Media Blamed For Making Economic Crisis Worse

By: Mike Shedlock | Tue, Jan 6, 2009
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A new poll is out showing 77% of Americans blame media for making economic crisis worse.

Seventy-seven percent of Americans believe that the U.S. media is making the economic situation worse by projecting fear into people's minds.

The majority of those surveyed feel that the financial press, by focusing on and embellishing negative news, is damaging consumer confidence and damping investment, making a difficult situation much worse. The poll was conducted via telephone, December 4 - 7.

Household Incomes:
$25k - $35k -- 79% answered YES
$35k - $50k -- 88% answered YES
$50k - $75k -- 76% answered YES
$75k - more -- 78% answered YES

Demographics:
85% of young adults (18-24 yrs old) answered YES
77% of males and females alike answered YES
65% of blacks answered YES

Richard Scheff, a national expert on corporate liability and white collar crime issues, warns media that they could potentially be exposed to liability despite apparent constitutional protections:

"Although statements by the media are protected by the First Amendment, the survey results demonstrate that the public believes that the press bears some responsibility for the lack of confidence in the economy. One would hope that the media would act less out of self-interest in these times of national crisis," said Mr. Scheff, vice chairman and partner with Philadelphia-based law firm Montgomery McCracken Walker & Rhoads.

Scheff seems to think bad news should be suppressed in the national interest. This is constitutionally dangerous thinking. Who gets to say what is or isn't in the anyone's self interest? From where I sit, it is always desirable to hear the truth from media and the Government.

Sadly, if one wants a positive spin on things, all one has to do is turn on CNBC to get a parade of experts proclaiming the bottom is in and housing will recover in the second half. And if one needs a laugh it's an easy matter to turn on Cramer. Actually it's quite hard to not get a bullish spin on things from the media.

Don't blame the media for fear mongering. The most fear mongering in history was done by politicians, administration hacks like Treasury Secretary Paulson, and GM executives all promising Armageddon if various bailouts were not passed.

There's Emotional Contagion Going On

The San Francisco Chronicle is reporting the Economy takes a toll on mental health.

In a typical week, Berkeley psychotherapist Don McKillop sees clients with a range of emotional issues. But these days, all of his patients have one thing in common: financial stress.

"In the last week," McKillop said, "every one of my clients mentioned anxiety over the economy."

McKillop is not alone. In an economic climate that grows more precarious every day, Bay Area residents are experiencing an epidemic of anger, anxiety and emotional stress, according to local psychotherapists and academics. "There's emotional contagion going on," says Corte Madera psychotherapist Ruth Kalb. "Panic begets panic."

In October, an American Psychological Association survey showed that 83 percent of American women and 78 percent of American men were experiencing heightened stress about money.

Women, the study said, are today more concerned with money issues than personal health. Women over 63 are especially distressed: Worries about the economy rose from 74 percent in April to 92 percent in September.

Inevitably, financial anxieties spill into family relations. "People are struggling with how to talk about this with their kids," Kalb said. "Adult children are needing to move back home, upsetting everyone's rhythm."

Economic anxieties are passed on to children, said Berkeley psychotherapist Susan Regan. "I was with this family in a family session and one of the kids turned to the parent and said, 'Mom, how's your job going? Are you OK?'"

Economic Masochism

While some blame the media for reporting bad news, hoping it will go away, others are fixated on it. Please consider Catching the economic anxiety bug.

Hymie Anisman, a neuroscientist at Carleton University in Ottawa, has diagnosed a new and highly contagious ailment for the recession era: economic masochism.

It was a pal who first exhibited the symptoms many people are experiencing these days -- although this man's case is extreme.

"I have a friend who sits all day going through various journals online and various blogs as if he wants to find more bad news. He's read it all 20 times, he's knows what's there. It's almost like he's addicted by it. But every once in a while he'll get some little glimmer that will reinforce some little glimmer of hope," Dr. Anisman, who studies the effects of stress, said in a recent interview.

Consumer Confidence At Record Low

Growing anxiety over jobs has Consumer Confidence At All Time Low.

Confidence among U.S. consumers unexpectedly dropped in December to a record on growing anxiety over the lack of jobs, raising the risk that spending will keep weakening into the new year.

The Conference Board's index of consumer confidence fell to 38, the lowest level since records began in 1967, from 44.7 in November, the New York-based private research group said today. Another report showed declines in property values accelerated.

Rising unemployment, mounting foreclosures and declining household wealth have dimmed the outlook for consumer spending, which accounts for 70 percent of the economy. This year's holiday season, the most important for retailers, was probably the worst in at least four decades.

"The deterioration going on right now in the labor market made people feel much worse," said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. "If people are worried about their jobs, they are not going to spend. That is extremely negative."

The 60 percent plunge in gasoline prices from July's record had prompted economists to project confidence would climb, mimicking the improvement in other measures. The median estimate in a Bloomberg News survey of 52 analysts called for the Conference Board's gauge to rise to 45.5 from previously reported 44.9 for November.

Those ever optimistic economists are forever predicting stock market recoveries, housing recoveries, job recoveries and consumer confidence recoveries, all of which set unrealistically high expectations and glimmers of hope that won't pan out.

No wonder everyone's miserable.

 


 

Mike Shedlock

Author: Mike Shedlock

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Mike Shedlock

Michael "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Visit http://www.sitkapacific.com/ to learn more about wealth management for investors seeking strong performance with low volatility.

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