We Are In the Midst of a Terrible, Horrendous, Life-Threatening Economic Crisis!!!!
Actually, we aren’t.
But if you believe the media and politicians we are.
The current state of the economy is so bad, it is being compared to the Great Depression. And yet, in December, when the unemployment rate hit 7.2% (which is certainly a major issue, and a significant increase over the prior year), it was still 3.5 times LESS than the 25% unemployment rate in 1933, at the peak of the Great Depression. Alas, even in 1940, after several years of FDR’s new deal initiatives, unemployment still lingered around 15%. In 2008, 25 banks went under; Depending what you read, between 5,000 and 10,000 banks closed during the Great Depression, a rate of 14-27 per day. Granted, the banks that went under in 2008 were much larger, and over their life-cycles had taken on several smaller banks; but the expanded number if you include subsidiaries still wouldn’t come close to the numbers from the 30s.
The point is this: The current economic struggle is nothing more than that – a struggle. But it is being portrayed as something much more. Some actual headlines from the past several months include: “Economy in Turmoil”; “What Rally? Wall Street’s Faint Hope Evaporates“; and from our President, “A crisis unlike any we have seen in our lifetime“. The situation is bad, but I think these claims are both a little exaggerated and a little dramatic. News reports are supposed to be unbiased and rational – extreme opinions and the dramatizing situations should be left to talk-radio and bloggers.
A recent study published in British journal BMJ concluded that happiness is contagious. Even better, the study found that having an increased sum of money resulted in only a slight increase in someone’s level of happiness. So with the economy in a slow-spell, and what probably qualifies as a recession, why doesn’t the media report more positive stories, and report the strict facts & figures of the economic struggles, instead of turning every speed bump into a catastrophic event?
My wife told me last night about a report that she saw on the nightly news about some Ku Klux Klan members being arrested for plotting an assassination attempt on Barack Obama. She said the report lasted about 15 seconds, and there was no analysis, no ‘expert’ talking-heads, and was not explored any deeper. I understand the reasoning of the news production team; Obama is being touted as the hope of our nation, and they don’t want to alarm people into worrying about something awful happening to him. They want to make sure his inauguration is painted in the best possible light. And since the major new outlets control what citizens hear and read, they have that right and that responsibility.
My question is: why don’t they apply the same principle to the economic situation? A major corporation files for bankruptcy? Report that information, interview a spokesman, and then report on a positive story about someone making ends meet during this difficult time. Don’t focus on the negative aspects of the economy just like you don’t focus on anything negative involving Barack Obama.
I’m not saying it will fix the economy – it won’t. But it may actually help a little bit. So much of the economy is based on how people feel about things anyways – the stock market rides this emotional roller coaster every day. Why not try and make people feel as optimistic as possible about how things are looking. It may just make a positive impact. 
Image: Library of Congress, Prints & Photographs Division, FSA-OWI Collection, LC-USZ62-91536 DLC
Dan Mason is an accountant by trade only – he would much rather write. He constantly daydreams about being in the woods or on the water, in the middle of nowhere. He resides in the Rochester, NY, area and is thankful the Adirondacks are only a few hours’ drive away. He is happiest when there is a pen (read: keyboard) or a canoe paddle in his hand.
My thought is that with the multiple versions of news and media out there now with the explosion of the internet in our recent history every source is trying to garner attention. I believe one of the ways they do this is by claiming everything is either the greatest ever or the worst ever. We have no in between anymore. For instance watch the buildup of the Super Bowl, much of the talk is that Steelers have one of the all time great or greatest defenses ever. It is very good but that good?, They did pad their stats with 4 games against the miserable Browns and Bengals. Do we really need discuss their place in NFL history or can we just say they are very good? Well media in general has to call them a all time great to grab your attention.
The economy stinks, it has affected my workplace and there are many being pinched right now. However so far it is following a fairly standard cycle of recession and good times that we have had in the US history. Lets hope it does not deepen any further than that but in the mean time we will have everyone screaming about the worst times ever when in truth it compares to other downturns in the not too distant past. And that does not help when you lower everyones confidence.
I agree with most of the commentary here, however, one thing that should be noted is that the risk for a double dip recession are pretty high. So far most of the potential bad debt in the the finance sector has been put on government balance sheets. Something has to give. When foreclosures on bad mortgages continue over the next 12-18 months, the government won’t be able to keep up the same pace bailing people out. Similarly Ben Bernanke and the fed have a difficult job to prevent a stalled recovery by keeping money in circulation balanced with the requirement of taking money out of circulation before hyperinflation hits.