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A true economic rebound or just media hype?

Posted by Scott Van Voorhis April 23, 2010 09:57 AM

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If you are in the skeptics camp, you have a champion in Olivier Garret, chief executive of Casey Research, based right next door, well sort of, in Stowe, Vermont.

Garret has popped up lately in media venues as diverse as the Huffington Post and Fox News arguing we don't have a real recovery, but rather media hyperventilation over isolated and often misread stats.

He recently slammed Newsweek's cover story - "America's back" - as "fantasy journalism."

It's certainly a timely message - on the non-hype side of things, check out the 21 percent spike in Massachusetts foreclosure petitions just reported by the Warren Group.

And it's a key one for any buyers out there trying to figure whether to pull the trigger now or wait for even bigger home price declines to come.

Intrigued, I gave Garret a call yesterday.

He contends the positive indicators we are seeing are a result of the trillions the federal government has pumped into the economy.

Instead of a full-speed-ahead recovery, we are likely to wind up with a repeat of Japan's lost decade in the 1990s.

After the collapse of a giant real estate bubble, the Japanese government made repeated attempts to revive an economy stuck in neutral. Each new round of stimulus spending brought signs of improvement, followed by a fallback after the support was withdrawn.

I will leave it to sharper minds this morning to debate whether we are in for a lost decade of our own. Certainly, the rubber is about to hit the road as the federal government pulls out the props from under the housing market.

But having toiled nearly two decades in daily newspapers and business publications, I do have some thoughts on the job the media is doing in reporting on our still shaky economy.

Sure, signs of recovery are being hyped - just as signs of doom were being hyped a year ago.

Reporters are not economists. They are in the business of looking for stories. And a break in the routine, the dramatic, the sharp departure or simply the bizarre, are what make for good stories, though not necessarily great economic analysis.

Putting out a daily newspaper or a radio or TV news show takes a certain set of skills - sorting through lots of information and locking onto what seems the most interesting or compelling at that moment.

It's a job that most economists, as smart as they are, just couldn't do. They just don't move that fast.

That said, even under such time constraints, a little skepticism and some analysis can go a long way.

It often makes the difference between breathlessly repeating isolated stats that may not be all that meaningful and coming up with a truly great story.

And there is much too little of that right now.

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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