During the century or so when newspaper competition was fierce, we learned that sensationalism and hyperbole were effective weapons in the wars for your nickels and dimes. Presses spewed out a daily diet of "crises," "disasters," "catastrophes," "tragedies," "cataclysms" and "killers on the loose." As recently as the mid-1960s, standing orders required that the first edition of each day's Washington Post carry a jazzy banner headline to promote street sales.

Those commercial necessities are largely behind us. The tabloid rags, in this era of local newspaper monopoly, will be extinct, I would guess, before the century is out. The habit of hyperbole, however, hangs on in newsrooms filled with Utopian visions against which present realities are harshly judged. "We see problems," the political correspondent Paul Taylor has written with great understatement, "more readily than solutions." He quotes Gay Talese, who said of us: "Gloom is their game ... normality their nemesis."

The great budget marathon, as an example, was depicted for many weeks as a morality play that would, in the end, require of us all sacrifice and suffering. I seemed to hear at times echoes from the Battle of Britain -- blood, sweat, tears and all that. To demonstrate the point, the "media" invoked the weekend shutdown of a few tourist attractions in Washington. A front-page story in The Post recounted the sad tale of a Scout leader who had "waited a lifetime" to make the trip, only to find the Washington Monument closed for the day. A modern Lewis or Clark, he had come all the way from Rochester, N.Y., which, I have since learned, is more accessible than the Arctic circle and is reachable daily for $65.80 via Greyhound. In the end, there were no draconian consequences to the budget, and, in fact, it handsomely enriched the political class that drafted it.

The hyperbolic tendency -- equating inconvenience with disaster and jaywalking with grand theft -- reveals itself almost daily in our semi-paranoid obsessions with each dimly perceived threat to human life, from killer apples to killer bees. That is our tendency in dealing with this shaky economy. CBS already has begun a nightly series titled "Bad Times." Newsweek's cover asks: "How safe is your job?"

The American economy clearly is in an unsettled state. It is on a plateau or approaching recession, which may cause genuine hardship. But either way, this is not Bangladesh. The GNP approaches $6 trillion. The material standards of our lives remain the envy of the world.

Still, The Wall Street Journal reported last week, the country is in a state of "clinical depression . . . the mood is disproportionately dark." Economics, said Harvard economist Robert Reich, "is not a fiscal science but about psychology and sociology. In some ways it's as Roosevelt said, 'We have nothing to fear but fear itself.' "

The press is a major contributor to our fearful state of mind. Our negativism is indiscriminate and now extends to our own business, which is going through a moderately rough patch. We report with alarm that cost cutting is the order of the day. Vacancies go unfilled. The $80 lunch is no longer considered patriotic. Advertisers are skittish, and with stock prices in free fall, publishers are nervous.

What we tend to ignore is the truism that it's all relative. Newspapers may be experiencing a "recession" of sorts, but they collected more advertsing dollars in the first half of 1990 than in any other six-month period in the history of publishing. The big media companies sing the blues, The Post, Los Angeles Times, The New York Times and the Gannett chain included. But their combined sales through the first three quarters of the year broke all records and exceeded last year's bullish results by about $150 million. Their profits are down but still total hundreds of millions of dollars, which should keep the gray wolf from the door at least through Christmas.

Perhaps what we need in the news business just now are a few sunny characters in the mold of Johnnie Armstrong. Felled on the battlefield, he had a cheery word for his fellows:

"I am a little wounded, but I am not slain;

"I will lay me down to bleed a while,

"Then I'll rise and fight again."

But Johnnie Armstrong, I fear, would be depicted in the press today as a pitiful victim of Pentagon bungling who ought to lie still and wait for his lawyer.