Summary: this is a follow-up to the many comments in Making us dumber, chanting “Dude, where’s my recession?” , which discussed another way the Internet can make us smarter — or dumber. Google “Dude, where’s my recession” for a splendid example. Thousands of hits for what might be the dumbest tagline of 2008. That post discusses why accurate economic forecasting is difficult, what we know about current conditions, and recent warnings from one of our top economists.
This post discusses economists’ forecasts and media bias. A theory is developed to account for the frequent but undocumented allegations of media bias in their reporting about the economy.
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I have learned a lot from the comments to Making us dumber, chanting…?” , as usual. Two issues surfaced. First, have professional forecasters been predicting a recession during the past year (if so, incorrectly)? Second, has the mainstream media been tilting their coverage during the past year to convince Americans that the economy is in or near a recession?
I do not know how to test the second theory. Bias is largely subjective, and so difficult to measure. Also, since people get their information in many different ways, your experience with media might differ from mine (in fact, having last watched a TV show in 1973, your experience is probably not mine).
The first is testable. We can examine surveys that measure the consensus forecast of major economists. The best known are the Blue Chip Financial Forecasts and the Wall Street Journal’s Economic Forecasting Survey. The latter is available to non-subscribers here.
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These surveys frame the economic coverage of the major mainstream media: Wall Street Journal, NY Times, LA Times, etc. Not that they follow it slavishly, but in my experience they seldom stray far from these consensus forecasts. Also, the major economists they quote seldom stray from the consensus forecast. So what did economists forecast for GDP last year, and how has their forecast evolved (using the WSJ data)?
Estimate the probability of a US recession in the next 12 months (by month of the survey)
Aug 2006 26% Nov 2006 26% May 2007 26% Aug 2007 28% Oct 2007 34% Jan 2008 42% Mar 2008 64% May 2008 63%
Now that most economists see a recession coming, how bad will it be? An Apocalypse? As of the May survey, the consensus forecasts for the change in real US GDP were:
2008 +1.2%
2009 +2.2%
Pretty mild.
Evidence of media bias
What I did not see in the comments were any actual quotes from the media to support the terrible things said about them. Like…
The point of that tagline is that the MSM and a lot of lefties are slavering, hoping, pining, praying for there to be a recession RIGHT FREAKIN’ NOW, so that they can try to hang that around McCain’s neck.
I think that’s the context, responding to media doomsayers that seem all too eager to jump the gun, albeit without any ideological motive of course and without a looming presidential election having anything to do with it. Today when I opened Google I saw three headlines predicting economic disaster. It’s like the media’s Katrina coverage all over again.
There have been two camps on diagnosing the economy: the US is going to end, or things are not as bad as you are being led to believe.
Reader Chris Baldwin emails: “While the tag line is somewhat recent, it is disingenuous to claim that this is all about Q1 and Q2 data. We’ve been told that we’re already *in* a recession for going on a full year now, when it is clearly nonsense. He’s right when he says that we might be in a recession in Q2, but we weren’t 10 months ago when all this doom mongering really kicked into high gear.”
— from the Instapundit; note the above table shows no sign of doom mongering 10 months ago
Is it possible — just a theory — that what we have here is bias by these people than the by media? Selective perception: they believe the media to be biased, so they remember those bits from the media stream that confirm their bias. Comments are welcome about this — especially comments with citing actual bias.
Even better would be studies showing serious media bias. The plural of anecdote is not data. We know the mainstream media has biases (how could it not?). There is well-documented bias against conservatives (although coverage of the Iraq War suggests that may have changed since 9/11, at least with respect to national security). Far stronger is their bias towards bad news over good. The media exists to sell advertising, so reports of babies picking flowers on a sunny day get little attention. “If it bleeds, it leads” sells papers.
Other posts about the Internet: does it make us smarter or dumber?
- Cable Cut Fever grips the conspiracy-hungry fringes of the web (7 February 2008)
- Resolution of the Great Submarine Cable Crisis — and some lessons learned (8 February 2008)
- What do blogs do for America? (26 February)
- The oddity of reports about the Iraq War (13 March 2008)
- Euphoria about the Bakken Formation (10 April 2008)
- The Internet makes us dumber: the Bakken euphoria, a case study (15 April 2008)
For more information about geopolitical implications of current economic trends
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A brief note on the US Dollar. Is this like August 1914? (8 November 2007) — How the current situation is as unstable financially as was Europe geopolitically in early 1914.
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The post-WWII geopolitical regime is dying. Chapter One (21 November 2007) — Why the current geopolitical order is unstable, describing the policy choices that brought us here.
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We have been warned. Death of the post-WWII geopolitical regime, Chapter II (28 November 2007) — A long list of the warnings we have ignored, from individual experts and major financial institutions (links included).
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Diagnosing the eagle, chapter I — the housing bust (6 December 2007) — What the housing bust shows about America’s fitness to survive.
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Death of the post-WWII geopolitical regime, III – death by debt (8 January 2008) – Origins of the long economic expansion from 1982 to 2006; why the down cycle will be so severe.
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Geopolitical implications of the current economic downturn (24 January 2008) – How will this recession end? With re-balancing of the global economy, so that the US goods and services are again competitive. No more trade deficit, and we can pay out debts.
- A happy ending to the current economic recession (12 February 2008) – The political actions which might end this downturn, and their long-term implications.
- What will America look like after this recession? (18 March 208) — More forecasts. The recession might change so many things, from the distribution of wealth within the US to the ranking of global powers.
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The most important story in this week’s newspapers (22 May 2008) — How solvent is the US government? They report the facts to us every year.
To see the all posts on this subject, go to the archive for The End of the Post-WWII Geopolitical Regime.
