26 September 2007
Emotion Trumps Data on CNN’s ‘Your $$$$$’
The numbers are good, but the reporting is fearful.
No matter what the data show, ‘Your $$$$$’ on CNN stays resolutely committed to anecdotal evidence and pessimism.
“When we were talking to people and asking them about The Economy, most said there’s a problem; most said something’s wrong” reported Ali Velshi, co-host of CNN’s ‘Your $$$$$.’ He quoted an unsourced/unnamed man-in-the-street.
Water-cooler scuttlebutt on consumer pessimism now passes for news data.
However people feel about the economy, the numbers are clear. The show’s graphics gave these facts: the Dow is up 10%, NASDAQ is up 10%, the S&P is up 7%.
The Heritage Foundation reports the, “average hourly wages…have risen 3.9 percent over the past year.”
Ignoring any good news from a source such as The Heritage Foundation or from her own graphics, Christine Romans, the co-host, reported “a one in three chance of recession.”
Velshi juxtaposed the “short-term thrill of watching investments go up vs. the long-term risk of lower interest rates.”
Much of the “thrill” may be that home buyers with good credit can get a 30 year fixed rate for 6.29 percent or a one-year ARM for 6.39 percent, again noted in the show’s graphics.
The ‘Your $$$$’ team never explained the “risk” of lower interest rates announced by the Federal Reserve last week. But one of the day’s guests, Ned Riley, from Riley Asset Management, made it clear that the perceived risk of lower rates should not be the possible increase in the rate of inflation. “Inflation is low and going lower [at] two percent,” Riley said.
Riley also cited that in 2003, the Feds were concerned about deflation with a two percent inflation rate.
‘Thrill’ and ‘risk’ were not explained by Romans either. The half point interest rate cut by the Federal Reserve, said Romans, “is a little like chicken soup if you got a bit of a cold, [it] can’t hurt.” The rate cut is, said Romans, “a little bit of a salve, but we’ve got some big issues.”
Even when economic numbers are up or interest rates down, the drumbeat of economic downturn continued on CNN. There must be a cloud in this silver lining somewhere, they seemed to say.
Media critic Michael Medved, at a recent conference hosted by the Culture and Media Institute spoke on changes in news reporting. News reporters, he argues, have changed from “fact tellers” to “truth tellers.” The print reporters — or CNN hosts in this case — report the ‘truth’ as they believe the truth to be. Even if their ‘truth’ is inconsistent with facts.
The Fed cut rates by 50 basis points, a full half percent. And based on this fact, CNN’s guest, Riley predicted a 14,500 DOW at year’s end.
But he got no reaction to this healthy prediction from the CNN hosts.
Can continuous bad news reports cause economic downturns? The evidence is clear that mass marketing does affect consumer behavior. Marketing works toward transference of emotion, moving consumers to avoid pain and toward a pleasurable solution. CNN is pursuing political marketing to make consumers feel the emotion of a “loss of confidence” using continuous bad news.
It is accepted that negative political advertising works for the trailing candidate. This is negative economic advertising by CNN; a network that trails FOX.
During the Depression, Franklin Delano Roosevelt bolstered the consumer confidence of the Nation, encouraging Americans with “We have nothing to fear, but fear itself.” The economic numbers were slow to improve, but the Nation felt better.
CNN does the opposite. The numbers are good, but the reporting is fearful. Communicating gloom seems to make CNN hosts happy.
After guest Peter Beutel of Cameron Hanover spoke of a possible recession, Romans said it was, “depressing.”
But then she smiled and laughed.
###
Jack Yoest, a freelancer for the Business & Media Institute, is president of Management Training of DC, LLC and teaches business at the
No Comments Yet
You can be the first to comment!
Leave a comment: