Something sneaky is afoot. There is a conspiracy within the media to paint the economy as miserable because they don't like Republicans or George Bush. As soon as Obama is sworn in, the economy will miraculously recover, and the media will give him all the credit. Oh-Yeah!
Many conservatives I know have swallowed in great gasping gulps this pitcher of Kool-Aid. Such is our hatred of the media and our desire to seek out conspiracies against us that we don't even recognize an economic collapse when we see one. We merely blame it on the mainstream media. In our defense, the MSM does make an easy target with all the abuse of journalistic standards that runs amok. Make no mistake: the U.S. economy is in serious trouble. And yet there still may be a bit of tail wagging the dog going on. The media may, in fact, be largely responsible.
First of all, a dose of reality. Today is the second full day of the Obama presidency and here are the business headlines:
Wall Street sinks on Microsoft , bank woes
Microsoft sees profits fall, will slash 5,000 jobs
Jobless claims surge, housing starts tumble
U.S. bank results plummet as credit problems soar
US crude inventories soar, sending oil prices down
Sony forecasts first annual net loss in 14 years
Analysts cut '09 profit estimate
Crisis sinks pound, rattles Britain
The point here being that this crisis, however it got its start, is real. No matter how much the media hated George Bush, it can't give those 5000 Microsoft workers their jobs back. To be certain, not all the economic news this week has been bad. There have been several large companies that reported surprising strength, but the overall trend is pretty horrific as today's stock market plunge demonstrates, the DOW dropping below 8000.
Still, as real as the current economic crisis is, the media has played a significant part in it. How? By systematically eroding consumer confidence.
The main feature of the Great Depression (and of today's crisis) was a self-propagating, disastrous fear: Consumers become fearful, stop spending, companies suffer, consumer fear rises more, consumers pull back more, companies close, etc.
And what generates such fear? According to research published in 9/07 by the National Bureau of Economic Research, pro-Democrat newspapers (and not many papers would fit into the other categories) consistently report bad economic news more heavily under Republican administrations:
We find evidence that newspapers with pro-Democratic endorsement pattern systematically give more coverage to high unemployment when the incumbent president is a Republican than when the president is Democratic, compared to newspapers with pro-Republican endorsement pattern.
When the financial crisis, which could have been remedied rather quickly in my mind had consumer confidence stayed high, hit in September, the media pounced on this news more aggressively than on any economic situation in my lifetime. They reported. They theorized. They predicted disaster. Were they seizing the day to put Obama in the White House? It would be naive to believe that media outlets (which still can't leave the Palins alone) didn't see an economic crisis as an opportunity to advocate for their favorite candidate.
From the beginning of the Bush administration to its end, the media placed America on a razor's edge, a country balanced painfully on the cusp of national and international disaster. Constant assaults against the administration's economic and national security policies following the terrorist attacks of 9/11 played havoc with the minds of both investors and regular consumers. In fact, the market never recovered consistent strength after 2001. While it did generally go up for a couple of short periods, the overall trend has been chaotic and fit for the best Six Flags roller coaster fans.
This is not to say that the Bush administration was sound economically. It spent money like an eight-year-old handed a platinum Visa card at the mall. But one has to wonder how much a role the media played in causing consumers to pull back. It would be a shame if these same media outlets were victims of the economic collapse they helped to cause, wouldn't it? Wouldn't it?