The Failure of the Journalists, Part II

20 December 2008 at 9:21 am 8 comments

| Peter Klein |

Another aspect of journalists’ remarkably credulous and fatuous attitude towards policymakers is their view that rhetoric, not substance, is what matters. Hence the constant references to the Bush Administration’s “dedication to free-market principles,” its “aversion to regulation,” its “belief in letting markets work by themselves.” This is of course sheer balderdash and piffle, virtually the reverse of the truth. Bush and Paulson and Greenspan and their clique are “free marketeers” in the same way (to borrow from A. J. Jacobs) that Olive Garden is an Italian restaurant. They adopt the language, and some of the form, of market advocacy without any of the content. The Bush Administration was already, before the “financial crisis,” the most economically interventionist since LBJ; it now ranks with Hoover and FDR as the most aggressively anti-market in US history. Greenspan and Bernanke expanded the money supply like none before; Bush and Cheney borrowed and spent trillions to finance overseas adventures; the Federal Register added pages at a record-setting pace; now the banking and automobile industries have become GSEs. Lassiez-faire, indeed! (BTW can anyone name a specific act of “deregulation” that contributed to the financial crisis? Gramm-Leach-Bliley? No way. And GLB was under Clinton, as was the infamous WGFM. What specific regulations, e.g. on hedge funds or mortgage-backed securities or executive compensation, did the Bush Administration oppose?)

And yet, there was Juan Williams on yesterday’s Diane Rehm show explaining, matter-of-factly, how Bush and Paulson had allowed their “free-market ideology” and “resistance to regulation” to “commitment to the idea that the market works itself” to lead the nation into ruin. Williams may be a good news reporter, but he  has the political-economy understanding of a fifth-grader. Does it ever occur to these “watchdogs” to investigate what government officials actually do, rather than simply repeat what they say?

Entry filed under: - Klein -, Bailout / Financial Crisis, Classical Liberalism, Public Policy / Political Economy. Tags: .

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8 Comments Add your own

  • 1. Per Bylund  |  20 December 2008 at 9:59 am

    I couldn’t agree more with your Olive Garden analogy. When I went to that restaurant with my wife we were greeted by a very young guy, supposedly playing the role of headwaiter, with “Bonjour and welcome to Olive Garden”.

    OK, I guess it was very exotic and “European” in a very American way. But my European self found it quite confusing to be greeted in French in a restaurant claiming to be Italian. Maybe “bon giorno” is too difficult to pronounce for the average headwaiter wannabe?

    In any case, I guess the analogy is double-valid: Bush’s policies are pretty “French” in substance…

  • 2. Peter Klein  |  20 December 2008 at 11:41 am

    The metaphor works better in A. J. Jacobs’s original, from _The Year of Living Biblically_:

    “I grew up in an extremely secular home in New York City. I am officially Jewish, but I’m Jewish in the same way that the Olive Garden is an Italian restaurant. Which is to say: not very. I attended no Hebrew school, ate no matzoh. The closest my family came to observing Judaism was that paradoxical classic of assimilation: a Star of David on top of our Christmas tree.”

  • 3. John V  |  20 December 2008 at 12:11 pm

    Great article.

    The thing that really irks me however is when actual economists like Krugman, Stiglitz, DeLong and others use this type terminology…and seem to believe it.

    When a lightweight like Juan Williams uses this type of language as Klein describes, it’s bad enough. Klein is right to say that Williams:

    “has the political-economy understanding of a fifth-grader”

    But what about actual economists?

    Outside of popular jargon, the term “Free Markets” actually has a real meaning on both an analytical and prescriptive level.

    Economists like those I mentioned must surly know what those real meanings are…right?

    Yet, no matter how many times I see economists take shots at Bush with terms like “Free Marketeer” or Greenspan with the same words and “Randian” and “Libertarian”, I can’t help but steam a little inside.

    I don’t know how many times to no avail I have asked what is so “Randian” about Greenspan’s policy record at the Fed. Same for Bush. Like I’ve said, I don’t care how much of fan Greenspan is of Rand in his private life. It has absolutely no substantive relevance in informing Greenspan’s actions in his government post.

    Greenspan may also have been a fan of Flash Gordon or the Green Arrow in youth. SO what?

  • 4. Attison  |  20 December 2008 at 1:24 pm

    …why pay any attention to Juan Williams ?

    …just an easy strawman among thousands of alleged “journalists”. He’s merely a biased pundit, performer, and sometime political stenographer.

    Professional news ‘Journalists’ should, as a bare minimum qualification, be truth-seekers & truth-tellers.

    Few meet that base standard… which is blatantly obvious in any contact with the daily product of the dominant news media.

    The problem is not “credulous and fatuous” journalists — but that the credential of professional-journalist is assumed to be true for anybody in the media who claims it.

    Our mainstream “Journalists” are not sources of truth — so why be so frustrated by mere mislabeling ?

  • 5. Kevin Carson  |  21 December 2008 at 4:30 am

    Blogger quasibill of Bell Tower argues that there was no market for mortgage-based securities, because they were considered too risky–until Fannie and Freddie started guaranteeing them. I can’t remember if he made the case in a Bell Tower post or on an email list, though.

  • 6. Andre Sammartino  |  22 December 2008 at 5:11 pm

    Arguments here that journos are only interested in these issues when the excrement hits the fan:

    http://business.theage.com.au/business/panic-stations-push-wrong-buttons-20081222-73p2.html

    “There is a compelling argument that the media’s growing ability to shape economic sentiment in its reporting of the financial crisis should bring with it commensurate responsibility.”

  • 7. Alex Goristal  |  25 December 2008 at 4:33 pm

    John V:

    I know not if Greenspan still espouses any allegiance to Rand or Objectivism. I do know that if he does, he should be glad that Rand is 27 years dead, for she would have long since performed the Objectivist analogy to excommunication on his pathetic poser ass…

    AleG

  • 8. Quote of the Day « Free Market Mojo  |  29 November 2009 at 2:53 am

    [...] ~ Peter Klein [...]

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