The Murky World of Economic Journalism   

Margaret Sanfelice, a 71-year-old widow, thinks 50 percent of all Americans are out of work. "Yes, half the country. Everybody's cutting back, cutting back," she told the Washington Post as part of a study on how the public perceives the state of the economy.

Though the unemployment rate is 5.2 percent, Sanfelice is not alone in her pessimistic view of the nation's financial picture, according to a three-part October series in the Post called "Reality Check." A 43-year-old Florida homemaker thinks inflation is at 40 percent. A Massachusetts contractor says the average corporation is making a 50 percent profit. Despite daily stories detailing government data and economic indicators, the series concluded that most Americans are outrageously off-base when asked about the jobless rate, inflation and the deficit.

Mario Brossard, the Post's assistant director of polling, says the dichotomy between the government numbers reported in newspapers nationwide and the average person's view of the economy lies not in ignorance, but in perspective. "They're not just whining. There are large portions of people who are having problems in this economy, [and] a number of them pointed to the media's doom-and-gloom pieces," Brossard says. "The press has been writing these [stories] and most people get their economic news from the media."

In a year when several major newspapers have run high-profile economic series--including the New York Times' seven-part "The Downsizing of America" in March and the Philadelphia Inquirer's 10-day "America: Who Stole the Dream?" in September--the findings of the Post's poll raise questions about whether the media are to blame for the public's skewed perspective of the economy.

Brossard says controversy surrounding prominent financial stories was a factor in the Post's decision to conduct the poll. "Reality Check" is the Post's third poll conducted jointly with Harvard University and the Henry J. Kaiser Family Foundation that focuses on "how information shapes how people think and act." (Previous polls have analyzed race relations and public trust in the government.)

The project on the economy was conceived in May by the Post's polling unit, headed by the paper's polling director, Richard Morin. By July, a list of questions had been compiled, and 1,511 adults, along with 250 econo-mists, were surveyed about their knowledge and perceptions of the economy. The poll results were ultimately developed into three days of front page stories.

"Here are the rosy facts about the U.S. economy, as measured by government statistics: Unemployment is at a seven-year low. Inflation is at its lowest level in three decades. The federal budget deficit has declined to about $109 billion this year from $290 billion in 1992. And the economy is creating millions more jobs than are being lost to downsizing, mergers, business failures and foreign competition," wrote Morin and business/financial reporter John M. Berry. "Yet here are the public's bleak perceptions: The average American thinks the number of jobless is four times higher than it actually is. Nearly one in four believes the current unemployment rate tops 25 percent--the proportion of Americans who were estimated to be out of work at the worst of the Great Depression. They believe that prices are rising four times faster than they really are and that the federal budget deficit is higher, not lower, than it was five years ago."

Perhaps the most disturbing finding of the "Reality Check" series was the notion that it hardly matters how journalists report government economic statistics, because about half of those surveyed think the government is fudging the numbers anyway. But Donald L. Barlett, who was nominated for a Pulitzer with James B. Steele for 1991's "America: What Went Wrong?" series and teamed with Steele on the Inquirer's epic on the economy this fall, says he is hardly surprised that the public has lost confidence in economic reporting.

"I don't think there is any question about it. After two years of interviewing, we found people see no relation between government numbers and their real lives," says Barlett. When the economy's impact on real lives is emphasized, readers will respond, he says, citing the Inquirer's 10,000 to 20,000 circulation jump in September when it ran the front page "Dream" series.

But Newsweek and Washington Post columnist Robert Samuelson, one of the harshest critics of both the Times and Inquirer series, argues that readers are being misinformed. He says journalists fall too easily into the trap of reducing complex money matters into black-and-white stories and, as a result, distort the public's perception of economic realities.

Steele says critics like Samuelson, who called the Times series "junk journalism," are far outnumbered by readers thanking the team for putting the economy's jumbled statistics in real-life terms.

Much of the public's confusion over the state of the economy, says Steele, can be traced back to the laziness of financial reporters. "Don't just say the unemployment rate is 5 or 6 percent. Go back and bring some perspective to the numbers," he says. "Readers are really hungry to see from whence things came."

Kirk Johnson, the New York Times' chief metro economics reporter, agrees. "Stories about numbers don't say much unless they focus on real people," says Johnson, adding that most economic stories will never be as complete as they could be.

But no matter how hard journalists work to present a clear, balanced view of the economy, if a reader has lost his or her job, newspaper stories are irrelevant. "It's like the blind people describing the elephant," Johnson says. "If you are downsized, you probably have a more negative view of the economy."

Johnson was part of the team that worked on the Times' downsizing series, which generated criticism for overstating the problem and pandering to the anxieties of white middle-class readers. But the series did illustrate the complexities of reporting on the economy. If news reports cite dozens of examples of people losing their jobs and homes, as the Times' series did, they are criticized for making the economy look worse than it is. If they center on statistics and expert opinions, they lose both readers and the relevance behind the numbers.

"You focus on one story--either the economy is good or the economy is bad--at your peril," Johnson says. "There isn't any one clear, coherent story about the economy. Ultimately, you have to focus on finding the truth that makes the most sense."

Newsweek's Samuelson agrees. "Journalism copes awkwardly with the ambiguities of many economic stories. We're most comfortable with scandals, trials, politics, sports and wars. The conflicts are obvious, moral judgments can often be made, and stories have clean endings," Samuelson wrote. "The economy defies such simple theater."