Want to understand the economy? Don't read the press [View all]

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http://www.aljazeera.com/indepth/opinion/2012/01/2012111124839271411.html

New York, NY - Financial journalists are supposed to be among the most educated and savvy about the economy. Many have either worked on Wall Street, or have advanced degrees in economics and business.

Over the past few years, their "news hole" has expanded significantly as the financial crisis became a top global news story. As reporting on workers declined, reporting on business surged because it tends to attract corporate and institutional advertising.

And yet is the reporting we are getting on financial issues better than ever? Is it more trustworthy, and better informed?

Unfortunately, some of the same patterns that invariably lead to misunderstandings remain.

Here are three reasons:

1. An over-reliance on official sources skilled at spinning data to bolster politically motivated "consumer confidence", and create impressions, not backed by fact.

2. A tendency to quote and rely on experts and luminaries with questionable track records and personal or ideological agendas.

3. A tendency to look at "progress" through the eyes of people in power or in powerful economic institutions with the assumption that if they do well, wealth/prosperity will trickle down into the lives of ordinary people.

Here are some examples.

Last week, the press dutifully reported the "good news" that US economy had created 200,000 new jobs and that the unemployment rate had dropped. There was practically a celebration on the editorial pages.

Sounded good. Most readers stick with headlines on subjects they find dense or inaccessible and get little more than a quick take. Sometimes, the information is packaged in easy-to-read graphics, especially when the arrows point up.

It can all be misleading.