Good News?

James Surowiecki sorts through financial media spin:

Take, for instance, this headline from this morning’s A.P. story on pre-market action: “Stocks open lower after data show larger-than-expected drop in new home construction.” The assumption in that headline is that a big drop in new home construction is a bad thing for the economy. And it’s true that in the short run, the drop in home construction is not great for construction companies, homebuilders, equipment manufacturers, etc. But for the economy as a whole, this drop is actually a very good thing. In fact, it’s precisely what we want.