Political Reporters and the ‘Dismal Science’

The story is told that five years after Hannibal’s victory at Cannae, with his troops camped outside the very gates of Rome, the Roman Senate auctioned off, at full price, the very ground upon which Hannibal was standing; perhaps the first example in history, given the Carthaginians’ subsequent retreat, of the market as a predictor of future political events.

More than 2,000 years later, the markets are still the best single predictor of political events, but you’d never know it if you get your clues about such things not from financial and economic data but from that breed of journalists called political reporters.

A couple years ago this was the subject of a blog called “What Do Political Reporters Know?”  The answer given to that question (little of value) is as true today as it was then, but more about that later.

First, let’s take a brief stroll down history lane.  For all the angst and surprise now being expressed by many about the state of the American economy, it’s not as though we couldn’t see some of this coming.  Indeed, many people (those who follow the markets) knew by election time, 2008, that the country was in great economic distress.  Some knew this even earlier.

And how did they know?  Let’s count the ways: They knew because commodity prices, especially oil and gold, were rising rapidly; that unemployment was rising and the dollar was falling; and that two of the most iconic names in American industry – General Motors and Chrysler – were petitioning the government for assistance to avoid bankruptcy.

They knew because in September of that year Lehman Brothers bellied up, the largest bankruptcy in U.S. history; and because, after peaking in 2006, house prices began a steep fall, such that by December 2008, the Case-Shiller home price index reported the largest price drop in its history.

All of this was known by people who follow the markets; this, and something else too: They knew that government at all levels – state, federal, and local – were running big and unsustainable deficits, tricked out with accounting gimmicks and featuring licentious borrowing, often to pay off unfunded liabilities.  In short, they knew that governments were running the same kind of game for which Bernie Madoff would later get a life sentence in the slammer.

Given that nobody had ever seen anything like this kind of economic maelstrom since the Great Depression (even as aspects of it – most notably, housing and unemployment – were to get vastly worse in the years following), and given too that this was occurring right in the middle of a presidential election, one would expect that historians reviewing the period would find that the “people’s sentinels” – political reporters – shined a bright light on the economy and its portents, and obliged the candidates for the presidency to do likewise, right?  Forget about it.

Not only did political reporters fail to oblige the presidential candidates to focus on the economy, they didn’t spend any quality time on the subject themselves. Instead, they treated the economy like a sideshow to the main event – the political horse race.

Now in fairness, it should probably be acknowledged that neither Barack Obama nor John McCain knew the first thing about the economy, and Obama’s only passionate comment about the matter – that he inherited the mess from President Bush – is not without some factual bases.

But none of this is to excuse the triviality and nonperformance, then and now, of the nation’s political reporters.  More importantly, the mere knowledge of reporters’ shortcomings isn’t enough to enable citizens generally to make smart and informed decisions about those economic and socio-political developments as will affect them personally down the road.

If, for instance, they wonder how they – or anyone without a defined-benefit pension plan – are going to be able to retire with interest rates near zero; or if they are concerned about the likely effect on crime and our civic culture of the impoverishment of millions of formerly middle-class people; or if they worry about the effect on their assets of further significant declines in the purchasing power of the dollar; or if, mindful of the growing might of a country like China, they are concerned about the future, including the future security, of their children or grandchildren; if, in other words, they are interested in things more serious than which political party is best spinning the misery, or likely to be awarded at the polls, then they need to begin to familiarize themselves with finance and economics.

There is no guarantee, of course, that a subscription to the Wall Street Journal, or any such, will make of you a veritable soothsayer.  But it’s a safe bet that if you follow the markets you’ll get a better handle on those things that matter than if you rely only on political reporters for your news of the world.

And there is my lesson for the day. That’ll be $50 (payable in silver bullion).


The opinions expressed above are those of the writer and not of The Media Institute, its Board, contributors, or advisory councils.

The Washington Post’s Health Care Coverage: The Whole Megillah

The Washington Post published last Sunday what is probably their best piece ever about the health care debate.  The irony is that the story was written not by a Post reporter but by the newspaper’s ombudsman, and the thrust of his article was reader unhappiness with the superficiality of the paper’s coverage of this issue

As one of them put it, "’Your paper’s coverage continues in the "horse race" mode.  Who’s up, who’s down … political spin, personal political attacks.’"

Lamentably, the same could be said about much of the mainstream media’s coverage of health care, and not just of health care but of a range of public policy issues, particularly those with an important economic component.

Consider, for instance, the remarkable announcement that issued from the White House on Aug. 25.  The federal deficit, they said, would rise by $9 trillion during the 10-year period from 2010 to 2019.  This amounted to an increase of $2 trillion more than the White House had estimated as recently as February.

Now if, at the very moment that announcement was made, the entire West Wing had collapsed into rubble, and the head of the OMB been struck deaf and dumb, the news might have taken on a kind of visual impact both for the media, and for the rest of us.

But there were no visuals, and so the news was reported in much the same way that TV news anchors announce a jump in the pump price of unleaded.  It was big.  It was a number.  It was Yet Another Example of Mankind’s Fatal Flaws.  (The news anchor’s burden, you know, stories like these.)

In other words, it was nothing at all.  Nothing anyone could be expected to relate to or get a handle on.  Five minutes after hearing the news so reported, the only concern on most people’s minds was what they were having for dinner.

And who could blame them?  For most people a billion dollars is hard to imagine; a trillion is incomprehensible.  And that’s the very point.  The missing ingredient in media coverage of the health care debate, and of the nation’s fiscal policy, is not what the polls or pundits are saying.  Nor is it insight into how politicians plan to spin or parlay these issues to their advantage.

The missing ingredient is the economic impact.  How, for instance, will the government finance such large deficits?  What will the impact be on the credit markets?  On the U.S. dollar?  With the government commanding so much of the investing pie, will there be enough left over to fund private sector needs?  And if so, at what interest rates?

Assuming a constant velocity in their capacity for error, what’s to stop a deficit that is said to have risen 28 percent in the past six months from rising another 28 percent in the next six?

Similar questions mark the health care debate.  What’s the plan?  Is it to provide insurance for people who currently have none?  Or is it to put a brake on rising costs?  Can a plan that attempts to do both really be “deficit neutral"?  And if it’s not, what’s the downside to that?

In the same piece cited at the beginning of this note, the Post’s ombudsman links to an earlier story written by a former reporter.  Called “Myths About Health Care Around the World,” this article provides some useful, if not completely convincing, perspective on the health care debate.  The author points out that Medicare, after all, is a government-run program, but he also points to countries like Japan and Germany that have private insurance with private doctors and hospitals and very efficient systems.

Reading it, one gets the inkling of an idea that perhaps there is a route to meaningful and beneficial health care reform, but it’s unlikely to happen if the media, through their pursuit of "horse race" and politicized coverage of this issue (the Pew Foundation says 72 percent of the Post’s stories were of this sort), keep people in the dark about the important details.

That way lies nothing but anger, frustration, and contempt — first for the politicians but, just a short step behind, for the media as well.

The Washington Post’s ombudsman appears to understand that now.  When will the paper’s editors and reporters?

The Financial Crisis and Horse Race Journalism

In 2001, the events of 9/11 were covered by the news media in a way that reassured and unified an angry and fearful country.  In 2008, a financial crisis that in its own way is as dire as 9/11 is being covered in ways that are divisive and infuriating.

At the root of the problem is the colossal failure of reporters to report the crisis, in the context of the presidential campaign, objectively and in a way that challenges the major party candidates to address the issue with the seriousness it demands.

Before it is over our financial and economic distress will almost certainly take the life savings and the livelihood of hundreds of thousands of people, and perhaps many more.  But by the evidence to date, reporters don’t get it.  So taken are they with the “horse race” conventions of political reporting that they have reduced even this, the worst economic portents since the Great Depression, to the familiar banalities of their stock in trade: who’s up, who’s down, and polls galore.

This, plus of course, their own political spin on things.  Thus are we told that the financial mess works to  Barack Obama’s political advantage …  and not much more.

Whether reporters perform this way because they are biased in favor of the Democratic Party and Democratic policies, or because they are themselves clueless about all things economic, or because they are, perforce, tethered to the inadequacies of the politicians they cover (with the correct answer being all of the above), makes not the tiniest bit of difference.

The stark fact is that the national news media have underreported and misreported virtually every important aspect of our national nightmare: how we got into it, how we can prevent it from happening again, and, most importantly, how we can escape its worst effects now — and how our national leaders can help us.  

Here at The Media Institute, which receives all of its financial support from media companies, we spend most of our time promoting the Speech Clause of the First Amendment.  This means that we promote those laws and regulations that maximize freedom of speech and of the press — something we will continue to do whatever the media’s journalistic shortcomings.

But at a time when all of the legacy media are in grave jeopardy — first from the competitive effects of the Internet, and now from the struggling economy — they are not making it any easier for themselves or for us.  If worse comes to worst, the people of this country are unlikely to forget or forgive the role the media have played at this crucial hour.

Political Reporters, the Economy, and the Presidential Race

In 1991, the Greek-owned cruise ship Oceanos sank off South Africa’s eastern coast. All of the crew, including the captain, abandoned ship before many of the passengers got off, leaving them to the safekeeping of the shipboard entertainers.

Watching the presidential candidates mumble and fumble their way around the country’s financial mess, it’s hard not to feel as those passengers must have felt—abandoned and alone, and every man for himself.

In fact, though, the more astute will have felt that way for some time. This, because though you wouldn’t know it from the stories filed by this country’s political reporters, the nation’s financial agony isn’t something that just sneaked up on us in the last few weeks.

From the extraordinarily high price of commodities like oil and gold, to the drying up of business and consumer credit, to the collapse of the housing market, to the sinking value of the dollar against foreign currencies, to the erratic and downward spiraling action in the equity markets, the U.S. economy has been sending out SOS signals for at least a year.

Like the presidential candidates, though, political reporters have been serving up economic mush, when they haven’t ignored the economy altogether in favor of “horse race” stories.

It’s in this environment that John Harris and Jim Vanderhei, co-founders of Politico, accuse Obama and McCain of putting on a bad show. “Tuesday’s debate,” they say “was a look through the wrong end of the telescope. Men with fascinating biographies seemed conventional.”

No argument with that assessment here. But then they come up with this: “Both Obama and McCain were once cult-of-personality candidates, running on their inspirational personal biographies and reformist profiles more than on their policy records.” D’ya think?

In my lifetime there have never been two candidates more uncritically acclaimed by the media. No Republican politician has ever gotten the kind of press coverage that (prior to this campaign) McCain received. And as for the press coverage of Obama, well, to say it’s been fawning is like saying that an eon lasts awhile.

So as the country’s staggering economic problems cast a giant shadow across the land–and in the process reduce the two presidential candidates to dwarflike proportions—it seems kind of late in the day for political reporters to blame the candidates for their lack of substance, much less because they no longer seem “inspirational.”

Journalists have had innumerable chances, over a long period of time and in an eerily declining economy, to explicate and challenge the presidential candidates’ economic policy views. Why haven’t they?

Pining for the candidates lost allure, Harris and Vanderhei close their article with this: “Obama and McCain are men with large life stories, asking to lead the country at a large moment. With one more debate to go, could someone turn the telescope around?”

Perhaps a better question would be when political reporters are going to turn that telescope on themselves.