Monday, August 4, 2008


FDR once famously stated, “The only thing we have to fear is fear itself.” Many people interpreted that to mean that there were no problems we need be concerned about. Of course, that’s not what he meant. Rather, what FDR meant was that, while the world is filled with problems we need be very concerned about, if we deal with them calmly and rationally, without fear, than we can deal with and solve them.

Unfortunately, today, Americans aren’t heeding FDR’s words. Rather, Americans, in growing numbers, seem to be afraid of everything, not only those problems we need to be concerned with, but also “problems” that either are easily fixed, or don’t exist at all. This is especially true of the country’s current economic troubles, and the blame for this lies largely at the feet of the mass media.

Yes, the economy is struggling. Yes, many people are having trouble making ends meet. Yes, while we may not currently be in a recession statistically, most would agree we certainly are in a “de facto” one. But, over the past couple of years, rather than trying to rationally report the situation, the mass media has fallen all over itself sensationalizing and blowing its reporting of these problems totally out of proportion and giving these reports virtually no perspective nearly every chance they get.

Fortunately, at least a few observers ‘get it.’ One excellent case in point: a column recently written by Jeff Jacoby and published on the Op-Ed page of the Boston Globe (Tuesday, 7-22-08).

In his column, entitled “Cheer up – these are the good old days”, Jacoby touches on the sensationalizaton of the economy’s problems by the media. Jacoby then goes on to put these problems in their proper perspective. For example, Jacoby writes:

Voices of reason keep trying to point out that conditions are not nearly as bad as they were the last time consumers were this despondent. That was in May, 1980, during the final year of the “misery index” – the sum of the inflation and unemployment rates – hit an excruciating 21.9. Inflation was then at 14.4 percent; unemployment was 7.5 percent. The numbers today are 5 and 5.5 [percent] respectively.

But more importantly, Jacoby goes further, offering the perspective of two other very rational observers – Federal Reserve Bank of Dallas members W. Michael Cox and Richard Alm. In their recent article (entitled “How Are We Doing” and published in the current edition of The American magazine), Jacoby notes that Cox and Alm point out:

The nation’s present troubles [Cox and Alm] argue, … “will turn out to be mere footnotes in a longer-term march of progress.” The US economy, “a $14 trillion behemoth” remains without equal as an engine of growth and prosperity. However impolitic it may be to say so, when you take a long view it is clear that we have never had it so good.

Moreover, as Jacoby further notes, Cox and Alm point to a number of reassuring trends to back up their long-range optimism:

Americans on average work far less than they used to. Annual hours devoted to the job have fallen from 1,903 in 1950 to just 1,531 today. We start working later in life, retire earlier, and live much longer. Even including household labor, [Cox an Alm] write, “only about a quarter of our working hours are consumed with work, down from 45 percent in 1950.”

[Additionally, the] material progress of recent decades has been extraordinary – at all income levels. Forty percent of poor families own their own homes. For many goods (kitchen appliances, color TV’s, air conditioners) ownership rates are higher among poor Americans today than they were among the general population in 1970...

…Short-term troubles notwithstanding, Cox and Alm observe, the “data points add up to steady and continuing progress for average Americans.”

As Jacoby (echoing a point we continuously try to get across on “The Money Show") concludes:

So, no, everything is not [as much of the media would have us believe] spinning out of control. Alarmist headlines notwithstanding, we’re doing all right…