CNN‘s “Your Money” 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.
”People [are] whispering about the risk of a recession,” explained host Christine Romans on the September 15 show. She claimed “The stock market still hasn’t found its footing.” 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, “Is going to tell us how scared we should be …”
Except that Rutledge didn’t appear frightened at all. Just the opposite: “It doesn’t make sense to go around screaming like Pee Wee Herman,” he said.
Romans was not screaming, but she did not react to Rutledge’s optimism.
“It’s a pretty good world out there,” said Rutledge. “[The] world economy this year is growing more than 5 percent ... It’s [grown] more than 4 percent the last 6 years.” No response from the CNN host.
Rutledge was bullish on the world economy and nearly shouted, “Highest growth in the history of the world!” There was still no reaction from Romans or co-host Ali Velshi.
While CNN reported on “recession,” the word was not mentioned in a September 7 conference call run by Edward P. Lazear, Ph.D., chairman of the President’s Council of Economic Advisers. Lazear discussed the “good path” 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.
“Their problem,” said Lazear from the data, is “attracting and keeping talent.” Companies have no problems “selling stuff,” said the chairman.
And much of the stuff being sold is for the off-shore market.
“The rest of the world [is important],” Rutledge said to Romans, “because one-half of the profits of the S&P 500 come from outside the U.S.” A healthy world economy is good because “exports are the fastest growing part of the U.S. economy.” A strong world economy minimizes the probability of any local recession.
That didn’t stop Velshi: “A 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 …”
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.