OCR Text |
Show Media's fault citizens misunderstand economy By ROBERT F DEE, chairman of the board SmithKHne Beckman Corporation Although he public ultimately sees through the sham, it doesn't always receive clear messages from the mass media of communication on which to base economic and political opinions, A recent example is public reaction to the present rate of inflation. The media for months have talked about problems in the American economy which are certainly real but haven't given strong emphasis em-phasis to the continuing decline in inflation. As a result, there is wide misunderstanding among citizens about the present inflation rate. Public confusion is reflected in a recent New York Times-CBS News poll. Of those interviewed, 70 percent said they weren't aware that the inflation rate had declined, and 34 percent said that is was actually h higher. Yet the inflation rate has plunged from the double-digit figures of 1979 and 1980 to 6.6 percent for the past year. Many economists are projectng a similar or lower percentage for all of 1982. It's clear that the good economic news isn't being reported with the same enthusiasm as the bad. Consequently, a very large part of America continues to expect rising prices. But this expectation ex-pectation itself can do further injury to our economy. In economic behavior, there is such a thing as self-fulfilling prophecy. Inflationary expectations alone could bring pressure for higher wages in labor negotiations and increases in prices by business in anticipation of higher costs. Funds that might otherwise be invested in-vested i in the country's economic growth would be channeled away from capital expansion. If individual citizens and companies take actions that ultimately lead to more inflation, a driving force for economic recovery will be eliminated. The truth about inflation gives hope for a beneficial upward turn in the economy: At the time of the poll, prices for food were up only 2.4 percent over the past year, compared to a 9.4 percent rise in the previous year. Gasoline prices were down 12.5 percent. Clothing was up only 2.1 percent. Overall, the Consumer Price Index rose 6.6 percent in the 12 months preceding the study, versus a 10 percent rise in the previous 12-month period. In other words, prices advanced at a much slower rate than in the year before the poll. But the poll results show that this change of pace in inflation went unnoticed by most Americans. Why? One explanation is that after ten years of rising prices, many people find it difficult to believe that inflation can ever be stopped. But that isn't the whole explanation. Much of the confusion can be attributed to the fact that a large part of our communications media is unsympathetic to the Administration's fiscal policies. As a result, they have failed to give the good news about the drop in the inflation rate the full attention it deserves. Surely the media understand that public confusion con-fusion about inflation can also have political consequences. con-sequences. They are aware that in the coming November elections a significant number of seats in Congress w will be contested. But if the Reagan Administration's success in bringing down inflation goes largely unperceived by the public (as it now seems to be) voters simply won't take into account this positive fact when they choose among candidates in November. This is a case where no news or sparse news is not good news. In fact, the lack of media emphasis on the decline in inflation can seriously distort both our economy and the American political process. I believe this matter calls for our action. We should tell our legislators that we're aware of the decline in the rate of inflation and that we want them to continue making cuts in federal spending to consolidate that victory. We should also write to our local newspapers and to the TV networks asking them to do thier part in spreading the news about the declining inflation rate as an important step in promoting the country's coun-try's economic recovery. Unless the truth about inflation becomes much more widely understood, we're all likely to suffer the consequences. |