Brad DeLong's Semi-Daily Journal: Why Oh Why Can't We Have a Better Press Corps? (Yet Another Washington Post Edition)
It really is a small thing. Or is it? It's a column by opinionator George F. Will on October 18, 2006 http://www.washingtonpost.com/wp-dyn/content/article/2006/10/18/AR2006101801502.html. One sentence begins:
Economic hypochondria, a derangement associated with affluence, is a byproduct of the welfare state: An entitlement mentality gives Americans a low pain threshold -- witness their recurring hysteria about nominal rather than real gasoline prices...
The very next sentence reads:
Economic hypochondria is also bred by news media that consider the phrase "good news" an oxymoron, even as the U.S. economy, which has performed better than any other major industrial economy since 2001, drives the Dow to record highs...
I repeat: one sentence condemns economic hypochrondriacs for not noting that it is nominal and not real gasoline prices that are at all-time highs, and the next sentence--the very next sentence--condemns economic hypochondriacs for not being enthusiastic about the fact that the nominal (but not the real) Dow-Jones Industrial Average stock market index is at an all-time high.
It is bad, and it is bad, to talk about the nominal rather than the real level of gasoline prices--to fail to adjust for inflation and so fail to note that the real cost of acquiring a gallon of gasoline in terms of tangible resources rather than paper banknotes is less than it was twenty-five years ago. It is surely also bad, and just as bad, to talk about the nominal, not inflation-adjusted "Dow... [driven] to record highs."
Adjusting for inflation is a good thing to do that leads to less inaccurate information and better analyses. It would be a good thing for George F. Will to do to do when noting the point makes his argument against what he calls "economic hypochondria" stronger. It would be a good thing for George F. Will to do when noting the point makes his argument against what he calls "economic hypochondria" weaker.
George F. Will, of course, does not see things this way. That real prices are much more important and relevant, and that nominal prices are misleading and uninformative, is not--in his view--a general analytical principle. It is, instead, a rhetorical point: a point worth making only when it strengthens his case. The possibility that there is something out there called "the truth" which is best explicated by correct economic analysis adjusting for inflation, using real rather than nominal prices--that idea is simply not in George F. Will's conceptual world. He does not view his readers as clients to be informed. He views them as cattle to be driven to whatever conclusion his own prejudices, ideologies, and personal commitments find convenient.
To put it bluntly: American journalism is badly broken. The fact that opinionators like George F. Will hold on to their journalistic market shares in America is quite horrifying to an economist who really does believe in markets, and expects market competition and consumer choice to drive prices of goods and services down and the quality of goods and services up. Competition has indeed driven prices down: you can read George F. Will for free on the world wide web. But competition has not driven the quality of the Washington Post's editorial page up: George F. Will still appears on it, and appears to feel no need to have anybody check his columns for economic illiteracy before he submits them, and the Washington Post editors appear to feel no need to fact-check his columns before they publish them.
And it is not as though this is an exceptional column, or even that the passages I quote are exceptional within the column. Economist Kash Mansouri, at his new weblog "The Street Light," says that he finds: "Every single one of the points that Will makes... misleading, disingenuous, beside the point, or all three..."
It's a big problem: Without informed citizens, we are unlikely to have informed policymakers. And without informed policymakers, we are unlikely to have good economic policies. So we economists urge all you readers to do your part in making the market for good journalism about economics and economic policy work. Find trustworthy sources of information who regard you as clients to be informed. View with suspicion all those who switch their arguments and analytical frameworks from week to week and even sentence to sentence--who regard you as cattle to be driven rather than clients to be informed.