Thursday, May 1, 2008

The media can shape the economic mood

The way people perceive the news is often determined by how the news is reported. A perfect example of this was presented to me today as I was perusing the media outlets at my fingertips here on the Internet.

First I went to and read one story about how the economy is bruised and battered, and "growing at just a 0.6 percent pace as housing and credit problems forced people and businesses alike to hunker down."

However, these statistics "did not meet what economists consider the classic definition of a recession, which is a retraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if modestly."

Then they reiterated that there was hope with a quote:

"The economy is weak but not collapsing," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group. "A recession can't be ruled out, although the stars are not lined up at this point to definitively say one way or the other."

Not the best economic report ever, but it's still holding above water.

On the other hand, one clicks on over to the, and one gets a different picture from the same economic report, as the report there starts this way:

"Consumer spending barely budged in March, the fourth lackluster month as Americans grappled with higher food and energy prices amid an economic downturn.

"Spending grew 0.1 percent in March when adjusted for inflation, after staying flat in February and recording a slight rise in January, the Commerce Department reported Thursday. At the end of last year, spending actually declined.

Then, to reiterate how bad the economy is, the Times reporter adds in a quote: "“What you’ve got here is a very dramatic consumer slowdown,” said Ian Shepherdson, chief United States economist at High Frequency Economics in London. “It’s much more severe than anything we saw in 2001,” he added, referring to the last recession.

Thus, while the post made me feel slightly hopeful that the economy is moving in an upward direction, barely, but still going in the right direction, the NYTimes article makes me feel grim about the economy, that there is little hope that we will avoid a recession.

Not only that, but the Brieibart article mentions that the economic figures do not meet the criteria for a recession in the first few paragraphs, while the word recession is not even mentioned in the NYTimes article until paragraph 13. Thus, the later reporter certainly didn't want you to get the idea that we are not in a recession, if you by chance didn't already think of it on your own.

Are we in a recession? Are we going to go into a recession? I don't know. I'm no economic expert. However, the reporter of the Times article wanted to make sure you did not get a glimmer of hope in reading his article, and the author of the Briebart article did.

Just another example of how a story is written can effect the mood of the person doing the reading, and perhaps even the confidence in the economy. If people aren't confident in the economy, they will hunker down and stop spending. When that happens, a recession is bound to happen.

Thus the media can effect the mood of the country.

Which is what liberals who hate George Bush and want to see a democrat win the office of the President in November want to happen. Conservatives want the opposite. Good journalists try to simply report the news, and how the news is perceived is representative of reality.

Now is this shoddy reporting by both media outlets? Was this done intentionally? Again I have no idea. More than likely, it was just human nature to spin the news so it represents that hidden agenda the reporter has pent up deep inside his head. Or perhaps its the respective media outlet catering to its audience.

All reporters are guilty of it to a certain extent I am sure. And this is a perfect example of why we need to make sure we get all our news from more than one source. Unfortunately, however, most of us do not -- we tend to get our news from the sources we agree with.

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