Oops. That last bit comes from May 2004 – right as the recovery from the previous recession was getting into full swing. John Roberts was an anchor, but he plied his trade with CBS instead of his current CNN role.
What I meant to say was how the media warned us of the incoming recession. It was Sharyn Alfonsi on CBS “Evening News” for New Years day. “With big business struggling, unsteady interest rates and signs of a recession,” she explained, “the best some forecasters are hoping for in 2006 is an average year.”
Wait a second – 2006? Or was it 2007? It doesn’t matter, there was a recession looming.
Some things are consistent. The media warn about a recession. This week, we got word that they might be right. Finally. After more than four years of such warnings.
It’s an economic maxim that everyone over-predicts a recession. “Economists have predicted nine of the last five recessions,” one phrasing goes. If economists have predicted nine out of five, journalists’ batting average is even lower.
If they get this one right, their record will still be worse than Chicago Cubs’ World Series history. The Cubs, after all, have won twice in more than 100 years. Now try predicting hundreds or even thousands out of the last, well, none. According to LexisNexis, ABC, CBS and NBC have made more than 1,200 recession mentions since 2004.
If we’ve finally gone into a recession, the media deserve a share of the credit.
But only a share. It would be naïve to say that Wall Street, Main Street and Capitol Hill had no role to play. It would be just as naïve to say four years of downbeat economic reporting has no impact.
Now, according to MarketWatch, the U.S. is finally in the recession the media have so desperately sought. “The latest data, covering activity in August and September, make it all but certain that the academic economists will eventually declare the economy is in a recession,” wrote MarketWatch’s Washington bureau chief Rex Nutting Oct. 1. All-but certain is right. Nutting followed with a piece Oct. 6 showing how “two out of three economists surveyed say the economy is in recession.”
Even though growth continues, four other measures of the economy are down – employment, incomes, output and sales. It’s a solid case to make because there is so much legitimately negative news now that a recession would be unsurprising.
It would be one of the most predicted events in world history. Four years ago, while America was in the midst of 52 straight months of positive job growth and a time period that saw more than 8 million new jobs added, the media decided a recession was coming.
Well, duh. Economies are cyclical. When the economy is bad, it’s a safe bet to predict it will get better. Same goes when times are good. Sooner or later the bear chases the bull off of Wall Street.
So predicting a recession … eventually, is akin to saying winter will return. It always does.
The bigger question is how harsh will it be? In a consumer-spending culture, the media play a big role. We are bombarded by stories of economic apocalypse. American media has nearly run out of outlandish examples. Foreign media is picking up the slack. The British Telegraph newspaper had this headline on an opinion piece Oct. 6: “We face extreme danger. Unless there is immediate intervention on every front by all the major powers acting in concert, we risk a disintegration of global finance within days. Nobody will be spared, unless they own gold bars.”
A year ago, such a headline would have been laughed at. Now we yawn because it’s little different than what we hear every day. Turn on a newscast, and you hear Wall Street is “free fall” or pick up Time magazine, and it’s got a Depression-era photo on the cover with the headline: “The New Hard Times.”
The media have tried for years to define our economy in a recession. But even a recession could have an upside. It might even force journalists to admit we’ve had 10 recessions in the post-World War II world. And that the difference between a recession and new Depression is like the difference between the flu and cancer.
Or maybe they’ll keep hyping the economy since it has become Obama’s No. 1 issue. If that’s the case, look for the economy to start rebounding Nov. 5, the day after the election.