"Blogs you can bank on
- Posted by:
- Economist.com | WASHINGTON
- Categories:
- The econoblogosphere
A STORY in the New York Times which begins by discussing the Obama administration's attitudes toward engagement with elements of the Taliban concludes with a passage that has touched a nerve in parts of the economics blogosphere. It reads:
“Part of the reason we don’t spend a lot of time looking at blogs,” he said, “is because if you haven’t looked at it very carefully, then you may be under the impression that somehow there’s a clean answer one way or another — well, you just nationalize all the banks, or you just leave them alone and they’ll be fine.”
Simon Johnson speculates that president Obama is trying to make a deeper point concerning the complexity of the financial system:
Perhaps the financial situation - e.g., in and around derivatives - really is too complex for anyone to understand, unless they have the inside knowledge of regulators. This would mean, of course, that going forward no one can question Treasury about anything important.
But that, in turn, makes congressional oversight impossible - even if we move to closed door hearings. And it raises the question: if our financial system has become so economically complex that President Obama is right, then is it also too complex to be politically sustainable?
My take on this is different. It's true that many prominent bloggers have advocated for nationalisation without any real acknowledgment that the implementation of the policy could be very tricky and risky. At the same time, there have been innumerable opinion columns in prominent newspapers doing the exact same thing. And meanwhile, there are economics and financial blogs out there which have provided coverage and analysis of the current crisis with a depth and clarity unmatched by mainsteam press outlets (with certain possible exceptions that needn't, I assume, be named).
The problem is that bloggers must establish their reputation by writing well consistently, and appreciating that reputation requires a fairly substantial investment on the part of the reader. Mr Obama stays in touch by "perusing newspapers and thumbing through weekly newsmagazines". This is fairly easy to do, as most informed readers can quickly skim the Wall Street Journal or The Economist and process the information accordingly, since there is no question as to the viewpoint and the reliability of the publications in question. The same is true for the New York Times or the New Yorker. The perspective and reputations are well known, and so any particular story can be absorbed, and the appropriate discounts for ideological bent made.
But it takes time to appreciate a Felix Salmon. His posts sound informed, but it's only after reading him for a while—and reading the comments and criticisms of him by a wide range of other economic and financial bloggers—that one can understand the quality and reliability of his opinions. And sure, if asked, I could put together an RSS feeder for the president containing subscriptions to what I consider to be the very best blogs for crisis coverage. But Mr Obama is likely to question my filtering decisions, at least a little bit. By contrast, he doesn't need to rely on the opinions of anyone else to judge a piece that he finds in the Financial Times. He knows where it's coming from.
This is a point that media critics often make in trying to assess the future of print publications. They seem to be seeking to emulate bloggers wholesale, when their most valuable asset is their public reputation, which has been established over the course of decades. They are a known quantity, and that's a good thing, as far as busy readers are concerned. Not everyone has the time to learn which bloggers to read. That, it seems, includes the president of the United States."
Me:Don the libertarian Democrat wrote:
"because if you haven’t looked at it very carefully, then you may be under the impression that somehow there’s a clean answer one way or another"
I was under the impression that arguments stand or fall on their cogency and evidence, not on the amount of time spent considering the problem.
"really is too complex for anyone to understand, unless they have the inside knowledge of regulators"
I don't buy this. For one thing, there are investors that do seem to understand these investments, at least as well as regulators.
"without any real acknowledgment that the implementation of the policy could be very tricky and risky."
This makes it sound like there should be a general disclaimer about human fallibility with every column. I take this to mean that the people who don't agree with nationalization want the people for it to drain all risk from it, which isn't possible. I'd like the people favoring the current plan to admit that it's a pig's breakfast of a plan, and that they're terrified of doing anything much different because at least it's a breakfast.
Posts
