Must-Read: Paul Krugman: Bubblewashing

Must-Read: I gotta agree with Paul Krugman here: Ylan Q. Mui is smart and hard-working. But she is not doing the job that a WonkBlog reporter should be doing. She is, instead, doing the standard Len Downie-culture Washington Post job of pleasing her sources and confusing her readers–nearly the exact opposite of what I took to be the task that Ezra Klein originally set the reporters of WonkBlog.

As I have said and will say again: The (surprisingly few) good journalists working for the Washington Post would land on their feet if it stopped publishing tomorrow. The rest shouldn’t be in the industry. And the quality of the information stream would be improved:

Paul Krugman: Bubblewashing: “Almost 15 years have passed since I warned about media ‘balance’…

…that involved systematically abdicating the journalistic duty of informing readers about simple matters of fact…. Have things improved? In some ways, they may have gotten even worse. These days, media balance often seems to involve retroactively rewriting history to avoid telling readers that one side of a policy debate got things completely wrong. In particular, when you see reports on monetary disputes, you often see characterizations of what the Fed’s right-wing critics have been saying that go something like this, in the WaPo:

Among the criticisms: The Fed was keeping interest rates artificially low and fueling speculative bubbles. The helicopter-drop of money known as quantitative easing did little more than inflate stock markets and fund Washington’s deficit spending. The bailout of big banks left them bigger than ever.

Um, no. The people who gathered at the anti-Jackson-Hole event weren’t warning about bubbles and too-big-to-fail. They warned, in apocalyptic terms, that runaway inflation was just around the corner. Here’s Ron Paul; here’s Peter Schiff.

Why would a reporter credit the Fed’s critics with warnings they didn’t give, and fail to mention what they actually said?

The answer, pretty obviously, is that if you were to say ‘Ron Paul has been predicting runaway inflation ever since the Fed began its expansionary policies’, that would make it clear that he has been completely wrong. And conveying that truth–even as a matter of simple factual reporting–is apparently viewed as taking sides. So what we get instead is a whitewashing of the intellectual history, in which Fed critics are portrayed as making arguments that haven’t been shown to be ridiculous. It’s a pretty sorry spectacle.

September 3, 2015

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