On Sunday's "Good Morning America," after 14 "Recession Rescue" segments or teases in less than a month, weekend co-host Kate Snow asked an economic psychologist if "part of [the negative financial outlook of Americans is] our fault, the media's fault, for constantly talking about how bad things are?" Snow and psychologist Kit Yarrow were discussing how much of the nation's current financial state is emotional, in light of comments last week by John McCain advisor Phil Gramm that when it comes to the economy, "we've sort of become a nation of whiners." [audio available here]
Yarrow responded to Snow's query by saying the media are to blame and that when journalists cover the subject, "Everything is described as a crisis." She added, "And it's described in anecdotal terms as well, which causes consumers, I think, to feel especially fearful." This is certainly true of "Good Morning America." The program has featured frightening graphics such as "No More Retirement? Economy Holds Couple Back," a June 24 story on whether the elderly will still be able to retire. On June 25, a graphic screamed, "Paying the Bills: How to Survive Economic Crisis."
On July 14, GMA featured a piece on people swapping items, such as DVDs, rather than buying them. Co-host Chris Cuomo asserted, "As gas prices rise and power bills soar, people are increasingly turning to bartering, or swapping, to make ends meet."
These examples are in addition to doing 14 segments or references in three and a half weeks on helping Americans through a non-existent recession. (Two quarters of negative economic growth are needed for a recession and the U.S. has not even had one.) Sometimes a "Recession Rescue" story involves some unrelated economic issue, such as finding out whether viewers have counterfeit coupons. But, for whatever reason, the piece is often given the inaccurate "recession" related title.
So, it was refreshing that GMA on Sunday did look at the media's role in causing economic distress, albeit briefly. Snow only asked the one question about the part journalists have played. Instead, she mostly offered generalized possibilities: "So again, that question, with all that bad news, how much is psychology playing into our economic woes?"
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See a June 25 NewsBusters post for a transcript of some of the "Recession Rescue" examples.
A transcript of the July 13 segment, which aired at 7:07am, follows:
KATE SNOW: Marysol, this week, former Senator Phil Gramm caused a real outcry when he suggested we're all a nation of whiners. The recession, he said, was mental. So this morning, a provocative question, is there any truth to what he suggested? There's no question many Americans are feeling economic pain.
[Brief video montage of reporters saying "recession" or "fears of a recession."]
SNOW: Record high gas prices, a housing market in turmoil, inflation on the rise. It sounds like an economic perfect storm. And when you compare this summer to last, it can be downright frightening. Last July, drivers were griping that gas was creeping toward $3 a gallon.
MOTORIST (FEMALE): But I'm not happy about it. It's too expensive.
SNOW: But today, with prices over $4, those complaints seem almost quaint.
MOTORIST (MALE): It's getting pretty ridiculous, the cost of it.
SECOND: MOTORIST (MALE): It's crazy.
SNOW: At the grocery store, we're paying much more for every day food staples, bread costs almost 15 percent more than last year. Bananas are up 25 percent and the price of eggs, almost 28 percent more.
CONSUMER (FEMALE): Every time I go to the grocery store, I'm amazed at how much money I'm spending on just our basic foods.
SNOW: And your savings for retirement, more bad news on Wall Street. This time last year, the Dow Jones was above 13,000, on Friday, it closed just above 11,000, down more than 20 percent from its October high. And with homes being foreclosed at a record rate, home values are dropping, down six percent since last June. So again, that question, with all that bad news, how much is psychology playing into our economic woes? Joining us now Kit Yarrow, a consumer psychologist, perfect person to ask that question in San Francisco. Good morning to you.
KIT YARROW (ECONOMICS PSYCHOLOGIST): Good morning.
SNOW: So things are certainly bad for a lot of Americans. And I don't think we want to discount that, but you say this is a psychological recession. What do you mean by that?
YARROW: It's a snowball, really. I think the way that consumers feel about things is very emotional. And those emotions are trumping reality, creating the snowball where they're pulling back on spending, which has been making our economy worse. But it's not quite as bad as consumers feel like it is.
SNOW: How so? How is it not as bad as we think?
YARROW: Well, you know, we've had really great prosperity for the last few years. We've had very cheap gas. We've had, you know, a lot of increase in our home values. We - we've had it really pretty good as stock market increases. And emotion is always caused by this mismatch between what we perceive and reality. And right now, I think there's a big mismatch between what we perceive should be, basically our expectations of the economy and now what we're getting. And that's causing people to feel fearful and upset and angry. And really, it's that emotion, the psychology that's contributing to our economy right now in a negative way.
SNOW: To fall on our sword here a little bit, do you think part of it's our fault, the media's fault, for constantly talking about how bad things are?
YARROW: I do, actually. Yeah, I have to say some of it does belong there. Everything is described as a crisis. And, you know, there's really been a preponderance of - information coming at consumers, I think just the volume of it. And it's described in anecdotal terms as well, which causes consumers, I think, to feel especially fearful. When you describe an individual's personal situation, I think people empathize with that and it makes them feel really afraid for their security as well.
SNOW: How much is about expectations though also? In terms of, you know, things have been going so well for so long. Do we sort of think we, that was what we deserved and now that things aren't going, maybe quite as well, we suddenly think it's terrible?
YARROW: Absolutely. And that's very well put. So I think we've become quite entitled to a sense that we're gonna have continued prosperity. And, you know, if we hadn't had it so good for so long, I don't think there would be this level of emotion that's causing us to drawback on our spending. It's really more like - you know, we expect it to be great growth and, you know, any sort of normal growth is considered a catastrophe now.
SNOW: Which is not to say it's not painful to go to the gas pump and pay those prices. Well, thank you so much.
YARROW: And you--
SNOW: Go ahead.
YARROW: I was gonna say, and, you know, gas prices and food prices in particular, I think, are causing people to be very emotional about it--
SNOW: Right.
YARROW: --because every single day, they're aware of difficulties.
SNOW: It hits you right in the face. Kit Yarrow, thank you so much.
