“My Two Cents”
By Andy Sutton

8/2/2006

As a consumer of news, each of us faces daily decisions regarding the information that we hear. We either believe it or disregard it. Much of what helps us make these decisions are our biases in one direction or another, but in any case, we are required to sift through mountains of information, suppositions and sometimes blatant untruths about the world in which we live.

I like to follow the old axiom that its sometimes better to hear what isn't said as opposed to what is said. What you aren't being told might indeed hurt you. Why bring this up? I along with most other folks that pay at least cursory attention to the news have been hearing a change in tone over the past few weeks, both in what is being said, and what is being left unsaid. For the longest time, the mainstream press was bullish on US economic prospects; the housing market was roaring, and would continue to roar, and by darned maybe it had found the ever-evasive Fountain of Youth. This barrage of rhetoric escalated in the face of huge increases in the price of commodities, and lukewarm at best performance in the major stock market indices. All this bullish rhetoric in the face of rising consumer prices (even the precious few counted in the CPI/PPI/PCE), stagnant wages and tepid home prices. There was a storm brewing and the mainstream media ignored it. In my opinion, this was willful deception.

Such was the case even in the microcosm where I live. The local free paper would have weekly charts depicting the growth in home values, sales numbers and went almost to the point of guaranteeing a mansion for anyone with a heartbeat. It was also admitted, rather proudly that equity extractions from rising home values were responsible for the lion's share of the local, state, and even national economy. The perception was that home values would rise forever and thereby fund the growing appetite for goods and services. To a large extent, this perception became reality for many people.

Pick up the same paper this week, a mere 6 months later and read the headlines: "Inflation in Valley at Record High", "Mortgage Applications at Four Year Low", and more threateningly, "Inflation outpaces wages in Valley". The bulls have become bears. The biggest cheerleaders of the 5+ year spending binge are now weighing in telling us that its time to tighten up and do without. Did things really change that fast? Surely, there were warning signs if you weren't going full speed ahead, eyes wide shut.

Again, why bring any of this up? The point is a simple one. Your media is facing rearward, and is on a sadistic type of broadcast delay. The aforementioned should have been the headlines of 6 months ago, not now. Much damage has been inflicted on consumers, families, the dollar, and the economy because of this egregious 'oversight'. It should be a valuable lesson to all. If it doesn't sound right, it probably isn't, and if it sounds too good to be true, then it probably is.

After all, news is nothing more than someone's perception. Don't be so quick to let their perceptions become your unfortunate reality.

Andy Sutton holds an MBA in Economics from Moravian College and is a member of Omicron Delta Epsilon International Honor Society in Economics.

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