02 Jan 2009

Poll Finds 77% of Americans Think the Press Has Worsened the Economy

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Markets are basically emotionally hysterical mobs and herds. They typically run furiously in one direction, until the mood changes, then they run just as furiously in the opposite direction.

Suddenly, in 2008, a nation-wide real estate slump led to a natural enough increase in mortgage defaults, generally on the part of no-down payment, or low down payment, buyers with no equity stake worth preserving. Single-digit mortgage default increases were reported in screaming headlines as clear evidence of catastrophe, and before you knew it, the credit markets were in a panic, and great and famous financial institutions suddenly found themselves in serious trouble as securitized mortgage debt almost overnight became non-negotiable.

Market confidence, or the lack thereof, had a great deal to do with the tone and volume of negative reporting, which was, to say the least, extreme. There is a natural conflict between the media, which needs the most exciting, easiest-to-sell story it can produce, and the interests of truth and the investing public. This Fall, there was an even greater conflict of interest between accurate and sensible reporting and the desire of the overwhelmingly liberal journalist community to amplify economic bad news during a presidential election.

reports an Opinion Research poll indicating the overwhelming majority of the public recognizes what the media has been doing very well.

Seventy-seven percent of Americans believe that the U.S. media is making the economic situation worse by projecting fear into people’s minds.

The majority of those surveyed feel that the financial press, by focusing on and embellishing negative news, is damaging consumer confidence and damping investment, making a difficult situation much worse. The poll was conducted via telephone, December 4 – 7.


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