Time Cover Highlights Depression, But Story Downplays Threat

     It’s almost like yelling, “There’s not a fire” in a crowded theater. It’s enough to get the audience’s attention by startling them, even though the alarm isn’t supported by reality.

     Such is the case with the cover of the new issue of Time magazine, which features a photograph of a Depression-era soup line and a headline, “The New Hard Times.”

     However at the bottom of the cover in much smaller print – “No, this isn’t Depression 2.0.” And the article itself suggests a preventative measure to ward off a Depression – government intervention.

     When Time magazine editor Richard Stengel appeared on MSNBC’s Oct. 2 “Morning Joe” and unveiled the cover, he was greeted with confusion from co-hosts Mika Brzezinski and Joe Scarborough.

     “There’s no doubt a lot of Americans are confused also,” Scarborough said. “[I]’ve been struck by the contrast, so when people saying this is like 1929 all over again. Those lines, soup kitchen lines, unemployment lines, far different from what we’ve seen in New York City this year. The only lines I’ve seen in New York City are lines to concerts, lines to basketball games and lines wrapping around buildings to buy $350 devices so they can talk on iPhones and also lines to buy flat screens. It’s, it’s far different from 1929.”

     Stengel dismissed Scarborough’s criticism and said Scarborough was not seeing the effects of the economic hardship from his lofty perch in New York City.

     “But Joe, New York City is often immune from the rest of the country,” Stengel replied. “One of the problems with the media is that we’re stuck here and not seeing what’s going on, on Main Street.”

     However, Scarborough – a former congressman from Pensacola, Fla., told Stengel he’s not seeing it away from New York City either.

     “Go to Best Buys, go to Best Buys in Pensacola, Fla. Go to Best Buys in Omaha,” Scarborough replied. “It’s happening everywhere. People are buying $4,000 flat screens; people are buying $350 iPhones. There’s a disconnect somewhere here that I’m not getting.”

     Stengel maintained that people are feeling it – they’re unable to get loans, which is not exactly the same thing as waiting in a line for a handout to keep from going hungry.

     “It is all on credit, but what’s happening much more frequently now is that people are connecting the dots between Wall Street and Main Street,” Stengel said. “Regular folks are being, you know, are feeling it. You run a dry cleaner store. You want to expand. You can’t get a loan. You have to let go of your people. It is trickling across America.”

     The cover story article, by Harvard historian Niall Ferguson [1], draws several comparisons and distinctions between now and then, but he concludes “Depression 2.0” can be averted – through government intervention.

     “But while we certainly face a global slowdown, we may yet avoid another depression,” Ferguson wrote. “Now, unlike in the Great Depression, central banks and finance ministries know it's better to run deficits and print money than to suffer massive losses of output and jobs. And the introduction of U.S.-style deposit insurance in many countries means banks are less vulnerable to runs by depositors than they once were.”

     “Finally, the possibility still exists (though the odds are slimmer than they were a year ago) that the Asian and Middle Eastern sovereign wealth funds could step in to recapitalize U.S. and European banks before they succumb to another great contraction,” Ferguson wrote.

     Time magazine’s one-foot-in, one-foot-out attempt to use Great Depression alarmism to promote its cover story is just one example of how the media have engaged exaggerations. A recent Business & Media Institute report, “The Great Media Depression [2],” revealed the media compared current economic conditions to the Great Depression more than 70 times in the first six months of 2008.

     Time isn’t new to controversial, eye-catching cover images. Its April 28 issue featured a doctored version of the famous Iwo Jima flag-raising photograph, but with the flag replaced by a tree to represent a war on climate change. The cover sparked backlash against the magazine, but the National Press Photographers Association recently nominated it as a 2008 Best Cover Concept Finalist [3].