Are we going to die from it?

I admit, that for a while I doubted that the recession was real. There is no point denying it, since I wrote about my doubts in this very blog. I thought that the media was feeding us stories about recession in order to make sure that a Democrat wins the upcoming presidential election. Well, the recession is very real, although I still believe that the media has a role in making it bigger than it actually would have been. A lot of what is going on is psychological, especially on the important level of consumer spending. Consider than in Michigan, one of the states most severely impacted by the recession, the unemployment is at 10 percent. That is about 4 percent more than the pre-recession level. However, the change in consumer spending is several orders of magnitude greater than the change in unemployment. A friend of mine told me that her business fell by 50 percent - this in relatively affluent Ann Arbor, which is faring much better than the rest of the state; in other places the predicament of small businesses is dire.

Since 95 percent of Michiganders did not see a change in their employment status, what accounts for this profound pullback? In large part, I think, this is fear, driven by the incessant barrage of bad news coming from the media. Having heard the phrase , "since the Great Depression" (as in: "The biggest drop in market capitalization since the Great Depression", "The worst holiday shopping season for retailers since the Great Depression", etc)  half a dozen times per day, an American consumer, like the groundhog, hides back in his lair, ensuring that winter will last longer than hoped. Not surprisingly, the fear of recession will make the recession worse.

Why do the media do that? Mostly it's because that's what the media is about: they cling to the idea that only bad news sells, so they'll whip it up for as long as they are able to get people's attention. If there are multiple ways to tell a story, and multiple angles from which to look at it - you can rest assured that the most frightening angle will be presented to the readers or viewers. I also suspect that the election plays some role still: having succeeded in getting Obama elected president, the jubilant media would like to ensure that any good news about the economy does not start coming while Bush is still in office, so that his "legacy" remains as dark as possible. After all, it is bad enough that the war in Iraq appears to be pointing toward success, so the public's attention must be driven away from that, and toward the bleak state of the economy. It will really be interesting to watch whether the tone in the media starts shifting toward more optimism in the later half of January... I do hope that it does, and not because it will prove my point, but primarily because it may help us heal. The media's role so far has been akin to a relative from hell visiting you while you are sick with a bad flu, and telling you stories about avian influenza, and how many people die of flu each year, and the complications you may end up with, and how you had infected many of your coworkers, so now everybody hates your guts, etc. Would it be nice if they told us, for a change, that everything will be alright, and that we've overcome much worse in the past? Is it too much to ask?

Fearmongers

How long we have been subjected to the incessant talk about recession? A year? More? I have this unfortunate habit of listening to NPR in the morning, while eating breakfast, and then at dinnertime, so I have had plenty of exposure to the not-so-subtle message that we should all be very afraid. They have been laying it pretty thick, really. They've brought in economists, who confirmed time and again that things are so bad, they hadn't seen it that bad in their lifetimes... If it's not a recession yet, it's for sure just around the corner. Heck, they've been feeding us stories about the Great Depression! (So it's not about Recession anymore... It's the Great Depression we're staring in the face!)

What's with this fear-mongering? I know that the US economy is not doing great at the moment, and that the housing crisis is very real. But why do I hear glee in the voices of NPR reporters emphasizing the negative? Whenever there is good economic news, it's always followed by "but.." or "however..." It's approching parody, like the recent headline that read: "Gas prices are falling and why this not such a good thing." Sweet Jesus! We've been talked to ad nauseam about how the high price of gas is straining the economy, with SUVs clogging the dealearships, carmakers laying off workers, food prices going up, etc, etc. Now, when the oil prices seem to be showing a downward trend, we ought to be worrying that it is not a good thing after all! What the bloody hell?

The naive explanation is that "good news is no news" and that the media simply has to feed on bad news, and if there isn't any, it'll create it. However, I think that there is a deeper layer to it, and his name is Barack Obama. The media is so invested in having him win the presidency that it uses all tricks at its disposal to promote his candidacy, short of telling us straight to vote for him. I'm certain the talk of recession is a part of it. The more we're scared, the more we will be willing to embrace the "change" Obama is promising. There is very little doubt in my mind that, should he win, the word "recession" will quickly disappear from the media's coverage of the economy.

There is a precedent: remember the 1992 election, when George Bush the Elder was defeated with "It's the ecomomy, stupid!"? Back then the media whipped up the bad news about the economy, to almost immediately change its tune after Clinton's victory. It's as if the election magically cured whatever was ailing the US stock market. It's the same screenbook, different actors.

However, I do wonder if they are not going to overplay their hand this time. I can't be the only one who's noticing the pattern here. And there is also a different pattern that manifested itself in past elections: the media thinks that the American electorate is stupid and can be easily manipulated. Yet time and again they've been proven wrong on that score. I'm fairly positive it will repeat itself as well. Unlike the media, I have quite a bit of trust in the voting public.

Quote of the week

A commenter Rorshach under a post in Protein Wisdom on the death of Oriana Fallaci:

"Small blurbs in Reuters and AP about her. That’s all they have to say on the subject, of course. When Noam fucking Chomsky dies, though, they’ll be writing about him 24 hours a day for three weeks."

Indeed.