The New York Times has a Nobel-prize-winning economist on staff. But no such expert is in tomorrow's front-page story on the trillion-dollar financial bailout. Only the stock market's verdict is included.
"The Rollout Dazzles This Time" was how the Times billed the story on its website. By which the paper's editors meant it dazzled the stock market, for one day: the Dow closed up nearly 500 points, or 7 percent.
That such a "verdict" would define the day's bailout coverage (along with quotes from those receiving the money) should sound dubious to anyone who has scoffed as conservative commentators said the stock market hates Barack Obama, tanking the day after he was elected, the day he was sworn in and the day he signed the economic stimulus package into law.
It should also sound absurd to anyone who remembers how Congress foolishly contorted itself around the stock market's "verdict" last fall. Stocks plummeted after the House rejected a poorly-structured, $700 billion bank bailout. A panicked Senate scrambled to pass basically the same bill, which soon cleared the House and became law.
Just a few weeks later, Treasury Secretary Hank Paulson implicitly conceded that the House had been right the first time: He scrapped his initial crap plan to buy up distressed mortgage securities and instead planned a bank "recapitalization."
Five months have passed, and the press is still letting Wall Street — whose dysfunction is, itself, the financial crisis — define the debate. In Monday's front-page bailout coverage, the Wall Street Journal quoted only Treasury Secretary Tim Geithner, the head of private-equity giant Blackrock and two Republican senators. Oh, and Obama, from his 60 Minutes appearance.
Which is basically inexcusable. Details of the bailout had leaked two days earlier. Economists had already begun blogging about it. Tomorrow's WSJ front-pager is only slightly better, quoting a broader array of players within the financial services industry but no economists or other experts with a less-than-direct stake in how things turn out.
The stock market has become "the media's real-time economic report card," according to a recent New Republic story. The market plummeted after Geithner outlined a bailout plan in February, but so what?
...was the market drop a signal that Obama's plan was bad for the economy as a whole or just bad for bank stocks? The two propositions mean very different things.
This, alas, is the very distinction the stock-mongers on television fail to grasp.
The magazine was talking about notorious CNBC shouting head Jim Cramer. It's kind of pathetic that these days it could be referring to the front page of the New York Times.