Warning: Parameter 2 to SyndicationDataQueries::posts_search() expected to be a reference, value given in /home4/sattek/roguepolitics.com/wp-includes/class-wp-hook.php on line 298

Warning: Parameter 2 to SyndicationDataQueries::posts_where() expected to be a reference, value given in /home4/sattek/roguepolitics.com/wp-includes/class-wp-hook.php on line 298

Warning: Parameter 2 to SyndicationDataQueries::posts_fields() expected to be a reference, value given in /home4/sattek/roguepolitics.com/wp-includes/class-wp-hook.php on line 298

Warning: Parameter 2 to SyndicationDataQueries::posts_request() expected to be a reference, value given in /home4/sattek/roguepolitics.com/wp-includes/class-wp-hook.php on line 298
journalistic ethics « Rogue Politics

Categories

A sample text widget

Etiam pulvinar consectetur dolor sed malesuada. Ut convallis euismod dolor nec pretium. Nunc ut tristique massa.

Nam sodales mi vitae dolor ullamcorper et vulputate enim accumsan. Morbi orci magna, tincidunt vitae molestie nec, molestie at mi. Nulla nulla lorem, suscipit in posuere in, interdum non magna.

Getting an Election So Wrong: The American Media and Pollsters in 2016

“After projecting a relatively easy victory for Hillary Clinton with all the certainty of a calculus solution, news outlets like The New York Times, The Huffington Post and the major networks scrambled to provide candid answers.”[1] The dynamics likely went beyond even candid answers from the media, with major implications for how much reliance Americans should place on their media-establishment for political information.


The full essay is at “Getting an Election So Wrong.”


1. Jim Rutenberg, “News Outlets Wonder Where the Predictions Went Wrong,” The New York Times, November 9, 2016.

Continue reading Getting an Election So Wrong: The American Media and Pollsters in 2016

. . . → Read More: Getting an Election So Wrong: The American Media and Pollsters in 2016

Minimizing the Gap Between CEOs and Workers

According to one study of people around the world, people of different cultures, incomes, religions, and other differences show “a universal desire for smaller gaps in pay between the rich and poor” than was the actual case at the time of the survey in 2014.[1]Interestingly, the respondents didn’t have a clue how much of a gap actually existed in their respective economies. The difficulty in estimation means that the public discourse on economic inequality has been rife with erroneous assumptions. Where the error lies in the direction of minimizing the gap, we can postulate that public policy allows for greater economic inequality than would otherwise be the case.


The full essay is at “CEO/worker Pay.”


1. Gretchen Gavett, “CEOs Get Paid Too Much, According to Pretty Much Everyone in the World,” The Huffington Post, September 24, 2014.

Continue reading Minimizing the Gap Between CEOs and Workers

. . . → Read More: Minimizing the Gap Between CEOs and Workers

Former Fed Chair Greenspan: How to Break the Back of a Bubble

While being interviewed on CNBC on March 7, 2014, Alan Greenspan spoke a bit on the problem of irrational exuberance in a market. Pointing to the failure of the Federal Reserve under his chairmanship to innocuously dissolve the “dot.com” bubble in the 1990s, Greenspan said he had come to the conclusion that asset-appreciation bubbles cannot be “defused” (for reasons he says are in his new book) “unless you break the back of the actual euphoria that generates the bubbles.”[1]Alas, piercing that wave would involve nothing short of unplugging a basic instinct in human nature; both monetary and fiscal policy would doubtless come up short. However, I suspect that the field of rhetoric may have something to say about how we can deflate societal exuberance, but only on the condition that greater clarity will have been achieved in identifying whether a given market is overvalued due to emotional excess (i.e.g, emotive greed having reached a critical mass) circumventing normal risk-aversion.


Greenspan’s prescription may have more to do with social psychology than economic theory. Even though the former central banker’s expertise or ken does not extend to psychology or sociology, the advice darts right to the central question to be researched. I am not suggesting that the claim be swallowed whole; back in 2008 after Lehman Brothers’s financial collapse and the subsequent  portent of a tsunami so powerful it could take the entire global financial system “by Monday,” Greenspan admitted in Congressional testimony that his mental model of financial economics suffers a fatal flaw he had had not seen coming.


Having held a free market, or laissez faire (let it make or do), theory firmly ensconced in his head, Greenspan suddenly realized that the market mechanism may not “price additional risk” once the market volatility reaches a certain point. Instead of asset-prices plummeting until enough buyers return to the market after having been spooked, the financial markets themselves freeze up. This is why Greenspan’s successor, Ben Bernanke, told Congressional leaders in September 2008 that without a bailout “we might not have an economy by next Monday.”


In other words, Greenspan’s paradigm or theory, which had insisted that markets can always self-correct could not account for the credit-freeze that began in the commercial paper market (over-night inter-bank loans). High volatility in a system combines with the high risk (from anticipations of system risk being actualized) shuts down the market mechanism itself. When he ran the Federal Reserve, Greenspan had been very wrong about the impact of the systemic risk on the ability of markets to keep operating.
As if Greenspan’s admission had been part of some nightmare or some figment of the imagination, Andy Sorkin, a financial markets host at CNBC, welcomed Greenspan on the air five years later with such vaunted praise that viewers could be forgiven for not having remembered that Sorkin had pointed to Greenspan’s fatal flaw as one factor among several in the near collapse of the housing market in the wake of Lehman’s bankruptcy. Surely Sorkin was hardly oblivious to the ex-central-banker’s grave error. Why then did the journalist act as if Greenspan were one of the priests at the Greek oracle? 

Even after admitting the fatal flaw he had held at the Fed, Alan Greenspan still enjoyed considerable respect. (Image Source: The Guardian)

The short answer may be that Sorkin did not want to lose any of the rich and powerful friends on Wall Street he had interviewed in 2008 for his book. For a person to admit the existence of a fatal flaw in his or her ideology and therefore in any supporting theoretical models as well, and then be treated as though infallible on another body of knowledge (i.e., international relations) stretches the mind’s capacity for holding a logical contraction (i.e., cognitive dissidence). Rather than being limited to Sorkin, I suspect that the refusal or inability to put a person’s present statements in the context of his or her past track-record is by now “hard-wired” into American society. The over-valuing of the new at the expense of the past probably enables the denial. 

Regarding Sorkin, his fawning before his notable interviewee, including exclaiming “wow” as Greenspan went on bragging at the beginning of the interview, strikes me as blatant enough to be misleading. Especially in having written a non-fiction book about the financial crisis of 2008, Sorkin should have prepped the television viewers up front, so they would not find themselves back to swallowing wholesale what Greenspan says as the Gospel truth. In fact, Sorkin may have inadvertently opened the door to another systemic bubble hitting us as a complete surprise. 



1.Greenspan Revisits ‘Irrational Exuberance,” CNBC, March 7, 2014 (accessed same date).

Continue reading Former Fed Chair Greenspan: How to Break the Back of a Bubble

. . . → Read More: Former Fed Chair Greenspan: How to Break the Back of a Bubble

Mandela’s Courage as Politicized Forgiveness

Whereas we grasp the interior sense in which Gandhi forgave, the media has promoted a false, politicized forgiveness as the real thing in Mandela’s case. I am impugning the aggrandizing press here, rather than Mandela himself.
 
 
In claiming that Mandela “insisted on forgiveness,” John Mahaha uses the following quote from the man himself: “To go to prison because of your convictions and be prepared to suffer for what you believe in, is something worthwhile. It is an achievement for a man to do his duty on earth irrespective of the consequences.”[1]Gandhi would doubtless have concurred wholeheartedly. The suffering being referred to here is neither suffering for its own sake nor suffering unnecessarily. Both Mandela and Gandhi must surely have concluded that they must voluntarily endure suffering to be true to their respective principles and see them realized in consequences that dwarf any for the two men themselves.
 
 
Nevertheless, I submit that what Mahaha takes to be forgiveness is actually something else. In philosophical terms, he unknowingly committed a category mistake in writing his op-ed piece. To be willing to suffer for one’s convictions is indeed laudable, but forgiveness is not necessarily entailed or even implied. I suspect that Mandela himself would admit that he did not feel any sense of forgiveness during the 27 years of imprisonment. I have seen video-taped footage of him on the prison-island refusing to speak with a group of people passing by while he was outdoors. His stiff glance and held silence belies any hint of forgiveness.
 
 
Lest it be claimed that Mandela forgave only once he had regained his freedom, his second wife insisted on a television interview following his death that he had used an incredible amount of self-discipline rather than interior forgiveness to work with his oppressors. Sadly, this insight did not stop the commentators and “journalists” from marveling at his forgiveness following such a long period of suffering. Clearly, the journalists and pontificators had not done their research.
 
 
The research could have started with topical statements from Mandela himself. “If you want to make peace with your enemy,” he once said, “you have to work with your enemy. Then he becomes your partner.”[2]Insisting that such advice is none other than felt forgiveness artfully “gilds the lily,” as if dipping Mandela’s heart in gold with the benefit of hindsight. The working peace is political rather than interior; accordingly, any forgiveness would be likewise, for Mandela would not have said “you have to work with your enemy” were the enemy already forgiven. Instead, he might have said, “you must get to the point of caring about and for your enemy.” Although the term political forgiveness applies, the operative virtue here is actually closer to political courage than forgiveness. According to his second wife, Mandela used great self-discipline rather than forgiveness to resist the impulse to retaliate and instead work with the bastards.
 
 
It takes interior courage to muster political courage, to deny oneself the convenient route politically. Mandela drew on his mighty courage in not only risking imprisonment by urging armed resistance, but also pushing himself to work with the party of his former oppressors. I suspect that humility, even if only in a political use, played a role after his arduous suffering in prison. Elongated pain has a way of resizing a man’s estimation of his own powers and proper stature. Interestingly, endured suffering may also rarify courage, for the downside is no longer of the unknown. While more difficult to unpack than saccharine forgiveness so often bandied about by dandies, tremendous self-discipline applied as courage as political forgiveness more closely fits the man who saved South Africa from itself.


1.  John Dramani Mahama, “Mandela Taught a Continent to Forgive,” The New York Times, December 5, 2013.

2. William Welch, “South Africa’s Leader Transformed Nation, Self,” USA Today, December 27, 2013.

Continue reading Mandela’s Courage as Politicized Forgiveness

. . . → Read More: Mandela’s Courage as Politicized Forgiveness

Murdoch: Journalism as Vengence

According to Reuters, “News Corp, whose global media interests stretch from movies to newspapers that can make or break political careers, has endured an onslaught of negative press since a phone-hacking scandal at its News of the World tabloid” in 2011. One danger in this mix of private power even over government officials and being publicly criticized is that Rupert Murdoch could use his power in vengeance to retaliate. The public does not often suspect that such a high-profile and financially successful person could act so irresponsibility, but we ought not take what we are shown at face value. There is, after all, a public relations industry.

                                         Rupert Murdoch, owner of News Corp.                                    

As reported by a few government officials and press outfits in the E.U., the News of the World tabloid’s managers had been paying off state police in Britain in order to hack the phones of government officials and celebrities, those managers reacted by retaliating by hiring at least one private detective to follow Tom Watson, a member of the British House of Commons, and Mark Lewis, a lawyer. A biographer who had been in regular contact with Rupert Murdoch over months told Frontline (PBS) that Murdoch had a habit of remarking that he had pictures of this person or another—meaning that if people did not measure up, Murdoch would destroy them publically. His newspapers, which were not that profitable anyway, were for such influence over government officials or otherwise retaliating against “enemies.”

After “the British Broadcasting Corporation and the Australian Financial Review newspaper . . .  said [in March 2012] that News Corp’s pay-TV smartcard security unit, NDS, had promoted piracy attacks on rivals,” Murdoch tweeted: “Seems every competitor and enemy piling on with lies and libels. So bad, easy to hit back hard, which preparing.” This reply is telling, for it makes Murdoch’s overriding instinct to exact vengeance transparent. Even referring to critics as enemies is excessive, given the possibility that Murdoch’s company had at the very least broken the law in Europe by paying off a police department and hacking into private voicemail accounts.

To claim that someone is an enemy simply for uncovering or reporting illegal or unethical activities merely points back to the source as sordid and perhaps even pathological in nature. “Enemies many different agendas, but worst old toffs and right wingers who still want last century’s status quo with their monopolies,” he tweeted. “Toff” itself might be a relic of a prior century; I have never heard of the word. Moreover, Murdoch’s squalid approach to business might hopefully be one day relegated to an earlier age, if there is such a thing as progress in terms of business ethics.

The lesson for us goes beyond one newspaper man, whether it be Hearst in the twentieth century or Murdoch in the twenty-first (at least physically). Might it be that we, the general public, assume too much regarding the maturity of people of position, even if the status has come in part from having built up a company from the ground up? Might it be that we ascribe too much to status itself—that we are in a status society wherein position counts for more than is entitled? Consider, for example, the childish mentality and behavior of Richard Fuld, the CEO who brought Lehman Brothers down in 2008 by piling on real estate debt to excess in an effort to catch up to JP Morgan Chase and Goldman Sachs.

If with great power comes great responsibility—a phrase uttered by Cliff Robertson in the film, Spiderman—then what do we do when childish, vengeful people are ensconced in positions of power? Considering the damage such people can wreck out of a sense of being personally wronged, society itself has the right to step in and rid the offenders of such power. I am not suggesting a personality test that they must pass every few years like renewing a driver’s license. Rather, once scandal has broken out in a major company, a government’s justice department should be able to have a presence in the company, keeping the CEO on a firm leash.

Unfortunately, where a society (and government) finds it to be in its interest to allow private power to be amassed to such an extent that the government itself can no longer act as a corrective on a company’s CEO, then the society really is at the mercy of a spoiled child. At the very least, we ought to recognize a CEO such as Fuld or Murdoch as such. If we then look the other way, we have only ourselves to blame for whatever havoc they wreck.

Source:

Georgina Prodhan, “Rupert Murdoch Fights Back Against‘Lies and Libels,’ Declares War,” The Huffington Post, March 29, 2012.

 

. . . → Read More: Murdoch: Journalism as Vengence . . . → Read More: Murdoch: Journalism as Vengence

The American Media Goes “Nuclear” on the U.S. Senate’s Filibuster

Is ending the filibuster on appointments to executive-branch offices as well as judicial appointments below the U.S. Supreme Court really “the nuclear option”? Is this expression simply rhetoric gone horribly over the top? Journalists would undoubtedly demur, at least publically, yet without feeling an ounce of shame.

On November 22, 2013, a leading story on the front page of USA Today immediately snagged my fleeting attention with the headline, “’Nuclear’ volleys across aisle signal a Cold War in Congress.”[1]The 52-48 vote in the U.S. Senate on the previous day was neither a “nuclear volley” nor the beginning of a “cold war.” Rather, the reform was yet another legislative device having to do with reducing the gridlock within the chamber and perhaps for a party to gain more control therein. The political tussles between the two major parties had already been going on, so the latest reform could not have been the start of a war, cold or hot.
To be sure, editors look for headlines to be attention-grabbers, and thus sensationalistic—yet even if the claim is false or even misleading? Signaling a cold war flies in the face of the prior existence of such a “war,” as during the U.S. Government’s partial shutdown when raising the government’s debt-ceiling was in jeopardy. Moreover, the reporter continues the sensationalism within the article.

For example, the reporter invokes “the superpower theory of Mutually Assured Destruction—that is, if you use the most powerful weapon against your enemy, your enemy will use it against you—neither side had ever deployed it.”[2]Does not this “theory” apply more to shutting down the government or refusing to raise the debt-limit? The fact that Americans waked up on November 22ndwith a functional federal government belies the journalist’s application of the theory to whether the U.S. Senate would confirm more appellate and district judges. Nevertheless, the reporter “reports” that “Democrats voted for detonation.”[3]  I didn’t hear any sort of blast, or for that matter, see any damage the next day.

As for any realistic (i.e., still incremental rather than radical) consequences, the reporter provides merely a quote at the end of the article. Sen. Chuck Grassley (R-IA) said, “The silver lining is that there will come a day when the roles are reversed. When that happens, our side will likely nominate and confirm lower court and Supreme Court nominees with 51 votes.”[4]As if as an afterthought, the reporter tacked on this quote, which says basically that the Senate would continue to delimit the filibuster’s domain. Crucially, incrementalism is not radicalism. Hence, the war rhetoric is misleading at best, and it displaces reportage on the real significance of the vote.


1. Susan Page, ““’Nuclear’ volleys across aisle signal a Cold War in Congress,” USA Today, November 22, 2013.

2. Ibid.

3. Ibid.

4. Ibid., emphasis added.

. . . → Read More: The American Media Goes “Nuclear” on the U.S. Senate’s Filibuster . . . → Read More: The American Media Goes “Nuclear” on the U.S. Senate’s Filibuster

Probing the Annals of CBS in 60 Minutes or Less: Benghazi as a Profit Center

The American CBS television network’s main news magazine, 60 Minutes, breached the network’s own journalistic standards in 2013 by not sufficiently verifying the veracity of Dylan Davies’s “eyewitness” account of the night of the attack on the U.S. embassy in Benghazi, Libya. Every human being makes mistakes; we cannot, therefore, expect the editors at 60 Minutes to be any different. Jeff Fager, chairman of CBS’s board of directors and executive producer of 60 Minutes, told the New York Times that the fiasco was “as big a mistake as there has been” at the program.[1]However, what if the lapse was intentional? What if the departure from the network’s standards was part of a determined effort at the network level to exploit a structural conflict of interest existing within the company?
Dylan Davies had been a security guard at the embassy. He described for correspondent Lora Logan the events he had witnessed on the night of the attack. Never mind that prior to the interview he had told both his employer and the FBI that he had not been at the mission on the fateful night. The easy explanation is that Davies lied and Logan failed to do an adequate fact-check on her interviewee. The media itself tends to go for such easily-packaged explanations.

Nevertheless, Davies was also the author of The Embassy House: The Explosive Eyewitness Account of the Libyan Embassy Siege by the Soldier Who Was There. No, I am not making this up; the man who had been nowhere near the embassy urged or went along with the emphasis on his status as an eyewitness to sell his book. That the publishing house, Threshold Schuster (a subsidiary of Simon & Schuster), was owned at the time by CBS, gave Fager the perfect opportunity to exploit an institutional conflict of interest under the more salubrious-sounding notion of “corporate synergy.”

As chair, Fager could help the subsidiary of a subsidiary while, as executive producer, also helping the network’s flagship news-magazine program. To the extent that he would make out financially, the conflict of interest is of the personal type; the “corporate synergy” gained by compromising journalistic standards (as well as any ethical mission statement) falls under the institutional type. I suspect the latter is the most operative here. Fager, or perhaps a manager at the corporate level, may have pressured the staff at 60 Minutes to not look very closely in checking up on Davies’s eyewitness testimony. Besides making good copy, the material would “cross-fertilize” another unit of CBS—the book publishing subsidiary—by selling more of Davies’s book.

Unfortunately, the exploitation of conflicts of interest typically go under the radar screen; the pubic typically has only a whiff of the proverbial smoking gun to go on. Moreover, Americans tend to ignore or minimize the need to deconstruct institutional conflicts of interest, preferring to go after personal conflicts of interest by making sure the self-enriched culprits feel some pain. In the case at hand, that Logan did not mention on camera that Davies is the author of a book being sold by a CBS subsidiary raises the possibility that she and her bosses had in mind something (i.e., the conflict of interest) in order for her to avoid giving any hint of it publically. In other words, the omission would be rather odd if the relationship were no big deal. Even so, with such conjectures to go on, the public is at a notable disadvantage even just in knowing that CBS exploited an organizational conflict of interest. As a result, managers know that going subterranean on such a matter is a workable course of action. To wit, Kevin Tedesco, the spokesman for 60 Minutes, replied to the enquiry of a journalist with a solid, “We decline to comment.”[2]When darkness prevails outside, it can pay to slam the door firmly shut. So much for the public interest; the private prevails in any plutocracy.


1. Rem Rieder, “Clock is Ticking for CBS to Probe Benghazi Report,” USA Today, November 15, 2013.

2. Ibid.

. . . → Read More: Probing the Annals of CBS in 60 Minutes or Less: Benghazi as a Profit Center . . . → Read More: Probing the Annals of CBS in 60 Minutes or Less: Benghazi as a Profit Center

The American Media Crying Wolf?

It can be said that the media’s currency is credibility. If so, the American media may have undone itself in characterizing the federal government’s sequester in 2013 as an imminent disaster of Congressional design. Countdown clocks going back days only escalated the orchestrated attention-getting and fear. Not only did the actual sequester not turn out to be a train wreck; the enforced budget discipline brought the spending line significantly more into line with the revenue line. 
 
Later in the same year, the clocks were back for the government shutdown. CNN outdid itself a week into the shutdown; not only did the network sport a clock showing how long the shutdown was in terms of days, hours, minutes, and even seconds! After eleven or twelve days, the inclusion of hours, minutes, and seconds could only be over-kill intended to stretch out the sense of alarm. CNN even added a second clock to countdown the upcoming default deadline. An artificial “catastrophe” on top of another! Imminent catastrophe as a permanent strategy?  Slow death by metaphor?

A look at the catastrophe.  Wikimedia Commons.

The confluence of the government’s partial shutdown and the prospect of a default fueled another confluence–that of the journalists and the members of Congress (and profits and attention-getting). Besides magnifying the significance of each public statement and meeting-outcome, both the journalists and politicians regularly misappropriated war terminology to someone’s refusal to talk to someone else. For example, the Huffington Post sported as a headline at one point, “[U.S. Senator] Joe Manchin: Democrats May Consider ‘Nuclear Option’ On Debt Ceiling.” Was it really necessary to stir the old fears in those people who had lived through the Cold War? Fortunately, a veteran spoke in an ad from a vet group to correct the sordid habit of the usual suspects. “It is not an epic battle,” he declared with a tone of disgust. “I’ve been in an epic battle and running the government is not one of them.” After that commercial, former U.S. House Speaker Newt Gingrich said on CNN, “It is a nasty, bloody fight.” Had the former Speaker taken a look at the photographs of the real battlefields at Gettysburg in 1863 or at the beach in Normandy on D-Day in WWII? The over-dramatizing is an insult to those who serve or have served in the armies of the American States and the U.S. Government.
To be sure, a default by the U.S. Government has serious economic implications. However, running up against the debt-ceiling does not in itself mean that interest payments will be missed. John McCain said the likely impact on the market, according to Wall Street bankers and stock analysts, would be “very, very negative.” That the media used “Armageddon” rather than “very, very negative” and referred to October 17th as “the magic day” points to a hidden agenda biasing discretion toward sustaining a seemly captive audience in line with profits at the expense of the mission of the media to report the news and thus of journalistic ethics. To deliberately foment fear in excess of what bears on a possible event violates Kant’s “Kingdom of Ends,” wherein beings having a rational nature are treated not just as means, but also as ends in themselves. As a rational being, I have recalibrated how much news I get from CNN, MSNBC, and Fox News.

. . . → Read More: The American Media Crying Wolf? . . . → Read More: The American Media Crying Wolf?

Americans on the Impact of a Government Default: Fact or Fiction?

Would default of the U.S. Government be catastrophic to the world economy? In searching for an answer, the discerning inquirer knows to avoid the incredulous reports. One problem is that the American media treats even such sources as just as valid as those that are backed up by expertise. It may even be that enough Americans presumptuously dismiss or discredit expertise out of sheer jealousy and resentment that the media have become accustomed to treating public surveys as equivalent to experts on matters requiring expertise. In Madison’s Notes on the Constitutional Convention, a fear of excess democracy can be found among some of the delegates who feared that expanding popular election in the U.S. Government beyond the U.S. House of Representatives would unbalance that government (i.e., in terms of “the one, the few, and the many” in favor of the many). The fear has been realized as the U.S. Senate turned to popular election and the Electoral College has been captured by the political parties (i.e., electors are forced or pressured to vote in line with the election results). I contend that excess democratization of presumed expertise is related to the expansion and the values (e.g., anti-elitism) behind it.
 
Regarding anticipations of the impact of a government default, the U.S. Treasury released a reportin October 2013 with the following results: “A default would be unprecedented and has the potential to be catastrophic. . . . Credit markets could freeze, the value of the dollar could plummet, U.S. interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse.” This forecast came from experts on the topic at Treasury, whom I suspect made use of the expertise of economists. Hence, the report has high credibility.
 
At the same time, however, American news networks were reporting that, according to public-survey polls, a default would not be catastrophic. The media was also reporting poll results indicating that a quarter of the Americans believe that Obama was secretly working to on a third term. Doubtless the journalists give no credibility to such claims. In fact, the tone of the reporting suggests that the sheer madness of such a belief is what is really being reported. “Just where is such paranoia coming from?” one journalist asked after reporting the poll. Yet the tone used by journalists reporting that a default would not be catastrophic according to a significant percentage of Americans suggests that opinions—even those biased by political ideological agendas—can be treated as fact or at least as of equal value to the Treasury report or those of economists. The underlying assumption is deeply problematic, yet it has become a staple of the public discourse via the media.
 
Of the 21% who claim the U.S. dollar would no longer be a reserve currency around the world, how many people are just guessing? How is it that non-finance/economists know the market would not tank?  For my part, I don’t know. I’m not an economist. Source: CFA Institute                                      
 
As an experiment of sorts, try paying extra attention to the claims that people make generally and you will soon come to the realization that many people go beyond their justifiable basis of knowledge or expertise in making clreaims with absolutely no caution that such would even be possible. The proclivity may be inversely related to the level of education, though the know-it-all graduate students and even professors is hardly a rarity. Even just after a few sentences from one, the arrogance-fueled over-reach is easily detected.
 
Try listening for the media basing findings requiring expertise as valid simply because a majority of Americans polled say so. Even though expertise renders a conclusion more credible (and accurate!), even experts can over-reach on their own territory. For example, an airline pilot who announces from the cockpit just after take-off, “We will arrive in Paris at 7:34am is overshooting. What if touch-down is at 7:35am due to a bit stronger headwind than anticipated? Would the passengers bail or storm the cockpit were the pilot to have said “around 7:30” instead?
 
Many Americans will leap to sue a professional (e.g. pharmacist, physician, surgeon, lawyer, CPA) who goes beyond his or her expertise such that people are harmed. So it is telling that we take at face value the economic conclusions of a political pundit whose expertise is in journalism or politics. The presumption that a majority of Americans saying X is not a problem can be taken as reason to conclude X really won’t be a problem makes it easy for the self-proclaimed “experts on the content” in the media to beguile an incredulous viewership.


. . . → Read More: Americans on the Impact of a Government Default: Fact or Fiction? . . . → Read More: Americans on the Impact of a Government Default: Fact or Fiction?

The Financial Crisis: A Systemic and Ethical Analysis

According to a study by the Dallas Federal Reserve, the financial crisis of 2007-2009 “was associated with a huge loss of economic output and financial wealth, psychological consequences and skill atrophy from extended unemployment, an increase in government intervention, and other significant costs.”[1]The study’s abstract goes on to “conservatively estimate that 40 to 90 percent of one year’s output ($6 trillion to $14 trillion, the equivalent of $50,000 to $120,000 for every U.S. household) was foregone due to the 2007-09 [sic] recession.”[2]
 
Interestingly, the Huffington Post “reports” the study’s finding in the following terms:  “a ‘conservative’ estimate of the damage is $14 trillion, or roughly one year’s U.S. gross domestic product. This is based on how much output was lost during the crisis and Great Recession, along with all the damage done to potential future economic growth.”[3] In fact, the article’s title claims that the crisis cost more than $14 trillion! Lest it be thought that the reporter and editor suffer from a learning or reading disability, the gilding here is notably in the direction of “selling more papers.”
 
Ironically, the Huffington Post also published an article pointing to the lack of accountability in that “the executives that [sic] were in charge of Bear’s headlong dive into the cesspool of subprime mortgage lending hold similar jobs at the most powerful banks on Wall Street: JPMorgan, Goldman Sachs, Bank of America and Deutsche Bank.”[4]
 
The upshot is that those stakeholders who played a role in the crisis, most significantly the people running the government, the media, and the banks, have gone on, relatively unscathed, while the systemic risk remained or has actually become even greater.  As a first step toward recovery, a systemic map depicting the interrelated parts in the systemic failure and a related ethical analysis can provide a basis for reforms sufficient to thwart another major financial crisis.

 
 To continue to the systemic and ethical analysis, please click on: Link
 

                                                         

1.Tyler Atkinson, David Luttrell, and Harvey Rosenblum, “How Bad Was It? The Costs and Consequences of the 2007-09 Financial Crisis,” Staff Paper No. 20, Federal Reserve Bank of Dallas, July 2013.

2. Ibid.

3.Mark Gongloff, “The Financial Crisis Cost More Than $14 Trillion: Dallas Fed Study,” The Huffington Post, July 30, 2013.

4.Lauren Kyger and Alison Fitzgerald, “Former Bear Stearns Executives Seemingly Unscathed by Financial Crisis They Helped Trigger,” The Huffington Post, July 31, 2013. The article was originally published by the Center for Public Integrity.

 

. . . → Read More: The Financial Crisis: A Systemic and Ethical Analysis . . . → Read More: The Financial Crisis: A Systemic and Ethical Analysis