Don’t trust the news on the economy!

Posted: April 14, 2009 in Blogging, Consumer Issues, economy, education, Finance For Youth, Other sites of Interest
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I have been reading and watching the news and the economy for some time now, as well as reading several blogs and websites. I would like to say that the majority of the sources have it right on, but sadly I can’t. There are essentially three TV stations that are dedicated to money and finance; CNBC, FOX Business, and Bloomberg. I personally choose not to watch the last one because it bores me to tears trying to watch it. I generally flip between the first two because they have characters that are entertaining.

I know a little something about economics, so watching one or the other isn’t much difference, but these networks are pointed at those who know nothing. These are people who might have a 401k or 403b. They might have some education, but they want to sound intelligent when talking about finance at the water cooler. I’ve also suggested that students watch one or both of these networks, because they are very simple to understand. But this is a double-edged sword. On one side, the content is easy to follow, so most anybody can do so. On the other hand, these people are there to sell advertising, and to entertain. They aren’t out there to educate. Their advice may or may not be the best, but it is better than nothing.

Another problem I see is that of credibility. Many people feel that the FOX name is a “right-wing” conservative brand, and therefore (for some reason) can’t be trusted. On the other hand, the NBC brand, including CNBC are decidedly left-leaning, and are at best as trustworthy as FOX.

Either way, lately both have been talking a lot about being at the “bottom” of the Depression. They don’t even call it the Depression. Larry Kudlow and Jim Cramer have bought in to the idea that we are on the upturn in the economy and are preaching about improvement by this year.

There is absolutely no reason to believe that we are near the bottom. All of the problems that existed that brought us into the Depression are still there, and there are new ones as well. Trillions of dollars are being siphoned away from my grandchildren in order to ARTIFICIALLY prop up the economy long enough that money will be made by those in power. Nobody gives a damn about the price you will pay.

So, if you can’t trust the news, and you don’t know which bloggers to trust, what can you do?

You have to do a little research on your own.  Remember I said that I go back and forth between FOX Business and CNBC?  I do the same with news, going between the equally biased FOX and MSNBC.  I have to see both sides of the news coverage, along with other channels to determine what I think about an issue.  I do the same with blogs.  On my Twitter account, I have conservatives and liberals that I follow.  I might not agree with one or the other depending on the issue, but I want to hear what they have to say.  This is what you need to do to make up your mind about issues.  Read this blog, and others that will disagree with me.  Decide which one you trust more and follow them.

Also, look at what someone has to gain or lose by having you listen to and follow them.  For example, when someone likes my blog, I get another reader.  I get no more money, and no more reason to push an agenda.  If you don’t like me, I lose another reader, and no more reason to try and change minds.  Many bloggers are the same.  Others lose money when you stop listening to them, or make money when you start.  Some, like politicians, lose their jobs when nobody believes them and get tired of listening to what they are trying to sell.

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  1. Good observations. Trust your own judgment, not that of the professional entertainers on TV who are trying their best to talk us into, through and out of this and many other real and imagined economic slumps. Regardless of the shape of the economy, they’ll still be talking as long as we tune in.

    TV is designed to entertain, not inform. Their job is to sell air time to advertisers, not real information to viewers. There probably isn’t more than 2% of information on TV news that anyone actually responds to except in the form or worry or foolishness. The rest is gossip, feel good and scare tactics.

    We have to remember that the economy didn’t crap the bed in a matter of days or weeks. It began getting sick and burdened years ago (while the TV talking heads weren’t saying a negative word about it) and it will take years to turn it around (if we can ever get government out of the business of trying to be the cure for their own illness in what is supposed to be a free market).

    The fact remains that many of us haven’t seen and will never see the effects of the economic downturn except on TV, so shut it off and get more useful information from sources that really know what is happening in specific marketplaces that are of interest to you as an investor.

    Media frenzies go from one event to another. They only have so much time and so much space to squeeze in all the scary things in the world, so at best they are selective. We need to be selective too.

    Pick reliable and informed sources, not mainstream entertainment, and do your own research. That’s the only way to draw meaningful conclusions and be better prepared to handle what’s happening.


  2. I always have to remember: The media is trying to make money first and report the news second.

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