The Wisdom of Professor Obama

Last April 14 when Mr. Obama was still in a two-candidate race with Hillary for the Democratic nomination, National Public Radio reported that he had accused a great many rural voters of being bitter.

Obama's key lines, which were published on Huffington Post, are as follows: "It's not surprising then that [voters] get bitter, they cling to guns or religion or antipathy to people who aren't like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations."

Mr. Obama tried to clarify his remarks by pointing out that in times of economic hardship, people clung to what's familiar.  He was honest enough to note that guns are not only familiar, guns also give people a feeling of being able to protect themselves should times get really bad.

Fast forward to the present.  Mr. Obama assumed the office of President of the United States.  Very shortly thereafter, Congress passed a stimulus bill which Mr. Obama said was "vital" to our economic recovery.

Instead of cheering us up, however, he not only told us over and over that we were in deep trouble, he told us that despite his telling us how urgently we needed it passed, his pork-laden gazillion-dollar "stimulus" bill wouldn't improve the economy any time soon.  People seem to listen real close when the Cheerleader in Chief tells us things are bad and that there's no reason to Hope for Change in the near future.

People listen to the President, even more than to the media's anointed candidate.  Sure enough, just as Obama implicitly advised, businesses keep laying people off.

California can't pass a state budget because the Republicans won't accept the tax increases the Democrats want and is laying off 20,000 state employees.  Mr. Obama noted correctly that people were feeling threatened when he made his "guns or religion" statement six months ago; they probably feel worse now.

It's hard to tell exactly what's happening in the economy amidst all the bad news, but there are some leading indicators.  For many years, magazine ad sales have predicted what the economy would do over the next few months.  When businesses advertise, the effect on sales comes after people see the ads and react.  When ad spending goes up, sales generally go up some time later.

Advertisers are far from stupid, of course.  They watch what's going on in their markets and, when they don't think people are willing to buy, they don't advertise.

This certainly can save an awful lot of money, but there risks in cutting back on advertising.  To some extent, cutting advertising is a self-fulfilling prophecy - even if people have money, they often won't spend it unless they see an advertisement pointing out something new to spend it on.  Advertising may or may not get you sales, not advertising certainly won't get you sales.

That's why it's particularly interesting to consider the New York Post article "Publishers See Red, Mag Ad Pages Down 21.5% in Q1."

Tomorrow, Media Industry Newsletter is releasing its report on the first quarter of 2009 and it will show ad pages have tumbled a numbing 21.5 percent for monthlies in the period compared with the first quarter of 2008. (MIN gets early numbers because the March issues are starting to hit newsstands.)

In comparison, in the first quarter of 2008 magazines had just gone negative, dropping 4.6 percent after racking up small gains for most of 2007.  Ad pages have now been falling for five straight quarters, MIN reports. [emphasis added]

Newsweeklies such as Time and Newsweek are particularly hard hit.  Car magazines are suffering, but motorcycle mags are up a bit - somewhat understandable as motorcycles are much cheaper than cars.

What's most fascinating, though, is the handful of magazines which are doing better than OK, they're going gangbusters.

Family Circle is up 5.4 percent.  Guns & Ammo is up 7.4 percent.  Sports Illustrated Kids is up an astounding 29.6 percent!

Let's assume that most advertisers know what they're doing.  They know that people who read news magazines and car magazines have slammed their wallets shut so they don't advertise there.  Where do they advertise?

Advertisers have picked up on Mr. Obama's observation that hard times get people interested in guns, and sure enough - Guns & Ammo is up.  They also agreed with Mr. Obama that people cling to their families (who are most like themselves), and we find family magazines doing well.

Religions, being mostly private, don't publish their results as widely, but anecdotal evidence indicates that traditional churches are not suffering from the downfall nearly as much as you'd expect, if at all.

Give Candidate Obama points for understanding the American psyche - when things get rough, people cling to religion, family, and guns.

Alas, it's too bad that President Obama's trenchant insights on the American economy do not extend to useful suggestions on how to fix it.