'The dog may bark,' they say in my native India, 'but the elephant moves on.'
I am reminded of the saying as I read and listen to the major media in the U.S. They bark incessantly about the recession and the possibility of something worse while the public - like a great pachyderm - goes about its business in the realization that the media are part of the problem.
The latest IBD/TIPP Poll found that:
- Two-thirds (66%) of Americans think the media coverage of the current economy is sensationalistic.
- A majority (56%) believe coverage of the economy makes conditions sound worse than they really are.
- Half (50%) say the media do not present economic issues in a fair and objective way.
But this is nothing new. The media were also fanning depression fears in the fall of 2001, six months into the last recession and right after the 9/11 attacks.
That December, however, the economic outlook component of our IBD/TIPP Economic Optimism Index - a measure of how consumers feel about the economy's prospects in the next six months - rallied to an optimistic 57.1 from a pessimistic 47.4 in November.
"This surge in consumer expectations," I observed on the front page of IBD on Dec. 11, 2001, "is clear early evidence that we might have already come out of the recession or are well on our way to recovery in the first half of 2002."
To many, that sounded foolish.
But it was comforting to learn months later that the National Bureau of Economic Research - the official arbiter of recessions - adjudged the 2001 recession to be over in November.
Economic conditions today are definitely not milk and honey, and the recession that began in December 2007 is lasting longer than usual. But the likelihood of a depression is poppycock.
The media rely on the Law of Repetition to convince us otherwise, but they must know that repetition does not transform lies into truths. And here are a few of the truths:
1. Even great economies are not immune to business cycles, with periods of contraction inevitably following periods of expansion. The U.S. economy grew a handsome 39% since 2001, and a contraction was due. Capitalist economies, moreover, use recessions to shake out weaker elements and prepare for the next growth spell.
2. Real GDP increased 1.3% in 2008 and 2.0% in 2007. In stark contrast, real GDP shrank 26.5% between the Depression years of 1929 and 1933.
3. While we have lost 3.6 million jobs since December 2007, the toll was far greater during the Depression, when as many as one in four Americans were unemployed.
4. We are starting to see some bright spots in the data.
Last week, for example, retail sales for January were reported up a surprising 1% - the best since November 2007.
Perhaps not coincidentally, the same IBD/TIPP economic outlook measure that pointed to recovery in 2001 has worked its way from 32.1 at the start of the current recession to 42.6, an improvement of 10.5 points in 14 months. That is a very encouraging sign that we are not heading toward a depression.
It's also one that won't be flagged by other news organizations. No wonder two-thirds of Americans give the media a C or lower for their economic coverage and only 5% give them an A.
Fact is, the media lack credibility. In January's IBD/TIPP Poll, only 15% of Americans said they have a "great deal" or "quite a lot" of confidence in the media. Nearly half (45%) stated that they have "very little" confidence in the media.
Contrast this to 78% confidence for the U.S. military.
As responses to our February survey show, media sensationalism is transparent. When covering bank closures, for example, the media conjure up images of people stuffing money into mattresses. Never mind that, unlike during the Depression, we now have safeguards such as the FDIC, and that no one has lost a dime in its 75-year history.
The message for the media in our latest survey comes through loud and clear: Stop trashing an economy that could be in the embryonic stages of recovery. Americans see your fixation on depression as an effort to make the economy sound worse than it really is.
Americans lack confidence in you, they don't appreciate your sensationalism and they see you as a part of the problem. Do you want to lose them as your readers and viewers?
There will be good times, and there will be bad times. News organizations that can show equanimity and be temperate in both can enjoy great success.
Mayur is president of TechnoMetrica Market Intelligence, which directs the IBD/TIPP Poll that was the most accurate in both the 2004 and 2008 presidential elections.