How did it get this bad? For two years, economic turmoil in the United States throbbed from a few areas of isolated distress – dark bruises on a national map that was otherwise unscarred. Even the deflating housing bubble was confined mostly to areas like California's inland valleys, Las Vegas and Florida, while manufacturing communities in Michigan and the South struggled to keep workers in their jobs. The Associated Press Economic Stress Map, a new snapshot of our national pain, shows that the economy was hurting, but it didn't demand a nationwide lifestyle adjustment. Then came the autumn of 2008. Banks failed, Congress poured billions into hopeful fixes, the Dow Jones Industrial Average plummeted, and soon the regional misery began expanding nationwide. – AP
Dominant Social Theme: It's a virus.
Free-Market Analysis: On Sunday, the AP came out with a story, Anatomy of an Economic Meltdown, that captures the mainstream media meme when it comes to explaining what is going on from an economic standpoint. The article is a spinoff of a "stress map" provided by AP that shows the economic points of stress within the continental United States. Not surprisingly, the worst of the stress is on the East and West coast with another large area of stress in and around the Chicago-Detroit regions.
This provides an ironic and unnecessary triumph for the traditional red states that are showing less stress. One would venture two points having to do with the AP stress map. First of all, this recession is unlike others in that it is punishing the regions and players that benefitted most from the current paper-money economy of the past decades. Second, the red (interior) states of America have suffered for so long that it is questionable how much more they have to lose.
The article from the AP is a perfect example of how the economic crisis (depression) is being covered by the mainstream press. The coverage features in large part a series of disparate events linked by a timeline but not causation. Here is a perfect example from the same article:
"Before last fall, you heard about people being laid off … but you didn't hear about plants closing … Now it seems really to have affected everything." By the end of the holiday season, the infection had spread far beyond Wall Street, into Dallas, Ore. and other timber towns in the Pacific Northwest; to manufacturing pockets in the Midwest such as Elkhart, Ind. and Rockford, Ill.; to tourism hotspots such as Branson, Mo., and Ocean City, Md.; and into distribution hubs like Bullitt County, Ky., south of Louisville. It continued into 2009, but the pace seemed to slow a bit in March. "I'm 50-something years old, and I don't ever remember any recession being so widespread like it is right now," Knafel said. By now, the back story is well known. Beneath the distractions – robust housing prices, a Dow racing toward 14,000, two wars and a White House campaign – lurked a dangerous stew of reckless investments, consumer debt, record oil prices, excessive growth, soaring medical costs and millions of uninsured Americans.
This analysis is perfected only if one wishes to express facts without providing understanding. First, we read about people being laid off, and then "by the end of the holiday season," we are informed, "the infection" spread. As for the reasons for the infection, that's not clear, but it may have something to do with "a dangerous stew of reckless investments, consumer debt, record oil prices, excessive growth, soaring medical costs and millions of uninsured Americans."
OK, so the unrolling depression is actually an "infection." And the infection is caused by high energy prices, too much growth and millions of uninsured Americans. Yet, in our opinion, the current financial problems are not an infection. An infection may be defined as "the transmission of infectious microorganisms from one person to another." One person (or region) has a sickness that is then passed along to another. This is not what is going on. The current economic crisis is not a disease. It is not transmitted. Nor is it caused by reckless investments or uninsured Americans.
This hasn't stopped the world's leading wire service from running a definitive analysis picked up by hundreds of media outlets explaining that the current rolling depression is an infection caused by noninsured Americans. Articles like this explain why there is so much confusion in the Western world when it comes to economic issues.
In truth, as many readers of the alternative "Net press may know well, the economic crisis is a further expression of the dysfunction of a paper-money economy — along with the ability of central bankers to over-print paper money, thus causing booms and busts. Over years and even decades, the stresses generated by the mal-investment of money build up until one day they prove too much for the economy to bear. Too much money has been invested wrongly and the larger economic order totters and fails. People don't need so many cars, houses, boats and clothes. And there are other non-consumer distortions.
As important, no doubt, as sector mal-investment, is the growth of the government sector while the economy is being successfully stimulated. This process puts too many people to work in jobs that basically harass the productive (private) sector. Work regulations, environmental rules and the redistribution of wealth (via taxes) all build up over time into an insupportable burden. The economy finally sags and collapses. Of course, again, none of this is the result of an "infection" nor is any of it caused by uninsured Americans.
The misinformation of the mainstream media when it comes to the economy is pervasive and in ordinary times would preclude people from figuring out ways to save themselves and their loved ones from further damage. Fortunately, the Internet has, during this terrible business cycle, provided many with the information necessary to take human action to help with their reduced circumstances. Those who read what the alternative press has to say carefully will likely buy gold and silver and understand where they need to put their energy to best earn an income. They will not learn any of this from AP.