Tuesday, October 20, 2009

Washington Post Headline and Abstract VI

I was going to write apost about how the headlines corresponded to that articles today. I am given pause by an absurd headline, but it corresponds to an absurd article. I guess overall the streak is broken. Now I object to 5 www.washingtonpost.com headlines in 6 days. Keep up the good work anonymous person who writes the headlines. Rome wasn't built in a day (believe me, I know, our plumbing still needs work).

In particular the number 1 headline at www.washingtonpost.com

"Poll: Most Americans support public option

Washington Post-ABC News Poll | Americans still remain sharply divided about both the overall package and Obama's leadership on the issue."

picks out the salient facts in the article in the order that corresponds to emphasis in the article and which also makes sense. I would not have been so pleased with "Plurality opposes health care reform plan" which would be a true statement about the polling results, but would not stress the new result in the poll.

The question about public option vs bipartisanship is very interesting, but really can't be summarized in a headline. That is to say, I can't do it and shouldn't complain that someone else didn't do it.

The third and fourth headlines in the column seem sensationalistic.
"At rescued banks, perks roll on" makes my blood boil (I didn't click the link, I don't like boiled blood).

The fourth headline is garbage, but then so is the article.

No help for prudent savers
Column | Uncle Sam's bailout of overly indebted borrowers costs those who carefully save.


The article by Allan Sloan begins

This is a quiz. What do the record-high Wall Street bonuses have in common with the record-low yields for savers? Answer: They show yet another way that prudent people, especially those living on fixed incomes, are being cheated by the government's bailout of the imprudent.

Here's the deal. The government is spending trillions to keep interest rates down to support the economy and prop up housing prices, and those low rates have inflicted collateral damage on savers' incomes. "It's a direct wealth transfer from savers and retirees to overly indebted borrowers," says Greg McBride, senior financial analyst at Bankrate.com.


Wrong Allan. Low interest rates are not a bailout. What instructions have we given the FED ? We ask for price stability and reasonable employment. There's nothing there about how savers have the right to some specific return. Yes macro policy implies transfers. That doesn't mean that low interest rates are a bailout for borrowers any more than high interest rates are a bailout for savers.

Now one could claim that the bailout program for homeowners facing foreclosure costs prudent savers via the tax increase that will be necessary to pay for it. I'm not sure this is true, since foreclosures destroy value. I'd guess that savers as a group benefit from renegotiating interest rates with homeowners facing foreclosure. In normal times, profit seeking banks renegotiated. Banks are not functioning normally and one could argue that the Federal Government can help savers as a class by filling in for the banks.

That is, one can argue both ways about the actual bailout of people facing foreclosure. One can not call an interest rate a bailout without offending against the English language. How low does it have to be to be a bailout ? Was Greenspan bailing out foolish borrowers who weren't even in trouble yet by keeping interest rates low ?

The article is pernicious nonsense. It is saying that public policy must be made in a way that it is optimal for all interest groups. This is impossible. Sloan is recommending public paralysis. Now he might be perfectly aware of this. A free market fundamentalist should oppose public setting of a price -- the safe short term interest rate. I'd only say that the Fed was set up for a reason and that getting to the right of Milton Friedman is rarely a good idea.

So what of employees of the post other than Sloan. Some powerful editor decided to put this article on the front page of www.washingtonpost.com. I think it is obvious that they felt that the article on bankers perks had to be Ballanced. This is terrible editing.

The poor guy who writes the headlines really couldn't have written a headline that both reflected the article as written and wasn't nonsense. So today I applaud him or her.

1 comment:

Rdan said...

Good thoughts to note and a good list.