Monday, March 21, 2022

Rodney Hide: Journalism in Aotearoa

If you want the lazy job in Aotearoa, be a journalist.

You write stories. Nothing could be easier.

You gather up some facts, get some expert comment, string it together with words to make a story -- or, in the sophisticated parlance of Aotearoa journalism, your narrative.

There is an infinite number of facts to choose amongst but your selection is made easy: you choose the facts that are easy to get and that are agreeable to you. After all, it’s your narrative.

The same for experts. There’s countless experts, often saying different things. It could get confusing. But it’s not. You quote the expert that says things agreeable to you. Also, the easy ones ready with a quote and keen to be the news. That’s why we hear from the same experts over and over.

As the pandemic runs out of puff, the New Zealand Herald has started “Inflation Nation” stories. These will “explore the reasons and impacts of the price shock - and possible solutions”.

First up, is Business Editor Andrea Fox. There’s price creep. Butter, cheese and yogurt are more expensive! A kilogram of cheese is $1.46 more than a year ago.

How can that be when there are cows everywhere? Turns out kiwis must compete with overseas buyers for “our” dairy products. Who knew?

(Ms Fox could usefully study comparative and absolute advantage. We could have cheap cheese but then we couldn't afford mobile phones or other electronic devices.)

Then the expert opinion and solution: Consumer NZ chief executive Jon Duffy says the Commerce Commission should be tougher on supermarkets. Mr Duffy is wanting a Supermarket Czar overseeing prices and making supermarkets sell from their own supply chain to their competitors at Czar-determined wholesale prices.

That’s Aotearoan journalism. It’s a story. It’s not true. It’s totally misleading. It’s muddled. The problem is not remotely grasped. The proffered solution is absurd and completely counterproductive.

That story would take 30 minutes to research and write including a coffee break. It’s one phone call, one google search and some sloppy writing.

There is no cause-and-effect thinking. The effect is inflation -- what is the cause?

Inflation is the sustained fall in the price of money against a basket of goods and services. It’s driven by supply and demand. There’s been nothing special in the last couple of years to shift demand. But what about supply?

Through the pandemic the Reserve Bank pumped $53 billion extra money into the economy. The average was $750 million a week. Through that time Aotearoan journalists were breathlessly telling stories about how well the Aotearoan economy was holding up despite most of us being locked up at home. It was an economic miracle. Not only was Aotearoa knocking covid for six we were sustaining our economy without working.

But sadly it wasn't true. It was just a story. Stories don’t explain. They don’t predict. They are just facts and comments strung together. Everyday news stories in Aotearoa are confusing and nonsensical.

It didn’t occur to the journalists that the economic miracle was fake. The clue was in the time value of money: interest rates crashed next to zero and asset prices boomed. We weren’t making more. We were just making more money. And so the price of money must fall.

And so now we have the inevitable inflation ahead of the inevitable crash.

Making it all the more unbearable are the endless stories about inflation -- all of them muddled, all of them wrong, all of them with counter-productive solutions.

A supermarket czar would mean higher prices, fewer goods, and poorer service. We know that through theory and bitter experience, here and overseas, and down through the ages. The absurdity of a government that can’t build a house, or plant a tree, dictating food supply prices as some madcap cure for inflation is so absurd that only an Aoteroan Journalist could possibly think that, let alone write that, let alone publish that.

But such rubbish is churned out day in and day out. The Main Stream Media are so inured to not thinking, to not analysing, to not critiquing, that they can’t even see the rubbish they write as the nonsense that it is.

Business Editor Ms Fox could well reflect on Milton Friedman saying in 1963, “Inflation is always and everywhere a monetary phenomenon”. But that’s too much to ask. Our journalists are dopey; our government is dopey; and in that dopey round-and-around circle policy gets made. And it shows.

Rodney Hide is former ACT Party leader, and Minister in the National-ACT Government from 2008 to 2011. This article was first published HERE


Terry Morrissey said...

C'mon Rodney,
Stop being so touchy feely and tell them what they are realy worth.

David said...

What's the name of our country Rodney? Why don't you use it? I really thought you knew better!

Unknown said...

We live in "New Zealand" Rodney not in fictious Aotearoa.Otherwise a good article indeed.

GRUNTER said...

Top article Rodney - and I get your sarcasm regards using "Aoteroa Journalism' - lost on a couple of the commenters above.

The lack of mainstream media economic and science understanding beyond the 4th Form is chronic. And our current Govt, along with Treasury and RB are no better.

We are at the start of a long-term inflation period in the double digits zone. All driven by money printing on a scale never seen in the history of the world. No small economy has ever printed as much as NZ and had zero consequences. The only debate is how far into double digits we will go.