Mis-reporting the UK into depression and recession
Wednesday, November 19th, 2008To date, I’ve steered clear of commenting on the state of the economy, largely because there’s already quite enough in the way of reports, statistics and “expert views”.
Yet I’ve also found myself harbouring a growing sense not just of frustration, but of something approaching anger at the way in which some sections of the press seem set on misrepresenting, exaggerating or otherwise sensationalising events as far as possible. In short, I wonder how much of what’s happening at the sharp end - redundancies, production cutbacks, etc - risks being driven more by what we’re allowing ourselves to be talked into believing as opposed to how it could perhaps otherwise have been.
Just how much of our prevailing “recessionary” mindset is a result of actual issues as opposed to what we’ve been persuaded into doing (either overtly or subliminally) by self-serving headlines?
Although I studied economics as part of my degree, I don’t pretend to understand the answer to my own question. However, basic common sense suggests that - just like at any other time - our combined behaviour is what results in the big picture headlines. But how much of this is a self-fulfilling, destructive cycle? The press say we should <insert suggested behaviour here> because of the state of the economy. So we all start doing it, which then causes <insert inevitable result here>. Then the press say that because of said inevitable result, we should all <insert next suggested behaviour here> - and so on.
In asking this, I don’t mean to belittle the real issues that are currently creating horrible circumstances for many people throughout the UK (and further afield). It’s a harsh truth that people ARE being made redundant. And that many people face higher bills this year, especially for gas and electricity. But I do wonder whether there’s scope for news outlets to report in a more constructive and (dare I even say) ethical way to help us work our way out of such real problems, as opposed to leading us to worry about imaginary issues, make existing ones worse or perhaps even cause new problems that could otherwise have been avoided.
At the core, of course, is the fact that sensationalist headlines rarely help anyone aside from the newspapers or websites that are writing them.
Today, for example, I read an article that really took the biscuit. It was published online by the Times and began thus: “Barclays customers wait almost a year to benefit from rate cut”.
This related to the recent reductions in the Bank of England base rate. To take this headline at face value, you’d think that Barclays wasn’t going to pass on any reductions for nearly a year. Which would obviously be outrageous.
So let’s read the opening two sentences: “Half a million homeowners with tracker mortgages will have to wait nearly a year to benefit from the fall in the base rate. Around 500,000 Barclays customers on tracker deals will have to wait until next October to benefit from the Bank of England’s 2 point fall in interest rates in the past six weeks.”
Again, seemingly outrageous. Only in the third sentence do we get a clue about the real truth of the matter: “Barclays is the only major lender to still review the repayments of new and existing customers on tracker mortgages on an annual basis.”
On initial reading, however, this still seems to reinforce the impression that Barclays is behaving unreasonably - and moreso, indeed, than any other major lender.
Yet the real truth of the matter is this, which only appears in the eighth paragraph: “Barclays’ borrowers can benefit from the reductions before next October but only if they call and ask the lender to recalculate their mortgage repayments.”
So ALL of those Barclays customers WILL in fact benefit from the rate reduction - and they’ll benefit regardless of whether they call the bank or not. Specifically, their interest costs WILL reduce. If they continue paying the same monthly repayment, they’ll be overpaying their mortgages, reducing how much they owe Barclays. That’s still a benefit in my book. And if they instead choose to have their repayments recalculated, they’ll benefit in a different way, through reduced monthly repayments. Either way, they benefit. Which is the exact opposite of what the headline says.
We’ve all seen countless other examples of attention-grabbing headlines, usually involving highly emotive verbs. For example, we’ve read about economic indicators surging, soaring or rocketing - or plunging, crashing or diving. Yet when you look behind such headlines, it’s surprising how often the latest actual changes in the underlying data have been relatively small - or, speaking from a strictly academic perspective, potentially even statistically insignificant.
But headlines sell newspapers and bring readers in to websites, so we shouldn’t be surprised. But perhaps what we should be is a little more wary about taking everything we see at face value, even when it comes from a supposedly authoritative and trustworthy source. Like, say, The Times…
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