You’ve got to know to understand (and be able to talk about it)

In the greatest economic crisis in a lifetime, we remain the only country in the world whose government has done nothing to try to stimulate the economy. In fact, the net effect of National’s policies is de-stimulatory, taking money out of the economy when it most needs an injection of spending. And I blame the media. You might think that’s unfair, after all National’s in charge but National is just following its ‘put your head in the sand and cut spending’ instincts (the same instincts that aggravated and prolonged the early 1990s and Asian crisis recessions). The only way we could force the Government to act (rather than hold Jobs Summits, which is merely a mask for inaction) is by having an informed national debate on how to handle the crisis. But we can’t do it because the conduit of that debate, the media, isn’t up to the task.

We are so ludicrously under-equipped to hold proper national debates on important issues that when Bill English says he will bring forward spending that is seen as countering the recession and when he says he will cut spending, that is also seen as countering the recession. Not one journo seems to go ‘hey, how can both increasing and cutting spending be tackling the recession?’ or ‘hey, isn’t every other country in the bloody world injecting stimulus into their economy? Why the hell are we cutting spending?’ If you want to see any good commentary on the Government’s recession policies, you have to go to the business sections of the papers, and it’s not favourable reading. The political journos seem unable to sit down and think about macroeconomic situation we are in and what the Government’s actions mean in that context. Many are so economically illiterate that they think running an economy is like running a household budget, and, even then, show they don’t understand the microeconomics of how households budget (John Roughan, don’t you realise that households and businesses borrow to acquire long-term investments all the time? What do you think a mortgage is?).

Look at this cycleway idea. It would be great for me, I could cycle the length of NZ like I’ve cycled through Europe but will it make a blind jot of difference to the economy? Fuck no. $50 million over 2 years. $25 million a year? That’s 0.015% of GDP. It’s like if every man woman and child bought one extra Big Mac a year. It’s supposedly meant to employ 4000 people but what the journos miss is that they would only be employed for a few months each. Even if half the money went to employing workers the number of work hours it would buy is only 1 million over two years, and we lost 17 million work hours from the economy in the December quarter alone. It’s less than a pittance, smaller than an irrelevancy.

Let’s have some context: Obama’s stimulus package is $1.1 trillion – 8% of GDP! He’s talking investment to not only give a mammoth dose of confidence to the economy but also to revolutionise it by building useful infrastructure. He’s delivered a true Green New Deal to not only help the US recover but also to begin to future-proof it against peak oil and work to mitigate climate change. The US and other countries are not spending these vast sums lightly, they are doing it because it is necessary to stop the recessionary spiral before it gets much, much worse. All we’re going to get is a cycleway that no bugger will use and provide no measurable stimulus and yet the media reports it like the Government represents it, as some recession-busting move.

It’s a lack of sophistication in our media analysis that is crippling our politics, preventing any serious discussion over whether the Government is doing anything meaningful to counter the recession, and whether what they are doing are the right things to be doing. If your analysis is no more sophisticated than ‘the Nats say this, Labour says this, and I reckon this’, it’s useless. I can get ‘I dunno, but I reckon’ from any joker in the street. I’m looking for analysis that arises from journos sitting down and thinking about the substantive impacts of policies, that is based on what the research says, what the studies say, what the experts say (the real experts, not the stalking horses like Michael Littlewood); analysis that comes to wise, nuanced conclusions. Informed commentary implicitly recognises the value of knowing what you’re talking about before spouting off. Unfortunately, we rarely get it. Vernon Small’s piece on the Cullen Fund was an oasis that shows the desert around it; the guy actually wrote about the economics of long-term investment, it was informative (well, informative to those who hadn’t already read the same points two days earlier on The Standard). The tragedy is that Small’s piece stands out so much in its exceptionalism. Not one of the other journos has got beyond ‘they say this but the others say this, and the public will feel (ie. I guess) this’.

While our fourth estate remains for all practical intents and purposes incapable of understanding complex issues, explaining them to the public, and challenging our leaders on them, our nation will suffer from poor policy decisions. While the foreign owners of our print media continue to slash and burn our stock of journos and the capable TV journos like Campbell continue to favour entertainment over information, things aren’t going to change.