Word has it that a new trend is afoot. It’s called a recession by the press, and it’s a state of being that begins as simple pessimism. Individuals and business have a reason to be pessimistic, but they learn it from the press — whom the general public, apparently, regards as the pundits of pessimism. Let’s face it, bad news and unrest sells.
This has been a gripe of mine for years, as those customers I spend time on the phone with sharing stories can attest. I have complained that imminent recession or not, once the press passes the story along, it becomes fact. The reason for this is really quite simple: Most people aren’t well attuned to the general fiscal well-being of our country (sure we know prices are high, but we lack nuts-and-bolts insights). Most information of this sort is gathered from news sources: television, radio, newspapers, magazines, and the Internet. Awareness usually comes long before the actual effects are felt. This is our source of broad view awareness.
It’s not the awareness or the press’s love of all things bad that bring prognostications of this sort to life, though. It’s our reaction that begins the real downward spiral. It happens something like this:
- The evening news reports the onset of a period of recession.
- We watch, unaware at the time, but start thinking of survival.
- We tighten budgets, suspend projects, lay off workers.
- The snowball effect takes over.
- The real recession begins as a result of these actions.
- The treasury finally confirms our belief.
- The press is lauded for its insights.
- After a period of adjustment, things return to normal.
I Thought I Was The Only One
I believe this is a social phenomenon more so than a financial matter, at first. I have believed this for years for the simple reason that that seems to be the way it goes down. We hear it on the news first, within months of getting this news we feel it on business and personal levels, and then, at that time, it becomes real. The news keeps talking it, but people adapt (that takes about eleven months on average), positivity reigns, and things improve (consumers and businesses starting spending again). Until the cycle repeats itself. In my eyes, the way this happens is rather matter-of-fact — I’ve seen it too many times to pass it off as a coincidence.
As the sub-heading notes, I thought I was one who felt this happens as I claim, but I now have more support. Specifically I read two editorial pieces recently that agreed with all my points. I don’t recall where I read the first one or who wrote it, but second piece, a second [print version] article, written by Rob Preston, Vice President and Editor-in-Chief for InformationWeek magazine, also supports my sentiments. After reading Mr. Preston’s editorial, I was inspired to go public with my feelings on this web log.
So What Can We Do About It?
If you’re like me, you probably feel pretty powerless to effect a change in the nation’s economic condition. Moreover, we’re victimized by reduced sales, shrinking budgets, the works, so it’s difficult to forget and move on. In other words, being that adaptation is time-consuming and painful, denying it is almost foolhardy. But that’s what has to be done, though we have to start at the onset.
Americans are known for not taking things lying down. Case in point: The British wanted to tax us without due representation, we responded by having a gathering (to which about 8000 people attended) and we tossed about 90,000 pounds of tea in Boston harbor. We started drinking what was passing for coffee back then — this was in 1773 so it was pre-Starbucks.
If we can respond as a group in that way, why can’t we respond today as a collective as well? In other words, if we are to deny reporters the validity of their views, we have to stop it swift and sure by not moving down to steps two and three on my list above. If we continue spending, nobody feels the the effects, the recession becomes a false alarm.
I know, I know. It was just a thought.
