Providing a textbook example of slanted news coverage, the Los Angeles Times wasted no time contradicting yesterday’s good news that the American economy continues to expand. Little wonder. The Times has been on a months-long crusade to convince voters, uh, readers that the economic sky is indeed falling. Good economic news shall not be tolerated! Today’s hit piece, found on page 1 of section C, begins with an incorrect headline, piles negative phrases on top of dire warnings, lapses into an absurd interior monologue contrasting “modern recessions” with traditional downturns, and concludes by dismissing “one of the few apparent bright spots in the latest growth report – a measure indicating prices have remained stable — [as] probably misleading.” Uncle Joe would give the writer, Peter G. Gosselin, a promotion.
The fallacious headline, “Economy slows, Fed cuts rates,” is proved bogus by the articles’ own first sentence, which affirms the economy grew “at a 0.6% annual pace for the second quarter in a row…,” [emphasis added] meaning — do we really need to say this? — economic expansion remained the same in the first quarter! A deceptive headline is a surefire tip-off of worse things to come, and Mr. Gosselin does not disappoint on that score. The first three paragraphs begin thus: “The U.S. economy dodged outright contraction,” “The economy’s performance…was so weak,” and “Economic activity remains weak.” I can’t be sure, but it seems the Times is trying to tell us something.
Running out of synonyms for “weak” after eight paragraphs, the discussion devolves into unprovable speculation as to the nature of the current slowdown. As Peter Gosselin sees it,
“The latest [economic] numbers strongly suggest that the economy is headed into…a ‘modern recession.’ These slowdowns differ from the traditional variety: They don’t involve huge layoffs, steep production drops or a slide in the economy’s efficiency. But recovery from ‘modern’ recessions can take extraordinary lengths of time. People who get caught up in them can be out of work for financially damaging stretches. Prolonged declines in stock and house prices can wreak havoc on family finances by eroding investments and savings and cutting off access to home equity credit.”
Well maybe, but we are not in a recession yet, and no one knows for sure how long this slowdown will last and how severe it will be. Nevertheless, the message is unmistakable: be afraid, be very afraid, and vote Democratic in November.
Speculation of the type on display in today’s Times belongs in an opinion piece, not the Business section.
Here’s some hard news Mr. Gosselin somehow overlooked. “Orders to factories for big-ticket manufactured goods jumped unexpectedly in December,” reported the Associated Press last January. “Boeing Co. and jet-engine makers General Electric Co. and United Technologies Corp.’s Pratt & Whitney unit said in separate presentations March 18 [2008] that they aren’t seeing a slowdown in commercial aerospace demand even as fuel prices rise,” reported Bloomberg News on April 2nd. Providing some welcome perspective for discerning readers, National Review in its May 5, 2008 issue reported, ”For all the talk of foreclosures, the homeownership rate is higher than it was in 2000. The Dow, meanwhile, has dropped all the way to — where it was in April 2007.”
On February 11th, Warren Buffett told the Ontario daily The National Post, “I am a huge bull on the American economy.” Providing historical insight, Buffet said, “I went through 1982 when short-term money cost 21 percent. This is not a tough period.”
We can all agree that the economy has slowed over the last six months, the housing and credit markets are a mess, and jobs have been lost. Reporting these facts is one thing, endless fear mongering is quite another. American businesses and citizens are in the process of dealing with a sluggish economy and are taking steps to pull through and help the economy rebound. We encourage the Los Angeles Times to just report the news. The good news is, it’s not all bad!
Posted by Jerry Pomeroy in Economics, Ethics, Fraud Watch, Media