A very long time ago, in a far away galaxy, I spent a month as an intern in a large newspaper. I was a third year university student and the editor in chief was a friend of our Research Methods professor. Se he gave us a half serious mission to come up with a blueprint to increase his paper's circulation.
We took it more seriously than him and wrote a full report. The number one recommendation was to have a framework that unites all reporting. Without such a cohesive framework, we argued, news items will reach contradictory conclusions or worse, will be of the "he said - he said" type gossipy pieces. Number two was to have continuity of reporting. If your previous day piece reached a certain conclusion you should not change this the following day, at least not without reference to your earlier item, and not without explaining why you changed your conclusion.
Needless to say, he didn't like it. Stupid kids, what do they know, he said to our professor.
I remembered this episode when I saw the headlines the day after the debt ceiling reporting.
Up until that moment, there was relentless coverage of US debt and how horrible it was and how bipartisan bickering prevented a proper response. Krugman was about the only mainstream voice who lamented daily that this was a stupid narrative and that if anyone paid any attention to actual economic causality the narrative would have focused on unemployment. He argued that the spending cuts everyone was advocating would very likely kill the fragile recovery and the only way to get out of a recession was to grow out of it.
Everyone else said, no, we need to appease debt holders (you know, banksters), even though the US bond risk pricing was near zero in real terms. So we need to cut spending, they said. Rating agencies joined the kabuki theater even though there was no basis to claim that US sovereign debt should be downgraded. Obama joined this narrative, Democrats caved, as usual. And the media breathlessly reported only that narrative.
Until, that is, the debt ceiling and the accompanying austerity measures passed. The following day, the headlines said that markets are falling because of fears of unemployment and a likely double-dip recession. The day after, markets tanked everywhere and we got more of the same causality.
I was aghast.
From literally one day to the next, the narrative and the underlying causality changed completely. Actually, it was totally reversed. If you read the papers the day before, and stopped there, what you would retain was the fact that the US was facing a serious debt crisis and urgent austerity measures and deep cuts were needed to fix this and reassure the markets. The following day, the same columnists and business editors wrote with a straight face that there was an urgent need to tackle the unemployment problem and stimulate the economy. If you came back from a long trip and started reading that day, you would think unemployment was everyone's main preoccupation and a solution to that was being actively searched.
You are either a disciple of Hayek and maintain that the recovery requires a healthy financial spreadsheet and therefore deep spending cuts. Or you are a disciple of Keynes and argue that, since businesses will not spend more when unemployment reduces the number of their potential customers, it is up to the government to stimulate the economy until consumer spending reaches the previous levels.
In the former, austerity is your focus, in the latter, stimulus. But you cannot have both. They are mutually exclusive positions.
Yet, the media gleefully shifted from an over the top Hayek narrative to a tentative Keynesian discourse from one day to the next without ever acknowledging or explaining the shift.
When you have no cohesive world view, no framework that provides an underlying causality, your reporting will be uninformative, disjointed and contradictory.
You know who does this best? The Economist.
Even though I disagree with their world view almost completely. I know where they are coming from, I know their framework and I know that they will say the same thing tomorrow and the day after.
The fact that they are the only traditional media outlet that remains profitable should serve as an indicator to others but their lack of causal framework prevents them from comprehending even that.
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