Friday, March 19, 2010

2nd session on covering the economy

2nd session, sponsored by NEFE

Getting it wrong – what journalists are missing in coverage of the stimulus and recovery

Panelists talk about journalists and covering the crisis.

Stephen Happel, economist ASU: Biggest scumballs of the earth are in the financial sector It’s not a failure of capitalism but a failure of regulation -- that’s how you can make the invisible hand work….

Kathy Kristof, personal finance columnist: It’s 1982 all over again. The complexity of explaining this as a derivative bores readers. It’s very complex and hard to understand. We need to make these lenders explain the risk models.

John Wasik, personal finance author: It’s more than 1982, it’s 1982 and 1930 combined. There’s $60 trillion in derivatives out there, an amazing amount….. It’s a market that’s not properly regulated.

Ali Malekzadeh: There are blackboxes in our economy that no one writes about. Universities are one of them. Hospitals, health care, insurance companies also – unless you develop yi9ur sources in those companies, who can’t chip away at that.

Government debt:

Ali Malekzadeh: The economy is about $1 trillion smaller than it used to be…that’s what you need to be writing about. Many people wanted a smaller government, but be careful what you wish for…. The state budgets will be smaller. Imagine that will mean.

Kathy Kristof: This level of government debt is not sustainable…. If you think consumer debt caused a crash, wait until you see government debt crash. We’ll have a much bigger problem 10 eyars from now. We’re on the track of becoming Greece. I worry about the next recession.

John Wasik: You’re going to see money cuts in every single state.

What journalism is doing:

Ali Malekzadeh: Talk about the people behind the numbers. Giving a picture of 375,000 laid off; can we give a picture of 3 of them?

Stephen Happel, economist ASU: The financial press really got what drove this crisis, (which is the lack of) financial regulation and greed.

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