Sunday I happened to turn on a Sunday talk show, something I tend not to do anymore. The show was Meet the Press. The topic of the roundtable was the banking crisis. (Read the transcript). It was one of those uninspired discussions mired in abstractions and financial cliches (“tax cuts” “need to cut spending” “need to preserve the banking system” etc) . These were educated and knowledgeable people, and yet they didn’t seem to grasp that the American government has crossed a dangerous line by bailing out banks. They seemed unable to criticize the financial sector for its excesses and unable to differentiate between what industry people were saying and what the American people were saying. Their solutions were basically that the American people needed to suck it up, that we should avoid public spending on infrastructure, that we should avoid regulation of business and let the economy grow of its own accord.
Here’s typical blather:
MR. GREGORY: All right. I, I, I want to talk more broadly about the, the banks in this country, what’s happening to them and what the government should do about it. Now, here’s a chart that struck us. This is the market value of some of the biggest U.S. banks. The big circle here is back in 2007, the little circle is here in January of 2009. And look at that, Citigroup in 2007 had a market value of $254 billion, now $19 billion. J.P.Morgan, $166 billion, now $94 billion. Wells Fargo, $118 billion, now $68 billion.
Erin Burnett, why hasn’t the administration been able to do a better job explaining how severe this crisis is to the American taxpayer?
MS. BURNETT: That is, that is the ultimate question here. It is amazing, when you listen to so much of the commentary out there, that it focuses on bonuses or private jet use or, or also just that they’re not lending. None of these things, really, are, are the real issue here. And it has been very poor public relations on behalf of the Treasury under Paulson, and even now so far under the Obama administration, to explain to the American people how you cannot have an economy that grows without a healthy banking system. Japan is the perfect example of that. They spent their way from a–the, the ratio of 68 percent to 128 percent, they got nothing, because the banks never got rid of those bad loans. And if banks don’t get rid of bad loans, they don’t lend. And that means new businesses don’t start, people can’t buy homes, they can’t buy cars. It, it makes sense to people. And that’s, that’s why you must deal with the banks.
MR. GREGORY: Right.
MS. BURNETT: That, that, that–it isn’t choosing Main Street vs. Wall Street. That is a completely false choice that is being put out there.
Here is why they are wrong:
- The previous Administration has already spent trillions of dollars on defense and subsidies to help various industries (mortgage deduction, etc).
- TARP 1 basically didn’t have the desired effect (and TARP 2 probably won’t either). TARP 1 was recommended by almost every financial commentator on these shows, and may well have been a waste of taxpayer money.
- The Citigroup bailout especially didn’t have the desired effect and was unduly generous for business. A commenter summarized a PBS exchange:
In fact, The NewsHour With Jim Lehrer had several people in its interview or panel segments who said Treasury cut a bad deal. On both the NewsHour and, later, on Countdown, several guests pointed out that the size of the CitiCorp handout was more than the capitalized value of the entire company.
Jeffrey Brown asked the guest (whose name escapes me), "So if a private citizen came along with this much money, they could have bought the entire business?"
"Yes," came the reply, "and instead Paulson only got (the government) a 7% stake."
- Domestic spending on infrastructure, education and green technology has been woefully inadequate. Public investment may not be “efficient” in the economic sense of the word, but at least its benefits are distributed, far-reaching and useful generally.
- The U.S. has been unable to effect systemic change on the health care system or entitlements.
Ok, I’m not an economist, but I think these 5 points are beyond debate. These sorts of points are crucial and things which bloggers and economists make all the time, and yet major media talk shows barely mention these things. In the Meet the Press show I alluded to, the guests on the panel consisted of the head of Moody’s (the discredited credit rating agency), a former VP of Citigroup and a son of a multimillionaire. These were actually informed people, but their viewpoints were skewed to the bias of the industry they came from. What we needed was balance, a liberal viewpoint, someone who can see the banking system more objectively. In fact, the only liberal viewpoint on the show was John Kerry….who himself was married to a multibillionaire! Kerry has a deep commitment to the public good, but he looks at things from a billionaire’s point of view. Can he help it?
These national news-and-talk shows receive lots of advertising from financial firms. Saying bad things about this industry could cause advertisers to disappear. This is not entirely a bad thing. Why, for example, couldn’t we have set conditions on banks accepting TARP money that they not use any money for advertisements on TV for the next two or three years? The solution, I’m afraid, is for people to stop relying on the major networks for news. These shows are good for reporting and investigations…not so much for commentary. But it goes deeper than that. Mere reporting is limited to certain subjects. Scandals are ok, but labor unions or minimum wage or deaths in Gaza or peace demonstrations just never seek to qualify as important (the same Meet the Press show had a 10 minute segment about the upcoming Super Bowl, from which NBC hoped to derive significant benefit).
I consider progressive bloggers reliable sources of information. (Do I consider myself a progressive blogger? No, I consider myself as someone with progressive views who occasionally blogs about these matters). Would these people make good talk show guests? Maybe, maybe not. That’s partly why I enjoy the old fogey show MacLaughlin Group. Sure, they are blowhards and too concerned with inside-the-beltway politics. They have one conservative guest who I find odious. But at least these people reflect individual opinions and have reasonable contact with the common man. Also, they are not millionaires. But their opinions interest me more than those on the Meet the Press panel. The problem is that Meet the Press called together financial experts to talk about politics. If they were called upon to discuss the best place to put investments or what the economic forecast for the next year will be or what caused the financial meltdown, I would trust their opinions. Instead they are being asked to comment on public spending questions—matters upon which they have no credibility. I would much rather hear commentary by a group of religious leaders than a bunch of banking experts. What about academics (those fools locked up in their Ivory Tower)? Robert Reich for example, is an economics professor, and so is Paul Krugman. Both are notable liberals well-versed in economics. They speak the same language as journalists and industry people. Reich speaks forcefully on labor issues.
The ideal panel would have 1 journalist, 1 politician, 1 academic type, 1 industry leader and 1 inside-the-beltway political commentator. These shows often have a false diversity. In the first segment of Meet the Press, the invited guests were John Kerry and Kay Bailey Hutchinson. Why does anyone think that two senators with opposed positions can provide significant insight about anything? Senators (with the exception of maybe Moynihan or Phil Gramm or Paul Simon) are just processors of information. They try to be mainstream politicians; they rarely have original opinions (although occasionally they have original rhetoric).
Instead of these point-counterpoint panels, what we need is a group of guests consisting of one person per interest group. Sure, the environmentalist and the energy executives are always going to disagree about global warming, so they can seem to neutralize one another. But if you added a technologist, a religious leader and a blogger, we could have interesting discussions.
I do not oppose a group of experts coming together to have a focused discussion about a single issue. But too often the most interesting thing about these TV talk shows is not what was said but who is not participating in the discussion.