Simon Wren Lewis on Bad Economics
What Is to Be Done Now?: Jeff Sachs Appears to Miss the Point by a Substantial Margin...

Good Beat Reporters

Felix Salmon:

What [should media] ethics look like?… [S]pend less effort ring-fencing journalists’ lives and conflicts, and more time simply being open about them. The end result could actually be a significant improvement…. The single biggest problem… [of] journalistic bias, has nothing to do with journalists owning stock… speaking fees. (Although with speaking fees, a simple would-you-be-happy-being-transparent-about-this test is often a very good place to start.) Rather, by far the most common way in which journalists are captured by corporate interests is precisely the same way that journalists get scoops: source cultivation….

Especially when it comes to background dinners with no particular agenda, a lot of what’s going on is a complex game of two people trying to get comfortable with trusting each other. That trust needs to be built up over time, and building it up takes a substantial amount of effort. It can be hard to distinguish, sometimes, from friendship. And if the journalist writes something bad about the source or the source’s company, the whole relationship can be jeopardized…. [R]eporters… feel bad if they write something that upsets the sources they get along well with. And that ends up shaping news stories, at the margin, much more than any financial incentives they might have….

I’m a long-time reader and fan of Joe Nocera, for instance, and so I know that he has featured Westwood Capital’s Dan Alpert in his column numerous times, as well as letting Alpert guest-blog for him on occasion. Last August, Nocera introduced him, quite explicitly, as “my friend Daniel Alpert”. Yesterday, Nocera wrote about the eminent-domain plan for seizing underwater mortgages; he concluded that “it’s time to give eminent domain a try”. In doing so, he ducked all of the questions… how Mortgage Resolution Partners is buying mortgages rather than homes, and performing mortgages rather than defaulted mortgages, and indeed is trying to buy performing mortgages for a fraction of their face value, even as investors are valuing them at or even sometimes above par….

Why was Nocera so seemingly blind to the weaknesses in the MRP plan? Maybe he considered and rejected them; maybe he didn’t consider them at all. Or, maybe, he was predisposed to like the MRP plan because his friend Dan Alpert is one of the principal movers…. [B]ecause I also knew about the Nocera-Alpert connection, I didn’t need to read the column to know what Nocera’s conclusion would be. Nocera was under no compulsion to write about the plan, and I’m reasonably certain that if he can’t say something nice about Dan Alpert, he’s not going to say anything at all. Dan Alpert wasn’t mentioned in Nocera’s column, and neither was his company, so even a close reader of Nocera’s work would have found it difficult to notice what you might call the friendship conflict….

This, then, is where a bit of first-person transparency would come in useful. “I’m biased: I’ve known Dan Alpert for years, and he’s a friend. But I still think this is a good idea.” It doesn’t take up much space, it’s perfectly natural, and it helps readers understand where the writer is coming from….

[I]f publications encouraged their journalists to be more ethical, rather than just requiring them not to be unethical, things might get a lot better. We’d see more detailed disclosures like Kara Swisher’s at All Things D. We’d see fewer anonymous quotes…. [W]e’d have columnists like Nocera explain their personal connections to the subjects they were writing about, even when doing so isn’t strictly necessary: it would still at the margin be better than not doing so…

Indeed, the best beat reporter ever is John Berry covering the Federal Reserve. He is excellent because:

  1. He understands the economics--and could translate it from Federal Reserve-speak into newspaper-speak.

  2. He can say things about the Federal Reserve, its role, its options, and its constraints that Federal Reserve officials themselves cannot because of history, politics, and institutions say.

  3. The Federal Reserve is a self-confident organization that believes that getting the story out of what it is really doing is an important mission.

  4. Hence they trust him and keep trusting him to tell the story straight.

  5. And they also respect him enough not to try to pull the wool over his eyes.

Now readers need to know that John Berry's view is not a view from nowhere--there is no view from nowhere--but rather a view from a viewpoint sympathetic to and in broad agreement with the Federal Reserve's view of the world as an institution.

Now I would note that this is an extremely unlikely combination of circumstances. You need a reporter who is a subject-matter expert and an institution that believes that getting the story out--rather than hiding key pieces of it--is an important good. I don't think John Berry would be nearly as successful covering an institution like the Pentagon or the White House, where often the goal of your beat sources is to get you to help them play hide-the-ball. And Berry's successors at the Post like Lori Montgomery and Jonathan Weisman who were not and seemed to have no interest in becoming subject-matter experts had no chance of repeating Berry's success. They quickly taught Berry's Federal Reserve sources not to engage: what's the point when the Post article is going to garble what they said?