Normally, I don’t quote sports columnists on this blog but I am a regular reader of Gregg Easterbrook’s Tuesday Morning Quarterback on ESPN. Gregg mostly writes on football (and very well at that- too bad he didn’t help me draft my fanatasy football team. Oh the humanity!) but he’s also an astute observer of the economy. To end the week, this week’s nugget of wisdom by a member of the media to the media was very timely (emphasis is mine):

…Just last winter, gas at $4 a gallon was said to represent a super-ultra emergency, and ExxonMobil profits were said to be obscene. Now gas is $2 a gallon and this is bad, according to CNBC economics bobbleheads, who last week warned the lower pump price will depress oil-company profits. Just last winter, rising consumer prices were said to represent a super-ultra emergency — now that consumer prices are falling, that’s supposed to be bad too, owing to the possibility of deflation. But innovation and rising labor productivity are supposed to drive down prices. Lower prices are a core goal of capitalist economics!

Oh no, the price is falling! Oh no!

These points should serve as reminders that the mainstream media always present all economic news as bad. Higher interest rates? Bad for borrowers. Lower interest rates? Might cause inflation. Normally, the media’s penchant for spinning all economic news as bad doesn’t matter — but right now it does, as pessimism more than logic seems to be driving the weak economy… Pessimism is driving the downturn, and that pessimism is advanced by relentless media negativism.

Even the Wall Street Journal is spinning events in the most pessimistic light. A page one story declared, “Investors in the U.S. stock market have lost more than $9 trillion since its peak a year ago.” But there is a distinction between a decline and a loss. The paper value of U.S. equities has declined $9 trillion since the peak in October 2007, but many investors have suffered no loss because they haven’t sold. Many people’s houses have declined in value in the last two years, but most people haven’t lost a dime because they haven’t sold — just as many people’s houses rose in value from 2002 to 2006 but most people did not gain, again because they did not sell. Doing nothing can be the smart move in a bear market, and those investors, individual or institutional, who have cleverly done nothing have incurred no losses and are likely to come out ahead in the long run. Yet some insist on claiming $9 trillion has been “lost.” Exaggerating the negative only worsens the economic-confidence picture.

Have a great weekend.