What Do Political Reporters Know?

One of the differences between, say, your everyday community organizers on the one hand, and investors on the other, is that while both have opinions, the investors have money.  Not only do they have some money, in a very practical sense they have all the money. 

This is an important thing to know these days because, as measured by the relative value of every asset class — from common stock to collectibles, real estate to commodities — investors of all sorts are making it clear by their actions that they are deeply worried about the future, and growing more so.

Many people, perhaps most, know this already.  They know it because they are among those who have already lost their jobs, or fear they soon will.  Or because they have seen the value of their 401K plans cut by half.  Or because they own houses whose value has declined so much they no longer have any equity in them.

Or perhaps they know it because they are avid consumers of the financial and business press; media outlets like Barron’s, the Wall Street Journal, Forbes, Fortune, the Economist, IBD, CNBC.

If, however, they are among the lucky few who have not been personally wounded by the current crisis, and get their news of the nation not from financial journalists but from political reporters online or off, stories reaching them of investor angst may seem like a kind of nasty and unwelcome rumor, like the warmongering of a distant and unimportant country.

And why wouldn’t it seem that way to someone munching solely on the crudites served up by our political journos?  Instead of digging into the facts of what the markets are saying, they offer up one story after another sourced by a political pollster or partisan strategist.

Rather than write about the substantive aspects of our financial and economic problems, they write about which party or politician is pulling from the gloom the greater number of political points.  In other words, they write about opinions — their own, those of the political class, and those of what are said to be the people.

One of the most durable sayings in the world of finance is that money goes where it’s treated best.  This isn’t a political statement, or an opinion, or a matter of manners and morals.  It’s a physical law, like gravity.

And where is money going right now?  It’s going into gold that costs more than $1,000 per ounce, and into short-term Treasuries that are paying less than inflation.  And what is that telling us?  It’s telling us that investors — professionals and amateurs, Republicans and Democrats — are scared to death and doubt, given what they know now, that our government is pursuing strategies that will help.

But don’t expect political reporters to tell you much about any of this.  They didn’t do so last fall, when the economy might have been carefully examined in the context of the national elections, so why would they do so now?  They’ve got too many opinions to spin to get bogged down with something as dreary as facts.