Essayist Thomas Carlyle was the first to label economics "the dismal science" more than a century ago, establishing a proud tradition of pessimism carried forth to this day by the news media. As rising energy prices stoke inflation and the housing market continues to decline, the media focus daily on how even middle-class families and financially sound businesses are struggling to make ends meet.
Such coverage is to be expected as we head toward recession, a likelihood reinforced last week by Federal Reserve Chairman Ben Bernanke in testimony before a congressional committee. But in their zeal to "afflict the comfortable and comfort the afflicted," the news media also pander to the victim class and champion nanny-state solutions. People who can't pay their mortgages didn't buy too much house for their means; they're all victims of underregulated predatory lenders. Higher prices at the pump and, by extension, almost everywhere else aren't the result of global oil demand racing ahead of limited supply; blame Big Oil manipulation, Wall Street speculation, and retailer collusion.
The media are preoccupied with worst cases even when the economy's fundamentally strong. Back in 2005, when the United States created more than 2 million jobs and by year's end was riding 29 straight months of net job gains, the major news networks were focusing on layoffs, according to an analysis by the Business & Media Institute. For example, when Fed Chairman Alan Greenspan talked in July 2005 about "sustained economic growth," one network TV reporter pooh-poohed Greenspan's comments and called attention to job cuts at Kodak and Hewlett-Packard. (In contrast, Bernanke's blunt economic assessment last week yielded no such contrarian stories on how some families and businesses are faring better amid the slowdown.)
OK, media outlets, including InformationWeek, have learned that bad news draws readers and viewers more than good news does. After our "Recession And You" story package), where we presented the results of our extensive reader survey and offered recommendations for how to manage business technology in a slowing economy, one reader criticized us for harping on the negatives and underplaying the positives.
We highlighted the fact that 32% of respondents to our March survey thought the U.S. economy was in a recession (though 68% weren't so sure); 24% of respondents said the mood in their IT organization could be described as "fear and loathing" (though 76% were considerably more upbeat); and 23% had been asked to cut IT spending (though 43% weren't reducing spending and the rest were only scaling back budgeted increases and trimming specific projects). It's all a matter of emphasis and perspective.
Why is the media's take on economic issues important? Because it has a significant impact on how people view the economy, according to a 2006 Washington Post survey, and it influences how people adjust their own spending and investments. For some people--especially the victim class--disinformation and exaggeration about economic issues is just the excuse they need to feel sorry for themselves and put their heads in the sand: "It's not our fault we couldn't complete that software project on time or our end-user satisfaction ratings are falling. The economic malaise is sapping our resources and morale!"
Then there's the proactive tack of one of my close colleagues. In a recent budget meeting, after our highly capable finance chief cautioned several executives to watch every dollar in anticipation of a softer economy, my colleague responded: Fiscal prudence is always important, but if you're asking me to take my foot off the gas pedal, my position is that I choose not to participate in this recession.
We all must anticipate a recession and plan accordingly. But don't go so far as to make one a self-fulfilling prophecy.
VP and Editor in Chief
To find out more about Rob Preston, please visit his page.