Four Years of Media Fairy Tales about the Economy

     “Armageddon.” “Collapse.” “Recession.” The media have been crying wolf about bad economic news throughout the four-year recovery.  Now that they finally have some legitimate bad news, you can expect journalists will huff and puff even louder.

     Almost over night we’ve gone from the mainstream media crying wolf to claiming that very same wolf is at the door.  Welcome to the Little Red Riding Hood Economy.

     How bad are things according to journalists? Bad enough to sell your children or turn your suburban home into a brothel.

     Only one of those was made up. According to one CBS affiliate story, “Housing Market Slump Forces Couple To Open Brothel.”

     What a nice, new media story about the oldest profession. Allegedly, two mortgage brokers rented out the tony home to prostitutes when they couldn’t sell it, even for $150,000 less than they wanted. This story has everything a Grimm storyteller could love – evil businesspeople, sex, money, crime, class warfare and enough gloom-and-doom to launch a fall TV pilot.

     To top it off, the mortgage brokers moved out of their New Rochelle, N.Y., home to begin renovating a home in … Pleasantville. So the story takes place in a classic suburban area made famous by the idyllic “Dick Van Dyke Show.” Then it relocates to a suburban locale made famous in “Pleasantville,” a movie about an identically named community, describing small-town bigotry and small-mindedness.

     Was this a news story or a creative writing exercise?

     Like much of the media coverage of the economy, it’s more than a bit of both. No housing slump “forces” anyone to turn to prostitution. Apparently, the cry of “will work for food” is no longer shocking enough for the media. Now reporters turn to “will hook for housing.” What next? “Will stab for surgery?”

     I’m sure some idiot will say if only we had more social services and a bigger safety net, these poor unfortunates would never have been turning tricks.  

     The only trick being played here comes from the network news shows that have warned us more than 100 times about a possible “recession” in the midst of a four-year spike in jobs. Nearly 9 million new jobs? Let’s scare the kids with talk of “recession!”

     Now that we finally had a down month in job growth, those same journalists are howling at the moon. CBS’s Anthony Mason told his typical horror story when the September job numbers came out.

     “It had a lot of economists uttering the ‘R’ word today, recession. These job numbers are the most worrisome sign yet, Harry, that the housing slump and the mortgage crisis could take the entire economy down with them.”

     That almost sounds like fact, not fairy tale. But back in May of 2004, the very same network was warning of a “new recession” if gas prices got “much higher.” Regular gas was at $2.07 a gallon and oil was in the $40s.

     On the June 12, 2004, broadcast, reporter Tony Guida predicted an even more substantial catastrophe. “Some oil analysts see economic disaster if oil hangs around $40 a barrel,” he claimed.

     Since then, gas prices have topped $3 a gallon several times. And we’ll never know if Guida would have been right. Oil didn’t hang “around $40 a barrel.” It’s shot up in price and is now above $78 a barrel. During that time, the United States has been on an amazing run of job growth, stock growth, corporate profits and overall economic success.

     So much for network fairy tales.

     But CBS didn’t stop there. The network never does. Reporter Sharyn Alfonsi welcomed the New Year’s stock market in 2006 with more talk of Mason’s “R” word. “With big business struggling, unsteady interest rates and signs of a recession, the best some forecasters are hoping for in 2006 is an average year,” said Alfonsi.

     Wrong again.

     So we should all stay skeptical now that Mason and others have greeted the latest job numbers with the Boogeyman of “recession.” He’s “afraid the housing crisis could drag us into recession.” Maybe one of these journalists might even be right. Finally.

     Perhaps we won’t get a happily-ever-after scenario. The economy might slow down or even move into recession. It’s happened before. Economies are cyclical.

     News stories about the economy, on the other hand, are consistent. They all read like Grim Fairy Tales. 

Dan Gainor is The Boone Pickens Free Market Fellow and director of the Media Research Center’s Business & Media Institute.