The record is clear: the economy is strong and getting stronger, as gas prices come down dramatically. There has been four years of robust economic growth. But this is a record that has gotten the Bush Administration in trouble. Why?
The problem is the perception of what’s going on, courtesy of the major media. Even though the latest numbers show unemployment at only 4.7 percent, an annual inflation rate of only 3.8 percent, and average hourly earnings up, a September Wall Street Journal poll finds 57 percent of the people somewhat or very dissatisfied with the economy.
The book, Economic Turbulence: Is a Volatile Economy Good for America?, strongly suggests that the major media are focusing on “losers” in the economic situation rather than “winners,” and that stories about lost jobs obscures how the economy has become more flexible and a benefit to most workers.
The book begins by taking issue with CNN’s Lou Dobbs, who captured the “national angst” about the economy in his book, Exporting America. Dobbs, however, failed to capture the dynamism of the U.S. economy, and the fact that while jobs are lost, new ones are created.
Looking at the Washington, D.C. area, the book notes how, in May 2005, Giant Food shut down its headquarters in Maryland and laid off 500 workers. The news was full of stories about “the demise of good middle-class jobs and how the local economy would be hurt,” it notes. But almost unnoticed, at the same time, was the announcement that a new firm, MOM (My Organic Market), was opening a new store in western Maryland.
The book said this is typical of how the media handle economic news. The bad is emphasized while the good is practically ignored. The “nature of the news industry,” it notes, “is to report on visible and traumatic events, which tend to be job losses, worker layoffs, and plant closings.” On the other hand, job creation, which can be a slow process, is not news.
Getting to the nub of the issue, the book makes the point that “People see workers getting fired, and jobs being lost as firms shut down because that makes news” (emphasis added).
A “popular perception,” the book says, is that good jobs are disappearing. And yet the data assembled by the book’s authors, Clair Brown, John Haltiwanger, and Julia Lane, suggest that many laid-off workers “are able to continually improve their career paths by finding better job opportunities with another firm.”
Yet the idea that good jobs are disappearing-the so-called “giant sucking sound” described by Ross Perot-has become “a theme of newspaper and magazine articles?” It cites a series of such articles in the Washington Post.
The book analyzes five major industries-retail food, trucking, financial services, software and semiconductors-and concludes that each of them “has more jobs for all workers than a decade ago, and these jobs tend to be higher skilled and higher paying.” However, in terms of the media, job destruction and job loss “are much more visible than job gains and worker hires?” That kind of coverage produces the economic depression we see in the public opinion surveys.
Looking at the government approach, the book says that intervention in the economy should be restricted to providing workers with skills and information that facilitates adapting to the ongoing changes in the economy. The alternative is the socialist approach of stifling change and mobility in the economy in the name of saving workers from economic changes and turbulence. That approach, the book suggests, will not be successful over the long run and will undermine a vibrant and dynamic economy that benefits the people as a whole.