The Media's Recession
by Jorge Vargas
Recent polls are demonstrating that most denizens of the US have small confidence in the stock market and a high confidence in the fact that there will be a recession. Most denizens of the United States have little concept of how the stock market, and economics in general, actually works. They do not seem to grasp that, in the stock market, the concept of self-fulfilling prophecies is at its strongest.
Of course, the global economic system is currently faltering, in large part because of the housing boom-bust cycle in the United States but also due to China's resistance to the possibility of re-valuing the yuan against the U.S. Dollar. Sky-rocketing oil prices - owed in large part to the weakness of the U.S. Dollar which goes back, in part, to the Chinese recalcitrance - is also partially to blame. But these issues did not cause the weakness currently apparent in the US stock market. That debilitation came about because of low confidence levels within the US public.
Where did the low confidence levels come from?
The obvious catalyst: The aforementioned housing woes facing the US economy, and economies in other key nations as well, what with the slow-down, in that field, in Spain and other key areas in the EU.
But who reported that story? Who made the whole world know about the problem? Who made the whole world lose confidence in that market, thus fueling further pull-outs which snow-balled into the recession that we are living in today?
The US media machine.
Why?
It is likely - though not at all certain - that a major calculation would be so that the media would influence the decisions of voters, though that would imply support for the Democratic party, since the obvious reaction to an economic slow-down would be to turn away from the ruling oligarchy. That's one possibility which need not be entertained though it must certainly be taken into account.
And it is likely that there is another - for these are not mutually exclusive: Economic meltdowns sell newspapers. Let's face it, economic growth is boring. Now, the news stories are becoming sexier, are they not? The US Federal Reserve is now, supposedly, bailing out the chief executives of the major companies that are slowing down and being bought out at minimal prices. The US President is now denying that there is a recession going on. Imagine the criticisms! And let's be honest, criticism sells.
But why was the US President denying it? What was he thinking? Why is he now encouraging trust and patience?
Because Mr. Bush's advisors - a few of them - understand economics; and yes, this does mean that, for once, Mr. Bush is acting in a correct, albeit amateurish, manner (After all, who can believe Mr. Bush after so many lies have been told? But then again, who should believe a mass media machine that blindly followed the US leader into Mesopotamia?). Because they realize that this is a self-fulfilling prophecy. If you think the stock market will collapse, you will withdraw your money before it does so and as you withdraw, the shares are worth less and less, so more people will withdraw, and shares become more and more worthless faster. It is, as the say, a vicious cycle. It can be stopped, obviously, and the government is in a position to stop it, but so, too, is the media.
How?
Through responsible and non-sensationalist media coverage.
However, that would be boring, and boring - in this society, at least - simply does not sell.
