TODAY: don't shoot the messenger

don’t shoot the messenger
No one likes breaking the bad news but the media has to do it – with the sensitivity of a good doctor
TODAY Weekend • December 20, 2008
Loh Chee Kong
cheekong@mediacorp.com.sg

PICK up a newspaper today or tune in to the news on the television or the radio and chances are you will be greeted by a slew of not-so-cheerful reports (to put it in a more upbeat way).
Be it some bleak report about the global economy or workers losing their jobs somewhere, there seems to be no escaping bad news these days.

A recent study by the United States’ Media Research Centre shed some light on the media’s negativity bias: It found that 61 per cent of stories broadcast by major US television networks were negative or pessimistic, while 15 per cent were optimistic.

In Britain, the mind-numbing depressing news drove journalist Achim Kram to launch OptimistWorld.com, a website dedicated to "taking a daily look on the bright side".
So, how about having some cheery articles in our newspapers for a change? Instead of lamenting the rising unemployment and raft of job cuts, why don’t we churn out stories of how people will be able to spend more time with their families now that there is less work? Or constantly celebrate Singapore’s strong position to ride out the latest downturn?

Singapore Management University’s economics don Vincent Chua, for one, thinks the media should "play the role of a good doctor".
Said Dr Chua: "It’s like a doctor coming out of an operating theatre. You can tell the family of the patient to sit down first, calm down, before breaking the bad news. It’s the same piece of bad news, but the impact is very different."

Yet, it would be dangerous to feed the population a diet of feel-good but unrealistic reports about the economy.
Economics professor Choy Keen Meng from the Nanyang Technological University said that if the press were to talk up the economy during a downturn, "then it might subsequently be held responsible for costly decisions made by economic agents under the assumption that the economy will recover more quickly and/or strongly than warranted".

CONFIDENCE AND THE REAL ECONOMY
As far as scientific studies are concerned, the media is giving the people what they crave — even if they are loath to admit it.

According to neuroscientists, the brain reacts with far more electrical activity to the stimuli of bad news than to good — plausibly explaining why people’s attitudes are more heavily influenced by downbeat than good news.

The notion that confidence — or what legendary economist John Maynard Keynes called "animal spirits" — is vital to the real economy is well-recognised, never mind its impact on financial markets which are primarily driven by human emotions of fear and greed.

Criticising United States President George W Bush’s pessimistic proclamations on the American economy in September as he tried to push through the US$700-billion ($1.05-trillion) bailout plan, The Economist stressed the importance for political leaders to be "upbeat in the face of economic and financial calamities".

As it pointed out, confidence is key to driving businesses to hire workers or invest in machinery and equipment; savers to put their money in the bank; and consumers to take out loans to buy houses or cars.

"So politicians ought to think twice about spreading despondency. That is the media’s job," The Economist concluded.

Yet, more often than not, the media does not set the agenda. Just examine how the US media covered the economy before and after President-elect Barack Obama was voted into office.
The overall tone became markedly more positive as the media bought wholeheartedly into his inspiring rhetoric — at least until the new administration’s economic rescue package is put into place.

While existing international research on how public sentiments impact the real economy has produced mixed findings, the media could "help the society move forward" by putting a "positive spin" on its reports, said Dr Chua.
"(Let’s say) the media put forth an article painting a doomsday scenario ... If I’m an investor, what would I do? I would probably hold back for a while. Having said that, some people may argue that this is the best time to enter the market," he said.

A study by Assistant Professor Choy and fellow economists Kenneth Leong and Anthony Tay showed that professional forecasts, which widely shape people’s expectations of the economy through the media, have "only small effects" on economic output but "significant" impact on inflation.
The empirical study done in 2003 did not suggest reasons why this is so. But while a vicious circle would be created when people chase higher wages to offset the anticipated rise in living costs, it can be argued that important stakeholders driving the economy — namely governments, central banks and the private sector — do not base their decisions and actions solely on ephemeral sentiments.

In fact, to the astute businessman, an economic slump is sweet news.
"We see a recession more as an opportunity," said Cushman & Wakefield (Singapore) managing director Donald Han.
Asst Prof Choy added: "At any rate, trying to sway consumer and investor sentiments in Singapore won’t be easy because everyone knows that we are totally dependent on the global economy to swing us round."

CUTS BOTH WAYS
If the media is to be blamed in any way for "talking us into recession", blogger Alex Cruickshank contended on popular Britain-based website Economonkey that "the guilt lies more in helping to perpetuate the boom years far beyond the point of no return".

In Singapore, the effect of consumer psychology — or the "herd instinct" — is most evident on the property market.
As property mogul Kwek Leng Beng once noted: "Sentiment is more important than supply and demand. The higher the prices, the more people buy."

In essence, sentiments skew people’s perception of risks. US real estate expert Robert Campbell noted in an online article: "When people are currently experiencing economic pleasure, they become overly optimistic and their perception of risk fades away. However, when people are currently experiencing pain, they become overly pessimistic and perceive real estate as more risky than it actually is."

Journalist-turned-property-analyst Colin Tan, for one, makes it a personal rule to stick to just the facts.
"We try not to lead the market, so we tell the negative facts as they are," said the Chesterton Suntec International director known for his blunt — and often sobering — assessment of the property market.
"To be in denial would hit you eventually. Perhaps the media can be more circumspect when it comes to bold predictions."

And just as the media unwittingly perpetuates feel-good sentiments when times are good, it would be ironic to point accusatory fingers at it when the economy sours.

Asst Prof Choy described it as "unfortunate" that the media has been regularly exploited by politicians around the world to manage expectations on the economy.
He added: "It is the media’s role to be accurate and objective in reporting economic conditions ... I really do not sympathise with the view that the media should talk up the economy during a downturn. Of course, if politicians do so, the media has no choice but to report their comments."

Be it in good times or bad, the media has to be objective. That means not indulging in hyperbole, sugarcoating or scaremongering — all in equal measure.

Let’s face it, even the most brilliant writer could not, and should not, mask the economic plight on the ground.

As they say, don’t shoot the messenger.