Newsweek's 'Conventional Wisdom' Revels In Imagined Recession Fear
You'll have to pardon me for just noticing this. It is after all, only Newsweek.
January 5, 2008
Of course, as fellow NewsBuster and Business & Media Institute staff writer Jeff Poor notes, it's highly unprofessional and misleading for media outlets to gin up fears of recession this early (emphasis mine).:
It wasn't good news by any means, but it also wasn't the end of the world.
The Bureau of Labor Statistics of the U.S. Department of Labor reported January 4 the unemployment rate rose to 5 percent in December, but if you're paying attention to the media coverage, you would think it's time to whip up some shoe leather stew and play "Brother Can You Spare a Dime."
A January 4 Associated Press story by Jeannine Aversa pointed to the job data as one of the "problems in the economy" that has "elevated fears about a recession." But even with all these "problems" - housing woes, the credit crunch, high oil prices, weak job numbers - the criteria of the economy being in a recession still haven't been close to being met.
A recession is a period of general economic decline; specifically, a decline in GDP [gross domestic product] for two or more consecutive quarters.
For the last two quarters, GDP (as reported by the U.S. Commerce Department) has grown at a rate of 3.8 percent in the second quarter of 2007 and 4.9 percent in the third quarter - not a sign of a recessionary trend.
Although fourth-quarter GDP numbers for 2007 won't be released until March, they're not necessarily looking to be negative. Economist and "Kudlow & Company" host Larry Kudlow told viewers of CNBC's January 4 "The Call" that GDP will come in at least at 2 percent.
"Our economy can grow at three-and-a-half percent," Kudlow said. "That is its potential. Right now, in the fourth quarter, it's going to grow one percentage point less."
Newsweek, of course, is not an authority on business reporting, but there's little wonder why the liberally-biased magazine would love to gin up fears of an economic downturn in an election year coming out of eight years of a Republican presidency.
Indeed, as BMI director Dan Gainor proved in his classic 2004 study, "One Economy, Two Spins," the media have often put a much more negative spin on economic data occuring during Bush's tenure than analogous economic data during Bill Clinton's adminstration:
Jerry King of ABC’s World News Tonight showed how he handled a positive jobs report. The story is from August 4, 1996 during the
Clinton term when unemployment was at 5.4 percent and 193,000 jobs were created. “Strong economic growth and low unemployment have both parties agreeing we’re in pretty good shape, though each claims it could make things even better.”
That “low unemployment” number was the exact same total reported in September 2004, but with a new spin on the reporting. When ABC did the story, it chose to focus on job creation, not unemployment. On the September 3, 2004 broadcast of ABC’s World News Tonight, Peter Jennings announced: “The government said today that the economy added 144,000 jobs in August. That was better than the previous two months, when job growth essentially stalled. But it fell short of the 200,000 jobs per month that most economists consider the minimum for strong employment growth.”
These two reports show a different ABC standard for whether the economy is “in pretty good shape.”