Do we really need a bailout?

If this was simply an issue of false balance – where we have a bunch of smart people saying yes to the bailout, and crazy uninformed people saying no – then it would be easy to discount the dissenting voices. But that’s not the reality that we’re dealing with.

I wonder if we are repeating our mistakes. By our, I mean the mistakes the general, mainstream news organizations made during the inflation of the real-estate bubble.

Here is why I wonder this.

There seems to be a broad, general consensus that the $700 billion bailout is absolutely imperative to stave off a national, if not global, economic disaster. Some of the smartest and brightest economic minds are saying so.

However, the consensus on a bailout appears to be an illusion. Instead, what if yesterday’s vote in Congress is hinting not at too much partisan politics and election-year posturing, but at serious doubt.

We know well that the American public is angrily against this proposed bailout. Lawmakers are feeling the pressure.

And if we discount the public as uninformed, then what of the dissenting minority chorus of respected economists? People such as former Federal Reserve economist Allan Meltzer, who told NPR’s Morning Edition that the $700 billion bailout is a bad idea.

What if they’re right?

With issues as potentially dark, and as very-much complex as these, it’s very difficult for the average news person to make sense of it all, let alone report it back in an intelligent way that gives the public the right information to make decisions.

We had an apparent consensus of voices telling us that the real-estate and mortgage boom was a great thing – these were smart voices leading companies such as the now-doomed Lehman Brothers. And we believed this apparent consensus, which was drowning out the dissenting voices of the minority who were raising the alarm.

That was a huge mistake.

And now with the stakes so high and the risks so scary, I am not seeing a sustained, careful examination of the generally prevailing viewpoint that the $700 billion is a good idea.

If this was simply an issue of false balance – where we have a bunch of smart people saying yes to the bailout, and crazy uninformed people saying no – then it would be easy to discount the dissenting voices. But that’s not the reality that we’re dealing with.

So I wonder if we owe it to the American public to delve more deeply into this issue, examine it much more carefully, and listen to the different viewpoints without trying to quickly explain away dissent as mere partisanship.

Update: Another interesting take on this theme comes from the Columbia Journalism Review, which points out that the press has to shoulder some of the responsibility for the financial calamity we face. CJR also has a careful accounting of the immense level of fraud that was involved in causing the crisis. Also, the public radio program “This American Life” offers a dissection of the mortgage frenzy, and the fraud that it perpetuated.

Advertisements

Leave a Comment

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s