Newspapers and broadcast media don't mold public opinion so much as they reflect it. If they don't like the coverage, readers and viewers go elsewhere.
What a time to be in the news biz!
Stories pile on top of one another so fast that it's tough to decide what to put on Page One, since they can't all go there. A guideline is that Page One of a major metro broadsheet daily has room for seven to nine stories on any given day.
These days, so many stories break so fast that not all can fit, so some editorial judgement comes into play.
Of course, that means that politicians and others can and do regularly criticize the choices, especially when a story puts a negative light on them. Nonetheless, that's journalism's job, to cover all the news and to decide which stories are most important for readers to know about.
And, of course, when readers don't like the editor's choices, they cancel subscriptions. Likewise, when viewers don't approve of the coverage, they change the channel. Realistically, there are some who become so disgusted or angry that they tune out entirely. Therefore, it's up to the writers, editors and news directors to present the stories in such a way to maintain interest even as they educate, inform and entertain.
So what's it been like, recently? Sexual misconduct by celebrities and politicians -- these are the juicy stories -- economic issues, stock market performance and politicians who claim credit for it, government officials who try to interfere with news coverage, government agencies that try to block fully free access to the Internet, allowing (or encouraging) carriers to decide who gets priority in transmitting stuff, a president who tells the Justice Department to block a communications business merger because he doesn't like the way one of the companies reports on what he does, or delays humanitarian aid to an island (Puerto Rico) struck by two hurricanes even though its people are American citizens, or stops another program that allowed its people (Haitians) to come to America after their homes were devastated by an earthquake, or plans to reshape the Federal Reserve Board to reflect his free market-trickle down economic theories, or wants to reshape the judicial system to conform to his views on how the law works.
Here we pause to take a breath.
All these stories and more are what keep journalists busy and interested in what they do, and excited about the opportunities to inform the public on the doings -- good and otherwise -- of political and government officials.
Here are some examples of the hot stories in America this week:
-- Janet Yellen will leave the Federal Reserve Board as her successor as chair steps in. President Trump did not nominate her for a second term as chair, which has been customary for years.
-- As noted here ten days ago, the government wants to block AT&T's acquisition of Time Warner, unless CNN is dropped as part of the deal.
-- Trump ends a program that has allowed Haitian earthquake refugees to come to the U.S.
-- The head of the Consumer Financial Protection Bureau is quitting as the White House pushes deregulation.
-- Increasingly, news media present examples of the president's ignorance of history and economics, as he claims credit for things that happened before he took office or would have happened anyway. Usually, this is for the good stuff. Like most politicians, if it was something bad, he blames his predecessor.
For that, here's a link to an excellent piece that appeared in the Irish Times, explaining how the new guy in the Oval Office doesn't really understand how the stock market works: https://www.irishtimes.com/business/personal-finance/six-stock-market-lessons-for-donald-trump-1.3294367
Tuesday, November 21, 2017
Sunday, November 19, 2017
Economics vs Business
The social science of economics studies what people do with what's available, and how they use resources to enhance their lifestyle -- at root, it's the study of food, clothing and shelter, with all the variations employed to make maximum use of these resources.
Business, while it is also the study of what people do with what's available, is primarily how producers market and sell their products and services to others, providing the most benefit to the business operators.
These definitions are simplistic, of course, but it's a good way to start understanding conflicts between producers and consumers, management and workers, as well as government and business.
In short, economics deals with what is, while business focuses on what should be. Meanwhile, there is some overlap of business and government policy, and depending on a group's preference, politicians may emphasize benefits to consumers or benefits to business.
An example of this conflict is the strategy currently employed by conservative Republicans in Washington who want lower taxes on business as a way to encourage production, which would mean more sales and more profits, contributing to more overall economic growth as expressed in a Gross Domestic Product increase of 3 percent or more.
This is an example of what academics call "supply side economics," which stipulates that "if you make it, they will buy." Assuming, of course, that "they" -- consumers -- have the wherewithal to increase their spending on food, clothing, shelter and other necessities and luxuries.
Another assumption is that the benefits of lower taxes will lead to more investment and production, which will bring more hiring and higher wages for workers, who will then use that increased income to buy more stuff.
That's an example of academics call "trickle down" economics. This is a variation of "supply side" economics, as opposed to "demand side" economics.
So which comes first? The idea that "If you make it, they will buy," or the premise that says producers make what people want -- that they supply stuff to satisfy a demand.
A stark reality is that neither dominates any market for any length of time. There have been products offered for sale that people didn't know they wanted or needed, until a successful marketing campaign persuaded them that they did. One example is Post-It notes. The product was introduced but went nowhere until after 3M gave it away as part of its campaign to educate and persuade people that they really, really needed it.
Currently, we are seeing a campaign by politicians to emphasize supply side and trickle down economics to boost GDP growth to 3 percent and more, claiming that this rate, shown recently, can be encouraged and will continue for years.
Enter the Federal Reserve Board, the independent monitor of the nation's money supply and economy, which believes that a long term growth rate of about 2 percent is the safer route. The Fed's primary tool in encouraging or slowing economic growth is controlling the money supply, which affects the interest rate, which in turn boosts or limits investment in production capacity. Next in line is hiring workers and raising wages in response to demand for products and services.
Clearly, this is a very tricky balance to strive for, especially in the face of government policies that stress supply side and trickle down theory.
So there can be a strong conflict between government desires and the Fed's actions. And that is what is currently brewing in Washington.
Bottom line: Watch for the Fed to increase rates to prevent an over-heated economic growth rate, something it has hinted at several times recently, even as the White House touts policy that would have the economy "take off like a rocket."
Now the question is, when will the Fed shoot down that rocket, opting for a steady cruiser instead?
Business, while it is also the study of what people do with what's available, is primarily how producers market and sell their products and services to others, providing the most benefit to the business operators.
These definitions are simplistic, of course, but it's a good way to start understanding conflicts between producers and consumers, management and workers, as well as government and business.
In short, economics deals with what is, while business focuses on what should be. Meanwhile, there is some overlap of business and government policy, and depending on a group's preference, politicians may emphasize benefits to consumers or benefits to business.
An example of this conflict is the strategy currently employed by conservative Republicans in Washington who want lower taxes on business as a way to encourage production, which would mean more sales and more profits, contributing to more overall economic growth as expressed in a Gross Domestic Product increase of 3 percent or more.
This is an example of what academics call "supply side economics," which stipulates that "if you make it, they will buy." Assuming, of course, that "they" -- consumers -- have the wherewithal to increase their spending on food, clothing, shelter and other necessities and luxuries.
Another assumption is that the benefits of lower taxes will lead to more investment and production, which will bring more hiring and higher wages for workers, who will then use that increased income to buy more stuff.
That's an example of academics call "trickle down" economics. This is a variation of "supply side" economics, as opposed to "demand side" economics.
So which comes first? The idea that "If you make it, they will buy," or the premise that says producers make what people want -- that they supply stuff to satisfy a demand.
A stark reality is that neither dominates any market for any length of time. There have been products offered for sale that people didn't know they wanted or needed, until a successful marketing campaign persuaded them that they did. One example is Post-It notes. The product was introduced but went nowhere until after 3M gave it away as part of its campaign to educate and persuade people that they really, really needed it.
Currently, we are seeing a campaign by politicians to emphasize supply side and trickle down economics to boost GDP growth to 3 percent and more, claiming that this rate, shown recently, can be encouraged and will continue for years.
Enter the Federal Reserve Board, the independent monitor of the nation's money supply and economy, which believes that a long term growth rate of about 2 percent is the safer route. The Fed's primary tool in encouraging or slowing economic growth is controlling the money supply, which affects the interest rate, which in turn boosts or limits investment in production capacity. Next in line is hiring workers and raising wages in response to demand for products and services.
Clearly, this is a very tricky balance to strive for, especially in the face of government policies that stress supply side and trickle down theory.
So there can be a strong conflict between government desires and the Fed's actions. And that is what is currently brewing in Washington.
Bottom line: Watch for the Fed to increase rates to prevent an over-heated economic growth rate, something it has hinted at several times recently, even as the White House touts policy that would have the economy "take off like a rocket."
Now the question is, when will the Fed shoot down that rocket, opting for a steady cruiser instead?
Saturday, November 18, 2017
Chasing the Big Story
Words and numbers are different species, but they each have messages and stories to tell.
The more juicy the story, the more it attracts news media attention. This is as it should be, but sometimes the journalistic wolf pack passes by other stories that are in some ways more important, and if they are covered at all they are relegated to the back pages.
Often, these stories have to do with business and economics, and many reporters rationalize their non-coverage by saying they are "dull" or "too hard" to deal with.
That's a reason, but not an excuse. No story is, in and of itself, "dull." It only becomes dull when the writer makes it so, or perceives it to be dull before making any effort to understand it and to write about in such a way as to attract reader attention.
Therein lies the challenge.
Granted, stories about crime, corruption and political machinations are juicy, easy to cover, and practically write themselves. That does not, however, excuse journalists from ignoring other stories that have as much, and sometimes more, influence on society.
Recently, we have seen a national pack of journalistic wolves chasing one of the juiciest stories in a generation. And this is as it should be. The bigger and juicier the story, the more media attention it attracts.
Meanwhile, there are other things happening in the nation and the world that the public needs to know about. To ignore them and chase down the easier story is certainly understandable, and the Big Story deserves all the attention it deserves.
But there are other things happening in the nation and the world which the public also deserves to know about. They may be more difficult to dig out, but that's the challenge that good reporters enjoy.
The more juicy the story, the more it attracts news media attention. This is as it should be, but sometimes the journalistic wolf pack passes by other stories that are in some ways more important, and if they are covered at all they are relegated to the back pages.
Often, these stories have to do with business and economics, and many reporters rationalize their non-coverage by saying they are "dull" or "too hard" to deal with.
That's a reason, but not an excuse. No story is, in and of itself, "dull." It only becomes dull when the writer makes it so, or perceives it to be dull before making any effort to understand it and to write about in such a way as to attract reader attention.
Therein lies the challenge.
Granted, stories about crime, corruption and political machinations are juicy, easy to cover, and practically write themselves. That does not, however, excuse journalists from ignoring other stories that have as much, and sometimes more, influence on society.
Recently, we have seen a national pack of journalistic wolves chasing one of the juiciest stories in a generation. And this is as it should be. The bigger and juicier the story, the more media attention it attracts.
Meanwhile, there are other things happening in the nation and the world that the public needs to know about. To ignore them and chase down the easier story is certainly understandable, and the Big Story deserves all the attention it deserves.
But there are other things happening in the nation and the world which the public also deserves to know about. They may be more difficult to dig out, but that's the challenge that good reporters enjoy.
Thursday, November 16, 2017
Data Doldrums
Monthly statistics don't always give a clear picture of progress, especially in economics. But they can be useful when gathered together and then tracked over time.
In addition, some are collected through surveys and polling, which cannot detail a complete set of everything that's going on. When done well, however, statisticians can get a pretty good idea of what's happening, even when they don't have every last bit of data.
With those caveats in mind, consider these: U.S. import prices rose by 0.2 percent in October, while export prices were basically unchanged, according to government reports.
The Consumer Price Index for all items increased 0.1 percent while hourly earnings fell by 0.1 percent. And the Producer Price Index rose by 0.4 percent.
The number of job openings is holding, at about 6.1 million. The U.S. economy added some 261,000 jobs in October, which helped to bring the unemployment rate to 4.1 percent.
And the total value of all goods and services produced in America rose by 3 percent in the three months ending September.
When you look at some sets of statistics, the economy is doing well. But if you're someone who is out of work, or has a low-paying job, the numbers that say prices are rising while wages are not, tell you a very different story.
So who's right, the commentator who says things are great, or the one who says many people are squeezed between increasing costs and static pay?
One answer is that they both are. There will always be some who benefit in a rising economy, and some who are left behind. The reasons for this are legion, including skill levels, education, regional differences in supply and demand for workers and goods, as well as attitudes on the part of workers, employers and government policies and assistance programs.
The best we can hope for is cooperation and coordination among people, companies and government to work toward programs that do the most good for the most people, while causing the least harm over all.
That's where politics and economics meet.
In addition, some are collected through surveys and polling, which cannot detail a complete set of everything that's going on. When done well, however, statisticians can get a pretty good idea of what's happening, even when they don't have every last bit of data.
With those caveats in mind, consider these: U.S. import prices rose by 0.2 percent in October, while export prices were basically unchanged, according to government reports.
The Consumer Price Index for all items increased 0.1 percent while hourly earnings fell by 0.1 percent. And the Producer Price Index rose by 0.4 percent.
The number of job openings is holding, at about 6.1 million. The U.S. economy added some 261,000 jobs in October, which helped to bring the unemployment rate to 4.1 percent.
And the total value of all goods and services produced in America rose by 3 percent in the three months ending September.
When you look at some sets of statistics, the economy is doing well. But if you're someone who is out of work, or has a low-paying job, the numbers that say prices are rising while wages are not, tell you a very different story.
So who's right, the commentator who says things are great, or the one who says many people are squeezed between increasing costs and static pay?
One answer is that they both are. There will always be some who benefit in a rising economy, and some who are left behind. The reasons for this are legion, including skill levels, education, regional differences in supply and demand for workers and goods, as well as attitudes on the part of workers, employers and government policies and assistance programs.
The best we can hope for is cooperation and coordination among people, companies and government to work toward programs that do the most good for the most people, while causing the least harm over all.
That's where politics and economics meet.
Monday, November 13, 2017
Carlinomics
"It's all about stuff." -- George Carlin
What is a trade gap and why is it "bad"?
Some folks would have us believe that a negative balance of trade is somehow evil incarnate, and a nation must avoid it at any cost or face bankruptcy and extinction.
At root, a trade gap is when we buy more stuff from them than they buy from use, and therefore "they," whoever they are and whatever nation they occupy, are somehow defeating us and that situation must change.
To the ultranationalists, the other way around is better. The important thing is to win, and the way to do that is for us to sell more stuff to them than they buy from us. That way, we collect all the money, and therefore we win.
A nice thought, but if we have all the money, it follows that they have none, and therefore cannot buy any more stuff from us. Likewise, if they have all the stuff, we would have none.
Therefore, one side goes hungry and cold.
Consider this, from what might be called the George Carlin School of Economics: "It's all about stuff," as the comedian put it for one of his sketches.
Or, from an economist's viewpoint, each side has stuff. But each side has more stuff than they need, so they offer to trade. I have more of this kind of stuff, but not enough of some other kind of stuff. But the other side says I don't need any more of that kind of stuff. I need this kind of stuff, but you don't have any
It turns out, however, that a third party has an excess of this kind of stuff, but doesn't need the kind of stuff that the first party has. So the three sides get together and invent money.
One definition of money is anything that facilitates trade, which then enables the three parties to do business, trading stuff for money, and then money for some other kind of stuff.
Simplistic, yes, but that's the way things work in the wacky world of economics.
Eventually, while there may be some lags in the three-way trading, all things balance.
In politics, there are winners and losers. In economics, every side benefits and there are no losers.
Political leaders, however, insist on winning. There must be a winner in everything, and for that to happen, there must be a loser.
In the economic short term, there may indeed be winners and losers as people compete, selling some of their stuff and collecting money from others. Over time, however, all things will balance and everyone benefits.
If one side wins all the money but has no stuff -- including foodstuff, clothing stuff and shelter stuff -- they are the worse for it. Conversely, if another side has all the stuff but no money, they will soon use up all the food, clothing and shelter stuff, and won't be able to acquire more.
What happens then, unfortunately, is war.
Currently, there are too many nations, including the U.S., where politics is dominated by those whose only goal is winning. There is no room for cooperation and mutual benefit from fair trade.
For them, international trade is useful only as a way to win.
That way madness lies.
Politics and economics are like love and marriage. You can't have one without the other, but unless there is mutual understanding, respect and cooperation, the relationship is doomed.
What is a trade gap and why is it "bad"?
Some folks would have us believe that a negative balance of trade is somehow evil incarnate, and a nation must avoid it at any cost or face bankruptcy and extinction.
At root, a trade gap is when we buy more stuff from them than they buy from use, and therefore "they," whoever they are and whatever nation they occupy, are somehow defeating us and that situation must change.
To the ultranationalists, the other way around is better. The important thing is to win, and the way to do that is for us to sell more stuff to them than they buy from us. That way, we collect all the money, and therefore we win.
A nice thought, but if we have all the money, it follows that they have none, and therefore cannot buy any more stuff from us. Likewise, if they have all the stuff, we would have none.
Therefore, one side goes hungry and cold.
Consider this, from what might be called the George Carlin School of Economics: "It's all about stuff," as the comedian put it for one of his sketches.
Or, from an economist's viewpoint, each side has stuff. But each side has more stuff than they need, so they offer to trade. I have more of this kind of stuff, but not enough of some other kind of stuff. But the other side says I don't need any more of that kind of stuff. I need this kind of stuff, but you don't have any
It turns out, however, that a third party has an excess of this kind of stuff, but doesn't need the kind of stuff that the first party has. So the three sides get together and invent money.
One definition of money is anything that facilitates trade, which then enables the three parties to do business, trading stuff for money, and then money for some other kind of stuff.
Simplistic, yes, but that's the way things work in the wacky world of economics.
Eventually, while there may be some lags in the three-way trading, all things balance.
In politics, there are winners and losers. In economics, every side benefits and there are no losers.
Political leaders, however, insist on winning. There must be a winner in everything, and for that to happen, there must be a loser.
In the economic short term, there may indeed be winners and losers as people compete, selling some of their stuff and collecting money from others. Over time, however, all things will balance and everyone benefits.
If one side wins all the money but has no stuff -- including foodstuff, clothing stuff and shelter stuff -- they are the worse for it. Conversely, if another side has all the stuff but no money, they will soon use up all the food, clothing and shelter stuff, and won't be able to acquire more.
What happens then, unfortunately, is war.
Currently, there are too many nations, including the U.S., where politics is dominated by those whose only goal is winning. There is no room for cooperation and mutual benefit from fair trade.
For them, international trade is useful only as a way to win.
That way madness lies.
Politics and economics are like love and marriage. You can't have one without the other, but unless there is mutual understanding, respect and cooperation, the relationship is doomed.
Saturday, November 11, 2017
The Politics of Me
What works in corporate business seldom works in national economic policy.
Voters across America sent a message to the White House this week, but whether the message will be acknowledged or ignored is an open question.
Noteworthy words:
Only I can fix it.
I'm the only one that matters.
I'm a pretty smart guy.
I'm rich. (By how much?) That's none of your business.
He lost because he didn't embrace me and my policies enough.
I have the world's greatest memory.
I don't remember anything about that meeting.
A selective memory and a focus only what matters to the self is very useful when you're sliding to oblivious.
Voters across America sent a message to the White House this week, but whether the message will be acknowledged or ignored is an open question.
Noteworthy words:
Only I can fix it.
I'm the only one that matters.
I'm a pretty smart guy.
I'm rich. (By how much?) That's none of your business.
He lost because he didn't embrace me and my policies enough.
I have the world's greatest memory.
I don't remember anything about that meeting.
A selective memory and a focus only what matters to the self is very useful when you're sliding to oblivious.
Thursday, November 9, 2017
Art of the Media Deal
Presidential message to AT&T: Sell CNN to Fox and I'll approve the deal to buy Time Warner. That way I'll get more favorable coverage from CNN.
Not exactly the way he phrased the message, but that's what it comes down to.
AT&T wants to buy Time Warner, which owns the CNN cable news network in addition to Time Magazine, the Warner Bros. movie firm in Hollywood, and other stuff for $85.4 billion, and the deal seemed likely to close before the year is out.
However, the Department of Justice stepped in and challenged the deal and told AT&T it should sell Turner Broadcasting, which owns a bunch of cable TV channels including CNN, in return for government approval. Otherwise, there are antitrust issues to cope with.
An alternative, according to published reports, would be for AT&T to spin off DirectTV, a very profitable satellite operation.
So there's the riddle: Sell a profitable content provider or dump a news operation, presumably to another news company more favorable to the president, who has often assailed CNN as a "fake news" operation.
The public kerfuffle prompted the CEO of AT&T, Randall Stephenson, to comment, "I have never offered to sell CNN and have no intention of doing so."
As early as a year ago, before the election, candidate Donald Trump, during a speech in Gettysburg, Pa., vowed his administration would not approve such a deal, "because it's too much concentration of power in the hands of too few."
Our resident cynic Pug Mahoney refrained from commenting on the irony in that statement.
Not exactly the way he phrased the message, but that's what it comes down to.
AT&T wants to buy Time Warner, which owns the CNN cable news network in addition to Time Magazine, the Warner Bros. movie firm in Hollywood, and other stuff for $85.4 billion, and the deal seemed likely to close before the year is out.
However, the Department of Justice stepped in and challenged the deal and told AT&T it should sell Turner Broadcasting, which owns a bunch of cable TV channels including CNN, in return for government approval. Otherwise, there are antitrust issues to cope with.
An alternative, according to published reports, would be for AT&T to spin off DirectTV, a very profitable satellite operation.
So there's the riddle: Sell a profitable content provider or dump a news operation, presumably to another news company more favorable to the president, who has often assailed CNN as a "fake news" operation.
The public kerfuffle prompted the CEO of AT&T, Randall Stephenson, to comment, "I have never offered to sell CNN and have no intention of doing so."
As early as a year ago, before the election, candidate Donald Trump, during a speech in Gettysburg, Pa., vowed his administration would not approve such a deal, "because it's too much concentration of power in the hands of too few."
Our resident cynic Pug Mahoney refrained from commenting on the irony in that statement.
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