Falling Consumer Confidence in U.S. Economy

Project by Aaron Choi, Stephen Couillard, Seamus Duffy, Andre Trescony, and Alex Wong

In late November, the Conference Board took a poll of American Consumers and revealed that confidence in the U.S. economy is at its lowest point since March 2009. This pessimism was well documented by many news sources, each with their own take on the issue. Here we analyze several publications' reports about this popular topic.

Al Jazeera on American Economic Confidence

Analysis by Aaron Choi

Al Jazeera reports the US consumer confidence in an external light. By that, I mean that they are less subjected to the political stance of either the Republican or Democratic Party, typically because as an overseas-based network the priority is mainly focused on Europe. It must be stated though, that the Al Jazeera news that we obtain is largely in English, hence the news in English seeks to cater to those who do understand the language and is most conveniently reached. This probably explains the fact that an Arab based network would be more concern with European matters (or at least that segment of the network).

The primary source of my inquiry was an article on the Al Jazeera Website written by Robert Shiller. It must be noted that Shiller does not work for Al Jazeera, he is a professor of economics in Yale University and the Chief economist in MacroMarkets. In fairness, the website labels the article under an “in-depth opinions” title rather than “news”, hence describing to the reader that the article is a representation. The article begins with a picture of a man counting cash in Euros, which prepares the reader into an introduction the links European economics with America. It then makes a connection between confidence levels and economic ‘drops”, establishing it as a self fulfilling prophecy. With that, Shiller explains that according to the Gallup Economic Confidence index; confidence has dropped sharply. The approximately 900 words article goes on to describe the historicity of the Gallup Index and their past implications. This includes past comparison between May2011 and September 2011 where polls dropped from 88% to 48%. Whilst taking the stance of the “average person”, the article explains the frustrations and helpless sentiments of the consumer, however states that conventional statistics are not enough to accurately analyze consumer confidence with the inability to replace single narratives that drive consumer perceptions. At the moment the narrative is ‘uncontrollable debt” but any inspiring stories may well shift the pendulum. Finally the article ends with a disclaimer that this particular article first appeared on Project Syndicate and that the opinions of the authors may not represent that of Al Jazeera, though the inclusion of the article into the website (in spite of all other possible views) should be noted and taken with precaution. The article was written on the 23th of September 2011 but only posted on Al Jazeera on the 26^th of September 2011.

Two days later, Al Jazeera reported on the streets of Washington DC, interviewing several passerby’s on their view of the American Economy. The 1.30 minute clip, states that consumer confidence is at about 45% where 90% is viewed as positive (according to the Conference Board of Consumer Confidence). In one of the interviews (there were only two), a job-seeking lady indicates the interconnectedness of the US and European economy, which brings a certain amount of curiosity to the specific questions being asked (the question was not reported). The clip mainly focused (visually) on middle class clothing products in “what-seems-to-be” a low crime neighborhood. The reporter admitted the fact that D.C. could be sheltered by the presence of the government but stated that “leading economist’ elsewhere are also finding that job hiring is lowest since the mid1980’s and the economy “at home”(the reporter said in a heavy English accent) is on a “knife edge” independent to what is happening in Europe. This documentary was labeled under the news section.

The video: http://english.aljazeera.net/news/americas/2011/09/201192881012557683.html

http://english.aljazeera.net/indepth/opinion/2011/09/2011924143540345185.html

Fox News on Consumer Confidence

Analysis by Stephen Couillard

This article from foxnews.com is written about the recent decrease in consumer confidence in the U.S. economy. It was co-authored by Christopher Rugaber and Joseph Pisani, both of whom are from the Associated Press. The article is 891 words. One structural feature that I noticed was that each paragraph is at most two sentences. Most sentences are split into their own paragraphs, which makes for a very choppy feeling to the article.

Before I read the article, I assumed that it would have a strong conservative tilt since it was on Fox’s website, but it seemed to be pretty neutral to me. A possible explanation for that is that fact that it was written by two reporters from the Associated Press. As far as I know, the AP is not known to lean heavily in either direction, which is part of the reason its articles are so widely used.

This article discusses consumer confidence and explains how it is the lowest it has been since March 2009. Most consumers have little faith in the growth of the economy, which the article explains. However, the article then claims that consumers often act differently than they say. This implies that even though consumers say they don’t have confidence in the economy, spending is at a better level than it has been in the past few months. Throughout the article, negative information is alternated with positive information or qualifying statements. It is in this alternation that the article retains its political balance. Focusing solely on the negative aspects of our current economic state could be interpreted as being conservative-leaning because it would appear to be criticizing the Obama administration. On the other hand, being too optimistic about the economy would appear pro-Obama, and liberal-leaning. With this balance between optimism and skepticism, the article manages to stay unpolitical.

Overall, the article’s message is that the American people aren’t happy with where the economy is headed. This article delivers an unfortunate message that doesn’t directly or obviously benefit anyone. It is hard to imagine anyone liking the fact that the American consumers have no confidence in their economy. However, the fact that the article’s main topic is the faltering economy benefits those that do not want to see President Obama reelected in 2012. The article doesn’t directly state that Obama is at fault for the struggling economy, but since he is in power it is safe to say that some sort of blame will be placed on him by readers of this article. Because of this, it makes sense that foxnews.com would publish the article.

Whether or not the article was meant to be political, it has political implications. The authors may have put the information in as neutral a way as possible, but the message will always be interpreted by the reader through his/her political lens. As we discussed in class, there is no way for historical representations to not be subjective because the author always has to choose what to include and exclude in his/her writing.

http://www.foxnews.com/us/2011/10/25/consumer-confidence-in-october-drops/

The Onion on the Economy

Analysis by Alex Wong

This bit is not a traditional news report; it is in fact an opinion editorial written by New York Times columnist and Princeton professor Paul Krugman. As so, the analysis of this piece in relation to the other stories might differ somewhat from what has already been established between two cut and dry news stories. Since there are explicit and implicit ideologies and views being expressed in this op-ed, it shouldn’t be hard to derive from his words that Krugman is a strong liberal who advocates sweeping reform and massive spending initiatives to correct and offset the decline of the economy. In short, while Krugman’s article isn’t exactly a NEWS STORY, its arguments and subjective nature can be easily juxtaposed and contrasted against other historical sources whose internal motivations, arguments, and tendencies may be less explicit.

528 Words

This piece of commentary/satire by the Onion (hardly what one would consider a credible news source) takes a fairly morose (and attempted humorous) stance on the present and future state of the American economy. Admittedly, the amount of Halloween references and terminologies rivals the presentation of actual substance, but there are conclusions about rhetoric, ideology, subjectivity, and the ‘politics of representation,’ present here, maybe more so than in a traditional publication by a more legitimate and accredited organization. Here, actually recounting news falls secondary to providing explicit opinion and insight, unlike the stories published in the Associated Press or CNBC.

Krugman begins his article with an introduction that establishes the “chilling developments” that have taken place in the economy. He mentions the high unemployment rate, and bids the reader to prepare for the terrifying tale of “economic woe” he is about to relay. Already, the reader is subjected to Krugman’s fatalistic view of the current situation, which only worsens as the article progresses.

His next paragraph is where he really gets into it. Beginning with a brief exposition of better days, Krugman recalls the massive federal surplus reported by the Congressional Budget Office as well as the supreme confidence abound in the market. He labels lenders with the term “predatory,” it seems that Krugman buries a portion of responsibility for the current state of the economy on the irresponsibility of lenders who “sucked homeowners’ blood.” Krugman then laments over the decade where we squandered a 230 billion dollar surplus into massive debt. It is interesting to note that the terminology that Krugman uses implicates that our own responsibility in the matter, “we” (poor damned fools) allowed our national balance sheet to “slip so far into the deep, bloody red!”

Up until now, all of Krugman’s ire has been rather general and omnidirectional, however, the partisan nature of his arguments reveal themselves in his next paragraph. He denounces the Bush administration, and claims that we are currently suffering in dire straits for their failures. Furthermore, Krugman asserts that power must be wrested from the top 1% of Americans favored by Bush-era tax cuts in order to avoid further economic catastrophe. Krugman does a little to reveal his particular ideology here, by denouncing a universally unpopular Bush administration and its policies, he firmly plants himself in a liberal camp, one from which he bases many of the implicit arguments he makes in the article. In the very next paragraph he forecasts an ominous future for the economy, more specifically, a “second depression”, and also notes the fact that the spending initiatives the government intend to enact to combat the situation are woefully inadequate. Krugman concludes his article imploring the government to spend and invest in the economy again to restore faith, as well as to pass Obama’s jobs plan.

Throughout his editorial, Krugman, in his presentation of facts and figures, places responsibility for the economic crisis on the doorstep of a conservative administration, power hungry elite, and fickle populace. His satirical use of rhetoric compounds the general bleak nature of both the article and the situation it describes. He argues the common reader into a position of agreement with his own: that typical big business/government agencies and the elite echelon of society that comprises these institutions are to blame for the mess, and that the common people are equally responsible for allowing their betters the means to rampage unregulated to this end.

http://www.theonion.com/articles/this-sure-is-a-spooky-time-for-the-economy,26442/

The Associated Press on Consumer Confidence

Analysis by Andre Trescony

Notes about the Authors:

Anne D’Innocenzio –

National Retail Writer (LinkedIn), covering consumer behavior, psychology [my emphasis], low-price chains, dept. stores, and clothing markets. Believes covering consumer spending is important due to its 70% share in American economy.

“Foodie, loves consignment shopping” (Twitter) [very quiche]

Christopher S. Rugaber –

Reporter covering employment and economy for Associated Press (Twitter)

From the bold, jarring headline “Consumer confidence at lowest since recession” until its proposition that even high income confidence is in decline, it would seem that the Associated Press aims to paint a dramatically bleak picture of the US economic landscape, that they aim to represent the sentiment of the “common man” as well as the wealthy, and that America’s economic woes are a relatively neutral and prevalent concern. The article reports on the Consumer Board Consumer Confidence Index Survey in October, which fell to 39.8 percent by mid-month. Not until accounts of the sources used and the scope of the article’s syndication are detailed does its reference frame become clearer. The article is far from bleak, and it is even further from motiveless reporting.

I would even suggest that the relative, benign neutrality of the AP article gives it implicit consent so as to work toward modes of propaganda that include the inducement of individual spending. The article’s word/paragraph ratio is 32.1, in very close line with other syndicated (Reuters, Commenters using these sources legitimately or illegally) accounts of the Conference Board’s Consumer Confidence Index for October, which lends the reader a series of information blurbs that resembles a news ticker in today’s all connected world. Effectively, this hits the reader with snippets of polarized data such as quotations from investment bankers and survey information, without offering in-depth analysis. The analysis is unneeded, as readers are conditioned to reacting to such phrases as “declining mood” and “recession.” A photo was used in the article, and I can assure reused in most syndications, of a prototypical consumer, a “high-maintenance” California mother, carrying her shopping bags as if Hollywood Royalty while holding her daughter’s hand so as to emblazon readers minds with consumer credentials. This helps to draw readers who might gloss over headlines to interrogate the article.

Getting beyond the article’s structural elements, an analysis of its tone and content helps to flesh out its possible motivations and proponents. AP’s wide syndication has already established the agency as a reputable, or conventional, source for news coverage. This particular story was syndicated by more than two-handfuls of print and electronic publications in my search. Obviously, AP writers have the ability to frame and initiate a news event, and so set a standard for reporting or op-ed/reaction. So what bodies are on AP’s radar for source material? What bodies frame the AP consensus on the US economy? In short, this list of agencies suffices to fill the article with informative content and conjecture: The Conference Board (Private/Univ. of Michigan), AP (New York), Dow Jones Industrial Exchange, RBC Capital Markets, BTIG (Brokerage), Bank of Tokyo – Mitsubishi UFJ. Not a single common citizen is enlisted among the quoted references, and all of the agencies above are integral players in the currency/market economies worldwide. Overall article tone is hesitantly foreboding, as it skillfully blends bleak analysis with uncertain or modestly reassuring data, such as “economists cautioned that what consumers say and what they do can be two different things” and “the percentage of Americans who plan to buy a major appliance in the next six months, such as a television or washing machine rose to 45.9 percent.” The tone gives the article credence as a sympathetic piece aimed at seeing through the difficulties posing the reader, giving it a tantalizingly coercive opportunity. On the content side, the article often alluded to greater economic crises, such as the European collapse and US consumer activity, but it intriguingly mentioned high-earners decline in confidence among its analysis. It even afforded the readers a detail about the relative importance of high-income spending, that they “account for a disproportionate amount of spending.” I would suggest that the motivation for adding such content would be to drive some sort of trend-reversal among wealthy readers by a combination of fear and reinforcement. Investors and the rich may realize that without their spending, the balance of a consumer economy may be tipped against them. It is, in fact, a warning for the prosperous.

AP reporting is rhetorical by nature, as its syndication is vast. In this particular article on consumer confidence in October, a hesitantly foreboding tone is used as a vehicle for the softening of readers to a subversive plan of action, a call to consume. Article sources bring together the biggest and most influential players in the corporate arena and fail to address the story of the individual. The AP article structure lends itself to drama over in-depth analysis; for it news is made, and many pundits reuse, disseminate, and frame their own debates therein.

http://www.businessweek.com/news/2011-10-25/u-s-economy-confidence-decreases-home-prices-stagnate.html

Comparison/Conclusion

Done as a group collaboration

Herman and Chomsky claim that the elite private corporation dominate the media mindset and feed information to audiences that suite a propaganda model. In our analysis we begin with the news reported on Fox about consumer confidence where an attempt is made to sound politically neutral though the choice of literature chooses to exemplify the shortcomings of the current political state of the United States. Indirectly, a finger is pointed toward the Liberal Party who is now in power, assuming that their leadership is to be blamed .In contrast the article in the Onion chooses to include the reader/general society in the responsibility of squandering national surplus. The Onion however takes the Liberal stance putting a larger portion of the blame on the Bush administration, accusing them for the current Economic downfall.

The two opposing views exemplifies the propaganda being delivered, favoring a certain political ideology though Fox tries to look more neutral and the onion conducts itself in blatant satire favoring the left. These news outlets are expected to take the political position they do and the ideology has effectively become dominant in the mindset of those creating such news as well as those reading it. In simplicity, the corporation has manufactured a consent that allows those in power (government, political parties) to communicate their message without too many questions being asked. In this case rather than viewing solely on consumer confidence, blame is directed toward someone else for the current state of the American economy. This leads to society perception being polarized between left and right and the public expects (or even demands) more similar news to be continually reproduced by these corporations. In that, a hegemony is formed, the regular American reacts to these polarized news as “common sense”, that we should all know that it is either Obama’s or Bush’s fault that we are in this current state.

Completely contrasting the Onion and it's liberal views, the Minnesota Republic publication on campus has very extreme conservative views when it involves the economy. It is always questioning why people insist in entitlements and higher taxes. This is obviously political propaganda to make liberals sound like complete fools having no idea how the idea of currency works or how the economy is run. A couple articles in the Minnesota Republic have questioned the Occupy Wallstreet issue saying they do not even know what they're protesting. It is amazing though to see the radical side and hear the arguments and realize there is always legitimate arguments for each side.

Al Jazeera being international (by that I mean “not American), it is more concerned with building a form of relevance between Europe, the Middle East and America. Hence the network is less concern with the “trivial American problems” and is more focused on how those problems affect their livelihoods. It is naïve to say that Al Jazeera is completely impartial when presenting American news and points of views but they are less likely to put the blame on either the Republicans or the Democrats (for the matter of economic confidence at least). The choice of literature, which was picked for the project, seemed to lament that it is not only Europe that is in an economic crisis but also America; that the sentiments of negativity towards national leaders are quite similar between the two geographical areas.

It is blatant however that the selected outlets cater primarily to the “white upper-middle class” society, with the choice of language and structure; it should be acknowledged that these articles/news networks were not meant for the “East Asian business person”. This is imperative to understand because the news literature seem to be reproducing news meant for the “hegemonic class by the hegemonic networks”, creating (once again) a cycle of “common sense”.

It must be noted however, that the networks labeling of news and opinions portrays a sense of transparency.Admitting to the fact, that those under the opinions label are representations of individuals rather than disguising the reporting of events as “impartial news”.

As we discussed in class, these news outlets seem to all get their information from the same source. In this case it is the Conference Board. If the news outlets simply passed on the statistical numbers they were given, all of the stories would be the same. But these outlets all have different perspectives and interests to serve. In order to serve these interests, the outlets shape the stories by adding their own commentary, which is used to bring the reader in the direction that the publisher wants. For example, the Fox News story is much different from the Al Jazeera story because Fox generally serves conservative interests while Al Jazeera serves international interests. It is this phenomenon that makes news/history partial because the writers choose what to include and omit based on personal interests.

Moreover, these interests do not objectively manifest themselves as novel opinion on the topic of consumerism and the economy, but rather they serve to sell news to a prepared client base demanding to hear an issue framed within comfortable and understandable bounds. Without these interest based reference frames, news could not easily be syndicated nor sold. The economy is a topic of some irony for major corporate news agencies to be covering, for it is with their intervention and the “flak” they deal with, as Herman and Chompsky propose, that the modern corporate world functions in order.