WSJ Op-Ed's Look at Old Media Business Bias: Very Good Points, But Incomplete

At OpinionJournal.com on Thursday ("Fair but Unbalanced -- How the media promote false pessimism about the economy"), Brian Wesbury, who has written several times on the disconnect between the strong economy and the public's perception of it (previous references here, here, here, here, and here), had another generally stellar column about what is nonetheless a relatively small piece of the problem.

Wesbury ascribes much of the disconnect to TV's need for "balance," when giving positive and negative views equal weight is often in reality unbalanced:

If one guest or expert is a "bull," then the other must be a "bear," to keep things fair. Or, if there is a single guest on air, the host often takes the other side of the issue in order to keep things balanced. Get some sparks between guests, a little argument here or there, and it's even better for the ratings. The bigger the audience, the better the show, that's the way the advertisers see it. It's basic supply and demand.

But this idea of presenting both sides of an issue, while entertaining, informative and seemingly balanced, may paradoxically create a warped perspective of the economy.

For example, the most recent Wall Street Journal economic forecasting survey, from July, shows that 49 out of 60 forecasters expect real GDP to grow at an average annual rate of 2%, or faster, in 2007. Of the remaining 11 forecasters, only two expect growth of less than 1%, and only one expects a recession. For 2008, the forecasters are even more optimistic, with none expecting recession.

..... But what seems clear is that in the name of producing an entertaining product, and in an attempt to provide contrasting views, the true consensus of experts is rarely reported.

A randomly selected pairing of economists from The Wall Street Journal forecasting panel would pit two rather optimistic forecasters against each other in debate. But having two economists debate about whether GDP will grow 2.1% this year or 2.4% is downright boring. As a result, the producers of business news spice things up. They arrange for debates between a bullish economist and a bearish economist.

..... While this is entertaining, and may bring in eyeballs, which sell commercials, this idea of "fair and balanced" debates leaves an impression that the experts are split 50/50, when in reality it's more like 80/20, or 90/10.

..... But if all the public sees is an endless stream of 50/50 debates, then it is really not that much of a surprise that people think the future is basically a coin toss. And a coin toss, especially in a time of war and terrorism, is not very good odds.

And that's too bad. The global economy may never have been as strong as it is today.

Wesbury's overall point is good. Truly "balanced" coverage in a situation where, as currently exists, there is an 80%-plus consensus that the economy is strong would seem to dictate 80% or so positive takes from the "experts."

But he lets the TV people off the hook when he excuses them for requiring a "50/50 debate" on the overall economy for interesting TV. This is journalistic laziness. There's plenty of room for "50/50 debate" even among those who think the economy is strong.

For example, "experts" will disagree on their policy prescriptions. Some might think in the current environment that the expiration of the Bush tax changes in a few years bodes ill for the long term while others (incorrectly, in my opinion) may believe it doesn't make much of a difference. Some might think that continuing the existing tax structure is enough to keep the economy chugging along, while others will believe that sustaining continued growth requires another tax cut. After all, Reagan had at least four (1982, 1983, 1984, and 1986); Hong Kong (second item at link), Iceland, and Ireland have have experienced spectacular economic results and swelling government revenues as a result of multiple tax cuts.

But assembling a 50-50 panel for what would surely be a spirited debate requires more legwork and preparation than the average TV show is apparently up to. "Get me a bull and a bear" is so much easier.

Wesbury's analysis is also incomplete in that it only applies to the 10% - 15% of people (at most) who pay moderate to close attention to business and economic news. The TV shows he refers to really don't have much of an effect on the general public. The average person is is more swayed by the constant partisanship and negativity of network news, top-of-hour radio broadcasts, and the Associated Press. Of the three, the AP has the most profoundly negative effect, as it has what amounts to an unfiltered open microphone to nearly every major US newspaper reader in the country.

Most of theses papers simply copy and paste AP business reports into their print editions and onto their web sites; they aren't in a position to question the underlying reporting. So the likes of Martin Crutsinger and other supposedly "objective" reporters get free rein to tell the country that, among other things:

• Home prices are falling nationwide, when they're not.
• The economy is "limping along" and "plodding along at a tepid pace," when it's not.
• Wages and earnings are flat or "stagnant," when they're not.
• Income inequality is increasing, when it's not.
• That the Bush 43 economy is nowhere near as good as that of the late 1990s, when by some measurements it's clearly superior.

Wesbury notes that "an NBC News/Wall Street Journal poll taken in late July found that 68% of Americans thought that the economy either was in recession already, or would experience a recession sometime during the next 12 months." With constant drumbeat of negativity, it's almost a wonder that the number is as LOW as it is.

Cross-posted at BizzyBlog.com.