Elizabeth Warren is the chairwoman of the TARP congressional oversight panel and was recently interviewed on Planet Money by Adam Davidson (full hour+ of audio). The Columbia Journalism Review's Ryan Chittum ran a piece on the interview.
It sees Warren as an outlier whose views, based on decades of research, are suspicious. It would never, ever have badgered a former bank exec, say, like this if one had been chairman of the panel. Davidson, like the reporters I referenced above, has been talking to too many bankers and insiders who sneer at someone not inside their bubble.
Here is what I find disturbing about the interview: Davidson presents himself as an expert on the economy and economic thought, and even issues as far flung as how congressional panels are composed.
But let's break down the reporter as expert problem below the fold.
They talk about the April report which they both agree is the world and US history of economic crises, governments response to them, and end results. Basically a score card on the various types of responses a government might have. There appears to be no objection from Davidson on these points or the taxonomy of how government might respond. Then he says this
[starting at 25:25, my transcription, errors may be present]
DAVIDSON: Don't you come out ... effective... I mean basically ... you can't read that report without thinking, "we should nationalize the banks, that is clearly the choice we should make."
WARREN: Well, that's ... the report does not say that we should nationalize the banks. The report says, "these are the options." And we don't have three votes for a position that says, "here is something that we should do." And so the report does not say that. I just want to be clear, some people think you shouldn't even say it. Some people think you shouldn't even talk about the fact that there are three tools in the tool box: liquidation, reorganization, and subsidization. Some people don't like calling giving money to banks "subsidization," they like Henry Paulson liked calling it "investment", "investment opportunities."
DAVIDSON: I prefer transfer, I think that is a clearer way of explaining it.
What is odd about this attack is that Davidson does not appear to be attacking the history, the facts, or the story that emerges. What he appears to attack is the conclusion; it is so repulsive to him that he doesn't even want it lain out (he appears to be in the group Warren was describing, down to wanting to rename bank subsidization).
Where could Davidson possibly have gotten the idea that this was a bad idea? Clearly it is not from the historic data. One (strong) possibility is that he talks largely to bank economists who consult with banks who would loose their jobs if the banks were reorganized or most of their salary if they were nationalized. He might point to acadmic economists, but you have to ask if he is talking to the right ones if they are ignoring the history. Basically, he should have a challenge here or concede the point in the face of overwhelming evidence. But no, he does not. Why? Because he is an expert.
This comes out even stronger later on
[this transcript from lambert at Corrente]
ELIZABETH WARREN: Who says a bank a bank is going to survive -- Who is not worried about the fact that the Bank of America's default rate has now bumped over 10%? That's at least the latest data I saw. So the idea that we're going to somehow fix the banks and then next year or next decade we're going to start worrying about the American family just doesn't [Davidson talking over] make any sense.
DAVIDSON: The American families are not -- These issues of crucial, the essential need for credit intermediation are as close to accepted principles among every serious thinker on this topic. The view that the American family, that you hold very powerfully, is fully under assault and that there is -- and we can get into that -- that is not accepted broad wisdom. I talk to a lot a lot a lot of left, right, center, neutral economists [and] you are the only person I've talked to in a year of covering this crisis who has a view that we have two equally acute crises: a financial crisis and a household debt crisis that is equally acute in the same kind of way. I literally don't know who else I can talk to support that view. I literally don't know anyone other than you who has that view, and you are the person [snicker] who went to Congress to oversee it and you are presenting a very, very narrow view to the American people.
Here Davidson is in over his head. Where I work I see about 20 to 30 labor and public finance economists per year give talks on their research projects. The question of why incomes are diverging is huge, and the question of the impact of this is also huge; I would say only Social Security rates as a more popular topic of discussion. The simple fact of the matter is that if he doesn't know about this then he either knows the wrong economists or asks the wrong questions. In any case, when there is just a reporter and an expert in the room, the best approach is to ask questions about their area of expertise. The best way to have the kind of interview that Davidson wanted to have is to have another dissenting expert in so that there is a meeting of the minds.
In the end, Davidson takes on Warren himself and in every case this turns bad for him. Warren is an incredibly adept speaker, and has command of not only the facts, but how they fit together to form a picture. It is worth listening to just to hear someone get schooled so completely. To be clear, I do not fault Davidson for not being an expert on economics, the financial system, or government. He is a reporter, his job is to present the views of a few experts on a topic, not to understand every topic in depth. What I fault him for is thinking that he is not a reporter but instead an expert.