The mother of all government stimulus packages is headed for passage – and sporting a 12-figure price tag. Since a recession is supposed to be a time for reining in extravagant habits, I wondered if there were any bargain basement stimulus plans available. I came up with one that would be virtually free.
Congress could pass a law requiring more positive coverage of the economy by the news media.
OK, so that's a tad unconstitutional. But the spirit of that plan does make an important point. Now that inflated asset values have been brought down to earth, many of our remaining problems are tied to a lack of confidence, fueled by what we read or see in the mainstream news.
Scanning the past year's headlines is like watching a bad horror film. The bodies keep piling up, and when you think it might be over, you find out it's only just begun.
Something is wrong with this picture.
While things in the economy truly are bad, this is not simply about reporting the truth; it's about representing that truth in the most responsible way. A media that is too much in love with stories that bleed is capable of making the recession worse than it has to be.
For instance, I recently read a headline announcing that the recession had begun to hurt small-business owners. The underlying article was about, believe it or not, a survey that registered an increase in the optimism of small-business owners. Deriding that small increase as insignificant, the article went on to tout the many sinister economic beasts awaiting us around every corner.
I saw another headline trumpeting negative job news. Upon reading the underlying article, I learned that initial jobless claims had unexpectedly fallen in the previous week. But this hopeful fact was quickly brushed aside as an aberration, and possibly even a result of layoffs getting an earlier start than in past winters.
I have seen a number of stories in which neutral or even positive economic news is taken too lightly, or spun negatively to the point of dizziness. Sometimes, the number of people on unemployment rolls is said to be the highest in so many decades. What goes unmentioned is the fact that growth in the US population over those decades makes such statements, while technically correct, potentially misleading.
If news stories took a more encouraging approach, while remaining engaging, maybe we could stimulate the confidence our economy needs without it costing an arm and a leg.
The economy that we get is the one that we create through our actions as buyers, sellers, investors, and business people. These actions are not born in a vacuum. They are born from our opinion on the state of the economy, which is born from the news stories we are exposed to.
No one knows the exact location of the line that separates reporting the recession from worsening it. But it does exist. With negative news stories assaulting our eyes daily, is it any wonder we're not buying, borrowing, lending, or hiring? Some of this newfound reticence is beneficial. It corrects the exuberance that inflated the economy to begin with. But the danger we face now is an overcorrection.
Reporters should not sugarcoat the fact that people are hurting. But those of us fortunate enough to gain the public's ear should be aware that our words have consequences.
There's plenty of bad news to go around. Let's not make it worse than it has to be.