We’re living in Everest-summitting, rarified-air economic times
In a recent column – “The Real Price of Free Information” – I encouraged all of us to become more discerning and skeptical consumers of the digital news and information being fire-hosed at us virtually every second of every day. So as a way of practicing, consider this headline: “Mount Everest climbers forced to retreat from summit goal.”
Sounds like they didn’t make it, right? But here’s what the copy revealed: The team actually summited late in the day, but, “before they could fully experience their accomplishment, darkness and weather made it prudent to set up camp on the leeward side of the mountain overnight, before re-summitting the next morning.”
This headline, while technically not wrong, was misleading. But full disclosure, I made up the entire Everest story, headline and all. However, you’ll see its usefulness when putting the following real headline in perspective with what actually happened. The following headline from a real Wall Street Journal article is a perfect example of why we must apply the discerning, skeptical reader discipline: “Confidence in U.S. economy retreats among small biz CEOs.”
It seems that content curation in the digital age requires headline writers to think: “Accuracy? Ethics? Whatever. My job is to make you click. If you don’t click, we don’t eat.” So, you and I are required to look under the hood of this headline that is referring to the results of a Vistage survey of small business owners, which reported that the December 2018 confidence response was 101.7, down from 106.3 in November.
Yes, technically this was a retreat. But I’ve been reporting on small business sentiment for over 20 years, including the Vistage report and the 45-year-old gold standard, NFIB’s Index of Small Business Optimism. The Index’s economist, Dr. Bill Dunkelburg, has reported its results every month on my radio program since 2000, as this indicator travelled from well over the almost five-decade average of approximately 100, to being stuck in the low 90s for almost the entire Obama administration.
Since December 2016, the NFIB Index has vacillated from a low of 103.0, to the Everest-summiting, rarified-air equivalent of 108.8 in August 2018. And yes, just like the Vistage report, the NFIB Index also dropped from 104.8 in November to 104.4 in December 2018. But put into proper historic and accurate perspective, a big bold headline of recent movement from both surveys should read: “Still a lot of happy business campers on Main Street.”
You’re going to continue to see headlines of small business sentiment that might sound more dour than optimistic. Just remember, the reality will likely not be that small businesses are retreating down the mountain, but rather that they’ve decamped to the leeward side of the summit to take a much-earned breather and reset for a second assault tomorrow.
Here’s another headline you’ll see this year: “U.S. economy declines to sub-3% GDP.” Even though this wording will be technically correct, again, let’s put it in perspective. For decades, the U.S. has referred to annual GDP (gross domestic product) growth in low-single-digit percentages. Anything at 2% or below is considered normal in Europe, but not here in America, while GDP growth at 3% or more is a champagne milestone that gets presidents reelected. It must be pointed out that we began using this GDP percentage range paradigm decades ago when the U.S. economy and population was much smaller. For example, the 1999 U.S. economy of $9.6 Trillion produced $34,000 for each of the 292 million Americans. GDP growth that year was an almost unprecedented and unsustainable 4.7%, which increased per capita performance by $966. Hold on to that thought.
Today, economists are still committed to that same growth paradigm even though the 2019 economy will be approximately $21 Trillion, or $62,000 per capita for a population of 334 million. That’s a 119% increase over 1999 in production with barely a 14% increase in population. Now, remember our “declines” headline?
Even though the 2019 economy is projected to grow at only 2.4%, that’s still an increase in production of over $1,500 per capita, or 55% more than 4.6% delivered in 1999. So, you can see that when you read a headline this year that GDP has slipped below 3%, you’ll be able to put it in context as a more discerning consumer of information in the Digital Age, and realize that we’re still experiencing rarified-air, Everest-summitting economic times.
Write this on a rock … As handy as they may be, don’t get your news from headlines. Be a discerning consumer of information.
Jim Blasingame is the author of The 3rd Ingredient, the Journey of Analog Ethics into the World of Digital Fear and Greed.
