Economists have a proud history of leading social causes of great value. The fight against slavery is my favourite cause of economists with Adam Smith and John Stuart Mill in the forefront. That’s where economics got it’s nickname of the ‘dismal science’ (from Thomas Carlyle who was dismayed at the way in which economists proposed to replace the noble mastery of ‘two legged cattle’ with nothing more than the cold, abstract and inhuman ‘cash nexus’.)
Well it does pale a bit against the fight against slavery, but economic journalists have been at the forefront of resisting one of the most pernicious threats to our way of life – the way in which journalism gets sucked into a vortex of post-modern meaninglessness in which, providing it comes from the right sources (and often even when it doesn’t) any claim however outrageous or absurd is reported straightfacedly as if it had the same level of plausibility as some well worn orthodoxy. Balance is then provided by quoting an alternative view. He said – she said.
As one of those at the forefront of the fight against ‘he said – she said’ journalism, Paul Krugman puts it if George W Bush said that the earth was flat the headline would be “Leaders differ on shape of world”. Anyway, over the fold – or at this link, Brad DeLong gives a good lesson in applied reality based journalism in the process of making short work of journalist Demian McLean who wrote an article about James Glassman.
Glassman was co-author of the absurdly hyped book before the ‘tech wreck’ called something like Dow 36,000. Proven comprehensively wrong, Glassman has nothing to declare but his shamelessness – arguing that his prediction in 1999 that the Dow would rise to 36,000 “very soon” perhaps in three to five years was true – it’s just that the three of five years bit was a tad – well wrong – ie it will take till around 2021.*
When confronted with the ‘he-said-she-said” defence Brad shows us how an article on Glassman’s current stance should have been written.
“The intelligent Demian McLean writes in about his story on James Glassman, the story that began:
James Glassman says his seven-year- old prediction that the Dow Jones Industrial Average will rise to 36,000 wasn’t wrong, just early. Two years after Glassman and co-author Kevin Hassett published their theory, the Dow average had sunk 29 percent…
and a few paragraphs later continues:
The Dow has since recovered…. The surge has improved some portfolios and may eventually do the same for the reputations of the authors, who stand by their forecasts…
Demian McLean writes:
[Brad DeLong’s Semi-Daily Journal: Fair and Balanced Almost Every Day: James Glassman and Kevin Hassett Rear Their Ugly Heads Yet Again: `Dow 36,000′ optimists unbowed | Chicago Tribune]http://delong.typepad.com/sdj/2006/10/james -glassman_.html: Pardon the irony, Brad, but you’re quoting a journalist out of context. If you’d posted my whole story, instead of editing it with ellipses, it would be apparrent the article addresses your point:
12th & 13th grafs:
With a 2021 deadline, Glassman’s prediction of 36,000 would require the Dow to grow by 7.6 percent annually. “When you consider the market has historically doubled every seven to 10 years, that’s not really going out on a limb,” said Barry James, who oversees $1.8 billion as chief investment strategist at James Investment Research Inc. in Xenia, Ohio…
The personal attack on me is curious, considering I e-mailed you before the story’s publication, hoping to include your voice as a critic. I never heard back.
[Brad responds.] I have to disagree.
Half the people who remember anything from a story remember only the headline. Of those who read beyond the headline, they focus on and remember what comes first. Because journalists typically write in “inverted pyramid” style, readers interpret placement of facts and factoids in the lead as a signal that they are the most important things. And what proportion of readers get to paragraph 13 at all?
Journalists mislead their readers when they put things that should appear in paragraph 1 in paragraph 13, just as editors mislead their readers when they put things on page A23 that should be on page A1
My view is that Demian McLean simply should not have written the article: it misinforms his readers. After all, with moderate power–the power to put things on the Bloomberg wire–comes the moderate responsibility not to misinform. If he were going to write the article, a much better lead–if he had to write the article at all–a lead that did not misinform–would have been:
James Glassman and Kevin Hassett predicted back in 1999 that the Dow would reach 36,000 “very quickly,” “perhaps in three to five years.” It didn’t. Now Glassman is predicting that the Dow will reach 36,000 by 2021. Glassman’s prediction of 36,000 would require the Dow to grow by 7.6 percent annually. “When you consider the market has historically doubled every seven to 10 years, that’s not really going out on a limb,” said Barry James, who oversees $1.8 billion as chief investment strategist at James Investment Research Inc. in Xenia, Ohio…”
*Reminds me of a bet a school friend made with me in 1969 during the moonshot that Neil Armstrong would die. When he returned safely I asked for my money. He said “so he hasn’t died yet . . . ” and kept his money.