Fear and Loathing in Business News
Journalism should not be a man-made disaster.

By Dan Gainor
The Boone Pickens Free Market Fellow
Jan. 4, 2006

     There was a time when we had nothing to fear but fear itself. Those were the days. Now the home of the brave is anything but and Americans find ourselves in a constant state of fear.

     We only need consult Charlie Brown’s famed psychiatrist Lucy Van Pelt to know that America is afflicted with a case of pantophobia – the fear of everything. We fear avian flu, a bust in the housing market, cloning, drugs, the economy, floods, gas prices, hurricanes … Heck, kids could learn their ABCs from our worst nightmares.

     On Christmas Eve, Susan Lisovicz of CNN’s “In the Money” reflected this sentiment when she described 2005: “if I had one word to sum it up, disaster. Whether it’s man-made or weather-made.” Certainly, 2005 was marked by one of the worst natural disasters in U.S. history. Hurricane Katrina cost more than 1,300 lives and tens of billions of dollars while devastating one of our nation’s most famous cities.

     But a man-made disaster that received little attention was the yearlong media obsession with fear. For example, take a look at the headlines on the December 29 edition of “Lou Dobbs Tonight.” We had, in order: Iraq reeling from more violence, Bush’s bad year, identity theft, failing grades in our nation’s schools and wildfires out west. That’s enough to make anyone pull his blanket over his head and hide.

     Faith may move mountains, but fear can move markets or even a whole economy. Fear of avian flu drove drug manufacturer Roche’s stock up more than 50 percent at one point during 2005 – all because it makes a good drug that could help fend off this looming threat. Buried in all the hype about the danger of a flu pandemic was the fact that only a handful of people have died from it worldwide.

     Fear of what the Gulf hurricanes had done or could do to our gasoline supply helped drive gas prices to a national average of $3.06 per gallon. Of course, the media encouraged this by pumping up the danger to $4 or even $5 gas. Never mind that it’s back down to about $2.19 – a drop of 85 cents per gallon. The big point is that we were scared. The bigger point is that we were scared by the media. And that kind of coverage can create its own brand of economic disaster.

     In his December 24 interview on “In the Money,” John Rutledge, the chairman of Rutledge Capital, said the fear factor has a definite impact on investment decisions. “Fear is what’s keeping people out of the market and they’re making a big mistake,” he explained.

     But Andy Serwer, who is also an editor at Fortune magazine and should know better, wouldn’t let Rutledge go unchallenged. Serwer argued that “eventually all of this stuff is going to catch up with us. Energy prices, deficits, terrorism, bird flu’s going to get you. I mean at some point aren’t things going to fold up here?”

     That’s the kind of glum-and-dumb we’ve come to expect from network news reporting about business, but this was a business show. Instead of being better about business, sometimes, like Dobbs, it’s worse.

     Media watchers would call such behavior tabloid journalism or even yellow journalism. Tabloid journalism is mostly hype – the old “Headless Woman in Topless Bar” type of news. Yellow journalism would be the more accurate term because it’s about sensationalism and though the yellow used to refer to an ink color, now we can apply it to how the media make Americans act – afraid.

     And it’s not just the network news. The September issue of Money magazine wrote about “Your six biggest money fears,” which ranged from dying young or having your identity stolen to surviving either a collapse of the stock market or the downfall of the entire economy. While the article did its part to allay dread about those six topics, it didn’t claim fear was a problem. Instead, it made the case that: “We all worry about money. Problem is, we’re scared of the wrong things.”

     It wasn’t that long ago that we were afraid of Japanese imports. Now it’s China. We were afraid of the stock market when it went up too fast. Then we were afraid when it dropped. Now we’re even afraid that it’s moving too horizontally for our tastes. The media have whipped us up into such a frenzy that we’re afraid of our shadow.

     That kind of fear shouldn’t be part of daily business coverage. It should be in the comics pages where we can all laugh at it.

Dan Gainor is a career journalist and The Boone Pickens Free Market Fellow. He is also director of the Media Research Center’s Free Market Project www.freemarketproject.org.