We didn’t always live in a 24-hour economy. In the not-so-distant past, work ended when the sun went down and resumed when it rose again. Technology made it possible to light and power workplaces around the clock. But to capitalize on that possibility, businesses had to find people willing to work those hours.
The broadcasting day used to end shortly after midnight, and night-owls often wakened to the sound of static and a view of gray horizontal bands on the tv screen. When the networks decided to broadcast around the clock, they had to find enough content to fill all those hours.
At one time, news was delivered once daily in a newspaper, and on the evening news, which ran for 30 minutes at supper time and was repeated – with some new content – just before bed. When the news media decided to run 24 hours, they had to find content to fill all those hours.
And that is a problem.
No doubt our current economic problems are real. By the time the indexes settle this will likely be the worst recession since the depression. But even if I’m wrong; even if the economy settles now at levels more positive than the recessions of the 1970s and 1980s, neither of those recessions will hold a candle to this recession in one respect: Hype and drama.
I hold the 24-hour news cycle largely responsible for this problem and they share the blame equally. If your preferred flavor of 24-hour news is Fox or MSNBC or anything in between, every time you turn on the TV or fire up a website you are assaulted with economy hype. Add to this problem the facts that a) at best, TV journalists have a populist understanding of economics and b) TV journalists are paid relative to their viewership and ratings, and you are not only assaulted with economy hype, but you are also assaulted with information that has been spun, misunderstood, misrepresented, or all three.
Have you considered who the news media rely on most for ideas and stories? Each other. They monitor one another with the rabid fascination born of cutthroat competition, producing results that sometimes look like a child’s game of telephone. The sheer number of news outlets, bloggers, financial company public relations departments and special interests produce so much news that the media has little or no time to fully evaluate or validate stories before throwing them out to the insatiable news public.
What’s an insatiable news consumer to do? It depends on your motivation. If your motivation is to be entertained by news, just keep watching what you’re watching and don’t worry about quality. If you’re consuming the news for knowledge, you’ll need to be more discriminating.
A good example is Warren Buffett’s 2/27/09 annual letter to Berkshire Hathaway shareholders. All news outlets reported on the message, and the spin you received depends on which flavor of news you favor. I noticed that few media outlets linked Warren Buffett’s actual letter to their news reporting, which is rather strange considering that links are free. A curious person would pull the letter and read it for him or herself.
That curious person would discover that Warren Buffett refuses to do something we seem to want our news media to do. He refuses to draw conclusions that cannot be drawn. Buffett educates by providing interesting facts interspersed with his analysis, which is clearly identified as his own potentially flawed analysis. By communicating with us in this manner, Buffett demonstrates that he respects our intelligence far more than the news outlets do.
Let’s consider another good example of your need to be discriminating when consuming economic news. Economists espouse contradictory opinions about the current economic situation. Depending on which flavor of news you favor, you are likely hearing from one school of economists or another, and the school of thought your news outlet is subscribing to has probably been selected to be supportive of their philosophical bias.
I know a fellow who constantly travels the world, and everywhere he goes he eats at McDonald’s. When he’s not traveling, he eats at home or he eats at . . . McDonald’s. Clearly he has limited his gastronomic experience.
But this is how most people consume their news.
So. The 24-hour news cycle requires 24-hour news content. The news world looks to itself for reportage. The competition to produce stories leads to little – or rushed – thought and analysis. News consumers dislike ambiguity and crave comfort, so the news media spoon-feeds us certainty and pre-approved bias. The result? Very few people understand the current economy, economic history, or the potential pitfalls and promise of various solutions.
Do yourself a huge favor. Pull the source of news whenever it’s available. Better yet, stop getting your economics information from news outlets, and rely on these highly respected sources instead (note: I have a strong preference for centrist, non-partisan, private think tanks. I have indicated institutes which have a distinguishable bias, but which are still providing excellent research. I have avoided think tanks which exist to advance liberal and conservative agendas):
• The National Bureau of Economic Research
• Institute for International Economics
• Brookings Institute
• The Century Foundation
• The Jerome Levy Economics Institute of Bard College
• Public Agenda
• The Cato Institute (libertarian)
• The Economic Policy Institute (center left)
• The Committee for Economic Development (center right)
Does this seem like extra work? It is. And as I said earlier, if you simply watch news for entertainment, it’s not work that would be valuable to you. But if you’re losing sleep over the economy, considering the best route to take with your business, deciding whether or not to switch jobs right now, or weighing the benefits of hitting the interview circuit versus starting your own business, you deserve to be informed.
Informed is significantly different than instructed. Instructed will provide answers, but unless you’ve selected an incredibly intelligent, unbiased teacher who is respected by even those who disagree with him or her, you can’t count on receiving useful answers. The result of informed is messy, ambiguous, and producing of more questions than answers. But it is informed that will empower you to actually think about the economy and make better decisions about your life.
Perhaps most valuable of all, every minute you spend conducting valid research on the economy is a minute you haven’t wasted being frightened by the 24-hour news cycle’s latest bogeyman.
© 2009. Andrea M. Hill