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The Press and the Global Economic Freak-Out

And so we come back to this because it just won't go away. Despite a recent improvement in the performance of the Dow Jones Industrial Average, there's still a global economic freak-out in full swing...and journalists and newsletter writers (ahem) aren't exactly keeping a balanced perspective about it. It's time for a little mea culpa.

Wrote reader Dennis back in November in response to RCPU's most grievous freak-out:

"I've been more than aware of the economic problems facing this nation for the last couple of months, as well as the failures in the housing industry that seem to have precipitated the whole thing.

"However, one thing that I've been seeing lately has me wondering if we're making things worse by the way in which we describe the situation. Words like 'cratered,' which you used in your article, seem to be a bit melodramatic to describe a growth rate of only 10 percent in Dynamics billings. Billings 'fell off a cliff' is used to describe the same situation.

"I suppose that to add some punch to their columns, writers seek for the most dramatic phrase to describe the Dow's loss for the day, or the number of home foreclosures in a month. However, when those phrases pass through the mind of the average person, I wonder if they don't have a cumulatively depressing effect. If there's any way to be optimistic in today's market, it's made harder by continually hearing about cratering and falling off a cliff.

"What I'm suggesting as a remedy isn't to paint everything as rosy, but to use less emotionally powerful words to describe, as rationally as possible, the events of the day, and then to give some context for them. To refer to the Great Depression as something which could happen only once isn't enough. We've got to refer to events more recent than the 1929 Crash or the '30s and try to do it in a less hysterical way."

Dadgummit (as we'd say in Texas), Dennis, your brand of thoughtful, sensible, rational e-mails is just not welcome around here. Just kidding. Actually, we really like what you had to say.

While we do think that we're all in for some rough times ahead (and in the midst of rough times now), we did try to qualify that Dynamics revenues being off isn't exactly tantamount to the coming of another depression. We were hoping that our readers would be savvy enough to see how silly it is to juxtapose the two, and we think that most were. You certainly were.

However, when it comes to mainstream coverage of the economy (and, uh, maybe some of the coverage here, too), we totally agree with you. There are a lot of alarmist writers out there who've bought into using scare tactics to get people to read articles. We've tried to subtly parody that just a bit, but it's entirely possible that we're being way too subtle. And, outside of attempted parodies, we've also bought too much into the same tactic ourselves -- it's just so hard to resist!

Really, the conditions of the early '90s and certainly of the late '70s (especially the late '70s) were arguably worse than anything we're seeing now, although the potential for total collapse seems much worse today. Nevertheless, some, maybe a lot, of the doomsday talk -- which has yet to die down after it was spurred partly by both presidential candidates during their campaigns -- is way out of line.

As for Dynamics revenues falling off a cliff, they might have by Microsoft's standards...but they certainly didn't by the standards of, say, AIG or GM. So, you make a very good point. We should be more careful about using language like that, and we will try to be in the future.

How panicked are you about the economy? Get your thoughts on that or anything else that's on your mind in to [email protected]. Next week we'll release our last batch of RCPUs until the new year, so hurry!

Posted by Lee Pender on December 10, 2008


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