The Media Don’t Get Economics
And this illiteracy has a high price.


Conrad Black

It would be a mistake if readers inferred that I spend an inordinate part of each week staring incredulously at television screens, as my comments last week, and my remarks here about the quality of economic reporting, might indicate. I don’t watch television often or lengthily, but it is true that apart from classic movies and some history and nature programs, I am usually more or less horrified at what I find when I do watch it.

There are serious and competent people, such as Peggy Noonan, who claim to take some comfort in the quality of American television, and they almost certainly have greater exposure to it than I do. But among my more dispiriting experiences is when I embark on a complete surfing of the hundreds of accessible television channels. The inane talk shows, mouthy and platitudinous commentators, news programs that convey only pap about health, food, and social work, corny sitcoms, mindless violence, ham acting so implausible that drama verges on slapstick, punctuated by screamed interruptions of advertising — it is all a worrisome comment on the state of public taste. And, contrary to widespread belief, it is not markedly better in other countries, though British historical programming is usually very good, and Canadian television news is superior to America’s.

This is of a piece with American television’s usual standards of explanatory journalism. I watched almost gape-mouthed at what CNN represented as an analysis of high gasoline prices this week. The implications for the president’s popularity were laboriously explained. But at no point in this exposition did the fact that the U.S. federal government has run up deficits of $3.5 trillion in the last two years, in a country that had a money supply of a little over $1 trillion at the start of this fiscal orgy, rate a mention as an explanation of why commodity prices are rising. (This is a 32 percent increase in the deficit — 27 times the historic level of federal-deficit increases in the entire history of the country before the onset of the Obama economic miracle.) We cut to Speaker John Boehner, who said a surtax on the income of oil companies would be considered. 

The day before, I had seen an experienced interviewer on the same network ask the secretary of transportation about skyrocketing gasoline prices, and receive the halcyon assurance that “all hands are on deck” to deal with it. No CNN person in these different segments asked or said anything about the implicit theory that the world’s petroleum- and commodity-exporting countries were to sit as mute as cigar-store Indians while the value of the dollar was eroded as a matter of policy, to prevent deflation. Inflation will prevent deflation, but is not a lesser evil. A very large number of observers outside the U.S., and a great many economically literate Americans, think that the Treasury and the Federal Reserve have engaged in madly excessive money-supply increases through federal spending, and that traditional inflation from too much money chasing too few goods is inevitable.

In the 27 months of the Obama administration, there have been spectacular rises in the prices of gasoline ($1.83 per gallon to almost $4), oil ($41 per barrel to over $90), gold ($853 per ounce to $1,500), corn ($3.56 per bushel to $6.33), and sugar ($13.37 per pound to $35.39). The real median household income has declined by $300, to under $50,000; the number of food-stamp recipients has increased from 32 million to 43 million; the number of people officially in poverty has increased by 10 percent, to 44 million (more people than the whole populations of Poland or Spain); the ranks of the long-term unemployed have increased from 2.6 million to 6.4 million; and the U.S.’s position in the rankings of economic freedom of the world’s countries has declined from fifth to ninth. I have admitted that my canvass of television news and comment is sketchy, but I have seen almost no reference to any of these problems except the prices of oil, gold, and gas.

Federal Reserve chairman Ben Bernanke is an undoubted academic expert on the economic history of the Great Depression. And he is doubtless correct that the Depression would have ended more quickly than it did if Roosevelt had been able to spend more and pump the prime more vigorously. Mr. Bernanke, in deference to his position and undoubted academic qualifications, has been given the benefit of the gigantic doubts that exist about his policy, including the latest foray into outer financial space with “quantitative easing 2,” in which $600 billion has been spent buying Treasuries to put money in the pockets of those who might spend it. The whole design of the policy — the incitement of profligacy by the profligate — was mad, and there is now, finally, after much noisy and orchestrated worrying from abroad, real concern that the intended solution just aggravated the problem.