It's another bad indicator, EVERYBODY PANIC!

Steve Chapman suggests that the constant din of pontificators demanding that "something be done" about the crisis du jour could benefit from the words of a college football coach:

A couple of alleged crises are getting all the attention at the moment. The first is the risk of a recession. The second, not unrelated, is the mortgage meltdown and the credit crunch it has helped to bring about. Just about everyone in Washington agrees that swift action is needed on both.

The scenario brings to mind what the late Ohio State football coach Woody Hayes said about throwing the football: Three things can happen, and two of them are bad. Efforts to micromanage the macroeconomy may be useless, or they may be destructive. In either case, they can impede a painful process that is needed to correct mistakes like the housing bubble.

For all the alarms about a repeat of the Great Depression, it's not a sure thing we'll even have a recession, much less a serious one. A recession is technically defined as two consecutive quarters of negative economic growth — meaning total output actually declines. A recent Wall Street Journal survey of 51 economists, however, found that, on average, they expect not shrinkage but very slow growth in the first and second quarters.

Of course, the media has been almost in unison trying to talk up a recession for several years now . . . and they're finally getting some statistical backing that the economy is slowing down (at least in America). In the same sense that a single swallow doesn't make a spring, a single quarter of negative growth does not make a recession.

There are lots of good reasons for people to be aware of the general state of the economy: it's dangerous to make long-term plans without some awareness of the potential turbulence in the market, but with few exceptions the print and broadcast media has been painting everything in shades of impending doom. There is a distinct difference between reporting economic issues and trying to turn every economic data point into a "proof-of-crisis" factoid.

One economist interviewed by the Journal suggested that "there might not be even one negative quarter in this recession" — which is the equivalent of a damp drought. Herbert Hoover should have had such problems.

This is not meant to go all Pollyanna on the economy: there are things that could be handled a lot better than they have been, but when talking heads are managing to talk down even positive news, you have to assume that reporting and opinionating have become too tightly entwined. Bad news sells . . . for a while. You often find that sensationalism will spike the public attention, but if there's nothing to actually support the induced panic, the next time it'll require much more "push" to get that same reaction. I think this has already happened with economic reporting: we've heard so many different variations on "the sky is falling!" that we're becoming numb to certain kinds of news.

Acting in a hurry without considering the long-term consequences, you may recall, is how we got into this predicament. Fixing major mistakes is not an overnight task. But in time, foreclosures will subside, the housing sector will return to normal and the economy will regain its usual vigor. Here's what Washington should do to help: Let them.

Exactly. Precipitate government action will almost always do one thing really well: extend the current crisis, and create even more unintended consequences. Let's hope that they manage to avoid the temptation.

But I'm not betting on it.

Update: For example, Roger de Hauteville points out that The Independent titled a recent article "USA 2008 The Great Depression", and included photos of Americans in a breadline:

You see, in the thumbnail view of the picture, the noble Bob Cratchit figure is holding his poverty-numbed fingers in the universal sign for "Please sir, can I have some more porridge?" It's a shame to ruin it by showing him in closeup, fiddling with his MP3 player to get just the right mix, and shod in elaborate, new, expensive footwear and clothes. Because what we're looking at here, is indeed a line of people who are willing to stand in a line to get free stuff. You're right there, Percival. Unfortunately for you Someone at the National Review Online read the caption on the image you used, and it reads:

"NEW YORK - NOVEMBER 30: People wait on line to receive donated coats at the kickoff of the 17th annual New York Cares Coat Drive a the Bowery Mission November 30, 2005 in New York City. Bloomberg helped give out coats to residents of the Mission and the coat drive hopes to collect and distribute 80,000 coats to needy New Yorkers by New Years. (Photo by Mario Tama/Getty Images)"

But your point is made, even if fraudulently. Very truthy, Cedric. People are lining up virtually, if not physically, for free food coupons, which you inartfully mention later in your article can be illegally sold to unscrupulous people for seventy cents on the dollar to buy drugs and booze and . . . wel l . . . I don't know, maybe MP3 players.