CNN Warns of a Recession, Ignores Stock Market Gains
CNN‚Äės ‚ÄúYour Money‚ÄĚ takes a gloomy view of the economy even when its own guests say otherwise. Rather than listen to an economist, the hosts decided they knew better.
‚ÄĚPeople [are] whispering about the risk of a recession,‚ÄĚ explained host Christine Romans on the September 15 show. She claimed ‚ÄúThe stock market still hasn‚Äôt found its footing.‚ÄĚ Not a well-researched comment, considering this is a financial program.
The Dow has gone up from 7,500 in 2003 to 13,403 and has climbed almost 1,000 points or 7.5 percent just in 2007. Employment has dropped to a low 4.6 percent, and the economy has been growing at an average of 2.7 percent per year with almost six years of uninterrupted growth.
of which was mentioned by Romans.
To make her case for catastrophe, Romans invited guest John Rutledge, chairman of Rutledge Capital. Rutledge, said Romans, ‚ÄúIs going to tell us how scared we should be ‚Ä¶‚ÄĚ
Except that Rutledge didn‚Äôt appear frightened at all. Just the opposite: ‚ÄúIt doesn‚Äôt make sense to go around screaming like Pee Wee Herman,‚ÄĚ he said.
Romans was not screaming, but she did not react to Rutledge‚Äôs optimism.
‚ÄúIt‚Äôs a pretty good world out there,‚ÄĚ said Rutledge. ‚Äú[The] world economy this year is growing more than 5 percent ... It‚Äôs [grown] more than 4 percent the last 6 years.‚ÄĚ No response from the CNN host.
Rutledge was bullish on the world economy and nearly shouted, ‚ÄúHighest growth in the history of the world!‚ÄĚ There was still no reaction from Romans or co-host Ali Velshi.
While CNN reported on ‚Äúrecession,‚ÄĚ the word was not mentioned in a September 7 conference call run by Edward P. Lazear, Ph.D., chairman of the President‚Äôs Council of Economic Advisers. Lazear discussed the ‚Äúgood path‚ÄĚ of the economy and he briefly mentioned some field research in gathering input from industry.
Unlike reports on CNN, many industry leaders are not focused on recession, he said.
‚ÄúTheir problem,‚ÄĚ said Lazear from the data, is ‚Äúattracting and keeping talent.‚ÄĚ Companies have no problems ‚Äúselling stuff,‚ÄĚ said the chairman.
And much of the stuff being sold is for the off-shore market.
‚ÄúThe rest of the world [is important],‚ÄĚ Rutledge said to Romans, ‚Äúbecause one-half of the profits of the S&P 500 come from outside the U.S.‚ÄĚ A healthy world economy is good because ‚Äúexports are the fastest growing part of the U.S. economy.‚ÄĚ A strong world economy minimizes the probability of any local recession.
That didn‚Äôt stop Velshi: ‚ÄúA UCLA forecast says the U.S. economy will be so sluggish in 2008 that a single piece of bad news could tip it into a recession ‚Ä¶‚ÄĚ
Jack Yoest, a freelancer for the Business & Media Institute, is president of Management Training of DC, LLC and teaches business at the Northern Virginia Community College.