WSJ: Media Bears - Why 1/3 of Americans think we're in recession when the economy is booming.

Wall Street Journal ^ | August 19, 2005 | Editorial

[OESY]

The paradox of the year is why so many Americans tell pollsters they feel bad about an economy that's been so good, with solid job growth and corporate profits, rising wages and home prices, and a huge decline in the budget deficit. Perhaps one reason is because the media keep saying the economy stinks.

That's the conclusion of... the Media Research Center, which finds that so far this year 62% of the news stories on the Big Three TV networks have portrayed the U.S. economy in negative fashion. The "negative full length TV news stories on the economy outnumbered positive stories by an overwhelming ratio of 4 to 1," the MRC reports.

...[A] CBS Evening News story on July 22 said that the economy is "very tenuous. It could fall apart at any moment. One piece of bad news, one additional terrorist attack, one negative corporate earnings, and it goes right down again." Contrast that funeral dirge with what Federal Reserve Chairman Alan Greenspan told Congress that same day: "The outlook is one of sustained economic growth."...

Media coverage of President Bush's tax cuts has been particularly slanted. During the 2003 tax-cut debate, three of every four major TV network news stories were negative. The favorite criticisms were liberal echoes that it would bust the budget and favor the rich. Earlier this year, a news story on National Public Radio announced that "as everyone knows, the primary cause of the budget deficit was the Bush tax cuts." No word yet on whom NPR is crediting with this year's revenue surge of $262 billion. Robert Rubin?

Given all of this doom-and-gloom reporting, maybe the surprise is that Americans are nonetheless behaving with their typical optimism, buying goods and services, bidding up the stock market, and creating new businesses....

[ninenot]

I have it on videotape.

Now it's clear you're a troll.

[ninenot]

Atl 67 can't prove ONE of his statements.

Troll--and evidently under the age of 14.

[dalereed]

"The reason why 1/3 of the population thinks it is a recession is because of their decline in buying power"

Illegals and the underground cash wages, at least in construction, have just come back to where they were 25 years ago.

I am charging people less than I was paying forman 25 years ago and having to furnish $20k worth of tools and 50 years experience to be able to charge that.

If I didn't have a home and condo paid for and no debt of any sort I wouldn't be making it.

[RFT1]

In raw numbers, factory employment in the US peaked in the mid 90s, as a percentage yes it declined, but absolute numbers, factor employment untill the late 90s generally tracked with the economy at large.

[remember]

You might consider that Bush has adopted the FDR receipe of priming the economy with deficit government dollars.

That's not entirely accurate. Dubya's deficits more closely mirror LBJ's "Great Society". He's spending money like a drunken sailor on BOTH "guns and butter".

Not only that but he cut taxes in a time of war, a first in American history. The added effect of that can be seen in the following graph (whose numbers come from a just-released CBO analysis):

The actual numbers and sources can be found at http://home.att.net/~rdavis2/cbobud05.html. As can be seen, the deficit is projected to shrink below $100 billion in 2012 only if the Bush tax cuts expire as currently scheduled. Otherwise, it will grow, surpassing a half trillion dollars a year by 2014. As the second graph at the above URL shows, this is projected to cause the gross federal debt to increase from the current 64% of GDP to 81% of GDP by 2015. All this will be just in time for the Boomer retirement.

[varon]

by people who gaze into their navel for inspiration

A phrase that I would like to have your permission to repeat elsewhere :-)

[varon]

flt screen monitors,17" for $279.00. Only 3 years ago they were selling for about $499.

. A 3.1 mega pixel digital camera I paid $265.00 for a year and a half ago .....//.......The 3.1 mega pixel cameras are now selling for $149

A 32 inch TV that cost almost $900.00 in the early 1990's can be bought for a bit over $300.00 today.

Hmmm, that should make everyone that buys flat screen monitors, digital cameras and 32 inch TV sets every week very happy.
However, to the rest of the population that have experienced wage stagnation, wage concessions or lower income from replacement jobs for those that have been moved off shore or outsourced the price increases in necessary consumables are a factor.

For an example look at the aviation industry and the billions in wage concessions the pilots, flight attendants and white collar workers have taken. That's a lot of buying power that has been lost.

Tell the thousands of mechanics at Northwest Airlines that went on strike at midnight because the airline wanted to cut their numbers and ask for a wage concession to accept a 25% wage cut because it will be equaled out by the bargain price on their next digital camera and flat screen TV they purchase.

Perhaps to your way of thinking as long as they get a good deal on something they would only buy once every 5 - 10 years then they are in 'hog heaven'?

[YoungKentuckyConservative]

And maybe I could have spent some of my "raise" money and rewards for my improved efficiencies and growth...but, it looks like I gave it all to the oil companies at the pump, instead. Oh well. Maybe next decade.

[YoungKentuckyConservative]

Likewise, the constant drumbeat of "gas prices" has people in a tizzy, even though last night on the FOX business show, all the analysts agreed that we'd have to see $90 a barrel before it would seriously affect the U.S. economy.

What a crock. The average family, commuting from the suburbs, is losing serious purchasing power with the increase in gas prices. Talk to real Americans. They feel the pain. I've cut back dramatically on my spending to maintain the same level of savings and investment. Gas prices ARE taking a toll on the economy, just not for the big fishes that continue their newspeak of "all-is-well status".

[Edit35]

Great article.

It was the Clinton supporting "media bulls" who helped usher in the 1990s economic upswing.

The NYSE and NASDAQ is mostly psychological driven (remember 1998-2000 stock market bubble) bolstered slightly with earnings reports (which of course can also be fudged).

Our economy has been on a big upswing since around 2002-2003, but one would never know it by reading the daily broadsheet newspapers (Phila INquirer, Chicago crapper, etc).

[chief_bigfoot]

"One word says it all,"oil"."

Aye. I can't heat my house with my mutual funds. Well, maybe for a couple minutes, but the missus gets hacked off about all the ashes form burning paper inside. It'll be more than 1/3 that think the economy is sour in about a month and a half when people start calling to get their fuel oil tanks filled and the natural gas price becomes more of an immediate concern. I have a call out to the local HVAC company to for an estimate to install an electric furnace asap. There's no way that I can swing filling a 1000 gallon fuel oil tank at $2.40/gal. Nuh-uh, no way.

[phil_will1]

"Probably because 1/3 of Americans are actually economically literate. They understand the overwhelming trade and current account deficits. They realize that the massive amounts of credit creation by the Fed (to boost the housing market) is doing great damage to America's international competitiveness."

Hopefully, they also understand the fact that our antiquated and horribly inefficient tax system is a major contributor to both of those problems.

[A. Pole]

It is a commonly used phrase. And as far as I know no freemarketeer copyrighted it yet.

[LS]

No, it's not a crock. We're talking the real economy, not just a few daily adjustments that people make. So you drive a little less---that's not the same as running a factory 40% less because you can't afford energy.

The fact is, gas at the pump reflects close to $1.00 in taxes in many states ($.56 in Ohio), and in real dollars, the cost of a gallon of gas, less taxes is only slightly higher than what I paid for it in 1970. As long as a gallon of gas is cheaper than a carton of cigarettes, you know it can't be too expensive.

[A. Pole]

[LS:] all the analysts agreed that we'd have to see $90 a barrel before it would seriously affect the U.S. economy.

[YoungKentuckyConservative:] What a crock. [...] Talk to real Americans. They feel the pain.

For these analysts and their employers the U.S. economy is the value of their assets and the interest they can squeeze out of their financial investements. So long as it stays high they will not feel any pain.

[phil_will1]

"An increase in Defense spending DOES NOT necessarily mean in increase in military preparedness. We have closed bases...."

Are you implying that base closings represent a decrease in military preparedness?

"Again, the money is going toward payroll and admin, NOT additional manpower and hardware."

I don't understand the distinction that you are making between payroll and manpower costs.

[JCEccles]

A third of Americans are out to lunch. Always were, always will be.

It's likely the same third that sympathizes with Cindy Sheehan's antics.

It's a twist on the old 80-20 principle: roughly 20-30 percent do 80 percent of the complaining. Eighty percent of the MSM's coverage is dedicated to playing up their worst fears and feeding their delusions.

[Dont_Tread_On_Me_888]

If you do not understand the facts and point I stated in post # 58, then it is useless to discuss this important issue with you.

[expat_panama]

the deficit is projected to shrink below $100 billion in 2012 only if the Bush tax cuts expire as currently scheduled.

Thanks for the heads up on the update. 

Your take seems incomplete-- I get that you don't like things the way they are and the way they're going.  Sometimes it seems like everyone has a big list of things they hate, and no ideas as to what they want.   I like my spending the money I earn as I choose, so I say we should either cut taxes or at least not raise them.   I hear you try to warn me that if I don't let you raise my taxes that the economy will collapse and our kids will starve.  I doubt that, but even if it were true, we first need to agree on how much we want to reduce the deficit (please tell me what you want) so the debt is cut to (by how much).

[Eagles Talon IV]

You pose some really interesting questions. You may in fact be correct about the quality of todays electronic equipment. I myself have a 32 inch Sony since 1991 and a Sony pre amp that works flawlessly and has done so since 1988. It cost me about $1000 back then and it cannot even be replaced today with the features it has. As far as automobiles, I believe they are perhaps better then they were. They are certainly more complex and as for quality it depends on whose you buy. I am a Japanese car buyer myself and have been since 1971. I can honestly say that except for tires, brakes, wipers and other routine maintenance, I have never has anything close to a major repair.

However, that said, as far as electronics goes, TV's for instance, you would have to replace about 4 of them to equal what you paid for one 15 years ago. All in all I believe the quality of the TV's has gone up due to advances in technology and no one questions that the prices have plummeted. This will not last however because as the emerging nations who now produce this stuff using ultra cheap labor will ultimately have to increase their wages and it will be reflected in the price of their goods and services.