BrainTrust Query: Is the news media terrorizing the U.S.A. about the economy?
The media is having a field day with news of the U.S. economy and should, I think, be called out as terrorizing the citizens of this country. They took the first two-thirds of a basic advertising formula from Madison Avenue: "Find a consumer's weakness and then scratch it until it hurts." But they left off the most important part, "...and we have the solution." It's as if you woke up to hear, "Starbucks coffee is going to be reduced to thin dishwater and there's nothing you can do about it."
Last March, when the news media realized viewers didn't respond to the hopelessness about the war in Iraq, they found another perfect scare: home mortgages. The bedrock of the American Dream was in jeopardy from sub-prime loans. All the talking heads lined up to crow that they saw it coming. They predicted that the American consumer would snap their wallets shut, the stock market would plunge and one even said on MSNBC, "If you bought a home in the past two years, walk away from it. You'll never get your money."
As the summer progressed, new headlines emerged. More people were using their credit cards to pay their home mortgages. ARMS were reset to double their value. Home sales plummeted; prices crashed 20 to 30 percent -- just like the Depression. You'd think no one was capable of paying a bill, selling a home or getting credit. We became terrorized!
Americans, unable to escape this news due to the proliferation of flat screen TVs in everything from the doctor's offices to coffee houses, watched the making of the economic downturn and were mesmerized. They understandably put a question mark behind just about anything in their lives. Good time to marry? Good time to buy? To change jobs? To move? And the wallets indeed shut.
The most optimistic of countries is now shaking in its collective boots fearing the future. The middle class is acting like they have no money.
In January, with the December numbers out, the sharks were circling and guest starring on the local media. All were hoping to be first to paint the bright red "R" of recession. Even though they can't get reliable data on that until May - a full four months from now, there's no doubt the media will continue to paint the worst picture until at least then.
When the economy does turn, which it invariably will, the media will be the last to know. But there are hopeful signs already.
Container traffic in Los Angeles/Long Beach ports broke a four-month decline in imports in December, setting a record. Retail sales did, in fact, increase in December by three percent. As the Fed lowers the discount rate, all adjustable home rates will benefit. The tax cuts recently announced will help as well.
I'm not denying we're dealing with some very challenging times, but it would have been preventable had we just realized the media weren't on our side.
Discussion Questions: Do you agree with the premise that the media have contributed to the economy's downturn by "terrorizing" consumers? If so, what do you think it will take to get beyond the negativity? How can marketers and retailers help turn the tide?