ABC's 20/20 Bailout Special

This last Friday, John Stossel of ABC's 20/20 news program had a piece called "The Big, Bad Bailout." I have provided a link to watch the 6 1/2 minute video here: http://abcnews.go.com/2020/. It talks about a ton of stuff that we have gone over in class. It shows a lot of clips of our current politicians explaining to the news media that this is a "crisis" that we have not experienced since the Great Depression, and that we need a stimulus package now, and we need it to be BIG!
As I first began to watch the show, I was pretty sure I was in for the normal "hell, fire, and damnation" story about the economy that is the norm in today's media. John Stossel, however, calls the importance and benefits of the stimulus package into question. He explains, and the news clips show, how politicians like President Obama say that when it comes to the need for the current stimulus package, there is a complete consensus among the economists of this country that it is important and vital to our recovery.
Afterward, however, John Stossel interviews a group of economists who all believe the stimulus package is bad, and not helping but hindering our recovery. He points out that a lot of the current stock market drops have immediately followed federal government press releases announcing more federal money to help struggling sectors. Investors really seem to dislike the government's help!
I thought the video was really informative and sums up a large portion of what we talk about on a day to day basis in class. I would really recommend taking the time to watch it.


Dr. Tufte said...

I'm glad that there is a source in the legacy media that at least sounds like what we talk about in class; as far as economists go, I'm not out of the mainstream.

Having said that, I do think the Stossel probably cherry-picked people who support his views.

A bigger problem - and I am guilty of this - is that a lot of economists are afraid to pull the trigger on this one. A lot of us are having real difficulty supporting our past research - suggesting that a stimulus/bailout is a bad idea - now that push has come to shove.

Liam said...

This brings up a question. We look to the daily trading markets for a mirror that displays the status of the entire U.S. economy, which reflect words spoken by certain committee members inside of our government. Why doesn't the U.S. citizen demand the cooking of the books? Or at least the removal of the committee members' mouths? I wouldn't say that the government is a business in the full sense of the term. My questions are retarded, but so are some consumers. Why must we let ourselves toy with each other and our short-term markets?

Abigail said...

Are you serious Dr. Tufte? You really think that member of the media would go so far to implement his personal opinion in a so-called unbiased television program. I don't think I can bring myself to believe this. It would totally undermine my ability to believe everything I hear and see on the 24 hour news stations.

Luke said...

His report was to show that not “all” or “most” economist agree with the stimulus package; even though Obama and the government wants it to appear that way. Of course, they are going to make the economy sound like it is horrible and that the unemployment rate is through the roof and everything is falling apart, but it is only to make the population feel like Obama is doing a good job and that he is going to save us from what big bad Bush did to the economy. Obama and his representatives are there to make him look good. His stimulus package may or may not help, but we will never actually know if it did, because at the moment when the stimulus is actually getting put into the economy there are already signs of things getting better. In the end, the stimulus may appear to make it look like it saved the economy, but it might have just been the upturn.