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By Jeremy Schiffres, Daily and Sunday Freeman, Kingston, N.Y.

Tuesday, February 24, 2009

Economic reality check

How about we start telling the truth about the U.S. economy?

The current recession is not the worst economic downturn since the Great Depression, as the national news media keeps insisting, as if wishing it to be true.

Three of the economy’s key bellwethers – inflation, unemployment and interest rates – were all much, much worse during the recessions of 1975 and 1982, making those downturns far worse than the one we’re in now. (How quickly we’ve forgotten painful price hikes, double-digit joblessness and borrowing rates of around 18 percent.)

But instead, we have Fox News’ robotic, brainless on-air personalities predicting this downturn will become a depression, that continued economic weakness will cause rioting in the streets and that the Dow Jones industrial average is headed for 6,000 or lower.

And even the usually reliable and even-handed Associated Press has gotten in on the doom-and-gloom routine. Last week – when a new government report showed the nation’s “leading economic indicators” (which predict economic activity six to 10 months ahead) had risen for the second consecutive month – the AP’s daily story on the economy buried that bright spot in the 13th paragraph.

The bottom line is this: Recessions are equal parts economy and psychology, and they can be self-fulfilling prophecies. If people are led to believe the economy is bad, even when it isn’t,they’ll make it bad. And if they’re led believe it’s catastrophic, even when it’s only bad, they’ll make it catastrophic. It doesn’t take much more than consumers slamming their wallets shut - because they've been scared out of their minds by exaggerating news reporters - to create the ripple effect that can ruin even the strongest economy.

All I’m saying is the current economic downturn should be portrayed for what it is: Bad, yes, but not the end of the world; and nowhere near as severe as the Great Depression - when the unemployment rate reached 30 percent and people stood in line for food handouts - or even the downturns of the mid-1970s and early 1980s.

The national news media need to keep things in perspective. And so, by the way, does the new president of the United States.



Anonymous Anonymous said...

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March 17, 2009 at 10:52 AM 

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