Column: Media plays major role in restoring confidenceFARGO, N.D. — Where does consumer confidence come from? How is it restored once shaken? And what’s the media’s role in shaping it?
By: MATT VON PINNON THE FORUM, Worthington Daily Globe
FARGO, N.D. — Where does consumer confidence come from?
How is it restored once shaken?
And what’s the media’s role in shaping it?
I’ve been considering those questions lately in light of the biggest national story the past half-year: the economy.
Let’s start by examining where consumer confidence comes from, or at least how it’s measured.
Every month a consumer confidence survey of 5,000 U.S. households is taken by an independent economics research group called The Conference Board.
That board releases a monthly report based on results of the survey that asks regular people questions about their current circumstances and outlook on the business environment and, particularly, their job security and family’s expected income.
Economists have long figured out that if people feel secure at work and in their surroundings, they will spend money. If they don’t, they won’t.
Businesses, in turn, base their activity and output on how confident consumers feel. When confidence is high, the economy buzzes. When confidence is low, things slow down.
Confidence is really low right now, according to the consumer confidence index.
Ironically, if people choose to not spend money— as they tend to do when they are pessimistic about future prospects for money — many of the businesses that employ those people need fewer people to make whatever they sell, starting a vicious cycle of employment cuts, less consumer confidence, more employment cuts, and on and on.
Which brings me to my next question: How is consumer confidence restored once shaken?
If I had an answer to this, I’d be a highly paid adviser at some think tank.
This is the million-dollar question right now with an apparent $787 billion solution.
But whether consumer confidence can be restored — and how quickly that happens — partly rests with the media.
Today’s constant bombardment of bad economic news only feeds upon itself — another vicious cycle.
The daily wire report around here is typically filled with so much bleak economic news we’ve jokingly dubbed it the “daily doom and gloom report.”
Does this mean the press should abdicate its responsibility to report on news that acutely affects people’s lives?
Absolutely not. The more information people have, the better decisions they tend to make.
But the media must also realize that a solely fearmongering approach to economics news — the kind you tend to see on TV and hear on talk radio — will only breed more fear.
What the world needs now is more facts and less fear.
Matt Von Pinnon is editor of The Forum, which like the Daily Globe is owned by Forum Communications Co.