As Amity Shlaes points out in her book "The Forgotten Man: A New History of the Great Depression" -- which has just been released in paperback -- by November 1933, unemployment had skyrocketed to over 23 percent. Think about that: 5 percent unemployment today vs. 23 percent during the Depression. Amidst today's talk of stock market "collapse," remember that during the Depression, the Dow plummeted to 90, a loss of nearly 75 percent of its previous value. "This downturn is to the Depression as a drizzle is to Katrina," says Shlaes, senior fellow at the Council on Foreign Relations. "In the Depression, America confronted deflation. There literally wasn't enough money. People made their own scrip, Monopoly money, to pay their bills. In Utah, they made a currency called the Vallar. Today, we are in an inflation. If this period is like anything, it is like the 1970s."
Positive news doesn't fit the narrative. On a day the Dow rose, writes BMI's Dan Gainor, ABC "Reporter Dan Harris seemed puzzled during the ... broadcast of 'World News with Charles Gibson' when he asked: "The sky is not falling. Why not?"
All three major broadcast networks are culpable. But BMI says CBS was the worst. That's typical when it comes to economic coverage, BMI added. "Business reporter Anthony Mason was even called 'the grim reaper' by his own anchor Katie Couric." "Early Show" co-host Julie Chen talked about "a world financial crisis" as if a "crisis" was just a given.
The state of economic reporting in this country is abysmal. We might laugh at it if it didn't have bad consequences. But the more people hear such inappropriate comparisons, the more apt they are to believe them and change their behavior accordingly -- investing less and taking fewer economic risks -- thereby aggravating bad economic conditions.
No wonder, as the Associated Press reported, "U.S. consumers are the gloomiest they've been since the tail end of the last prolonged recession."
I am not saying the 1929 coverage was great; looking back, much of it was naive. I'm also not saying there are no economic problems today. But today's problems are no excuse for reporters to make glib comparisons to the Great Depression.
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