The Wall Street Journalasks this morning how European governments plan to pay for their purchases of European bank stocks. Funny it's not asking how the U.S. government proposes to pay for its own purchases here. Oh, that's right: We're America. We're not subject to the immutable laws of economics.
Call it another case of "media failure." We've had a lot of that during this crisis — and well before. It's one of the regular themes of this blog.
Russia is experiencing its own version of "media failure" right now. It seems the Kremlin is strong-arming news outlets to downplay the even-more dramatic events there — including frequent halts to trading on the exchanges. No matter how rattled Americans might be by the events of the past month, most Americans who saw this story probably took heart that at least it's not like that here.
Or is it?
The main channels have either downgraded or ignored altogether Russia's financial turmoil since it began in mid-September, according to media monitoring companies and research by The Moscow Times. On Monday, for instance, none mentioned the meltdown in Russia or any possible repercussions from the crisis. Only the smaller Ren-TV and Zvezda channels mentioned the stock plunge, according to Medialogia, a private company that tracks the media…
The Kremlin recently instructed both state and privately owned television channels to avoid using words like "financial crisis" or "collapse" in describing the turmoil in Russia, said Vladimir Varfolomeyev, first deputy editor at Ekho Moskvy radio.
"Specifically, the blacklist includes the words 'collapse' and 'crisis.' It recommends that 'fall' be replaced with the less extreme 'decrease,'" Varfolomeyev said in comments posted on his LiveJournal blog late last week.
Ah, but this isn't happening in America, is it? Well, there are two ways of looking at that.
The first is that it is happening on the Murdochtopus TV channels. On Friday night, when Hank Paulson was announcing the broad outlines of the plan for Uncle Sam to buy bank stocks, CNN, MSNBC, and CNBC all carried it live. On Fox News meanwhile, Brit Hume was leading what was surely his umpteenth panel discussion about Barack Obama's ties to 60s radical Bill Ayers. Whatever discussion of the economy that does take place on Fox News or Fox Business appears confined to the notion that the market meltdown is solely a function of anxiety over how Obama plans to socialize the U.S. economy. Any discussion of how George Bush is already socializing the U.S. economy is off limits.
So what about the rest of the establishment media? Certainly they're not ignoring the situation, nor are the words "collapse" or "crisis" forbidden. But that's as far as it goes.
Mostly they've acted as a passive conduit for the propaganda and the post-9/11 style scare tactics of Paulson, Ben Bernanke, and the other people whose own interventions have brought us to this juncture — augmented by Bush, McCain, Obama, and Pelosi.
It's reminiscent of a tale told in the introduction to John Pilger's book Tell Me No Lies. A group of Soviets visiting America during high Cold War days marveled at the uniformity of opinion they observed in the newspapers and on TV. "In our country, to get that result we have a dictatorship, we imprison people, we tear out their fingernails. Here you have none of that. So what's your secret? How do you do it?"
I suppose a couple of weeks ago, one could have argued the propaganda techniques weren't working because Congressional offices were flooded with phone calls opposing the bailout.
But look at what happened after the first bailout bill failed in the House. A host of establishment figures stepped forward to declare that Armageddon would descend upon us if the bill wasn't passed. Passionate voices standing in opposition, running the gamut from Ron Paul to Dennis Kucinich, were marginalized.
The phone calls to Capitol Hill started turning around. Then the bailout passed and Armageddon came anyway, the Dow and the S&P cratering 18+ percent the following week.
So the Chimperor goes on TV this morning and no one bats an eye when he declares we had to destroy capitalism in order to save it. The news that Pakistan — whose government Washington desperately seeks to prop up — is turning to China to avert national bankruptcy? That's confined to foreign media outlets.
But so far this week, traders have their rally caps on. And that's all the ADD-afflicted 24/7 media will notice until the next round of panic sets in.