Press the Press on Its Failure to Cover the Economic Depression Adequately
To the Financial Editors and Reporters of this nation:
One thing that defies sense to me is how nearly all of you have demonstrated an overwhelming tendency to write more optimistically about the economy than the facts deserve. I can understand why the government does it and to some extent why economists do it (in that many work for investment firms or for the government), but it surprises me that so many reporters follow these pied pipers wherever they lead. I can only conclude that many of you are living in economic denial — not wanting to see our economic situation as bad as it really is.
I’m writing this open letter to the press to try to stimulate those who are reporting on this recession into waking up and realizing that …
1) The 2008 global recession never ended. So, please stop parroting the government’s line that it did. Regardless of what the government’s one measure (GDP) has done, the problems that began in 2008 remain practically unchanged:
- Housing is still on a long decline with occasional upward swings along the way.
- Recovery of the jobs lost during the worst part of this global crisis is almost non-existent.
- Banks are still unwinding their balance sheets from bad debts created in the first recessionary dip.
- Europe barely came out of recession before it went back into full-on recession.
- Stock markets have not fully and stably recovered their losses from their former high points; so we have not returned to where we were and will not for a long time because…
- The underlying problem of bad debts still exists everywhere. Bad debts are far short of unwinding yet.
2) We are in an economic depression, not a recession, and we are already sliding into the depression’s second recessionary dip. Many people don’t realize that the Great Depression consisted of several ups followed by recessionary downs, but the press is without excuse for not taking the time to analyze things more deeply. The fact that you see upward movements in the present economic crisis does not mean we are in recovery. The Great Depression also had a very spiky bottom. Depressions have a lot of volatility as people do all they can to bring on recovery and their efforts fail again and again.
The difference between an economic depression and a recession is that a depression is caused by a meltdown of a nation’s (or world’s) economic core, while a recession is caused by the bursting of a speculative bubble. This is the first time since the Great Depression where our central banking structure has melted down. We’ve seen failures of credit unions at the periphery of our economy in the past, but never since the Great Depression have we seen a total meltdown of the largest banks at the core of our economic and monetary system.
Herein lies the difference: In the 80′s we saw something like 500 credit unions go bankrupt, but we did not see a collapse of our any of our core banks. Comparatively, that’s like lopping off all of your fingers (very bad) versus completely crushing one of the vertebrae in your neck (completely debilitating). There may be a lot more bones involved in the finger lopping, but the damage is nowhere near as crippling as the crushing of a single vertebrae. That’s the difference in cause of an economic depression vs economic recession. This time we had several vertebrae disintegrate along the central nervous system of our economy.
The difference in how a depression graphs out vs how a recession graphs out is simple: a depression is longterm and likely consists of more than one recession. It’s the difference between a bay and a cove. A bay may have several coves. An economy in depression tries to rise and then falls, tries to rise again and then falls again. It is like a dying man, struggling to move forward. An economic depression is a long painful unwinding. It is WAY past time to start calling this economy what it is and to hold economists and government officials responsible when they try dodging these tougher terms that describe our times. If you want to keep calling it a “recession,” it is certainly a great one to say the least. I call it that only tongue in cheek, for it is clear to me that it is much more than a recession.
3) The only reason this depression graphs out like an upside-down, two-humped-camel is that the government has done everything it can to prop up the economy in the middle. The so-called “economic recovery” you reporters talk about everyday has been created by completely unsustainable government actions; therefore it is a false economy or false recovery in this sense: as soon as the government actions that are creating lift end, the economy will fall right back into its hole. A true lift would be one where the government does what stimulus it can to kickstart the economy and then the economy, being revived, continues on its own. You will NOT see this so-called economic recovery continue on its own, so why do you keep giving it the benefit of calling it a “recovery?”
It’s long past time for you to start asking harder questions, stop parroting words like “recovery,” and stop painting pictures that are rosier than reality. Having watched your flacid reporting throughout the first four years of this depression, I’ve decided to start being tough on reporters for not being as tough as the press should be on the economists who so completely failed to see the depression coming and who have continued to fail to see every downturn since it began. I’m going to start writing to reporters directly and to editors to criticize you for not being tough on the government as it continues to bail out the rich at the enormous cost of everyone else with no demonstrable recovery for all the trillions of dollars spent. Never in the history of mankind has so much money been spent with such diminishing results. If you economic and business reporters are not going to hold the government’s feet to the fire and certainly the economists’ feet to the fire (for their failure is obvious), then it’s time for people to start holding your feet to the fire until the fourth estate starts doing its job within society.
I think the press has failed miserably overall at reporting this depression. I cite on my blog (http://thegreatrecession.info/blog) numerous times how reporters lean toward talk of “recovery” at every glint of hope and fail to sift out the truth that can be found deeper in the very numbers they are reporting. If I can sort the truth out from your own numbers, you should be able to, also. It is, after all, your profession! (Visit this article as just one of several available examples I’ve posted on my blog if you don’t believe my statements about your failures to see what you should be able to see.)
For the most part, the press has parroted whatever the government has told it. It has not bravely dogged out the corruption that created this mess in the investigative way that it should have (such as the way The Washington Post once ferreted out Watergate). So, you are wide open for criticism in failing your central role in society. I guess investigative journalism is dead because it costs too much in time when the investigation may bear no fruit. Farmers are braver than you editors. They plant and tend a crop all year with no promise that it will bring a harvest. They bank an entire year of their lives and income on one possible harvest.
Maybe you don’t think investigative journalism is needed because you don’t suspect there is massive corruption to uncover. Really? How could you possibly think that when we are witnessing the greatest transfer of wealth from the public sector to the wealthy private sector in the history of world? Everyone knows it is happening without any disclosure or accountability for individual transactions before congress or before courts. If you think there is no corruption to root out in the middle of a massive transfer of wealth that is entrusted entirely to the hands of a few unelected bankers, you don’t understand the human condition. Somewhere there is considerable corruption. It’s been four years that this transfer has been happening. Why haven’t you found any corruption in all that time? I mean found things you turned up yourselves, not some case the government brought up. Are you sleeping on your newswires, waiting for Reuters to do the work for you?
If the press is not going to critique the government sharply, I’m going to start critiquing the press directly. I have been critiquing it in my blog but will now start to do so by emails to individual reporters (when their address is available on the article) and letters to editors (whether they want to hear it or not) whenever I see an article that casts a rosier picture than the facts merit or that fails to take the government to task in an aggressive enough manner on what it says. I’m writing this as an open letter in order to encourage my readers to take any part of it and combine it with their own effort to press the press toward better reporting. There has been no recovery — only a mirage that looks like an upside-down camel — and you will begin to see that ever more clearly over the months ahead. The oncoming recession is the second dip of a global economic depression. Mark my words and come back to them when you see it happening. It is already happening in Europe.
At this point, I am holding the press as accountable for its failure as the government. I hope others will ratchet up pressure on the press, too.