gave up in the first few months of the year but, being that this is an election year, you won’t really hear this without looking at the data for yourself. This means that if your 401K is down, you should look closely at what you are invested in and make some changes. Personally, I kept putting as much money as I could into my 401K while accepting my losses because I knew that when things turned around I would be money ahead. Personally, my 401K is about to crest where it was in December and throughout the past 4 or 5 months, I’ve bought on the cheap.

    Let’s see, in terms of the high gas prices, I believe you that it is not pleasant and is certainly no help to the economy, but the numbers in and of themselves don’t indicate that the economy per se is in bad shape. The numbers indicate that there is global competition for scarce resources and Americans need to make some changes in their consumption. Am I happy about this? No, but I don’t think it’s the economy’s fault. I think that high prices are an economic signal being sent to consumers which tells them to change their habits. For most things, you don’t need legislation, Thomas; the market takes care of itself. As prices rise, larger vehicles will become a thing of the past, people will begin carpooling and using public transportation and a new balance will be reached. And, we have failed to invest in and encourage good alternative energies, of which bio-fuels are not the answer.

    And, Thomas, the decline in the dollar isn’t necessarily a bad thing, except in the case of the price of oil, which is valued in dollars. Economic theory states that as the currency falls, imports will fall because foreign products become dearer and exports should increase as our goods become cheaper. Eventually, the dollar should regain strength. In the meantime, however, the dollar cannot fall beyond a certain point without putting the whole world into a giant depression and, rest assured, no one will allow that to happen.

    And, Thomas, the economy has not been declining over the past several months; just look at the economic data. IRS rebate checks are being issued right now, which doesn’t sound like anyone is ignoring anything. The economy is on the upswing, the Fed rate cuts are working through the system and rebate checks are on the way.

    Comment by dangrdave — May 7, 2008 @ 5:57 pm

  4. Look beyond what I may see? Sorry, I choose to look at exactly what I see rather than pretending nothing is wrong. The Dow is down 3% from where it was in January. The Nasdaq is down over 7.5%. S&P 500 is down over 2.5%. When we’re well into the 2nd quarter of 2008 and stocks are down that much YTD I’m not sure how you can spin that as being good. Asd for the 401k, about 75% of my 401k is made up of the most conservative investments possible. Given that, I’ve still lost 2.5% since January 1st. I shudder to imagine how much (if any) money would be left in it if I had not made such conservative investments. If you’re brave enough to risk your retirement with this bad economy then I wish you the best, but I’m not willing to gamble with my future like that.

    With gas prices too many people fail to connect all the dots. Paying higher prices at the pump affects individuals because the extra money spent on gas is money that’s not being spent elsewhere that could stimulate the economy. The bigger problem is gas prices affect every aspect of our world. It drives up prices on almost every commodity because it’s required either in the production and/or distribution. Food prices go up because it costs more for the machinery that processes the food, more to deliver it to distributors, more to deliver it to the stores where we buy it. We’re already spending less money because of the gas we have to buy for ourselves, and then in addition the things we need to buy are costing more and more on top of that. It’s called a spiral effect. I would agree that we have failed to invest in and encourage good alternative energies, but saying bio-fuels are not the answer makes no sense. They may not be the ultimate answer, but they’re certainly better than no alternative.

    The decline of the dollar is bad in a lot of ways, most namely inflation and also in the price of oil. Increasing American exports because our money is worth nothing is not something to be proud of. Decreasing imports when our economy is heading down and we have less money to spend on higher-priced American goods is not a good thing. Contrary to what most republicans want to believe, our economy is not the only one in the world. I’m reading a book right now that I will likely recommend to you when I’m finished. It talks about the “rise of the rest”, referring to China and other countries whose economies have risen in recent history to the point that America is no longer the economic superpower it once was. Until we accept that fact and adjust to the “post-American world” as the author calls it, we will have some problems operating in a world that no longer sees us as a superpower (outside of our military).

    I’m not sure which economic data you want me to look at, but from everything I’ve seen (including the numbers in this comment) our economy is indeed heading down. The government wasted over $40 million just sending mailings to everyone who would be getting a rebate and is betting on that money being spent to stimulate the economy. Obviously $40 million could have been spent a lot smarter than that (like being put towards the record deficit that Bush has accumulated) and rebate checks (which is a lot more than $40 million wasted) will not benefit anyone other than oil companies (see ridiculous gas prices) and credit card companies as people pay off debt so they have room to charge gas next month. The rate cuts only stimulate inflation and the devaluation of the dollar.

    I would love to be wrong and for you to be correct about the economy getting better, even if only for selfish personal investment reasons, but hard numbers and reality show me a completely different picture that scares me (and hits my wallet) more and more each day.

    Comment by Thomas — May 8, 2008 @ 9:22 pm


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