The Economy and the Future of Publishing

May 4th, 2009

I’m not a trained economist, although I’ve worked as a businessman for some 30 years, and have closely followed economic issues for many years. I think it’s obvious to everyone that works in publishing that the economic situation worldwide (and particularly in the U.S.) has become the “double whammy” that’s causing huge distress for publishers of all shapes and sizes. I keep pondering how newspapers would be faring if we weren’t in a recession. Obviously the Internet is a huge challenge to their current situation and prospects, but just as obvious is that a robust economy would be mitigating a lot of the pain they’re suffering today.

I’m sure that most readers have noted that for every doom-and-gloom story that’s published are two more that take the tack: “Such and such economic indicator fell for the fifth straight month, but a glimmer of hope is appearing.”

And so observers of the economy essentially fall into two broad camps: it’s bad now and going to get worse before it get better, or, it’s bad now but we may have bottomed out.

I’m with the former, partially by temperament, but largely from experience and study. I sold every stock I was holding several years ago, somewhat prematurely, but as they say, “you can never time the top or the bottom.” So the collapse of the stock market cost me next to nothing.

On April 22nd the Wall Street Journal headlined an article: “IMF Says Recession Is Deepening.” As we all know, institutions like the International Monetary Fund gain little capital in making statements as gloomy as that. The article leads off with “The global economy is in the grips of a deepening recession that isn’t likely to turn around until sometime next year, the International Monetary Fund said on Wednesday. The IMF, which had been slow to apply the word to the current downturn, also released a new definition of global recession.”

The Canadian Globe & Mail headlined its report on the story “IMF sees ‘severe recession.” The lead paragraphs for that article are as follows:

The world is in its worst economic state in 60 years, and recovery will be slow and painful, the International Monetary Fund says in its newest global outlook.

“The global economy is in a severe recession inflicted by a massive financial crisis and an acute loss of confidence,” the World Economic Outlook begins, projecting a steep 1.3 per cent contraction of the global economy this year and a dismal 1.9 per cent expansion next year.

“This represents the deepest post-World War II recession by far.”

Not very encouraging.

So my advice to all publishers who read this blog is by all means retain your optimism, but PLEASE make sure you’ve got a worst case scenario in your planning. Without it you remain excessively vulnerable.

UPDATE: For a little levity, always appreciated when reporting on the economy, check out on today’s The Onion, “Nation Ready To Be Lied To About Economy Again.” Included is this gem:

The report estimated that 663,000 private and public sector jobs were lost in the month of March—a revealing statistic many people found shockingly blunt. Responding to the new information, an overwhelming majority of citizens said they believe that, during these extremely uncertain times, our leaders have a responsibility to come together, sit the American people down, and lie through their teeth about everything from misappropriations of taxpayer dollars to the severity of the credit crisis.