Macro-economics is not my strong suit...

I confess -- I'm bad at large-scale economics. I'll never understand international monetary policy; I have a hard enough time at the national level. That being said, there are at least two things that annoy me. Of recent annoyance is the subprime crisis; MarkCC has an excellent explanation from a while back. Essentially, both lenders and borrowers made bad decisions about who can afford what and the risks involved, and now much of the bank industry is teetering on collapse. Should the government help out? NPR has an analysis (also somewhat old). I agree with the sentiment there that this would be a 'subsidy for risky behavior'. The government should stay out of this -- the people and institutions involved in this should face the consequences of their short-sightedness; taxpayers should not be left holding the bag on their irresponsibility. Happily, the current resolution seems like a private solution will be implemented. We'll see. The second thing is, of course, the "recession". Economics on a national scale is really about confidence -- and I want to know how much effect does the media have by harping about the recession have on that confidence? Is there any way to quantify this effect? I'm not a media-conspiracy theorist; in general, I think the media tries to be objective and impartial. But in many ways they cannot help but be biased towards making a fuss. As an example, look at how unemployment is reported. There are two distinct metrics for the labor force - "unemployment rate" and "jobs gained/lost". Frequently these two run counter to each other. Here's an alarmist CNN article titled "Job losses worst in 5 years". Buried in there is the admission that unemployment is down. Of course, that metric is possibly deeply flawed; but you can bet that if it were reversed, they'd be reporting it the other way. Ahh, well.