When It Comes to Inflation, The Bloom Is Off the Rose

While I agree with a few statements in Alan Gottesman’s article “Don’t Worry, Be Happy” [Media Outlook, Sept. 25], I think he might want to take a look at how radio stocks are faring on Wall Street. It may be coming up roses at advertising agencies, but when it hits the fan in the boardroom, it quickly spreads to the streets.

And in the boardrooms of the radio comglomerates, there’s a lot of bloodletting. The trickle-down effect to the street? Salespeople need to increase their sales projections by substantial amounts and fast. Why? So radio stations can report good earnings. When these mergers and acquisitions were hot, did anyone stop to figure out what would happen if the economy put on the brakes? If it’s so rosy out there, why have radio stocks been taken out to the woodshed and flogged?

The article states: “The self-correcting mechanisms that temper the [economy] and that might, ultimately, bring on a recession are still operable—we just don’t know what will light the fuse.” Actually, I believe the fuse has been lit with the increase in oil prices. Now that the Northeast is about to turn on its furnaces, the heat will, indeed, go up. When we go to fill the gas tanks of our SUVs, we will think twice about that extra trip to the ski slopes, or to the city for a night out or to Grandma’s for the weekend with the grandchildren.

That is how we will get spooked. Inflation may appear trivial to Mr. Gottesman, but if you look closer, you’ll see how quickly people stop spending when there is uncertainty. It just takes another 90 days for it to register on the Wall Street inflation meter.

Generation X may not remember the old “misery index,” but baby boomers do. Where I live, home and car sales have slowed, and Walmart is no longer looking for help. Personally, I’m looking forward to being able to call a plumber and actually get a call back.

Carol O’Leary


Media Planning Services

Rye Beach, N.H.

For the Record: Until recently, Michelle Cervantez oversaw Ford’s corporate media and its buying arm, Ford Motor Media [Media Outlook, Sept. 25] … a|r media is the creative company in charge of the Versace ads [Critique, Oct. 2].