Ok, I’m hoping that this is in fact the correct forum for this, as the debate that developed at work was quite heated. However, if it rightfully belongs elsewhere, I hope someone moves it.
At work the other day, a co-worker and I were discussing the numerous corporate layoffs and the falling stock market. I’m hoping to phrase this well, but I may come across as simplistic. I have a basic understanding of the economy, but I am not an economist.
His claim: The media is largely responsible for the continuing downturn of the economy. This is because they continue to report corporate layoffs, dot-com failures etc. If they continue to report them in the same manner-for example “XYZ Technologies to lay off 26,000”-people will become stressed about the economy, spend less money, leading to more layoffs and closures.
My claim: The economy has been in a roaring cycle for far too long. Such a downturn was becoming inevitable, regardless of the media’s reporting. The media reports the effects of the economy, but does not cause further downturns. If people are spending more on the same basics (food, shelter, clothing, transportation), they have less disposable income for investing, for that new CD, whatever. They quit buying the extras, leading to a lower level of manufacturing, and from there to layoffs or potential layoffs/closures.
Does the media bear any responsibility for this, or are they reporting the effects of the downturn of a volatile market/economy?