Broken Economy: The Media’s Role

by

First, a disclaimer: I’m not an economic expert.

But for the media, I would not know our country is in the midst of an economic crisis. Over the past year or so, there has not been one day without some news outlet moaning about how we are in the worst economic situation since the good old days of the thirties.

Assume the following: Timber, a 45 years old middle aged man from the small hamlet of Setauket, has money invested in Bank Boolack. Boolack loans out money to graduate students. Timber is jolly, and makes a comfortable living. His income does not fluctuate with the tides of the economy. He watches a combination of CNN and Fox News so he can keep his views balanced. One day, a pundit says the economy might falter soon. For the next week on TV, Timber observes similar doomsday predictions about the economy’s frail health. Timber panics, and takes all of his money out of the bank.

Many others in Setauket, frightened by the pundits grim faces and grim words, also take out the money they invested in Boolack. These withdrawals happened so much that the Bank had no more money to loan out. The bank failed, and a thousands of future students(people who would take out loans, pay it back with interest, and thus give the bank a profit) are left to the tedious task of begging their baby-boomer parents for help to fund their education. But many parents said no to their kids’ requests. These unfortunate students ended up doing nothing. And, all of a sudden, Setauket’s economy was not growing anymore. Jobs dissappeared, people started making moonshine instead of buying Svedka vodka.

Ok, forgive the elementary lesson in economics, but I thought it the best way to display the media’s effect on the real world. Just think, if people had no information about economic indicators (that we don’t understand in the first place) so many people would not have sold their stocks, etc. and our economy would not have been hurt as much as it was.

P.S. It would help if the reporters and pundits that broadcasted all of this crap were qualified experts in the fields they reported on. Alas, what is reported need not be informative or accurate; it need only have a speck of truth and a whole lot of sex appeal.

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