Why economic pundits in stories are so negative

James Surowiecki of The New Yorker writes that the gurus and insiders frequently being quoted in the business press these days are biased with a gloomy outlook, but the media doesn’t realize the reason why.

Surowiecki wrote, “The same issues are at work with the money managers and Wall Street analysts you see quoted in stories about the markets. Because things have been so terrible on the Street, it’s difficult for them to believe that things might be O.K. in the rest of the economy. (In fact, as I wrote two weeks ago, there is considerable evidence that the broader economy is not suffering the same kind of dramatic reversals as the financial markets.)

“And because Wall Street would, of course, be among the biggest beneficiaries of a Fed rate cut, it’s not surprising that the general message it’s sending is that disaster is near if the Fed doesn’t act. In fact, when, recently, the government announced that durable-goods orders had risen sharply last month, some people actually expressed disappointment, because good news made it less likely that the Fed would intervene.

“The headline of one of Jim Cramer’s columns at TheStreet.com captured this idea perfectly: ‘This Fed Needs More Crises.’ The tagline read, ‘Calm markets will let Bernanke’s crew take their eye off the ball.'”

Read more here.