Friday, April 3

Let's hope the Oz practises what it preaches

Wishful thinking, perhaps. But The Australian's second editorial today appears to signal a shift from a hard-right ideological stance to a more balanced, middle-of-the-road assessment of economic policy, the causes of the global financial crisis, and the best measures to try for recovery.

When I saw the heading and subheading (above), my first thought was: “Good God! The Oz is dumping on its own commentators.”

Not quite. But if the Oz follows its own advice, it will start giving a more balanced, unbiased coverage of economic issues than we've seen in the past. The full editorial [1] is worth reading, but here are selected passages:

AMONG all the pontificating about the G20 meeting, Barack Obama called for calm coverage of the event. Everybody at the G20 understood the need to kick-start the world economy and better regulate financial systems, he said, adding "there's a great desire to inject some conflict and some drama into the occasion". He was referring to press and politicians, economists and instant experts, including Australians, who seize on statistics to create a sense of disaster about the global financial crisis every chance they get. And he's right.

It is far too early for anybody to understand whether tax cuts or cash payments are the best way to kick-start consumer spending or what amount of money governments around the world need to borrow, or print, to recapitalise banks and expand employment programs. There are cases for all these options, but in the absence of evidence it is puerile for commentators and politicians to denounce whatever governments do, just because they can. There is certainly more sound than sense in the Opposition's strident warnings that the Rudd Government is racking up a dangerously large deficit, when much of the money is being spent to stimulate the economy in the worst economic crisis in 80 years.

It's time for politicians seeking to score political points to calm down and for commentators to stop seizing on reports from international agencies as infallible evidence in support of their ideas about each economic indicator. This unprecedented crisis makes predictions pointless . . .

The electorate's economic literacy is one of Australia's strengths, ensuring people are not seduced by snake-oil solutions. But the fact the voters understand the crisis is the very reason why they neither need nor want instant analysis, every hour on the hour.

The Australian's new stance flows from the overnight G20 agreement. If the G20 achieve nothing else, they may have steered the Oz into more balanced coverage. The world's leaders meeting in London will have done something worthwhile.


You might call it bias. I call it intellectual rigidity. Economics editor Ross Gittins is far kinder. He calls it “priors”.

Gittins, in a piece in The Sydney Morning Herald and the Melbourne Age on March 16 [2] , “The GFC and secret economists' business – Your guide to the ideology behind the global financial crisis”, explained:

LET ME let you into a little secret that will help you make more sense of the never-ending debate over the global financial crisis, what caused it and what should be done about it.

As all the professional participants in these debates understand but rarely acknowledge, whatever theory or empirical evidence they quote, the position they take gets back to their "priors" — their previously formed beliefs and values.

A few weeks earlier, he had offered this "tutorial" [3] to incoming Shadow Treasurer Joe Hockey, explaining the economic debate.


No comments:

Post a Comment