Bad News Bears - Economic Fear-Mongering by the Media

The U.S. economy is still suffering, and some serious strategic and structural changes are needed in business and government to address the underlying causes of the crisis.

But in the spirit of FDR's comment about fearing fear itself, I believe the U.S. media is making this crisis far worse than it needs to be. As the headlines and newscasters scream the latest bad news -- job losses, stock market plunges, poor corporate results -- investors' jitters increase. They shun the markets, which dries up the capital available to companies, which reduces their operations, which leads to layoffs, which leads to foreclosures and falling consumer spending, which drags down the banks, which . . . you get the picture. It becomes a self-perpetuating negative cycle, which our national leadership is struggling to turn around by pumping bailout money into the damaged economic sectors.

But it seems to me that this cycle of doubt itself, rather than fundamentals of the economy, is partly to blame for the dizzying decline in the market averages and the associated fallout. The media reports the economic news that fuels this downward cycle. And I believe there is more here than just the media acting as the bearer of genuine bad news.

So let's take a hard look at what is going on in the media today and how that affects news reporting.

As we know, the traditional media is highly threatened now, because its historic business model, based on advertising, has been blown to smithereens by the Internet. Few newspapers and not many radio or television operations have successfully made the transition to the Internet era. We have a front-row seat for this sorry spectacle here in the Bay Area, as San Francisco's only daily newspaper, the Chronicle, dies a slow death. The Rocky Mountain News ceased publication in February, and both the LA Times and The New York Times are wobbling.

As the classic media fights for its life, publishers, editors and reporters grasp at hyperbolic subjects and viewpoints they hope will command attention, in a struggle to retain readership and viewership and to continue to attract advertising dollars. Bad news has long been known to draw more attention than positive stories, so it's not surprising that a concentration on bad economic news would dominate the media right now.

But there are degrees in the extent of negative focus. At the moment, editorial decisions are being made in favor of covering bad economic news at the expense of other important topics, concentrating media coverage obsessively on negative stories about the economy.

For example, last month a TV editor scrapped a story for which I was to be interviewed on some important good news -- a potential U.S.-Russian deal to work together on stopping Iran's nuclear program and to cancel the missile defense plan for Eastern Europe -- to instead report on the latest U.S. government support for the insurance company AIG. Those micro-level editorial decisions being made throughout the media are what in the aggregate are producing the unitary focus on economic bad news.

No one, least of all I, would argue for media happy talk about the economic crisis. The real underlying factors behind the crisis -- the long neglect of a prudent energy policy, or the need to rethink the criteria for extending credit to homebuyers, for example -- need to be reported in full, and the media should help to surface new directions and policies to put our economy on a sustainable growth path.

But this constant yammer of the latest declines on Wall Street and how Joe Public feels about the disaster surrounding us is simple fear-mongering, which leads to bearish behavior by investors and shoppers. I am afraid that the media's own perceived interests, at this time when their backs are against the wall, may not be serving public needs as they once did when they could be counted on for more fair and balanced coverage.

This points up the importance of reading, watching and listening critically to what the media is currently reporting, discounting the crisis tone and looking more at the fundamentals of the economy. As President Obama said in his inaugural address, "Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished."

We are experiencing a crisis of confidence, and I fear that the media are fanning the flames in an effort to save their own skins. The ironic thing is that media perceptions of their own interests may be shortsighted. The economic downturn may finally demolish many media companies, whose business fundamentals are weak, along with all the rest of the individuals, companies and other organizations that are being so negatively affected.

Comments

[OhgReaTone]

Our attitude about the economy is as important as any stimulus package coming out of Washington. The media finds itself desperate for ratings, and pessimism sells. ..........­........

http://thefiresidepost.com/2009/04/07/does-our-economi-attitude-matter-a-hole-in-the-bucket/

[lagumbo]

This the reason why newspaper media is shutting down and cable media is not view with any kind of seriousiness. The journalist, or so call journalist don't even research anything they print or report. They take their talking points from the REPUBLICANS[ TALIBAN PARTY] and go with it. This is because they are all so upset with our first black president. The refuse to accept the election of PRESIDENT OBAMA. They will do anything to try and discredit him, on all phases. They want him to fail, so they will keep this up for his entire first term. The media thinks in four years they can keep this up ,so a republican can get elect in four years. PRESIDENT OBAMA HAS DONE MORE IN 75 DAYS than Bush did in eight years, but the media will continue their on slaught to diss our President. They media is dead and it deserves to be.

[truthyguy]

The people in the media are not interested in the story as much as they are in promoting their own careers. Just look at the headlines on HuffPo. Most stories attempt to find something controversial or negative, no matter how insignificant it is in proportion to the overall positive nature of an event. For example, Obama has this past week smoothed over relationships with leaders of other countries who (thanks to Bush) hated the U.S., made progress on economic plans to reverse the world economic meltdown (which exists thanks to the deregulation policies of Bush) and obtain commitments to assist in the war in Afghanistan. But what are the headlines in today's stories? "NATO Refuses To Send Combat Troops" "Fashion Faceoff" etc. If a so-called reporter can report something that is positive and without controversy OR report something that is meaningless in the overall scheme of things or out of proportion to the entire story - but by controversial, promote their career and maybe be interviewed as being the person who "broke the (non-story) story", then guess what happens. Someone should remind these people that THE NEWS IS NOT THAT THEY ARE REPORTING IT.

[dobberdoss]

"It becomes a self-perpetuating negative cycle"

When is the news EVER positive? What you are advocating is the media to bury their collective heads in the sand and feed the US public MORE 'spin" like we had with Bush!

The public are not at fault here other than they were sold a dream, an "American Dream" that was unattainable for most. Now did that so-called 'positive' dream or outlook based on excessive consuming help us as a nation? NO? that's why we are here, I'm happy with the media attention so far on this, better than the crap we got feed on Iraq and terrorism. Atleast an American can just walk out their front door (if they still have a home) and gauge it for themselves based on what the media are saying.

[blueflag]

Oh, if they just didn't talk about it,...it wouldn't be happening. Hmmm. For an entire week, the media has been spinning bad news as "less bad" or "expected.­" Not exactly transparent or negative.

[vesaversa1]

The big news papers have met their demise to the internet and so will these fearmongering news networks and cable channels if they don't stop making the news and start reporting it .

[Helzapoppin]

The fact that markets rely so heavily on confidence makes them intrinsically "con games" by definition.

We are not suffering a crisis of confidence. We are suffering a loss of falsely elevated value.

[OtayPanky]

Blogger: ...in the spirit of FDR's comment about fearing fear itself, I believe the U.S. media is making this crisis far worse than it needs to be.

===

Oh please. That was the president doing what he had to do in his role as comforter-in-chief. What mobilized us as a nation was the fear that we'd end up under the rule of Hirohito and Hitler.

Fear is the natural, evolutionary response to threat. It leads to a fight or flight reaction, for individuals and for countries. And if you're not afraid right now based on the economic fundamentals described by many here, then you're living under a different rock than the rest of us.

The media is no more manufacturing fear here than they were after 911. Actually, they're only following the lead of both Barack and Hillary, who, during the long primary season highlighted the terrible human toll of our prolifigacy - and that was BEFORE last summers's great slide.

Even though the media didn't catch the crisis beforehand (who did?), they've generally done a pretty good job after the fact explaining it in terms that average Americans can understand. And that goes for ALL forms of media - print, radio, network, cable, internet.

The result? After a long dark night of hypnotic sleep, the electorate is energized, aware and willing to vast and needed changes to our financial markets. I can only hope that Geithner, Summers et all have the stones needed to enact them.

[dakotawoman]

Crap. The media focuses obsessively on the "scoop" or the drama, all for ratings. And they end up repeating themselves and each other. Every repetition of the same piece of news sounds like "new" news and so there's exponential build up of the "de jour" sentiment of the day: fear, outrage, patriotism, comedy, rage. And that's not even factoring in the "telephone game" and/or urban myth factor skewing details. And don't even start me on the outright lies and misrepresentations. . .

Wall Street is artifically creating wealth by playing with money and assets. The media creates and maintains artificial "news" by focusing or ignoring what their corporate bosses tell 'em to. It's a dysfunctional marriage made on Madison Avenue hell.

Real journalism died years ago. It's al "info-tainment" now.

And, besides, most people pay attention to only those media outlets they favor already: the 'net, or Faux News or CBS televsion or the New York Times -- those that tell them what they already think.

[texastrixie]

If anything, the MSM isn't reporting enough on what is happening to this country! I am semi-retired (waiting out cataract operations), and have on the news all the time. Even then, I only heard about the tent cities in CA about a week ago, even though they have been building for months. Also, I just heard yesterday that Stockton CA's free food pantry is EMPTY. They don't get donations often enough, or in large enough quantities, to keep anything on the shelves.

So what about that is hype? For many people who still have a job and have not seen their hours cut, there is no recession. It is precisely that the news media has not been informative enough about the current situation that makes many Americans begrudge the stimulus package. They are doing alright, and no one they know personally is broke (or admitting it), so why should we help the economy?

Personally, a little discretion on the part of all Americans wouldn't be such a bad thing. Yes, we need to buy things to keep the economy growing, but the prospect of losing their jobs has encouraged many people to begin to creat an "emergency fund," just in case.

[MyGuyO]

Here is a tip. Don't believe a word they say.

[jane gutowski]

i wish you had said that before the media elected obama president.

[dakotawoman]

Wasn't the media. He got elected IN SPITE of the media. If this nation had gone the way most of the news outlets seemed to point, it would have been "more of the same" hell.

[slowtono]

The people are aware! The media has led the misconstruction. The negative Bush bash is now followed by the Obama isn't life rosy commentary. The facts are in, Americans want their money back, their cushy real estate jobs back their big cars back and their we're AIG Citi Bank richies too lives back. It's simple the media can't sell this deal, and if the government can't deliver we just move on to another set of leaders. The medias problem is the lack of truth and question. They have become the voice of self desirer not the voice of the free nation.

[dakotawoman]

You see the news as proclaiming "rosiness"? What news you watching? If I recall correctly (and I do) old Dubya got all kinds of rose glasses treatment over lies, lies, lies, lies, mistakes, more lies and stupidities that would have gotten the average guy fired from a burger line job. Come on. Obama is succeeding DESPITE the new's belated attempt to be the gate-keepers. Too late -- freedom got out.

Remember,
"You can fool all the people some of the time, some of the people all of the time. . . ."

[userw014]

Blaming the media for negative news about the current financial crisis is wrongheaded. Given that there isn't any good news about the economy, this would leave no news (or at least chatter) about the current situation.

Sure, people have lost confidence in the economy - but their faith in good government and fair dealing from the captains of finance and industry has been BETRAYED.

Among the things government promises to do is uphold the laws and to (insofar as is possible with law) provide for fairness and justice. It was fair that the captains (and other officers) of finance and industry be rewarded for taking on the burdens and risks of directing large enterprises.

However, government chose to ignore the law and to even to explicitly make legal unfair practices. And the captains of industry are crying that now that the burdens they agreed to bear and the risks they agreed to chance have turned against them.

Workers of all sorts are loosing their jobs, their homes, their health care and are being forced by the government to bear even more of a burden - while the captains (and officers) walk away, still with fat rewards.

There isn't good news these days and to ignore that there isn't - or worse, pretend that there is - is another BETRAYAL by the media.

Unless our society is in such bad shape that the best that can be done is put it into terminal hospice care and offer it pain killers.

[henryberry]

The media isn't changing its modus operandi in the present financial crisis in order to survive. it is simply demonstrating as it has been for the past several years what is has been doing which is leading to the demise of much of it. Most of the media has simply lost the knowledge of how to simply report the news. It looks for emotionally-charged angles and subjects, sensational ones as much as possible. If it can't find a sensational angle, it'll often sensationalize a story. When it can't find anything sensational or otherwise emotionally charged such as cuteness or bathos to give its stupefied audience a momentary shot of artificial liveliness, it is content to be a lapdog for local or regional vested interests. I call practially all of the media in Connecticut (where I live) more or less a version of the Chamber of Commerce. Most of the news comes from news releases or "official spokespersons" of different businesses or government agencies or politicians. As critics have said, most of the news has become a type of entertainment. And as video games, movies, and shopping offer better entertainment than news, the media inevitably withers. It seems to be a vicious cycle now. The worse the news media is, the worse it gets. The worse it gets, the less are serious, capable people drawn to the field; and the less the public is willing to support it.

[MAUIMONKEY]

Awesome, dude, just awesome. I look forward to reading more of your posts.

[noaxe397]

This columnist reminds me of the comment by McCain economic adviser Phil Gramm during the 08 presedential race when he, Gramm, said Americans were a bunch of whiners.
This blame-the-media stuff is so 90s. The term "liberal media" is anachronistic, what with as many conservative blogs as there are liberal ones, and talk radio being 90% conservative and Fox News with twice the ratings of CNN or MSNBC. It seems to me that any spin put on any news event would have a greater chance of being conservative than liberal.

And, BTW, the offer by Russia to agree to no missle defense in Europe that the writer refers to was well covered by the media, even at the height of the AIG frenzy.

[OneLiberalLady]

If the author is correct the media seem to be shooting themselves in the foot. Her logic is that the constant negative reporting of the economy actually drags it down further. A slumping economy depresses advertising, thus dragging down newspaper revenue. I think she may have a point!