Dan

Calabrese

Read Dan's bio and previous columns here

May 5, 2008

The Associated Press Economy . . . and the Real One

I hate to pick on a fellow journalist, but if I were Jeannine Aversa of the Associated Press, I would be embarrassed. Ms. Aversa covers economic issues for the AP, and I guess it’s hard to come up with actual economic facts every day, so she likes to publish predictions.

This tends to precipitate the following chain of events:

1. Ms. Aversa reports that economists expect the economy to tank, jobs to disappear, etc.
2. The economy does not tank, and jobs do not disappear (at least not as much as “economists expected”); Ms. Aversa reports economists’ surprise.
3. Ms. Aversa reports that economists now expect the disasters they thought would happen this quarter to happen next quarter.
4. Rinse. Repeat.

This past Thursday, I wrote about how Ms. Aversa had to report the shocking news that the economy actually grew in the first quarter of 2008, and that contrary to what she had been saying in her stories for weeks, the U.S. is not in a recession.

Then again, every day is a new opportunity for a recession to start, and Ms. Aversa manages to work this into a story about the unemployment rate going down:

Businesses are handing out pink slips as they cope with an economy that is teetering on the edge of a recession, or possibly in one already.

You get that? We are “possibly in (a recession) already.” True statement? Well, sure. A recession is two consecutive quarters of negative economic growth. We’re in a quarter. It’s not over. This quarter’s growth could be negative! Then, next quarter’s could too! Ergo, it is possible that we are already in a recession.

What an insightful observation.

The latest breaking economic news from the AP is that the unemployment rate has declined from 5.1 percent to 5.0 percent. (This exceptionally low level is often known as full employment, with the theory being that at any given moment 5 percent of the workforce is going to be between jobs for one reason or another.)

The unemployment rate declined in spite of the fact that 20,000 jobs were actually cut during April – a phenomenon explained in part by the fact that “entrepreneurial households” (people becoming self-employed) were up an astounding 362,000. But the development stunned Ms. Aversa’s unnamed “many economists,” whom she says were “bracing for job cuts of 75,000 and for the unemployment rate to climb to 5.2 percent.”

Jeannine Aversa needs to find some new sources. These guys blew it on their prediction that we would see negative growth in the first quarter (only to go right ahead and predict we would see it in the second – just read Jeannine Aversa’s stories), and were way off on their call about the unemployment rate.

If you must quote people making predictions, why keep going back to the same people who keep getting it wrong?

Better yet, why can’t Ms. Aversa and her colleagues at the AP just report the economy as it is, rather than trying to speculate about what it’s going to be? Because they sure as hell can’t get that right to save their lives.

Thankfully, this doom-and-gloom reporting has not succeeded in giving us a recession. But it has scared the crap out of a lot of people, and who knows how many people have lost their jobs just because employers were nervous about the economy? And who knows how many of those employers were only nervous because of the stories they read in their local papers off the AP wire?

It always inspires howls of derision when you “blame the media” for anything, but when the media tells us incessantly that a recession is coming, or is already here, it’s hard to blame people for tightening their belts and taking steps to hunker down for it.

And when it turns out the media and its sources were wrong, and probably couldn’t correctly predict the sun coming up in the morning?

Oh well! No time to dwell on that. They have to focus on reporting their new predictions.

The AP claims that it practices “accountability journalism,” through which it presumes to tell us when public officials are failing to govern in the best interests of the people.

The wisdom of this approach is a subject for another day, but who will hold the AP accountable for stories about the coming recession – stories that were incessant, scary and wrong?

© 2008 North Star Writers Group. May not be republished without permission.

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