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     There’s nothing like a compelling sob story to put a human face on economic reporting. Unfortunately, the tragic stories highlighted by the media to slam business and naysay the economy are often worst-case scenarios that gloss over subjects’ failure to exercise personal responsibility.


     The media have encouraged readers and viewers to feel sympathy for others who made bad choices; inaccurately labeled extreme cases as representative of “average Americans;” and suggested that lazy or irresponsible people deserve the benefit of the doubt while blaming business or the economy at large for their personal problems.


     ABC “World News with Charles Gibson” on January 29 profiled the Walkers, a couple two months behind on their mortgage payment who regularly borrow money from their teenage children – because of the economy.


     The Walkers were struggling to afford their mortgage payments because their rate had adjusted from 9 percent to 14 percent. Rather than use the story as an opportunity to encourage borrowers to borrow only what they can afford, reporter Betsy Stark and the Walkers used it as an opportunity to slam lenders.


     “Would it be so bad if they got 9 percent interest from us rather than, you know, 14 percent interest,” Susan Walker said. “I mean, 9 percent is still a pretty, you know, a pretty penny.”


     Only after ABC stepped in did Homecomings Financial, the Walkers’ lender, agree to refinance the mortgage back to 7.6 percent, Stark said. But she never addressed the fact that the Walkers agreed to an adjustable-rate mortgage starting at 9 percent – already high; average ARMs peaked below 7 percent – and had to know that the rate could go up.


     The NBC “Nightly News” profiled a different family on January 29. Denise and Dave Dorman were introduced as an “average American family.” The Dormans sold their house 18 months after putting it on the market, for a loss, according to reporter Erin Burnett.


     Burnett blamed the Dormans’ $20,000 in debt on “rising gas prices, health expenses [and] slowing business.” She did say the Dormans were cutting back on extra expenses like eating out, but showed video of the family opening a delivery pizza box as evidence they were “staying in” for dinner.


     She didn’t dig deeper into the Dormans’ personal finances, but reported that “the average American owns nine credit cards. In fact, of every $100 we spend, 40 is charged to plastic.” Burnett didn’t say where she found those numbers. But credit reporting agency Experian says Americans have an average of four credit cards. Only 14 percent carry more than 10 cards.



What is average, anyway?


     Using extreme cases as examples of everyday Americans’ lives has been a mainstay of the media’s coverage of economic issues. A segment that aired on the “CBS Evening News” January 24 and again on the “Early Show” January 25 was no different.


     Occasionally a reporter or producer will find a truly unusual and unfortunate story, like that of Karen Wimbish.


     Wimbish took out a $100,000 home equity loan to pay for home improvements to accommodate her wheelchair-bound son. She started stumbling on the payments when the rate adjusted from 7 percent to 9 percent.


     “She hoped to get out of the hole by refinancing her mortgage at today’s lower rates only to be told she doesn’t qualify,” Cynthia Bowers reported.


     It was a sad story to be sure.  Only the most heartless of brutes wouldn’t have some sympathy for Wimbish. But Bowers’ attempt to liken all bad loan decisions to Wimbish’s story was inexcusable.


     “Millions of Americans are facing the same problem,” Bowers reported, as if millions of Americans renovated their homes to accommodate a paralyzed child and began defaulting on the loans they used to fund the upgrades. Millions of Americans may be facing higher mortgage payments because they signed for adjustable-rate loans they couldn’t afford, but they shouldn’t escape personal responsibility.


     The “CBS Evening News” on January 11 reported on Dean and Dori Julian, a couple with two children who were allegedly suffering as part of rising unemployment and a slumping housing market. “When the economy grinds to a halt, the average family loses $5,000 per year,” reporter Sandra Hughes said. “This family of four is out twice that much in a month.”


     Dori Julian had recently lost her job in the real estate business, accounting for a $10,000 monthly loss. Excluding Dean Julian’s income, the Julians must have been pulling in around $120,000 a year. Is that average?


     No. The U.S. Census Bureau reported in August 2007 that the median household income in 2006 was $48,200. It’s unfortunate that the Julians had to remove their child from private school and are trying to sell their vacation home, but they hardly represent an average American family.


     A lot of people live normally in circumstances the Julians consider their “personal recession” – clipping coupons, limited restaurant dining and considering selling a car. Would it be so hard for the media to profile some of those families who are making it – happily – to show readers and viewers that it can be done?



Feel bad for this person.


     While some reports exaggerate a family’s financial situation or inaccurately describe them as average, others simply fail to acknowledge a subject’s own role in his/her financial demise.


     The Washington Post on January 27 profiled Ivan Toledo, a Florida resident whose financial life had “come undone.” Toledo was out of work and about to lose his home. “Somewhere in between, five credit cards were maxed out, the car and power bills went unpaid, and the cable TV was cut off,” the report said. “He and his wife worry about their 18-month-old son’s runny nose, but without health insurance there will be no visit to the pediatrician.”


     But while the newspaper tried to portray Toledo as the victim of a bad economy looking to the presidential candidates for answers, it failed to hold him to a standard of responsibility by questioning his own decisions.


     Two years ago, Toledo quit his job as an ironworker “because he wanted something more interesting and less physically draining.” With a baby on the way, Toledo quit the job without having a new one lined up, so the family took out a home equity loan to stay afloat.


     Toledo found a job at an auto body shop, but was laid off four months ago. He acknowledged he has had trouble finding work because he is “asking for too much money.” He said he also applied for minimum-wage jobs but was told he was “overqualified.”


     But rather than take responsibility for his own actions, Toledo blamed the nation and the government for alleged failure. “This country is in a bad hole, and we need someone to help us get out of it,” he said. “This country needs a president that can deliver. If not, things are going to get worse. We just hope and pray it will get better.”


     Not to be outdone by The Washington Post, the Los Angeles Times on January 27 profiled Nathan Drake in a regular feature that offers financial advice to readers in dire situations. Drake was $54,000 in debt.


     But while he admitted to enjoying luxury – going out to nice restaurants, owning a boat he refuses to sell and making payments on a nice truck to tow the boat – Drake tried to blame his predicament on credit card companies.


     “I never had any debt before. But all of a sudden I had all these credit cards,” he said as if they magically appeared in his wallet and swiped themselves through card readers without his consent. The article blamed college campus card distributors for Drake’s problem even though it was clear his own irresponsibility was to blame.


     On January 26 ABC “World News Saturday” mentioned Mike and Dawn Lembeck, a couple who are “stuck” with two mortgages because they moved into a bigger house before selling their smaller one.


     The report didn’t suggest the Lembecks are struggling to make both payments, but still painted them as victims of a flailing housing market rather than challenging their decision to move before selling their old house.


     On January 30, CNN’s “American Morning” featured Veronica McNeal, an unemployed mother of two shopping for good deals. One deal she was looking for? A “TV at a good price.”



Voice of Reason


     The NBC “Today” show featured a bright spot in the worst-case-scenario reporting. In an segment with Marty Ummel, MSNBC legal analyst Susan Filan attempted to educate viewers regarding what drives housing prices.


     Ummel is suing her realtor because she and her husband paid $1.2 million for a home but later found out other homes on their block sold for as much as $175,000 less. The Ummels didn’t claim they weren’t able to pay their mortgage, but blamed the realtor for their own irresponsibility in not investigating other options.


     When asked if she should have done her homework to find out if other houses were available for less, Ummel responded, “Absolutely not.” She accused the agent of withholding information from her and being negligent in his work.


     But to its credit, the “Today” show featured voices saying “it’s the buyer who really must do their diligence, ask the right questions, and make the final decisions.” Filan called the suit “unusual” and said “I don’t think it’s a suit that has merit.”