The Media’s Inner Eeyore
Eeyore, the old grey donkey in Winne the Pooh stories, expected everything to turn out badly. Wished a “good morning” he doubted it saying he was not one to indulge in “gaiety”. Eeyore lived on the gloomy side. The present was dark. The future held no respite.
Media coverage of the economy brought Eeyore to mind. A New York Times story raised the question of why people are so pessimistic about the economy when the actual numbers are pretty good. They and others might have looked in the mirror.
No good news is left to stand on its own. Whatever the facts: Inflation is down, employment is up, wages are climbing, retail sales are strong, the outlook is gloomy.
The basic facts about the economy are good. Nobel prize winning economist Paul Krugman points out, “The economy is actually looking remarkably strong.” In the last 18 months six million jobs have been added. Unemployment is down to 3.4 percent, the lowest in 50 years. Inflation over the past six months has been 3.3 percent compared to 9.6 percent last June.
But we don’t think so. According to a Federal Reserve Study, a record low percentage of Americans are positive about the economy in general. Since a year ago February, the consumer expectations index has been down to the level associated with a coming recession.
Are we all naturally Eeyore? Or has Eeyore taken over the media and we have been persuaded? Reading the following headlines and paragraphs from recent news stories about the economy, it seems Eeyore is alive and well and has found a home.
Inflation Cooled in March, but Stubborn Price Increases Remain
Inflation is slowing, a fresh reading of the Federal Reserve’s preferred index showed, but costs continue to climb rapidly after stripping out volatile food and fuel — which shows that price pressures retain staying power and it could be a long road back to normal.
The housing market is slowing. Businesses are pulling back on hiring and investment. But American consumers are keeping the economy out of a recession — at least for now. … It isn’t clear how long that resilience can continue, however.
Unemployment Is Low. Inflation Is Falling. But What Comes Next?
Despite hopeful signs, economists worry that a recession is on the way or that the Federal Reserve will cause one in trying to rein in inflation.
What Bank Earnings Reveal About the Health of the Economy
JPMorgan Chase and Wells Fargo reported solid earnings on Friday, but big questions remain about the sector’s health and a potential recession.
Inflation eased again in April, but prices are still rising fast
The trend is going in the right direction, but policymakers are worried it’s getting tougher to bring down, threatening workers and families
In a column early this year, Krugman asked, “Will Americans even notice there is an improving economy? … Most people don’t read long-form, data-driven essays on the economic outlook. Their sense of the economy is more likely to be shaped by snippets they read or hear.”
The snippets are gloomy. The Eeyore virus spread by contact with the media has infected us and there is no readily available vaccine.
The political implications of the disconnect between reality and our perspective are enormous. The economy – or the perception of it – is a major factor in who wins elections. Despite the actual economic numbers, only some 30 percent of adults approve of Biden’s handling of the economy according to most recent polls.
We still remember the sign that James Carville, then campaign manager for Bill Clinton, put on his desk during the 1992 presidential election, “It’s the ECONOMY, Stupid.” It was the answer to the question he was constantly asked. What issues drive the campaign? The economy at the time was not great. Clinton won. The words are framed in the playbook of every political consultant.
The media is not going to change the way it presents the news. The bond with Eeyore is too tight and long lasting. In the Pooh stories, Christopher Robin, Pooh and the others who lived in the forest with Eeyore, knew Eeyore. They recognized him for being an Eeyore, were fond of him without being infected with his Eeyoreness.
There is wisdom there. And perhaps the makings of an effective vaccine if, as we are reading or listening, we separate actual events from speculation about what might happen next. The facts are from regular government reports. The speculation is mostly Eeyore.