The journalists who produce the UK’s Channel 4 news programme produced a rather sly piece of leftist propoganda last night (Quelle surprise? Ed). Faisal Islam – whom I have met – had a brief slot on last night’s daily broadcast suggesting that the Chicago school of economics, most famously associated with the likes of Milton Friedman, is somehow partly to blame for the credit crunch. Yes, you read that right.
Mr Islam went on about the “complex models” that were used by these economists and somehow sought to draw a link between the Chicago School, and the decisions taken by banks, both central and private. That seems a bit rum. I don’t recall Dr Friedman or his associates granting a sort of blanket blessing to financial engineering techniques of the kind associated with recent turmoil, suchas using derivatives to put bank liabilities off the balance sheet. That school has also hardly been in favour of encouraging sub-prime lending by legislation. After all, quite a lot of economists with conventional “soft Keyensian” views pretty much signed up to how banking has operated in the last few decades, and of course signed up to the idea that former Fed Chairman Alan Greenspan, and his successor, Ben Bernanke, did a spiffing job.
There was no apparent attempt – admittedly quite difficult in a short TV spot – to explain what the key arguments of the Chicago school of economics actually are. Nor was there any attempt to point out that this “school” is only one of the centres of free market economics. The Austrian viewpoint, which tends to eschew statistical formulae completely, went unmentioned. And yet it is the latter approach, as exemplified by the likes of Thomas Woods, that has been most active in pointing out the sheer folly of central bank activity in the past decade or so. And this central bank activity is what has been the prime culprit, a fact that Mr Islam’s documentary left unmentioned.
The programme also failed to ask any questions of the Keynesian tradition, with its love of big, artificial aggregates such as “consumer demand” etc. If one is going to point to the hubris of statistical models of economic behaviour, then the Keynesian macroeconomic tradition is surely as much in the firing line as the Chicago one.
As propoganda, it was very effective on anyone who might not understand the issues. It might have been put together by that performance artist, Naomi Klein.
Maybe the problem is that these issues are often highly complex and difficult to portray intelligently in a 5-minute news slot. Well indeed.
As I have explained not quite at length, the relevant economic theory is The Old Mother Riley School of Economics, an American version in Enronomics. They are quite simple to understand, which is why C4 and others go rabbiting around looking for unusual suspects.
Channel 4 News seems pretty lefty. Faisal Islam, who also blogs for them, seems a standard Keynesian, and Jon Snow is pretty left-wing, too. That said, apart from perhaps Newsnight, it is probably the best news program on TV: BBC 1’s news is lefty, too, but, with just a half hour slot, does not go to the depth of reporting that Channel 4 does.
Richard Garner, the best news programme on TV is Jeff Randall Live on Sky News. By far.
Fair enough – I was speaking only from my own experience, and I get Virgin media, so, no sky for me!
Maybe I do them an injustice, but I have a sneaking suspicion that most Channel 4 media types get their knowledge of liberal economics (and the entire variety of modern American thought) from slighting references in Naomi Klein and Adam Curtis.
This post reminds me (again) of one of my favourite quotes from William Blake.
Usually I dig up this quote as a scorn on the general do gooder mentality of socialist and other social engineering intentions, but I think, from this discussion, that it can be applied to economics as well. With so many insights from the age of enlightenment this also was penned 200 odd years ago.
[open sarcasm] I am shocked, shocked to the core. Why, if I didn’t know any better, I’d say this smacked of disinformation!
That is the most likely explanation, isn’t it, boys and girls? [/close sarcasm]
It’s pretty funny to assume that a news slot of any length is intended to inform an intelligent audience.
Any mass media coverage of economic matters is hilariously flawed, in fact MSM coverage of anything is usually flawed.
But, when you read bilge like this(Link) from the august personage that is the Chairman of the FSA, it’s hardly surprising that us mere laymen cannot grasp complicated economic concepts.
Yes, Lord Turner. It’s absolutely obvious that the answer to the ‘problem’ of ‘excessive’ bonuses is to create a special tax that reduces the ‘spare’ cash profits. How could we have not thought of something this obvious before?
All British television and radio is a mixture of leftist ideology and just simple ignorance.
As for the specific point of the article – the Chicago School is split, some of them oppose trying to “spend your way out of recession” and some of them (like the Keynesians) support bailouts “even if we have to throw money from helicopters”.
Appealing the memory of Milton Friedman does not help – as he (at various times) took BOTH positions.
Of course Comrade Barack Obama has a plan to make American television and radio like British broadcasting. Mark Lloyd (the “diversity officer” at the FCC) has plans, including 100% taxes, to made sure that dissenting voices (such as people who know something about Austrian School economics – the great enemy of Marxism) are removed from broadcasting in the United States.
Although, unlike Lord Turner, Mark Lloyd openly supports such Comrades as Hugo Chevez.
I tried to warn people last year – and Glenn Beck (among others) is warning far more people now.
Heed the warnings – for reason’s sake heed the warnings.
Barack Obama is not some some Gordon Brown clone – he is a much worse thing, a much worse thing indeed.
People like Mark Lloyd and Van Jones (the “Green Jobs” Communist) do not appear by magic – they are appointed directly by President Barack Obama.
All British television and radio is a mixture of leftist ideology and just simple ignorance.
Isn’t that redundant?
Yes, clearly the Chicago school insisted on the Community Reinvestment Act forcing banks to lend to bad credit risks. Perhaps Barney Frank can get to the bottom of this!
To some extent yes Laird.
As someone can consider himself a non leftist (or even an anti leftists) but, because he is ignorant of anything but leftist ideas, come out with leftist propaganda whenever he talks about economic policy (or history, or culture, or….).
Ludwig Von Mises often noted the point you have made – but I had (in my writing above) forgotten it.
Still there is a difference – the ignorant man is at least trying to be honest.
The committed leftist does not care if he fakes film and documents, misquotes people (and so on and so on).
Indeed the committed leftist (such as the people who run C4 news) hold such activties to be highly moral – as they are for the cause.
{sigh} Paul, that was intended as a (feeble) joke. Do I really have to put emoticons in my posts? ;-p
My apologies Laird.
It is no reflection on your abilty as a joke smith.
It is simply a matter of my underdeveloped sense of humour.