1. The Missing Link
It makes no sense, really, until it starts making sense.
On the front page of the newspaper, a headline tells us that the economy has created 20,000 new jobs last month. Hurrah! You gotta love that. Unless your eagle eye happens to catch the small article buried deep in the back of the stock quotes pages that says that unemployment rose by three tenths of a percentage point in the same month.
Hunh?
This is not Orwellian doublethink. The newspaper has simply omitted a simple, vital fact that would help you make sense of the other facts: 40,000 people lost their jobs in the very same month. Business journalists won’t ask; politicians won’t tell.
In fact, the practice of leaving out information necessary to the understanding of a phenomenon occurs more frequently than we might think. When a politician claims to increase social spending while cutting taxes, he doesn’t usually mention the need to increase the government’s deficit. (When he isn’t lying about increasing spending on social programmes, that is.) When your parents tell you a man and a woman fall in love and then babies appear, they’re obviously omitting a messy (but actually quite important) step in the process.
The missing link: not just a failed reality television show. Watch out for it!
2. The Magic Is Gone
Welcome back to Economics Right Now! Rumours have been circulating for several months that the torrid love affair between the stock market and the economy is over, and that they are on the verge of splitting up. For more on this story, we go to Wanda Wallawosky on Wall Street.
“Thanks, Eleeza. I’m standing in front of a digitally realized image of a wind swept moor for no discernible reason.
“Over the past two years, the Dow Jones Industrial Average – the bellweather of the stock market ball and darling of investors everywhere – has plummeted and, all statements to the contrary, appears set to fall further. The American economy, on the other hand, is growing at a modest, but nonetheless real pace. Could this be a sign that their relationship is in irreversible decline?
“The digitally enhanced image behind me has morphed into dealers on the floor of the New York Stock Exchange gesticulating frantically for no discernible reason. This is intended to add poignancy to my story.
“Lawyers for both sides have denied that there is any tension between the stock market and the economy, that their relationship is as strong as ever. However, Economics Right Now! has incontrovertible rumours to the effect that the stock market has been spending a suspiciously large amount of time with foreign exchanges, particularly Japan’s sleazy little Nikkei.
“Some observers are suggesting that the marriage of the economy and the stock market has actually been a sham for decades, at least since the deregulation craze of the 1980s. But, that’s a possibility too terrible to contemplate, so I’ll end this report with a digitally rendered image of a clear blue sky over a field of windswept wheat…”
3. The Recession Is Dead! Long Live the Recession!
DAY 1: “The recession is over!”
DAY 7: “Basic economic indicators are sound. The recession is over!”
DAY 14: “There has been a lot of profit taking, but basic economic indicators are sound. The recession is over!”
DAY 28: “As long as investors remain calm, markets should return to their pre-recession levels in no time. There has been a lot of profit taking, but basic economic indicators are sound. The recession is over!”
DAY 180: “Alan Greenspan says this is a necessary correction, nothing to worry about. As long as investors remain calm, markets should return to their pre-recession levels in no time. There has been a lot of profit taking, but basic economic indicators are sound. The recession is over!”
DAY 365: “The bear market offers many bargains to savvy investors. Alan Greenspan says this is a necessary correction, nothing to worry about. As long as investors remain calm, markets should return to their pre-recession levels in no time. There has been a lot of profit taking, but basic economic indicators are sound. The recession is over!”
DAY 730: “We’re about to turn a corner, and the recession will be over!”