It is helpful when watching to remember that the circus tents of the network "news" and entertainment media exist for one purpose only. That purpose is not to keep you informed, but to keep you watching.
Premise - The Depression Will Not Be Televised
SEATTLE - 05 January 2002
Television, or more accurately, the television media complex, is a one trick pony anymore. The major financial news content/delivery corporations are dominated by large (Microsoft-sized*) corporate interests, and they have settled upon a winning strategy: Pick one story and milk it for all the entertainment value it's worth, and neglect all other stories of significance. The only story on TV recently is the war, or more specifically, the war as drama: The manhunt. Where is Osama? Is he dead or alive? Who will be the next target of American firepower. Television is weak on how the war is affects our lives domestically, especially economically. There is no time to cover something as mundane or unpleasant as, say, the economic collapse of a country, especially if it's your own. That really doesn't move product.

But it doesn't matter because the Second Great Depression will be brought to you live. You will see the effects of it in your very own life, if you haven't begun to already. I know, the recent mood is optimistic, predicting a "V" recovery, mild recession, quick rebound, etc., but I don't think we're going to get out of this economic pickle quite that easily. You see, our current economy has been fine tuned for high-octane growth, as evidenced by the huge debts being carried by individuals, corporations and government alike. Even a slight slowdown means almost certain bankruptcy for all of them. Look at what happened to the airlines: One week without business and these huge corporate behemoths were all on the verge of insolvency. Now they're living on borrowed money. Yours.

High-octane growth is unfortunately a thing of the past. The war changes, or rather reorganizes, everything. 9/11 was National Reorganization of Priorities Day. Prior to this day, in the good old 90's, Americans pumped numbers, and we loved it. We pumped all kinds of numbers. We pumped the stock markets to new highs, productivity to a new high, home ownership to a new high, employment to a new high, and hours worked to a new, all time high. No one likes to mention this last one, though we all feel it.

We loved to pump numbers. As a nation we felt successful and powerful. We were simply the best. In the 1990's we kicked our arch-rival Japan's butt, and left them in the dust. If you remember the early 90's as I do, it was another period when our economy was under threat. Japan was on the rise as a very real economic challenger, buying our golf courses, Rockefeller Center, out producing us in DRAM, building better cars and selling more of them. We had massive trade deficits while they had massive surpluses. They called us lazy crybabies, and we felt like and acted like it. It was a scary time. The idea of America, the best at everything, slowing down, losing ground to a nimble upstart, going the way of the Brits, was not at all pleasant. It had the feeling of a period of transition, and it was. But rather than losing the "war" to Japan, as was widely predicted, America rose to the challenge. We worked harder. We worked smarter, and we left Japan in the dust, widening our lead as the world's single, dominant superpower.

Japan outworked us in 1990. We outworked them in 2000. We pumped the numbers in just about every category to heights they had never seen. Uncounted long standing records in the annals of business history fell during our latest 10 year (a new record) economic expansion.

This author is reminded of Big Mac - Mark McGuire - in 1998. In that year he broke baseball's single season record for home runs. Not only did he break it, he demolished it. Babe Ruth's record of 60 in 1927 had been bested only once, by Roger Maris in 1961. (Maris hit 61 in '61, but this was widely considered a fluke.) In 1998, Big Mac hit 70! A near 15% increase in productivity!

It was a sign of the times, for American business was demolishing productivity records as well, in addition to profit records, production records, and stock market records. The granddaddy of the times was a five digit Dow in early 1999. Dow 10K was astonishing, fanciful, especially considering it had been a mere three digit Dow only 17 years prior. The days of inflation, stagnation, "stagflation," and "economic malaise" of the 70's were long forgotten. In 1999 with Dow 10K, NASDAQ 5K, everything appeared to be A-ok.

But back to Big Mac for a moment. Where is he now, just three years after his historic season? Did his productivity continue to soar? Let's see, at a rate of 15% increase per year, that would put him at 106 home runs in the 2001 season. Is that what he hit? Not even close. He only had 29 homers last year, (a near 60% drop in productivity) and a pitiful .187 batting average. He had a bum right knee, said he was tired, "worn out" from baseball and called it quits. Retired from the game. Nothing lasts forever.

And Dow 10K? We're still hanging on to that one. Barely. NASDAQ 5K went the way of Big Mac, down 60%. 2001 saw the largest single month drop in the Dow and the largest jump in unemployment since Depression One, in addition to the largest corporate loss (JDS Uniphase lost $50 billion), and the largest corporate bankruptcy (Enron) ever. Like Big Mac, our economy is breaking down, showing signs of injury, and averages are dropping. Get ready to say goodbye to Dow 10K in Y2.002K. But don't expect to hear that on television. They're already talking about the nascent recovery.

Even before National Reorganization of Priorities Day, the vaunted American consumer was getting tired, out of money, out of credit, harried, rushed and unable to enjoy the so called prosperity of the age. Pumping numbers was already slipping on the list of priorities. And the war only makes it worse. In order to pump numbers the way we did, we can't have the distraction of war. We can't be taking a week off to watch television, the way we did in September. We can't be haunted by the threat of imminent death, possibly your own. These conditions are not optimal for business. Business is no longer the top priority, and the war gives everyone a mutually understood excuse to reevaluate our lives and lifestyles.

Everyday we are reminded that things will never be the same again, that everything changed on that fateful day. Because we're reminded of it, we think about it. Because we think about it, we begin to believe it. And once having begun believing, we proceed to make it so. God, family, friends, health, love, life itself are on the rise. We are beginning to remember that the best things in life, the things we have long taken for granted, are free.

Unfortunately, enjoying too much free stuff will be disastrous for the economy. Even a small slowdown in growth now spells larger contractions ahead. It is no wonder we are being told that it is our patriotic duty is to shop. Meanwhile, economists are missing the forest for the trees, inspecting every piece of data to justify the foregone conclusion that the recovery, just like during Depression One, is "just around the corner." The recovery is not just around the corner, and things will get worse before they get better. But you won't likely hear that on TV anytime soon. As I said before, that really doesn't help to move product.

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* MSNBC, sister of CNBC, America's leading source for television business news, is a joint partnership of General Electric, America's largest corporation, and Microsoft, America's second largest corporation. When you dial up CNBC on the web, where do you go? The Microsoft Network. In disseminating news, who's views do you think will be given voice - Working America's or Corporate America's?
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