Are New York Times Reporters Really Prohibited from Talking About Currency Values and Trade?

April 28, 2019

I asked that question about Washington Post reporters about a year ago, it turns out I have to ask the same question about New York Times reporters. It turns out it comes up in the exact same context, an effort to blame Trump’s trade war for the plight of U.S. farmers.

The issue here is a very simple one that is completely non-controversial among economists. Other things equal, a dollar that has a higher value in currency markets will mean lower prices for U.S. farmers. The logic on this one is straightforward.

Suppose that milk sells in Europe for 2.5 euros a gallon. If there are 1.2 dollars to a euro, then a U.S. dairy farmer will get $3.00 for a gallon of milk sold in Europe. Now suppose the dollar rises in value so that it a euro is only worth 1.0 dollars. In this case, the U.S. dairy farmer will only get $2.50 for a gallon of milk sold in Europe. In the real world, things will always be a bit more complicated, but that basic logic still holds, a higher valued dollar means lower farm prices measured in dollars.

For this reason, it is mind-boggling that the NYT could tell us “the price of milk has dropped by roughly a third in the last five years,” without mentioning that the trade-weighted value of the dollar has risen by more than 20 percent over this period.

There are lots of very good reasons not to like Donald Trump and his trade policy, but the NYT shouldn’t be in the business of making stuff up.


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