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Wednesday, 08 October 2008 |
The fall of the stock market two weeks ago had me almost in tears. I called everyone I know claiming the world was coming to an end and I did not know what to do about it.
I was certain I was to become destitute in a matter of minutes without a penny to my name.
That, thankfully, did not happen. Along with most of the world, I kept CNN.com up every time I logged online. I kept tabs on what was going on and asked my mathematically inclined friends what it all meant.
It was not until I was
sitting in an Introduction to Journalism class this week, did I receive
my answers. My professor asked the class to read an article entitled,
“Reporting the Economic Crisis with Skepticism and Perspective.”
Poynter.org is a website founded by the Poynter Institute, “a school
for journalists, future journalists and teachers of journalism.” The
Web site always has updated information on world matters and opinions
from current journalists.
The article the class read was a power tool to me. By that I mean it
was so useful at stopping my fears on this world ending economic
crisis. The article interviewed Pulitzer Prize winning journalist,
David Cay Johnston.
Johnston called for journalists to check inflation and to “pay attention to the rest of the news; don’t hype this story.”
Johnston went on to say that, “Markets rise, but they also fall. For
almost two weeks our political leaders have been scaring people, so why
are we surprised that prices have fallen? …The Dow fell 7 percent
Monday, but in October 1987 it fell 22 percent (three times as much)
and the sun still came up the next morning.”
When asked about business sections of newspapers losing readership and
an event like this increasing that readership, I found Johnston’s
delivering an insightful response; “Most business sections are of
little interest because they tell readers little that matters. Write
from the point of view of readers, not sources. Thus, cover banking
from the perspective of bank customers, not owners. Very few readers
own banks, but most readers have bank accounts.”
Johnston made me feel that I would not lose my money or mind during
this “crisis.” Johnston agreed that there was a problem; however, it
was not that big of a deal.
Additionally, Johnston made a point that journalists are playing up the
scare tactic, and if they were to honestly talk to people, their drama
would cease.
I believed that if I had the capacity to research the stock market
numbers and to understand them, a lot of stress in my life could have
been avoided. Now, I understand, even more than before, the power of
words.
Here is a world issue being played up so journalists can get readers
and money. After reading this article, my heart rate can go back to
normal, I can understand that things are not always as they seem and I
can realize that a little fact checking could go a long way.
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Um, do you know anyone who has lost their home or job because of our current economic climate?
Do you know anyone who has lost their retirement because of this?
Or anyone who can't afford to pay for food, clothing or heat because of the failing economy?
Obviously you must not, or else you wouldn't so casually call this "not a big deal."
Unfortunately I know people who fit in all of those categories, and trust me they're scared to death of the future and would be appalled that you would write this off as something that "isn't a big deal."
Yes, our economy has seen tough times in the past and we've bounced back. But it isn't in recent memory when our economy has suffered in such an extreme way.
Sure journalists want to sell newspapers and their headlines can be sensational. As a "journalist" yourself, you should know that better than anyone. The Appalachian has been guilty of doing the same thing.
You say that the Dow dropped 20 percent on Black Monday (Oct. 19, 2007), however according to an article by Floyd Norris in The New York Times it was the S&P 500 that dropped 20.5 percent. However so far in October 2008 the S&P is down 22 percent. The market has been down every day this month and has been volatile in how it has been down. Also, it is incorrect to compare the two, according to Norris, because the S&P was coming off record highs in August of 1987. At the closing bell on Oct. 19, 1987 the S&P was just down 7.2 percent since the end of 1986, by the end of December it was up 2 percent for the entire year. The S&P index is currently down 42 percent from where it was a year ago. A huge difference, and what Norris would definitely call a recession. So obviously, to compare the two is simply inaccurate.
However, I'm not sure that this issue has been over-sensationalized. Today the Dow dropped to below 8,600 points, more than 7 percent to their lowest level in five years. When can you remember a time that Congress signed a $700 billion economic bailout plan to help people?
You also say that you called everyone in practical hysterics a couple weeks ago claiming that the world was coming to an end, yet you admit at the end of your article that you really don't know much about the economy and the stock market. Maybe if you did some more research you could be more versed in what is actually going on, instead of latching onto the words of one person.