Does Media Bias Make the Economy Worse?

[RMNIXON]

In the book "Freedomnomics" by best selling Author and Economist John R. Lott, a portion of the book discusses media bias and perhaps rightly concludes that much of it is a matter or personal perception. Our own particular bias will color what ever segment of the media we look at and what we want to see or hear as opposed to what we are presented.

So he undertook a study on the most objective News he could think of. Here is the published summary of the findings:



Is Newspaper Coverage of Economic Events Politically Biased?

JOHN R. LOTT Jr.
University of Maryland Foundation, University of Maryland
KEVIN A. HASSETT
American Enterprise Institute (AEI) October 19, 2004

Abstract:
Accusations of political bias in the media are often made by members of both political parties, yet there have been few systematic studies of such bias to date. This paper develops an econometric technique to test for political bias in news reports that controls for the underlying character of the news reported. Our results suggest that American newspapers tend to give more positive news coverage to the same economic news when Democrats are in the Presidency than for Republicans. When all types of news are pooled into a single analysis, our results are highly significant. However, the results vary greatly depending upon which economic numbers are being reported. When GDP growth is reported, Republicans received between 16 and 24 percentage point fewer positive stories for the same economic numbers than Democrats. For durable goods for all newspapers, Republicans received between 15 and 25 percentage points fewer positive news stories than Democrats. For unemployment, the difference was between zero and 21 percentage points. Retail sales showed no difference. Among the Associated Press and the top 10 papers, the Washington Post, Chicago Tribune, Associated Press, and New York Times tend to be the least likely to report positive news during Republican administrations, while the Houston Chronicle slightly favors Republicans. Only one newspaper treated one Republican administration significantly more positively than the Clinton administration: the Los Angeles Times' headlines were most favorable to the Reagan administration, but it still favored Clinton over either Bush administration. We also find that the media coverage affects people's perceptions of the economy. Contrary to the typical impression that bad news sells, we find that good economic news generates more news coverage and that it is usually covered more prominently. We also present some evidence that media treats parties differently when they control both the presidency and the congress.


SSRN-Is Newspaper Coverage of Economic Events Politically Biased? by John R. Lott, Kevin Hassett




But what bothers me is the effect of "perceptions" do to bias on the actual actions of consumers, businesses, and investors. Not what is perhaps intended in the voting booth, but on real world economic decision making large and small. Nothing should be treated more objectively and with caution than economic news. Opinions and predictions may vary, but the numbers above support a overall tilt that is irresponsible!

[bheld]

No matter who is in office the media consumers don't know a demand curve from a laffer curve. Most couldn't even tell you what GDP stands for, or spell it for that matter.

We get the message about the economy that the corporations want us to get. Trying to figure out which party benefits more is stupid.

[bheld]

And if the Iraq Casualty study funded by George Soros is out the window then any study that has anything to do with the AEI, Heritage, Cato, or any other conservative think tank is done for as well.

[RMNIXON]

Originally Posted by bheld

And if the Iraq Casualty study funded by George Soros is out the window then any study that has anything to do with the AEI, Heritage, Cato, or any other conservative think tank is done for as well.

Perhaps it matters who can back up their data and their methods? Not who somebody likes or dislikes because of their politics or the results of a given study. That would simply make everybody "full of shit!"