Announcer A:
Today and every day the American people must make decisions on which their whole survival may depend. To make sound decisions the people must be informed. For this they depend on the nation's free press. How well is the nation's press doing its essential job? The people have a right to know the truth. They have a responsibility to ask. The right to question.
Kimball:
Some news hits us smack in the pocketbook. For most of us that's a mighty sensitive nerve. Inflation, recession – what do those ten-dollar words the economists use add up to? Well, they add up to billions of dollars these days. And how much is a billion dollars? It's hard to grasp. An airplane literally costs as much as its weight in gold. Wall Street goes through crazy gyrations. Complicated farm parity prices. What does all that mean to those of us who already have trouble making the little numbers in our checkbooks balance? The experts and the politicians who try to explain the economic facts of life sometimes have an ax to grind. The stories in the papers can get pretty dull. Whose fault is that? How do we make sense out of it all? Mr. Louis Lyons, I hope you and your guests on this program will give it a try.
Louis:
To go into these questions we have two highly qualified guests. One is professor of economics at Harvard University, a former editor of
Fortune magazine, and author of the best-selling book, The Affluent Society – Dr. John Kenneth Galbraith.
Announcer B:
Professor Galbraith says, and I quote: "One of the most disastrous trends in the newspaper business is the notion that all a reporter needs is a strong pair of legs and a sharp pencil. This is one reason why some of our most important economic stories are so badly covered."
Louis:
Our other guest is one of America's most highly respected writers on business, and author of the book, The American Stockholder – the financial editor of the
Philadelphia Bulletin, and a syndicated columnist familiar in many other newspapers, Joseph A. Livingston.
Announcer B:
Mr. Livingston writes, quote: "It happens that financial writers on daily newspapers, who ought to be objective, become apologists for Wall Street. They are drawn into the inner circle of thought and attitudes. Management, if successful, can do no wrong."
Louis:
Well our guests, one a financial editor, the other a professional economist, seem to be somewhat unhappy about the state of our reporting on economics. We'll go into this with them in just a moment.
Announcer A:
The Press and the People.
Announcer B:
As moderator from Harvard University, the winner of the Peabody Award for television and radio journalism, and the Lauterbach Award for outstanding contributions in the field of civil liberties, Mr. Louis Lyons.
Louis:
Professor Galbraith, you are quoted as saying that a good pair of legs and a sharp pencil aren't enough to make a good reporter. As an economist and journalist, what would you say are the qualifications for reporting in this field of economics?
Galbraith:
Well, I wouldn't entirely discount the importance of the pencil and a good pair of legs, but I would suppose the principal qualification was professional knowledge, professional know-how. And I think the gravest defect of economic reporting has been the notion that it is something that can be safely entrusted to the sound instinct of the amateur.
Louis:
Thank you, we want to get into that. And, Mr. Livingston, we've just heard a quotation from your book, The American Stockholder, in which you say many financial writers are apt to be apologists for Wall Street. Well, won't you explain that?
Livingston:
Yes. I think it is perfectly natural that anybody who is associated with a particular field should become well-acquainted with what goes on with the persons in that field. And there, and therein lies a tendency toward bias, a tendency to be sympathetic. That doesn't mean that all writers of finance or all writers of polities become so sympathetic, so embedded with the ideas of politicians or government officials or educators that they can't be objective. But it does indicate the tendency. And we can't all be exceptions.
Kimball:
Dr. Galbraith, what would you say are the important running economic stories that are being poorly covered these days?
Galbraith:
What coverage? Well, somebody said on this program last week or so, Ed Lahey, that inflation was the worst covered story, and this has long been my opinion, that this is very badly covered, that whatever explanation is in the handout is soberly treated and without any discrimination of any sort. That's the worst covered of the large stories. The worst covered of the smaller stories – but it's by no means a small story – I would suppose is agriculture. Why these large costs of the agricultural program keep mounting, and what is wrong there, and why isn't Mr. Benson quite the genius he was pictured as being two or three years ago?
Louis:
Mr. Livingston, would you agree that these stories – inflation and agricultural surplus – are about the worst covered?
Livingston:
Well, I would say that certainly in terms of words and linage, inflation is certainly one of the best covered stories.
Galbraith:
Not the best covered, but the most extensively covered.
Livingston:
Well, most extensively covered.
Galbraith:
You're certainly not putting a wordage measure on the quality of coverage, are you?
Livingston:
Well, when you...
Galbraith:
I'm sorry I...
Livingston:
No, that's quite all right, I think it's an excellent point. No, I would not put a wordage measure, except that newspapers operate in part on wordage, and when you come to explaining inflation, which I think is what you want, Dr. Galbraith, you are asking newspapermen - reporters - to do what economists themselves can't do. What...
Kimball:
Mr. Livingston, what would you say inflation is?
Livingston:
well, if you take the standard economic definition, it's an increase in the money supply which is greater than the supply of goods. But we have come to define inflation as any rise in prices.
Galbraith:
But look, Mr. Livingston, there are some people who do this very well – Ed Dale
of The Times and Mooney, also of The Times, the Washington Bureau, Barney Nossiter of the Washington Post, your own column. I think anybody who reads these reporters will get a very good and rather deep knowledge of what is going on. Now I think the real point is that all of these people are rather fully trained for their job, whereas most of the people who write on this particular subject – I'm not being snobbish about this, but I think it's a fair statement – I think they would themselves that they can't do it out of any depth of knowledge of the problem. And this is like having somebody from the sports page go to work on atomic energy. It's the same problem of absence of professional skills.
Louis:
Well, Mr. Livingston, nobody is going to accuse you of absence of professional skill, I am sure. And I notice a point in your column that seems to me to show skill in trying to help the reader. You use what you call a box-score on the recession, that suggests to the reader that the recession is something he should keep up with. How many other places do you see any such device, which tries to suggest to the reader that, in the same way he keeps track of the ball game, maybe he ought to keep up with a box-score on this important subject?
Livingston:
Well, the Committee for Economic Development got up a box-score on the recession – it would, curiously enough, simultaneous with this and independent of this. And that was published in a great many newspapers. I think the point at issue between Dr. Galbraith and me is that he has cited reporters, but the, I don't think newspapers can really do the kind of job that I suspect Galbraith wants done on inflation. To really explain inflation, if you are just talking about the day-to-day movements of prices, the day-to-day pressures in wages, the day-to-day actions of corporations in raising prices of steel or copper, I think the newspapers do that job adequately.
Louis:
Well, Mr. Livingston, we've collected bushels of clippings in the last couple of months from newspapers about inflation and other financial matters. And in all this we found only one and that was not by a financial writer, by a reporter in Washington for the St. Louis Post Dispatch. He was quoting Professor Sumner Slichter, only one, and that was Slichter who said who and what causes inflation. And it's interesting that those institutions that Slichter put high on his list include the construction industry, the defense industries, and credit finance concerns.
Livingston:
I would like to include Dr. Slichter in that.
Louis:
All right. Of course, he also includes farmers and labor unions and politicians. But go ahead and include the economist too.
Livingston:
Well, I think Dr. Slichter is one of the chief causes of inflation in the United States, because he has predicted that we are in a laboristic society in which we are going to have one-and-a-half to two per cent inflation every year. If someone of Dr. Slichter's eminence makes that kind of a forecast, we all want to get into the show; and therefore the construction industry has to raise its prices, the steel industry has to raise its price, the United Auto Workers have to raise its price, and so forth. The surest way to get inflation is to have everyone predicting inflation. Of course, I don't think you get it that way, because then you get a crash.
Galbraith:
I would like to come somewhat ambiguously to the defense of my colleague. Slichter does have the virtue of having been wrong in the past and possibly is wrong again. The...
Livingston:
Everyone in this field, Dr. Galbraith, has that virtue.
Galbraith:
I think this is a very good point.
Louis:
I think Dr. Galbraith in his book, The Great Crash, rather intimated that almost everybody was wrong the last time in 1929 and certainly the press, he thought, was wrong in reporting events that led up to it. And I wanted to ask you, Dr. Galbraith, whether in this most recent recession the press hasn't done a better job, whether it hasn't been more candid in dealing with thes recession facts?
Galbraith:
After all, twenty-five or thirty years have passed and they should have improved a little bit. The reporting on the 1929 crash, outside of The New York Times and one or two other journals, was terrible. They stood on the sidelines and cheered it on. But...
Livingston:
I want to object to that, when we come to it.
Louis:
Well, go ahead and object now.
Livingston:
Well, it's true that the press, generally speaking, talked about the boom and the new era. But, after all, this was not unique. The press is not an independent autonomous force in our society. The press reflects what goes on as well as being critical.
Galbraith:
Well, there were some newspapers...
Louis:
You mean if politicians and leading politicians said, "Recovery is right around the corner," that was news, whether it was around the corner or not.
Galbraith:
This is not right, Joe, and it's not what I am saying. The newspapers cannot be quite exculpated in that fashion. What they said in
1929 was more than reiterating what
Charlie Mitchell and the other people – the other inflationists of the period – said. They reported as news that things were going to go up and up and up. And there was no tendency whatever to look with any sort of a critical eye on the insanity of the times, with the limited exception of a few newspapers.
Louis:
Mr. Galbraith, we can't accuse Mr. Livingston of this right now. Among my clippings I find one of his in December: "Break in the stock market described as overdue." And another one: "Proof that boom will materialize is yet to come." He apparently is taking a skeptical view. How many others in your craft have do you think been doing this?
Livingston:
I don't know, but I still want to come to the defense of my craft and make the point that when you have a mass point of view, a generality in the point of view, you are bound to have that reflected in the press. There's no reason why...Look what happened during the recession. Everyone in April and May a lot of people were saying - or not everyone, but a lot of pe— were saying, "This is terrible. We are going to have a new recession. It's going to go deeper. We have got to have a tax cut and do something fast." This was said by Senator Paul Douglas, who is a Democrat. This was said by Arthur F. Burns, who was the former head of the President's Council of Economic Advisors. This was said by
the distinguished panel...
Galbraith:
What you are saying, Joe, is that a newspaper can never have anything in its columns that's wiser than its readers?
Livingston:
What I'm saying is...
Galbraith:
This is what you've come close to saying.
Livingston:
Well, what I'm saying is that when, that the newspaper cannot be different from the scene that it is interpreting.
Galbraith:
All right. I would certainly say this, but surely when there is something of an extravagant sort–
Louis:
Well, this was extravagant.
Galbraith:
Let's talk for a moment about something specific, in which you've done a lot. For example, there was the extravagant build-up that was given to the Ford issue - this was the issue of Ford common stock when it was transferred from the Ford Foundation to the public.
Louis:
You may remember, Dr. Galbraith, that Mr. Livingston did a series of columns in which he pointed out that this was non-voting stock. How many other financial writers did that?
Livingston:
As far as I know, none. But that makes my point.
Galbraith:
And you're saying that this is all right: Because the public didn't see this distinction and because there was a great build-up of enthusiasm for the Ford stock that no newspaper – yourself excepted – should take any exception to it. Now, you're not saying that?
Galbraith:
You're not saying that you are the only paragon of the financial press?
Livingston:
No, but what I am saying is that you are asking the press–
Galbraith:
To be as good as you. This is a reasonable...
Livingston:
If you want the press to be as good as somebody else, then you are asking everyone to be on an equal plane of endeavor. When you have 90 per cent of people thinking in one direction, you can't expect the press to do otherwise. Look, hen you accept people in Harvard or Radcliffe, you accept exceptional people. You don't expect the general...
Galbraith:
That's our story.
Livingston:
Well that's your story, all right. When you try to go to work, any professional person goes to work, you don't expect perfection. You expect...
Galbraith:
I'm saying something...better...however...You expect the newspaper to be vaguely wiser than its readers.
Louis:
Mr. Livingston, would you feel that a newspaper, because it's an advertising medium, almost inescapably takes an optimistic line about business?
Livingston:
Well, that's a hard question. I would suspect that that is true.
Louis:
I get that impression from year-end reviews and so on.
Livingston:
Well, look, year-end reviews are a happy time. I mean, New Year's celebrations are good times, and people feel good. If you notice, immediately after the New Year's there is a recession in the joy.
Livingston:
There is a second thought. That's the hangover.
Louis:
Now you suggest in your book that the financial reporter doesn't find the financial community very communicative or helpful. It sounds as though bankers weren't as easy to get news out of as politicians or football coaches. And you also say that the reporter is apt to be over-awed by the big banker or industrialist, which again suggests a contrast with the political columnist who, as you know, is not abashed by the highest politician, and in his column will advise the President or the Secretary of State. Is there this difference in the...?
Livingston:
I think there's a very real difference there. You see, the average reporter, financial reporter, he might get $175 or $200 a week, and be is dealing with a man who gets $150,000, $200,000, $300,000 a year.
Galbraith:
And isn't it true, also, Joe, that the average financial reporter is likely to be somebody who didn't get along very well in the front part of the paper or didn't do so well even on the sport page, so he's shoved to the back of the paper where–
Livingston:
It's true that in some newspapers you get superannuated copy readers and put in the financial department.
Galbraith:
Is this good journalism?
Livingston:
No, of course not.
Galbraith:
But this is designed to reduce it to the common level...?
Livingston:
But I suggest that you have that in all professions. I mean sometimes we have professors who are–
Louis:
Mr. Livingston, would you go a little further with this, as to the status...
Livingston:
Yeah, I would.
Louis:
...of the financial editor. I'm thinking of this, let me just ask it. To what extent does the financial editor sit in on the news conference with the managing editor and the editorial chief, or suggest that maybe this business story ought to be on the front page, maybe this ought to be followed up by the local staff? Is there any of that?
Livingston:
Well, here is that in some papers. I think it would depend upon the status of the financial editor. When the financial editor is a cast-off from some other department, as Dr. Galbraith suggests, he is probably ignored. And I know of some very important people...
Louis:
I assume you are not ignored.
Louis:
I assume you're not ignored.
Livingston:
Thank you. No, I think if I make a suggestion that a story ought to be on the front page, it's considered. I don't mean that it goes on the front page. And I'm sure that is true in certain of the papers in
Boston, and certainly in Washington Post and other large papers.
Kimball:
Dr. Galbraith, can I interrupt here? You gentlemen are talking about the mechanics of economic reporting, and I'd like to ask you, where do I get this wisdom that Dr. Galbraith is talking about? You say that I can't find it in the newspapers. Can I find it in the magazines?
Galbraith:
No, I don't think this subject is particularly well treated at all. I think, with Joe Livingston, that part of the responsibility does lie with the economist – that the views of the economists and the problems of inflation aren't very clear either – but I also, I think the main problem is that it's passed to the people, the subject is treated in a highly impressionistic and highly non-professional fashion.
Louis:
[Inaudible]...is there any reason why economics should be described as the dismal science? Is there any reason why you should be almost the only economist I can think of who's written a book about economics that is a best-seller? Is there something inherently difficult about this?
Galbraith:
I think that, again, economists have been to some extent responsible. We've tried to set ourselves apart as a priesthood and to take on to ourselves some of the remote and arcane qualities of people who know what other people don't know. This is always a very nice thing to believe, even if it isn't so.
But I have the feeling, as far as the newspaper business is concerned, and from some slight past experience in it, that this is regarded as a kind of hopeless business, and therefore you get it as far to the back of the newspaper as possible. And notice that the news magazines too get their business sections as far back as possible. Then...
Louis:
Well let me interrupt again as to...in your book, American Capitalism, you say that there are a lot of myths that have been perpetrated on the American people about economics and you suggest that the press helps keep them afloat. Would you specify a little bit and then we'll ask Mr. Livingston what he thinks?
Galbraith:
Well, yes. Well, to take one of the choicest myths of our time, and it's one that's very much in the, well, one that's very much in Mr. Livingston's mind. This is the myth for example that the stockholder is the ultimate democratic power who controls the corporation. Well we know in fact that, as far as the large corporations are concerned, the stockholder has no power whatever. But the newspapers, the financial pages, have done a marvelous job of keeping going this notion that the ultimate sovereign power in the modern corporation is the stockholder. You'd agree with me on that?
Louis:
Mr. Livingston's book does dispel that particular myth, I think.
Livingston:
There's one point I want to get across here. It seems to me that when the press, when newspaper people get hold of something that they can understand, they do something with it. I think the success of Dr. Galbraith's book, The Affluent Society, is in part due to the fact that newspapermen recognize that this was something of exceptional merit.
Louis:
A new look at this whole subject I think is a part of it, don't you?
Galbraith:
You're making it awfully difficult for me to criticize newspapermen.
Livingston:
Well, I think what you've done...
Louis:
Well say something [incomprehensible]...there's good work in this...for Mr. Galbraith.
Livingston:
Well, I think Dr. Galbraith is criticizing society, and he expects newspapers, which are a reflection of society, to be different from society.
Galbraith:
No, no, I'm not being that cosmic at all, Joe.
Livingston:
Well, if you're not...
Galbraith:
What I'm saying is that the financial pages of most newspapers are dull, tendentious, and it's extremely, it's a good thing that they are buried near the back of the paper because nobody should read them anyway.
Livingston:
Well, I think they are buried there because the average reader is not terribly interested in these stories. I mean, you can't illustrate a story about US Steel earnings with Marilyn Monroe. That's really the difficulty.
Louis:
I don't know, we have queens in all kinds of businesses, you know. And in that connection, Mr. Livingston, on other programs newsmen, political reporters have told us on other programs about efforts of the government to manage news. Now to what extent do you encounter that on the financial page – the efforts of business press agents to get their propaganda in?
Livingston:
Well, we meet business press agents all the time.
Louis:
How do they do in this field?
Livingston:
Well, some of them do better than others, but I think it depends upon the editor and his evaluation of the news. I don't think there's any difference by and large between the way a financial editor would handle an information officer of US Steel or General Motors and the way a political reporter would handle an information officer from the Department of Health, Economics, and Welfare.
Louis:
Dr. Galbraith, I was interested in the recent end-of-the-year developments in
Europe, the devaluation of the franc and the convertibility move in
England, that, how differently it was reported. The Associated Press and the Chicago Tribune have about the same story on it.
And the headline of the Tribune is: "Predict Gains by the United States in Money Moves." But the Wall Street Journal, certainly a sophisticated business publication, takes almost the opposite tack: "Move Promises Sharper Competition for the United States." And, we noticed, the one paper that picked up this Wall Street Journal article was at the opposite spectrum politically certainly, the York Gazette in
Pennsylvania. Their headline: "Sharper Competition for America Seen." Well, this wide variation in outlook on the same story interested me somewhat, it suggests the difficulty perhaps in interpreting these economic events.
Galbraith:
Yes, I think so. One should for any indictment of this sort exclude the Wall Street Journal, which does seem to me to go to work on these problems with a good deal of professional zeal, which does do a good job. I am referring really to the ordinary financial page of the ordinary newspaper, which seems to me to be a total waste of time.
Kimball:
Dr. Galbraith, I'd like to ask you this wrap-up question. What is the one story that perhaps I ought to be following and where can I find out what I need to know?
Galbraith:
Well, I would have to go back to my earlier statement and say that I think probably it is the question: What are the forces causing this month-after-month and year-after-year increase in prices? As to where you would go for it, this seems to me is a problem, for the very reason that I think it is the worst-covered story in the United States.
Louis:
Thank you, gentlemen. Well, we all agree this is a tough subject, economics. Yet it's the bread and butter of our existence. It certainly comes home when jobs are lost, when prices rise. Then people feel it in their bones. Politicians know this. They've always said: "You can't beat prosperity," or "The depression will lick any administration." But news about these conditions that affect all of us is traditionally kept within the financial page, and the convention is that only brokers and bankers are interested in business. Today the state of business certainly is everybody's concern, whether it means good times or bad.
And what do we find in here? The national budget, we agree, is pretty well covered. It comes out on a definite date, which gives it a news peg, a convenient handle for it. But inflation, the biggest story, we say is not well reported. It doesn't have such a news peg. The press just doesn't appear to be set up to keep such things as inflation under continuing review in the news columns. Now, Mr. Livingston and a few others do it in their pages, but their expertness is seldom brought to general attention in the general news pages.
Well, the answer has to be reporters who can be their own economists and our interpreters. Even such men can't serve the reader if they can't write about business with complete independence. Well, one may ask: "Can the press – itself a business – be independent of business?" The simple answer is: "The press has got to be independent to have the confidence of its readers." So until next week at this time on The Press and the People, this is Louis Lyons.