I turn on the TV and I turn to Fox and I get one interpretation of public policy. I turn on MSNBC and I get a different view. I turn on CNN and I am not sure what I get. But common to all three of these news outlets is that none of them really concentrate on educating the audience as to the basics of how things work. To the reader of this blog, the following may seem tedious, but work with me here, please. This is an educational piece that explains one of the key themes of this blog. Or, you can skip this and move on to the next post.
During the Enron crisis, the stock market was crashing and President Bush stabilized it by making it a criminal offense to put forward financial statements that misrepresented the financial condition of a public company. Instead, the press concentrated on the Sarbanes-Oxley bill. But if one reads the first few chapters of a basic text in financial management, one will learn that information risk is a major factor that has to be controlled in order to stabilize market values and lower interest rates. History has proven Bush right in that instance and the Sarbanes-Oxley bill has proven to be excessive. The press could have educated the public on something important, but they focused on the wrong thing. We, as a public, could have learned something important.
During a debate on Social Security, one Democratic Representative, said that a bankrupt Social Security Fund was okay. It would pay out 40% of its commitments. The press did not jump on this and they should have. Just the mere thought of a 40% payout is offensive, but another education opportunity was lost. A basic first year text in accounting would explain that bankruptcy is the inability of a company to pay current obligations with current cash. Again, a major opportunity to educate all of us was lost.
During the debate on General Motors and Chrysler, no one in the press talked about public versus private goods. Many of our freedoms and responsibilities as an electorate are present in a discussion on this subject. The freedom to own property is embedded in this right. A basic text in economics discusses this. Again, the press was silent on this subject, and the Government went ahead without an educated electorate to help with the decision.
During the debate on fiscal stimulus, the press failed to educate on the efficiencies of tax cuts versus direct government programs. Guess what? A basic text in economics addresses this.
During the debate on banks and TARP, the press failed to educate on monetary policy. Again, a basic text in economics discusses this.
I heard people recommend that when writing for the general public, it is best to write to a 10th grade level of education. I also heard that we should peg our writing at the 8th grade level. We spend so much on education and this is the result? I am advocating that we raise it to a first year college level of education. After all, 85% of our fellow citizens have completed high school. This is just a little higher. If low expectation is the standard of our press, then no good policy will be the result. Every smooth politician will think that he or she can sell us anything.
I really don’t care that Fox is conservative and MSNBC is liberal. I care that they educate and enable us, the electorate, to competently engage in public discussion. We need some economic education. Good policies are the result of an educated electorate.