On the Contrary

For those of you who are repeat readers you know that I like to sum up the Sunday talk show chatter and see if anything besides the usual Washington echo chamber is on anybody’s agenda.  So I started with Meet the Press who had White House Chief Economist Christina Romer and House demagogue Eric Cantor (R-VA).  It was two interviews you could fast forward through.  Dr. Romer pitched the administrations way forward and Representative Cantor told us they had it all wrong.  Yawn.  Once again we had politicos pitching their politics instead of a reasoned discussion about the way forward.  Let’s face it, if Christina thought we ought to be more aggressive she would never say it since she must push the administration plan, and Cantor, while full of criticism, had no plan of his own.  This interview is a reflection of the chattering classes on cable.  No new ground or any rational look at the policies and the way forward, just the same old dueling political ideologies.  No wonder we never make any progress.

I then ran through (DVR) Reliable Sources (no transcript available) because I knew they were going to talk about John Stewart’s roasting of CNBC and Jim Cramer in particular.  The reason the Daily Show and John Stewart are so important to this country is that he takes the obvious, points it out, and makes fun of it.  Mainstream media is locked in their echo chamber and they are missing the real stories that are staring us in the face.  Enter John Stewart.

Well the panel discussion was interesting with most of panelists recognizing that Stewart was calling out mainstream media for not paying attention to the real story, how did all the experts miss the coming downturn.  Of course, there was Tucker Carlson claiming that this was just a liberal hack job on Cramer.  My how the Right continues to be blinded by their politics.  Sooner or later one would have to ask how this coming major catastrophe in our economic lives was so ignored by the financial community.  But Tucker can’t go there since all he sees is liberals ruining his perfect country.  Why do they have this guy on anything?

To me this story was the epitome of all that is wrong with our media.  The conventional wisdom is that nobody saw the economic disaster coming, but this is belied by a little research on the actual reporting which shows that there were financial journalists (and economists) who were warning of this coming meltdown.  But what became painfully obvious in the Camer interview is that most of the mainstream financial journalists were tools of the financial community.  Their reporting depended on access to the movers and shakers in the financial community and their access was dependent on their echoing what their masters were telling them.

Sadly this same dynamic is at work in the mainstream media as well and is why reporting is so much an echo chamber.  What we get are media talking heads who are tools of the political parties.  Their talking points, questions, and criticisms are part of the carefully crafted political dialogue that they just parrot.  So what we get for news is that same old arguments with no real factual or rational basis to judge them.  I guess the best way to say it is that our news has degenerated into a game of spin with the media nothing more that echo chambers for that spin.  Puppets driven by their puppet masters.  At least it is cheaper than doing real research and background.

Then there was Dick Cheney on CNN telling us that we are less safe today because of the Obama administration following the rule of law and even more important, that the administration is using this economic crisis as an opportunity to expand government.  I have a feeling that you need to watch John Stewart tonight, because the irony here is unbelievable and John King (CNN correspondent) just went along for the ride instead of questioning any of these highly dubious claims from a man who has almost destroyed law and order.  Is it just me or did waiving habeas corpus, rendition, torture, warrantless wire tapping, enemy combatants, and military tribunals not expand the power of government beyond anything we have ever seen?  Did attacking Iraq and now seven years of unending war while al Qaeda rebuilt in Pakistan make us more or less safe?  It is incomprehensible that we still give this man deference instead of challenging his “facts” every step of the way.

There was as usual a bright side and it was once again from Fareed Zacharia on GPS.  I cannot say enough about his approach to discussing important issues.  He rarely ever has on political flacks pitching their spin, but international subject matter experts to give their perspective on various issues.   I won’t bore you with the details, but this is one show where you can really learn something and question some of your own preconceptions.

Alas, this morning the news was all about public anger over AIG and the bank bail out.  Anger, anger, anger.  Although it is a real emotion that many of us are feeling, emotion is not what is going to solve this crisis and I have yet to hear (except on blogs such as the Baseline Scenario) what our real options are.  Do we have an option to public spending for stimulus and is what we have done enough?  What does history from the Great Depression or the Japanese lost decade tell us?  What are possible scenarios to bailing out the banks and what are the pros and cons?  What happens if we do nothing?

Oh, I agree we have heard these arguments, but only as political talking points.  Where are the economists (mainstream) and what can they teach us?  We are not being educated by our press.  They are failing as journalists.  How many of you know the real crisis in Europe that could make our problems infinitely worse?  The press once again are simply acting as an echo chamber of the political spin.  Oh by the way did I mention that the financial analysis and advice for our way forward is being giving by the same talking heads that missed the whole economic crisis?  When will it ever end? When will we ever learn?  Where have all the flowers gone?

As my usual habit I watched the Sunday news shows and once again was appalled.  Meet the Press had a good interview with Secretary Gates about Iraq and Afghanistan, although entirely predictable.  What could have followed was a discussion of what is really possible there with some experts on Iraq and Afghanistan.  But, alas, we then get the pundit echo chamber discussing both this topic and the economy.  Too much personality and not enough intellectual substance.  I could have turned off the sound and been 100% correct on what each would say.  Reliable Sources is suffering the same fate.  As long as they use journalists to discuss how journalists are performing we are going to get circular and self-reinforcing arguments based upon their political leanings and the conventional wisdom of Washington.  Okay, Okay.  Wisdom and Washington used together is an oxymoron.

When I say echo chamber what I mean is the same old political arguments that most of us are past, but the media is still focusing on, repeating the talking points of each side.  I yearn for a subject matter expert’s view of the policies instead of political flacks or pundits.  There were several exceptions however.  I got part of the interview of CNN’s John King with Democrat Neil Abercrombie of Hawaii where John just let Representative Abercrombie answer the questions without interrupting him with questions.  It was refreshing to hear complex questions being posed, and the guest allowed to fully respond in a full and reasoned way.  Maybe John King should have moved to NBC and taken over Meet the Press.

As usual the real information and learning was with Fareed Zacharia of CNN’s GPS.  Fareed’s two focuses were the Taliban/Jihadists and the economy.  He asked a really profound question about if we should have two different approaches to the Taliban and Al Qaeda.  His view was that he lumped under the Taliban all the fundamentalist Muslims who want to implement the Sharia but are not interested in attacking the West, and under Al Qaeda, all those jihadists who want to wage warfare with the West.  His point was that lumping them all into one group and waging war against them might be counterproductive.  The ensuing discussion made clear that there is no coherent agreement on the Muslim community from there is something inherently wrong with the underlying religion to all Taliban are jihadists.  Think about this discussion another way:  The way forward in Afghanistan is dependent on how we see this issue.

But real clarity both on the economy, Afghanistan, and conservatism came in the next discussion with Martin Wolfe and Canada’s Prime Minister, Stephen Harper.  Martin Wolf is associate editor and chief economics commentator at the Financial Times, London.  He made short work of his criticism of the Obama administrations economic recovery plan.  To Wit:

• The stimulus package is required, but too small.  We need to spend $700 billion this year alone to stimulate a $4 trillion deficit in spending.  It is a world recession and we can’t think small or parochial.  This year we just need to get money in people’s hands and next year do the infrastructure thing when appropriate projects are shovel ready.  He did not say, but implied that tax cuts to business were a waste of money since without demand, they are not going to expand.  This crisis is not going to be solved by private demand and spending
• The banking bailout has been too little too late with no clear direction.  Banks have to be recapitalized and although he shuns the world nationalization, they have to be taken over and restructured, which in essence is the same thing.  The Obama administration has been way too timid and needs bold action before the situation gets much worse (See The Bank Problem)
• The mortgage crisis cannot be solved by just adjusting interest rates and must address principal balances.  Depending on your social goals, you can do this one of two ways, either through the foreclosure route (people lose their homes), or through a program of renegotiating the loans with adjusted principles based upon market evaluations.  Either way, principal balances have to be brought down to the reality of their deflated worth

Note that all of the above indicate bold action and we have yet to see that out of Washington.  Mr. Wolf’s view is that the economy won’t wait.  I could not agree more (See Fire the Generals).

Fareed had invited Prime Minister Harper, the leader of the Conservative Party in Canada, because Canada is in much better financial shape than the United States.  Mr. Harper was blunt about why.  The current crisis was because the lessons of the 1920’s went unheeded.  Unregulated capital markets will lead to pyramid schemes sooner or later.  In Canada, not only do they much more strictly regulate the banks so they couldn’t over leverage themselves with risky investments, but they regulate the mortgage industry so the types of risky loans that finally came back to haunt us were not allowed.  He also made the point that while he is not a Keynesian, he understood that the problem is global, protectionism is counter productive (buy America), and that private spending is not going to solve the problem, and he supported the stimulus package.

Think how different this is from our own conservatives who hate the stimulus package and were the leaders in laissez-faire government.  Could it be that there is another model of conservatism that is, uh, should I say, conservative?  How refreshing.  Here is the prime example of the difference between a true conservative that we use to know, and our brand of conservatism in this country today that is just radicalism (hate government, cut taxes, and protect my share of the pie at all costs).

But finally Mr. Harper left us with one other thing to mull over in regard to Afghanistan.  When asked if he would contribute more support to Afghanistan, he said he would have to know what our strategy was and what our end game was.  His reading of history had told him that there have been ongoing insurgencies in Afghanistan throughout history and no matter what we do, it will continue.  If this is true, what is an acceptable end game?  Isn’t it interesting that the conservative party in Canada is making sense and asking important questions while here in America they have gone off the deep end?  Just another rainy Sunday listening to the talking heads and thinking about where we go from here.