In his Sunday column, Ted Vaden, the public editor of The News & Observer, discussed the complaints from readers who say that the paper's coverage of current economic issues is too negative. While the paper has run a number of distressing economic stories, the reason is fairly simple: the economy is distressed.
In all probability, the economy either has entered or is about to enter a recession. The chair of the Federal Reserve, Ben Bernanke, said as much the other day. This recession likely will result not from "normal" factors that shape the business cycle but from severe structural damage to the economy — damage inflicted in large part by rampant financial speculation and derelict public leaders. Proof of that damage can be found in the extraordinary actions taken by the Federal Reserve since the beginning of the year. The Fed has moved aggressively to shore up unregulated investment banks, even going so far as to provide firms with hard cash in exchange for likely worthless securities and arranging a buy-out of Bear Stearns. These are extraordinary actions.
Granted, the North Carolina economy has yet to experience some of the problems that already have manifested themselves in other states. However, the trends call for concern. Unemployment is rising, job creation has slowed, consumer spending has declined, inflation is rising and family incomes are atrophying. And many working families have not yet recovered from the 2001 recession. It may only be a matter of time until national problems damage North Carolina.
This lack of awareness of the severity of economic issues likely results from a problem flagged by Vaden in his column; namely, limited coverage of structural economic issues in state and local media outlets. Absent a "big-picture" perspective, it is difficult for people to see beyond their personal frames of reference and recognize just how serious the current situation is.
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