The author has been described by News Ltd as an "iconoclast", "Svengali", a pollie's "economist muse", and "pungently accurate". Fairfax says he is a "Renaissance man" and "one of Australia’s most respected analysts." Stephen Koukoulas concludes that he is "85% right", and "would make a great Opposition leader." Terry McCrann claims the author thinks "‘nuance’ is a trendy village in the south of France", but can be "scintillating" when he thinks "clearly". The ACTU reckons he’s "an enigma wrapped in a Bloomberg terminal, wrapped in some apparently well-honed abs."

Thursday, July 26, 2012

Does popular media promote minor bad news over major good news (screen-shot)?

Only days after the RBA Governor complained for a second time in recent months about how economic news in this country is negatively biased, we are presented with a classic illustration today.

The closely-followed APM stratified median house price index reported that house prices rose--in contrast to many dire predictions frequently recycled by the press--across the nation, and by an especially sharp 1.6% in Melbourne. When there is bad news (or even "opinion") on the housing market sites like the SMH and the Age will often feature these stories (or commentaries) prominently in their top 'leader' panel. Yet you can see from the screen-shot below that today's good news is buried six sections down the page as the lowly No. 10 ranked business article (the same is true on the Age's site). Click to enlarge the image.

The story itself manages to put a negative spin on what is very positive news. The opening line reads: "House prices struggled to rise in the June quarteras earlier rate cuts lifted sentiment in a subdued property market." Isn't a more accurate assessment: after 12 months of house price declines, the market has shown the first signs of recovery?

In the SMH screen-shot above you can also see that a report about 630 jobs being lost gets front-page (online) prominence but the more significant news about an increase in the value of the $3.6 trillion housing market is marginalised. 

Interestingly, the RBA Governor has highlighted this exact point that small pockets of job losses tend to get much more attention than secular jobs gains. It is this bias in economic reporting that the RBA believes has contributed to the negative sentiment that pervades both businesses and consumers. That is to say, we are talking ourselves into doom and gloom.