This article is an appeal to the
media.
Speaking to the Journalism Education Association in
This seems to be a case of not knowing how lucky she is.
Economic management matters to all New Zealanders because the quality of
economic institutions and polices fundamentally determines how productive the
economy can be.
In a healthy democracy we need penetrating media analysis of economic
issues to help citizens assess the economic competence of incumbent governments
and parties competing for office.
This need is particularly important in an election year when claims and
counter-claims about policy directions abound.
The prime minister is right to suggest that
However, many media organisations do their best to compensate by
featuring economic commentary by qualified people through articles and
interviews.
Here journalists could do a better job of sorting out the wheat from the
chaff. There is a large measure of
common ground in the opinions of respected economists, although there are areas
of legitimate debate. And while there
are quacks in economics, just as there are in medicine and other professions,
it is not difficult to screen them out.
A quick check amongst practising economists would soon establish who
they respect among their peers.
Among academics, the names of professors Lew Evans at
In the area of public policy, the New Zealand Institute of Economic
Research has for many years had an annual award for distinguished
contributors. A disclaimer in my own
case may be in order, but the list of recipients would be an obvious ‘go-to’
source.
Journalists would also find the Institute’s current director, Brent
Layton, is highly regarded by his peers.
Regrettably, the Treasury, which employs many economists, can no longer
be taken as a reliable source of politically neutral analysis.
As John Gibson has written, “It is no wonder that
almost all of the researchers in Treasury have either left or taken secondments
so that they spend as little time as possible at No 1, The Terrace. What’s the
point, when research is systematically ignored or distorted by politicians?
What’s the point, when senior management check which way the wind is blowing
before taking a position and will even disassociate themselves
from research done in their own department?”
It is astonishing, for example, that the
Treasury has not advised the government that pursuing its carbon neutrality
targets could do enormous damage to the economy, as research shortly to be
released by the Business Roundtable will reveal. Nor does the Treasury appear to have bluntly
told the government that its goal of restoring
But at least journalists may now have access to
researchers who have left the Treasury and are working in other organisations.
On many specific economic issues, journalists
would find unequivocal views among economists.
On inflation, for example, Nobel laureate in economics Ed Prescott has
written that today “All respectable economists agree inflation is a monetary
phenomenon”. Thus, contrary to finance
minister Michael Cullen’s frequent claims, tax cuts cannot be inflationary
given sound monetary management. At most
– and even this is uncertain – they might cause a one-off increase in the CPI,
not ongoing price increases.
Similarly, Dr Cullen’s claim that
In the run-up to the election, it is
particularly important that journalists do their job well.
Former prime minister
Robert Muldoon cynically traded on the public’s limited understanding of
economics when he said most people wouldn’t recognise a budget deficit if they
fell over it, and he went on to wreck the economy.
Today the public better understands the dangers
of high public debt, but the hollowness of claims about achieving ‘economic
transformation’ and carbon neutrality have not been clearly exposed. And we can ill-afford another election
campaign with unjustifiable vote-getting policies like interest-free student
loans.
We need the media to shine a spotlight on bogus
economic claims by all parties in the election debate. Competent journalists have ample means of
doing so.