More than five questions for Michael Hlinka
We talk to Michael Hlinka, who reports on business issues of the day for CBC's Metro Morning, about the abysmal coverage of the latest installment of the U.S. debt crisis, political bias in business reporting, and the questions journalists are missing.
J-Source: You used the word abysmal [to describe the coverage] when we first approached you. Where do you think journalists have been fumbling?
Michael Hlinka: I think there was a wonderful example with the Globe and Mail piece. I’m going to go back to what I suspect is the core root of it: The Globe and Mail piece seemed to point out that the issue was – the root of the economic problems – was that Americans were saving too much, and we were in what is called a balance-sheet recession. When on the same page of the newspaper, the same page of the same paper, they indicated a statistic that personal indebtedness went up by $15-billion over the past month. It simply tells me that there is an editor out there who is not doing his or her job. I don’t know who it is, but those are too conflicting. It would be the same as saying they’re having a very, very cold winter and then putting on the same page of the paper that average daily temperatures are three degrees higher than they’ve ever been on recorded record. It’s just sloppy.
J-Source: Now you mentioned there’s an editor out there that’s not doing his or her job. But as for journalists – business journalists that are reporting the story – are they asking the right questions? What are they missing?
MH: I think what’s overriding the coverage – I mean most of the coverage I get in the United States – is this desperate attempt to vindicate Keynesian economics and also to vindicate their selection of Barack Obama as the choice for the President of the United States. There were all sorts of polls that indicated the mainstream press had 80 or 90 per cent voted for Obama. And I think what their doing is they’re running interference for his own failed economic policies.
I see this time and time again. Let me give you an example of that: The discussion was somehow the Tea Party had hijacked American politics and if not for this lunatic fringe everything would be fixed to everybody’s satisfaction. The consensus in the States was that spending was the problem and taxes weren’t the problem. What the Tea Party said was OK we’re going to draw a line here – by the way I’m not a fan of the Tea Party – but what they were saying is we’re not going to increase taxes at all whatsoever and to find a dollar in savings you cut spending by a dollar. The Democrats said to find a dollar we will cut spending by 75 cents and increase taxes by 25 cents. Because really the issue was spending and not taxes. You wouldn’t have understood that from the coverage.
There was far more similarities and differences -- in the way these guys were portrayed as a sort of extremist lunatic fringe – between their position and the Democratic position. Had the Democrats said for example, or had the opposing position said, “No, we think spending should stay where it is. There should be a one-dollar tax increase,” then I think you’ve got something that really stands out. Then by all means you put it out in the terms that the debate was put in. In the media, I think I’m the only person who pointed that out, that I heard of. And, I’m sure there were other ones, so I don’t think I’m that unique. But it just seemed to me stunning that this was the highlight and the headline was far, far more similar than differences between the major parties.
J-Source: So, it sounds like you’re saying journalists have a narrative that they want to stick to that falls in line with their beliefs.
MH: Absolutely. And I think it’s been, at least in the press reports that I’ve seen, shown. I think the writers of these articles want to believe in Keynesian economics. Anything to the contrary and anything that upsets their world view …
The other thing is the kind of intellectual sloppiness. The decade of the 1960s was a spectacular decade for economic growth in North America. In that, the savings rate hit a low, in 1960, of 7.3 per cent. In 1967, it was as high as 9.5 per cent. Savings last year in the United States were estimated to be 5.8 per cent. So, there’s never been any statistical correlation between economic growth and savings rates. And anyone that would say that I think is simply delusional.
J-Source: Are there any big questions – ones that are so obvious – that journalists just aren’t asking that you would like to see pursued as a story?
MH: I think what the story is right now is the size of the public sector versus the size of the private sector. There are some journalists who – and when I’m saying these criticisms I’m talking mainstream journalists – are talking about this, and are looking at this critically, and I think somewhat intelligently, and whether there is some sort of connection. This is something I think tends to be proven empirically over time, is that society’s tend to have big public sectors, relative to the private sectors, don’t experience the same growth as those society’s that have the ratio the other way around. That’s one thing that I just don’t think anyone is talking about in the mainstream press. And I think that’s because they don’t want to hear what the answer is.
J-Source: Now, there are some people that are saying that the S&P just confirmed what we already knew: that the U.S. government has a major fiscal problem right now, and things aren’t going so well. But others are saying it’s this big shock – but the government was doing so well! Have journalists oversold the idea that the economy was recovering?
MH: Yes. I think they basically followed the party line. I’m a full-time teacher. I do a business commentary and I love doing it, and it’s a great, great experience, but I spend most of my time working with students and preparing academic materials, that’s sort of my stock and trade.
One of the stories that has not been pursued is the number of times the economic revisions, the numbers have been revised down in the United States. In fact, I can give you anecdotally, this morning they released the productivity numbers for the second quarter and they revised the productivity numbers for the first quarter down dramatically. Last week, when they recorded the GDP numbers for the second quarter, the numbers for the GDP first quarter were revised down dramatically. Nobody is looking – that I’ve heard of – at these stories and saying why are they so far off in their initial estimates and why is the consistent bias on the upside on the upside rather than the downside? Because if it were an honest error one would think that there would be equally wrong reporting: overly optimistic and overly pessimistic numbers. Why is the persistent pattern out of the Bureau of Statistics in the States all of the revisions have been downwards, in some cases sharp downwards revisions, over the past year. I think it’s an interesting questions and no one’s really delving into that.
J-Source: OK, so you said the quality of reporting relating to the latest U.S. economic story has been abysmal, but what about the quality of business reporting in general? Is that a trend: fitting the business narrative to the political one?
MH: Business reporting is always problematic, because if you are a for-profit institution, you’ve got to be very, very careful not to bite the hand that feeds you. So there’s that inherent built-in bias. And that I understand. It sort of goes with the territory. The bias that I find a little more troubling, particularly in the context of the United States is that I think there’s been a different level, a different standard – and I think that George Bush was an abysmal president, please don’t get me wrong on this – but I think that there’s a fundamentally different standard that George Bush was held to than Barack Obama is being held to. And I think it’s because the people who do the reporting, for the most part, did not vote for George Bush.
J-Source: If this bias exists in business reporting when it comes to Obama, versus, say, Bush, is it just more prevalent in business reporting, or just more obvious, or is it widespread?
MH: Well I think it’s widespread, I think across the business spectrum and across the political spectrum.
On the other hand, when I talk of the mainstream, I have no question, by the way, that there’s an equal bias on the other side: on the talk radio kind of stuff. I just don’t listen to it. But I would imagine on the other side of the spectrum, I’m sure it’s equally biased the other way. So this is not a particular issue where I’m simply suggesting there is only one side that’s guilty of brutal exaggerations. I think everybody has their agenda and they selectively pick the facts to fit it.
J-Source: On the flip side, you’ve been following the coverage, has anyone done a really good job? Someone wants to go and find a narrative that’s not confusing and contradictory, is there a place they can go?
MH: I don’t know it. I’m sure there is but I don’t know it.
Here, I have to cut a little bit of slack my colleagues in the fifth estate. You want to be providing a range of opinions, a range of analysis, a range of whatever. But it’s just to me very troublesome when analysis on the same page of the newspaper – and this is what prompted the original [abysmal] comment – is contradictory.
Yesterday, even in the Toronto Star, the headline on the Star was that global fear triggers a sell-off – or something along those lines. Rather than allowing for the fact that what was going on was a rational re-pricing of markets given that we now have more information, or information that we did not previously have. Why was it necessarily fearful when the markets were going down by three or four per cent, but a pejorative word wasn’t put on the process when the markets were going up by three or four per cent.
J-Source: How do you think this translates to regular, average Canadians reading the paper. It sounds like it would be confusing.
MH: It’s confusing. The only reason why there’s any significance to it whatsoever is that people rely on the media to provide them information to make decisions and the problem that I have with this is that the bias the media has is the decision and the belief is that if we just simply print more money and give more money away like we’ve been doing for the past two or three years, then the problems will correct themselves.
I’ll pass on a conversation with somebody that I had at my gym the other day. He said that what we ought to be doing is giving people on welfare more money, because then money would be spent and we would get out of the economic doldrums. I looked at him and I said, ‘Why don’t we give everybody – not just people on welfare – a million dollars? Because then we’ll all be millionaires and then all our problems will be solved.’ And he stopped and his jaw dropped, and I think in that moment he realized the foolishness of what he said.
If you said to me, ‘I think you should give people more money on welfare because it’s the right thing to do. Welfare hasn’t gone up with the rate of inflation and as a humane society I think this is a decision we should make.’ Well then, there’s something serious we could have a discussion about. But my fear is his world view of economics is being coloured by, for example, the front page of The Globe and Mail, where the front page is saying the whole problem here is people aren’t spending, if people would just take their wallets out of their pockets and start spending money then everything would just be hunky dory. Would that it were only that easy – you know we’ve tried that for the past three years and it simply hasn’t worked.
J-Source: So, when you come down to it, point blank, could you say the media isn’t doing its job?
MH: This is a criticism of media in general: I wish that it would work harder to be a little bit more nuanced and -- this by the way is the human condition; it’s not just the media – generally what happens is we have points of view about something. If I, for instance, like a particular restaurant and I had a bad experience, what I would probably try to do is rationalize that away: it was a server, this that or the other thing. Generally what happens is we make up our mind and selectively find the facts to fit that narrative, whatever that narrative is.