A survey of U.S. financial journalists finds some believing they dropped the ball on the lead-up to the meltdown, some think negative media reporting could make the recession worse, which leads into the final point of this post -- neuronomics.

From AP via Google News (posted Thursday):

Sixty-two of 100 journalists surveyed by Abrams Research, a firm started by former MSNBC chief Dan Abrams, criticized the media's work, suggesting there was an over-exuberance about the economy and a failure to connect the dots as troubles began.

"That's a very telling and interesting number," Abrams said Thursday. "Some of the comments we got were really fascinating. I think there's a lot of self-examination going on within the financial media about what happened and why."

The journalists questioned over the past few weeks, mostly reporters from organizations such as CNBC, The Wall Street Journal, The New York Times and others, were promised their identities would be kept confidential in return for their opinions.

They split almost evenly on who deserved the most blame for the crisis: 45 said banks and 44 said regulators. Only two believed that the media was mostly to blame, and nine pointed their fingers at consumers.

Said one journalist: "Everyone dropped the ball. But the media does not have nearly as much blood on its hands as the financial industry and government."

I would again draw peoples' attention to an American Journalism Review article (blogged about here on Nov. 29) that highlighted the efforts of some U.S. financial journos to raise awareness of looming problems in the U.S. financial system and economy. They went unheeded.

From CP via Google News on Wednesday:

If all that bad economic news has made you nervous about spending money or investing in the stock market, blame the people telling you about it.

Even if your job is safe, the value of your house hasn't plunged and your investment portfolio isn't keeping you up at night, some experts say the media is scaring consumers from opening their wallets, which in turn is only adding to the woes of Canada's recessionary economy.

"Media attitudes do help to shape how consumers feel," said Glen Hodgson, chief economist at the Conference Board of Canada, an Ottawa-based economic research group.

"If (the media) keep saying the sky is falling, well, people think the sky is falling."

While Hodgson said there are clearly issues such as the global credit crunch that are negatively impacting the economy, the problems aren't as deep or widespread as perhaps people are being led to believe.

"Everybody gets worried - even though the chance of them losing their job, losing their pension, is very slim," Hodgson said.

"It's why media exists, we all want to know what is happening out there. The question is whether the bad news is getting amplified?"

The result of blanket media coverage of the economic troubles in Canada is said to be helping to lower consumer confidence, creating what the conference board recently called a "psychology of recession."

I'm astounded that Hodgson wouldn't point an accusatory finger at political leaders and economic officials for being something less than optimistic.

Robert Fife, CTV's Ottawa bureau chief, said the following tonight: ""People aren't going to spend if the politicians keep talking about an economic armageddon."

Actually, seems like people aren't listening in any event; a Friday CTV.ca headline: Consumer spending resilient despite downbeat economy.

Here's what some others had to say in the CP article:

Cliff Grevler, a partner at The Boston Consulting Group, believes a lot of the negativity consumers in Canada are feeling is a reaction to what is happening south of the border.

A recent Boston Consulting Group survey shows 87 per cent of Canadians pay attention to American economic news.

What's more, Grevler said the survey shows 26 per cent of Canadians changed their spending habits as a result of what they see happening in the U.S. ...

That might well be true, but see the headline above.

Catherine Swift, president and CEO of the Canadian Federation of Independent Business, agrees intense media coverage of the weakening economy is making some consumers needlessly nervous.

While her own organization has showed business confidence has been falling in recent months, she said two-thirds of the federation's members are expecting 2009 to be the same or better than 2008.

"The majority are not looking at a worsening of conditions," Swift said, although some businesses are nervous to expand or invest because of what they are hearing and reading.

However, Swift said it's "human nature" to focus on the negative.

"Let's face it, media wouldn't do it if there wasn't a market for it," Swift said.

And finally a countering voice of reason.

David Soberman, a marketing professor at the University of Toronto's Rotman School of Management, said the media's reporting of the economy is only overblown to those who don't feel the impact.

"If you are a retired person who just had 50 per cent of your RRSP wiped out .. or you are in Oshawa now where factories are closing because of problems in the auto sector, how can you say those people are overreacting?" Soberman said.

"To me, the suggestion that the media is making things worse can only be true if they are reporting things that are untrue."

Novelist Douglas Coupland touched on an interesting concept in a Globe and Mail commentary on Wednesday - neuronomics. However, the headline was "Gloomageddon."

As old economic models seem increasingly irrelevant, a new field, neuroeconomics, is evolving: Scientists study human responses to risk and the near future on a small scale, then apply gleaned lessons to society as a whole. The evolving thinking is that electronics extend our central nervous systems, and that economic news in particular has hit the point of speed and saturation that our microeconomic daily freak-outs are becoming the new macroeconomics.

The advantages of time, geography, education, connections, gender and wealth have largely levelled the information playing field with democratic vim. Your grandmother gets her Nasdaq data at the same speed as David Geffen, but she's probably not as agile as him at interpreting it in a rational way. And when she or Mr. Geffen or anyone else go to interpret their financial information, their brain's amygdala moves into action, as do parts of their orbitofrontal cortex that regulate the amygdala.

I don't wish to play down the science behind neuroeconomics. Basically, when the brain needs to make a decision on a situation that may well go sideways, the brain tends not to use statistics or logic to rationally guide its way. Instead, it says: "An information vacuum? I hate vacuums. I know - I'll fill in that vacuum with fear." The fear switch is pulled, and welcome to 2008. We have a billion amygdalas out there feeding on each other, exacerbating their worst tendencies and creating fear where it's neither merited nor of any help.

So, as human nature doesn't seem likely to change in the foreseeable future, the only thing we can do is command our rational selves to stop our irrational selves from clicking the Reuters or Huffington or Drudge bookmark every 10 minutes. As we know, bad news travels instantly; good news ends up on a slag heap. Remember: Capitalism is a robust system. Things really will get better. This will pass. Go out and buy a Chrysler.

Or maybe not. 

One problem with Coupland's analysis is that expert opinion about the problems facing the global economy has proven to be largely valueless.

When economists and politicians say, "this oughta do it," and it doesn't, then the little people are left wondering as to who does know.

Margaret Wente had a useful column this past fall when she opined on how no one really knew what was going on.

I don't think people are stressing themselves out over nothing: If you work in the advertising-supported news media, some major shock waves have already hit. More may come.

If you live in an Ontario auto town, unemployment rates are already at recessionary levels.

There is stuff happening in parts of the real economy that makes people scared. So to suggest this is all a media construct or our own overactive imaginations feeding on each other is, to my mind, incomplete.