November 13, 2015
When a columnist uses your blog name in his title, he has to expect a response, right? Egan is unhappy about attacks on reporters and reporting from both the left and right. I am not going to particularly defend the targets of Egan’s criticism, but I will say that people have very good reason to be angry at the media. And here I am referring to elite outlets like the NYT, Washington Post, National Public Radio, not the small town journalists working at “poverty-level wages” who Egan grabs as a cover. (This reminds me of Walmart and McDonald’s touting the small businesses that will be hurt by a higher minimum wage. It’s not the story and everyone knows it.) I will stick to economic reporting, since that is my turf.
First, these news outlets cover economic issues almost entirely from an insider perspective. This means that the news is what people at the White House, the Fed, or the leadership in Congress want to be the news. And, it is overwhelmingly told from their perspective.
This means, for example, that trade deals like the Trans-Pacific Partnership (TPP) are often wrongly described as “free trade” deals. And it is often assumed, sometimes explicitly, that the point of these deals is to increase growth. Of course the deals are not at all “free trade,” since a main purpose of all recent U.S. trade agreements has been to increase patent and copyright protection. These are forms of protectionism. They serve a purpose in providing incentives for innovation and creative work, but they are nonetheless forms of protectionism.
It is simply wrong to describe patents and copyrights as “free trade.” Calling them free trade distracts from a serious discussion of their impact on the economy, inequality, and public health, after all, we are all supposed to support free trade.
Interestingly, the costs of these forms of protectionism are left out of almost every economic model that attempts to estimate the TPP’s impact on economic growth? This cost would almost certainly be a large negative. If patent protection raises the price of a drug fifty-fold (not uncommon) it has the same impact on the market as a 5000 percent tariff. Why do reporters never point this out?
The assumption that these deals are about increasing growth is also unwarranted. The negotiating parties are industry groups like the pharmaceutical industry, the financial industry, and the entertainment industry. These groups are interested in promoting profits for their industries not economic growth. Why is this so hard for reporters to acknowledge?
Also, reporters routinely pass along obviously absurd material from the Obama administration where they boast of jobs created by exports. Anyone who has taken an intro econ class knows the relevant issue is net exports, which is exports minus imports. If a reporter is covering trade they should know this. This means that the story here is not the number of jobs created by exports, but that the Obama administration feels it has to make up phony stories to push its trade deal. If it was reported this way, the Obama administration would quickly can the nonsense about jobs created by exports.
Moving on to globalization in general, Egan took a shot at Texas senator and candidate for the Republican presidential nomination Ted Cruz for saying that reporters would be more concerned about immigration if they faced direct competition from large numbers of immigrants, instead of having this competition largely restricted to the less-educated segment of the workforce workers. This is where he cited the poverty-level wages and pointed out that the debate questioner was from the United Kingdom.
Of course, it is very difficult for workers in the most highly paid professions to work in the United States and that is by design. While our trade deals have quite deliberately sought to put steelworkers and textile workers in direct competition with their low-paid counterparts in the developing world, there has been no similar effort to remove the barriers that make it difficult for foreigners to train to U.S. standards and work in the United States as doctors, lawyers, dentists and other highly paid professions.
This is one-sided protectionism. Bringing in more professionals from abroad would lower the pay in these professions, reducing the cost of health care, legal services, and other services provided by these workers. It would mean more growth and jobs. That’s what the models show. But, we don’t do this because these highly paid professionals are powerful people, with friends in Congress, the administration, and the media.
FWIW, it is difficult (not impossible) for a newspaper or other employer to hire someone who is not a U.S. citizen or green card holder. This is a serious disincentive to bringing in the foreign competition even when there are not formal licensing barriers. I say this as an employer who has had occasion to deal with it. Any economics reporter who thinks they are playing on a level playing field with their counterparts in the rest of the world should be in a different line of work.
One last point on this set of issues, it is common in the media to talk about inequality as being a natural result of technology. This is sort of incredible because the Obama administration is openly pushing a trade deal which makes patents both stronger and longer. The explicit justification is to provide more incentive for innovation. This means redistributing more money to the people who benefit from patent protection. In other words, the Obama administration is arguing that we don’t have enough money going from the rest of us to those who innovate and are supported by patent protection; it wants to shift more money in their direction. Sorry folks that is policy redistributing money upwards, not technology.
Let me shift to one of my other pet peeves for which people should rightly want to take pitchforks to the media. It is standard practice to report government spending as millions, billions, and trillions. Everyone knows that no one who is not a budget wonk has any idea of what these numbers mean. To the typical reader, they just hear “really big number.”
This is inexcusable since it is very easy to provide this information in a way that is informative simply by expressing the spending as a share of the budget or with some other denominator that would put the number in perspective. This matters hugely to U.S. politics since it has helped to foster confusion about where taxpayer dollars are being spent. Tens of millions of people think that much of the budget is going to foreign aid or TANF because they hear about the billions of dollars spent in these areas. If it were standard practice to report spending as a share of the budget, then many more people would know that each of these items account for well under 1.0 percent of federal spending.
This shift in reporting practices would require just seconds of a reporter’s time. And it would mean that they would actually be providing information to readers rather than just writing down a number that is meaningless to almost everyone who sees it. Why can’t reporters do it?
Enough of my diatribe, regular BTP readers know the other areas where I have major gripes with the media. But Egan is mistaken if he thinks he works in a profession that doesn’t warrant the wrath it receives. (So do I.)
Note: Typo on protecting steelworkers and textiles workers corrected from earlier version. Thanks folks for calling it to my attention.
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