The world is a complex and intricate place. So how are we to understand even just a piece of it, say, the United States government and its economic policies? It is a big problem, for the standard sources that I was taught as a child to rely upon – newspapers and television news – are breaking down.
For example, in early February 2004, the then Chairman of the President’s Council of Economic Advisers, N. Gregory Mankiw, spent some time trying to explain the issues surrounding “outsourcing” to America’s elite political news reporters. Mankiw’s standard description of outsourcing is very much like mine – indeed, like that of all neoclassical and neoliberal economists – and goes something like this:
As with any change in technology that increases the volume of international trade in goods and services, the outsourcing of service-sector jobs creates winners and losers – but almost surely more and bigger winners than losers. Big winners are workers in poor countries who get better jobs working for firms that can now export services to rich countries. The major losers are those who previously held the now-outsourced service-sector jobs; they must now find new and different jobs and almost surely find that their skills are worth less.
But even in the US, losers’ losses are outweighed by winners’ gains. Workers in certain industries find their skills in higher demand as foreigners spend their increased dollar earnings, consumers benefit from lower prices, and shareholders and managers see their companies’ profits increase. However much we may worry about the distributional consequences of outsourcing, we should never overlook the fact that it increases the total size of the economic pie.
Mankiw made that argument, but he failed to be understood. Indeed, on February 10, 2004, he woke up to an unpleasant news story in the Washington Post: ”President Bush’s top economist yesterday said the outsourcing of US service jobs to workers overseas is good for the nation’s economy.... Mankiw’s comments come as the president struggles to shore up support in manufacturing states that have lost millions of jobs....Mankiw’s conclusions may prove discordant during an election year...”
It happened again on February 11: “Democrats...lit into President Bush’s chief economist yesterday for his laudatory statements on the movement of U.S. jobs abroad.... Rep. Donald Manzullo (R-Ill.) called for the resignation of N. Gregory Mankiw...”
Of course, the Washington Post’s journalists know, on some level, that they were being unfair to Mankiw. They didn’t claim that what he said was inaccurate, or shortsighted, or analytically unsound. The descriptive terms they used – “discordant,” “embarrassing,” “political liability” – suggest that they knew they were giving Mankiw a raw deal.
But was there any sign of the standard economic analysis of outsourcing in their stories? Not one.
Greg Mankiw thought a bunch of reporters were coming to talk to him about the state of the economy and the analysis made by the Council of Economic Advisers in its “2004 Economic Report of the President.” But the last thing the reporters wanted to do was to convey a thumbnail summary of Mankiw’s analysis of outsourcing. That’s simply not the business they saw themselves as being in.
The problem is not that the Washington Post and papers like it hire people who are unintelligent or lazy. The problem is that conveying accurate information about the economy is far down the list of priorities for normal news reporters. Making a splash matters. So does keeping track of who is up politically and who is down. So does pleasing your editors so that they’ll give your stories better placement, and pleasing your sources so that they’ll keep talking to you. Compared to these imperatives, there is little to be gained from informing the public about how the economy really functions and about the dilemmas of economic policy.
Indeed, the economy is vastly inferior to Hollywood as a source of glitterati gossip, but much economic reporting makes the coverage of the birth of Brad Pitt’s and Angelina Jolie’s baby look profoundly serious. Likewise, government is vastly inferior to the World Cup as a sporting spectacle, but much political reporting focuses on who played well and who played badly.
What can we do about this? The answer is simple, and it is a matter of demand, not supply. After all, few people go into journalism to deliberately mislead the public. If we demand better economic and political journalism the way we demand excellent coverage of the World Cup, we’ll get it.