Too much economy

I was breakfasting as usual around 7.30am when one of my daughters turned on the television and there, on the screen, some overly groomed talking head told me all I needed to know about the overnight stock market movements in the United States. I was then apprised of the price of a barrel of oil and the state of the Aussie dollar.

On the way to work I was again reminded of the state of play on the New York stock exchange - it hadn’t changed as the markets had closed. Oil prices were static and the Aussie dollar was steady. I arrived at the office. It was 9am.

At around 11.55am I went to lunch. I drove to a small roadhouse near work. Again the person on the radio reiterated the state of the overseas market, the local stock market, the price of oil and the state of the Aussie dollar. I was informed also on what the current value of the Aussie dollar might mean to exporters and farmers. I left the roadhouse at around 12.30pm to return to the office. Still listening to the radio I was re assured again that the Aussie dollar was steady.

On the way home that night I was further advised there had been a slight fall in the ASX on the back of some late profit taking; the price of oil was unchanged; the Aussie dollar had risen slightly against the greenback; and there was some speculation about interest rates in the US.

No sooner had I digested that lot than I was reminded that the Reserve Bank of Australia was to meet in three weeks, so the count down had begun; our interest rates were in the spotlight and I was not going to be allowed to forget it. Economists all over the nation would now be interviewed, on an hourly basis no doubt, and asked to give their best guess on the three-to-one shot that are our interest rates - how hard can that be? They either go up, or down, or they stay the same.

This type of reporting goes on every day in both the print and the electronic media: weekends offer you no respite. On the contrary the reporting moves from the minutiae to the analytical. We are subjected to this saturation reporting week in and week out.

Listening to this endless dissection of our economy reminded me of that movie Ground Hog Day in which the lead character, Bill Murray, gets stuck in a time warp and relives the same day over and over again. The only difference with this life of ceaseless economic reportage and the movie is that in the movie, Murray’s character, exposed to the boring repetition of his daily life, slowly realises he has been given an opportunity to change a few things about himself - and does just that.

We don’t seem to be as insightful or as lucky. We listen to this daily drivel day after day after day as if our lives depend on it.

The popular press, like Orwell’s Ministry of Truth in 1984, overwhelms us hourly with news about the economy. Just as in 1984 there was no escaping the messages of the Ministry of Truth, that War is Peace, Slavery is Freedom and Ignorance is Strength, in 2005 we too are unable to escape the omnipresence of a message that “It’s the Economy, Stupid!” Access to economic information is, or so it seems, vital to our survival as a species.

I would suggest that if the financial well-being of the average punter relied on responding to the second, third and fourth hand information gleaned from the popular press they would be broke in no time. So why is this stuff poured down our throats? Even eminent people of economics do not seem to know why.

In a speech to the Financial Review’s Leaders Luncheon in April this year the Governor of the Reserve Bank I.J Macfarlane posed the question. “Economic News: Do we get too much of it?”. The speech got very little exposure from the media, which might be considered curious as the luncheon was convened by one of the Fairfax group’s most respected vehicles.

As far as I can determine it was only the ABC that reported on the details or the fact of MacFarlane’s address at the luncheon. It was as if the media collectively felt that his comments were superfluous to requirements: after all he was commenting not on the economy but on journalism. Maybe those journalists present felt he was somehow uninformed. We may never know.

Macfarlane presented facts based on some analysis done by his organisation. This research revealed to him at least two things. First, the amount of media coverage Australians get on economic matters exceeds that on offer in the United States and the United Kingdom by a very large margin, an exponentially large margin in fact. And second, the detail of some of the reportage does little to inform the reader over and above that offered by more traditional longitudinal analysis.

Macfarlane concluded that, in his opinion, we do get too much economic news but even he was unable to explain why. He did not categorically state that the level of reporting in Australia was a particularly good or bad thing; he was fairly even handed.

He felt the level of Australian economic literacy developed in part by large scale and frequent reporting on the economy had helped to facilitate economic reform. On the down side he felt it contributed to people being a bit gloomy - I would add that it has also bored some people to death.

But I would have thought that this mystery posed by the governor of the RBA would have sent reporters scurrying all over the place to find an explanation that the good governor could not. But no. Macfarlane’s comments sank like a stone in the lake of media disinterest.

So I searched the Fairfax site for some comments on Macfarlane’s speech. There were none. For about $3 a pop I could have purchased any number of stories relating to other things Macfarlane had said in April but nothing about the Governor of the Reserve Bank of Australia saying he felt that there was too much economic reporting going on in Australia. I found nothing in the Murdoch publications either.

The message here is clear: the media, and I suspect politicians, firmly believe we need to know this stuff. Although I will be interested to see if the frequency of reporting is quite so intense when things start to go pear-shaped.

But let’s face it, most of what purports to be economic news is not news; it is steady state commentary. A live call of an around-the-world yacht race would be just as engaging.

Economic reporting is a bit like weather reports, but less useful. Oil prices have captured the imagination of economic journalists of late and a fair share of our disposable income. But do we really need to know on what price a barrel of oil might bring on any given day. I sincerely doubt any business whose largest expense is fuel, like the airline industry for example, relies on radio reports or newspaper updates to determine their next strategic move in response to fluctuating prices. Anyone who puts petrol in their car knows what the oil price is doing. Knowing the price of a barrel of oil is about as useful to most people as knowing the going price for ambergris.

Bill Clinton’s political advisor, James Carville, gave us the phrase that gave us the bumper sticker, the T-shirt and embossed coffee mug that declares, “It’s the economy, Stupid!” Even though Carville’s pointed message was only designed to keep Clintons campaign workers on message, no one has embraced it so passionately as Australian politicians and journalists. Little wonder Macfarlane’s suggestion that economics is over-reported in this country disappeared into some kind of journalistic Bermuda Triangle. It was tantamount to heresy.