What We Know ... About the Economy

If news stories are any guide, what we know -- or what we hear and read -- about the economy is more about the big boy corporations and banks than about the struggles of everyday people, according to a story in the NYTimes about a study coming out today.  The Times uses Pew data to find:

Reviewing almost 10,000 reports from Feb. 1 to Aug. 31 in newspapers, on news Web sites, on the radio and on network broadcast and cable television, Pew found that almost 40 percent of economic news reports dealt with the trials of the banking and auto industries, and the federal stimulus bill passed in February.

Unemployment and the housing crisis accounted for 12 percent. And, the study said, “stories that tried to explicitly examine the broader impact of the economic downturn on the lives of ordinary Americans filled 5 percent of the economic coverage.”

Now, you can argue that covering the banking and auto industries either directly affects us all (if you work in those areas) or indirectly affects us (if we feed those industries by, say, making windshields for Ford) or interests us all (because we see industry as vital to a thriving economy).  So I take the veiled criticism here with a grain of salt. 

You can only do so many poor little person stories before they wear thin, both with the journalists but also with the audience. And -- this is important -- there is ample evidence that focusing on the troubles and struggles of people actually leads the audience to blame them, not the economy, for their problems.  When it happens to us, external factors played a role.  When it happens to someone else, we blame some failure on their part.

So is 5 percent the right amount?  I'm not sure, but 5-15 percent is about what I'd hope for with that kind of coverage.

Economic Outlook

So Wall Street seems to be doing okay, but what about Main Street?

My own anecdotal evidence suggests Main Street is seriously suffering, especially on jobs (which, to be fair, always lag as an economic indicator). But what people know about the economy, at least according to the polls, says it's not as bad as I think.

Asked earlier this month how worried they are over the direction of the nation's economy, 78 percent said they are "somewhat" or "very" worried about the direction. That's pretty awful. But earlier this year the number was 81 percent, and in the Fall of '08 it was 88 percent. So you can argue there's improvement, at least in perception. And the "very worried" category has dropped from 48 to 36 percent. One of those good news-bad news things: people's perception is improving, but over a third still see the economy as crap. Asked about their own economic condition we see similar numbers. In the latest poll, 64 percent are "very" or "somewhat" worried about their situation (who isn't?), but that's a bit better than the 70 percent earlier in the year.

While the above ABC/Washington Post poll contains glimmers of hope, at least in perception, according to an Ipsos/McClatchy poll, the proportion of people who believe the economy has "stabilized" has inched down to 49 percent. I find that one fascinating.

In part we see a trickle down effect. Experts say we've avoided the worst, we see green shoots, and every day the Dow seems to be doing okay, and even while people individually are struggling there is a message (outside of Hannity, Limbaugh, et al.,), that things are looking better. Or at least catastrophe has been averted. So the trickle down message reaching some, at least in perception, is one of cautious hope. And if there's one thing Americans know, it's cautious hope for the future.

Data drawn from here.

Consumer Confidence

I always like to look at the various measures of consumer confidence and optimism. You'll find a nice batch of them here at that marvelous site, pollingreport.com. The TIPP indicators are above 50, which is mildly optimistic (on a 100-point scale). But the ABC News consumer comfort index is stuck in the negatives, -47 at last measure, a tick up from -49 a month ago. That scale goes from -100 to +100, so -47 kinda sucks. A little more complicated is the Consumer Board's confidence index, but it shows nice improvement and optimism of late.

Who cares? We can see the stock market is struggling to rally (Dow up 73 points as I write this) but a lot of people are carefully watching consumer spending. Until it shows up, other problems won't be solved easily, such as unemployment or tax revenues for local and state governments. What people know about the economy is in part based on their own lives, part based on what they see down the street or downtown, and in part what they consume in the media. The green shoots argument that we've hit bottom and see sprigs of life, seems to be true. Or at least as a perception.

It's Still the Economy Stupid

A Pew report shows people are still all about the economy. More than 4-in-10 follow economic news "very closely." This is one of those times when Main Street meets Inside-the-Beltway brainiacs, when the struggles of average people coincide with journalistic coverage, when politicians actually have a clue.

Okay, that last one goes a bit too far.

Not all is well in newsland. Just a few minutes of CNN/Fox/MSNBC/et. al and you quickly realize they can't report on anything unless there's a dash of partisan or ideological seasoning tossed into the recipe. TV News = haul out a tired hack from the left, a tired hack from the right, and let each have his or her say, in 30 seconds, which isn't enough time to explore these complex problems. Sigh.

In more important news, one-in-five people followed American Idol "fairly closely" or "very closely." In what people know, a crappy TV show with even crappier talent really matters.

Interesting data point. American Idol's shrinking audience over the past three years has happened more among the youngest and oldest viewers, but not the 40-to-64 age bracket, a group that stayed more or less constant in its love of bad TV. Parents show a huge drop, non-parents almost no drop. Weird, but I honestly don't care enough to tease out meaning from this odd yet fascinating statistical datum.

What People Want

In an interesting online piece at The Atlantic, it's argued that what people really want is not so much happy talk by their president but instead something quite different.

As it turns out, they want honesty. According to a Pew Research Center poll conducted last summer, fully 96 percent of the public say that the requirement that a political leader be honest is either “absolutely essential” (52 percent) or “very important” (44 percent), making it the most sought-after trait in a political leader. In fact, those in Obama’s opposition party are somewhat more likely to say honesty is absolutely essential (59 percent of Republicans) than are those in his own party (50 percent of Democrats) or independents (52 percent).

This is the big debate, of course. Should Obama be honest about the economy, or be a booster, or walk a fine line between the two?

As the article notes, what is truth is debatable -- all resting on your particular political predispositions. That last sentence brought to you by the letter p. But it's an interesting issue in today's economic mess -- do we want a cheerleader or the grumpy guy who tells us the hard truth? Or both? Telling us how bad things are didn't work for Jimmy Carter as president. Hell, almost nothing worked for him. Reagan came along and it was "morning in America" and people responded, so to me the matter is far from settled.

When Things Get Bad

From the Good News, Bad News desk, a lousy economy may be bad for business, even the journalism business, and yet, and yet ...

Here's this from a recent Pew report:

Americans continue to follow news about the economic crisis closely because they feel it is directly relevant to their lives. More than eight-in-ten (85%) say even when the economic news is bad they feel better knowing what’s going on, while 77% say they need to stay on top of economic news because it matters in the financial decisions they make.

In other words, when things go to hell, people go to the news. Sounds great, right?

The second graf arrives like a needle in the eye:

At the same time, close to half (46%) of the public says they often feel they don’t have enough background information to follow economic news stories ...

Rut roh.

So people care. A lot. It's their lives we're talking about here, they're friggin economic existence. The opportunities are there, news people. But the way we tend to tell news stories, especially economic news stories, often don't work -- at least in print. TV does this pretty well, especially CNN, in helping the average person understand not only what the hell is going on but also what it means to them personally

Other news providers, especially newspapers in dead-tree or online, need to think hard about how to make this work.

More on this later, especially on a set of famous experiments that demonstrate how we tell a story about economic conditions can influence who people blame for problems.

National Priorities

What do people name as the top national priority? You're thinking, "Aha! Trick question! It's so obvious!"

No trick. Just like you guessed, it's the economy. A CBS News/NYTimes poll had 60 percent of adults nationwide saying the economy is, to borrow from CNN, job #1.

In second place? Other.

I don't know what the hell other is, given the long list of topics scoring from 2 or 3 percent. In that list you've got stuff like war in Iraq, family values, education, health care, poverty, and the ever-popular "unsure." Given the margin of error, there is a huge tie for second among nine different topics.

Other recent surveys show largely the same thing -- economy first, a host of other issues tied at a distant second. What people know out there is that things are bad, getting worse, and there's not an overload of confidence in government's ability -- Democratic or Republican -- to fix the mess. Sometimes political knowledge comes down to direct experience, and I'm betting average people out there have a hell of a lot more direct experience with job loss and tough economic times than do the suits in D.C. of either party.

Newsroom Cuts, and Bagels Too

My local daily newspaper announced cuts, including five jobs out of a newsroom that could use 15 more people to adequately cover the University of Georgia, Athens, and its surrounding counties. Just another sign of the financial times, and yet I wonder about all the stories that will be missed out there -- the misdeeds of politicians and cronies, the businesses getting away with murder, and I suppose murder itself.

What we'll know about our community has been significantly harmed, all to service debt and feed the profit margin beast.

The paper will get slimmer, the price will probably go up, and the brainiacs and bean counters will wonder why circulation continues to drop. It's like McDonald's serving burgers cold and wondering why people stopped buying them.

Even my favorite local bagel place is closing at the end of the week. I plan on having lunch there today to see it off.

Why are the two related?

Simple. Zim's was a kind of community meeting place. If you visited in the mornings you'd see groups of people who often gather there to drink coffee, nibble a bagel, and share their lives with one another. Sorority girls, retirees, journalism professors who blog too much, you'd see them and a host of others at the cool custom-designed tables, chatting and eating and creating one of those "third places" where people visit and connect.

A good newspaper is kinda like that, or used to be. In some ways the Internet has blown up geographic communities and replaced them with communities of shared interests regardless of where one lives. That's good, and that's bad. We need both kinds of communities, but interest in news is hurting, at least the traditional way we provide news, and I'm not all that convinced that a sense of geographic community isn't also disappearing.

Today, I'm reading the Athens Banner-Herald in paper form. And I'm eating a bagel at Zim's.

The Economy

More bad economic news today, and as time passes people are more and more pessimistic about 2009. The last positive numbers in the consumer comfort index were recorded in December 2006. These range from -100 (awful) to +100 (wonderful). In 2008 a steep decline began and the latest number is -49. In fact the index has been either in the negatives or barely positive since 2002.

Asked if they are hopeful or fearful for 2009, national survey respondents were more negative about the state of the world then themselves personally, but even then the numbers weren't great. Personally, 35 percent were fearful, according to an ABC/Washington Post poll in December. In December 2004, 30 percent were fearful about their personal lives for the next calendar year.

One-third say it's "very likely" and another third say it's "somewhat likely" we'll see a depression. About half favor an economic stimulus. A third say no.

So what people know about the economy is in part what they see or read about, but more important is what happens to themselves, to family, to friends and neighbors and local businesses.

There is no mixed message here. The news media and the real world agree, it's damned ugly out there.

Anger and What People Know

People are angry. They're pissed about the economy, about Iraq, about gas prices. So it's no wonder that folks are angry about the proposed trillion dollar buyout to hopefully fix a looming economic crisis.

Anger and other strong emotions have an interesting relationship with knowledge. In general, emotions tend to increase motivation but hinder learning. Pissed off people pay attention, but the emotion gets in the way of reasoning. The result is often a focus on individuals, someone to blame. Scapegoats.

Enter, the CEO.

I agree, I want someone to blame as well. Public execution of a few CEOs, with pay-per-view television, might go a long way toward helping with the bailout. Since that doesn't seem likely, we may have to go with the Bush plan, with some changes. It took me a few days to accept this after some heavy reading, thinking, and acceptance that my pay-per-view idea was never going to fly.

But some GOPers in the House, for philosophical and political reasons, are balking. I'm not a partisan, and yet here's my gift to the Dems. A line that may or may not work:

Let a Hundred Herbert Hoovers Bloom.

Yeah, ya gotta be historically knowledgeable to get the line, but what the hell, I'm a PhDweeb, so boiling that down any more wouldn't work. Maybe a good preface, like: "As well all remember, Republican Herbert Hoover failed to blah blah blah." And then let the hoovers bloom.

Not a bad line for the debate tonight, if there is one.

My money? McCain walks in at the last second to a rousing ovation.