More Good Economic News That Isn’t
I’ve been an economics and financial writer for 30 years. I used to enjoy my work. I used to take pride in it. The markets were kinky, sure, but that made the writing more fun. And even though a slew of picaresque and flagrantly self-serving characters might for a time generate oddball quirks in markets and even the overall economy, even in the midst of the most extreme bouts of irrationality there were still always plenty of grounded reporters who consistently treated such foolishness in an appropriately disrespectful manner.
That’s not true anymore. Reportage about the economy and the markets — at least in most mainstream media — now largely consists of parroting press releases from experts of various stripes or government spokespeople. And the result is not just infuriating for a long-term professional in this field, but outright embarrassing.
A perfect example was yesterday’s “good news” supposedly showing that our economic masters were every bit as smart as they think they are. A few banks have repaid their TARP loans, part of the $4 trillion that government has sunk into our black hole banking system. The repaying banks have now sent back $70 billion they borrowed plus $4 billion in interest and dividends.
Is this really good news? Only if you don’t have a calculator, an awareness of where this money came from, and the most basic understanding of what government bailouts were purportedly designed to achieve.
The $74 billion the government has been repaid is less than two percent of the $4 trillion the government has borrowed or printed to keep incompetent lenders from going down. Less than two percent! Even this piddling sum was generated by a manipulated stock market rally that allowed banks shares to soar, bringing a lot of money into bank coffers, almost of of which they added to reserves before paying back a few billion to the government.
The young woman I watched on the evening new reporting this $74 billion payback was practically falling over herself with joy about the tidings she was bringing her viewers. The fact that this piddling payback freed bankers to once again pay themselves huge bonuses, and that the $4 trillion in total money the government has given these banks has done little or nothing to reanimate the overall economy, was not mentioned.
Is it any wonder that the vast majority of Americans who don’t dwell in Wall Street trough feeding land, in economist statistical entrails reading world, or in the Washington Beltway bubble, have become so cynical about the expert and official pronouncements they are receiving? The real wonder is that anyone but media masochists such as myself bothers monitoring the mainstream press at all for financial and economic insights.