I hadn't thought about Jayson Blair in a long time, which is probably for the best. Like Stephen Glass and Sabrina Rubin Erdely, the temptation to tell a story we think people want to hear is sometimes just a little too tempting.
John also commented on the stock market, that he felt that the US economy in 2003 wasn't big enough in reality to support a Dow Jones Industrial Average over 10,000. The Dow closed at 8,726.73 on May 12th, 2003. John correctly noted that any likely big jump in the stock market would probably be bubble-driven behavior, which had just happened with the dot-com boom and bust. This is exactly what happened with the housing bubble.
On October 16th, 2015, the Dow closed at 17,215.97, almost double what it was when John wrote. It doesn't seem like the US economy is twice as large now, but it might just be true that the output of the economy is disproportionately likely to accrue to those on the top.
A Flowering of Frauds
Probably you have to dislike the New York Times much more than I do to really enjoy the Jayson Blair scandal. That's the one about the young ace-reporter who turned out to have been filing his reports from home, even when he claimed to have been traveling around the country on assignment. The Times devoted more space to the matter in its last Sunday edition than it's likely to devote to the next nuclear war, so there is no need to rehearse the details. It's always a bad thing when a venerable institution bleeds credibility. First the priest scandal, and now this.
I had been reading about the affair for some time before I saw someone characterize Blair as an affirmative-action hire. The Times actually denies this characterization. This could easily be true: he was a go-getter whose father was a senior federal bureaucrat, the sort of youngster whom the Times would be likely to try out anyway. Of course, it's awfully hard to believe that he was not retained for reasons of affirmative action. Despite years of repeated fabrications, the Times was always willing to give him another chance. Be that as it may, the episode is not typical of the downside of many affirmative-action programs. Affirmative-action programs that go beyond outreach produce groupthink, hypocrisy, and self-doubt. They do not generally produce plagiarism and fiction that is written without benefit of a poetic license.
That kind of thing can happen where affirmative action is not an issue, as the case of Stephen Glass of The New Republic illustrates. Before his editors caught up with him, I too enjoyed his reports on zany anti-Clinton demonstrations and Animal House conventions of Republican youth. That part of his work was harmless, because the subjects were imaginary. The problem is that he sometimes applied the same methods to real people and real organizations. He never learned Robert Graves' principle for writing book reviews under deadline: a gentleman who reviews a book he has not read must take care to praise it.
The Glass scandal actually occurred in the mid-1990s; you can read about his specific malefactions here. At the time, they seemed like a fitting comeuppance for The New Republic, which had waxed very merry in the 1980s about the Janet Cook incident at the Washington Post. That one involved an award-winning story about an inner-city child who turned out to be a "composite." The Post needed to be razzed back then; its post-Watergate reputation for world-historical journalism made it insufferable for years. Still, let the satirists of the world beware as they zero in on the Times: evils must come, but woe to those through whom they do come.
In any case, Glass is back in the news because he has just published a novel about a young journalist who makes things up. Thanks in part to the renewed interest in journalism fraud that has been generated by the Blair story, he has been repeatedly interviewed on television. A movie is in the works. You will find no links to those things here.
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Readers will have gathered that I am sanguine about the prospects for the US economy. We are coming out of a long slow-growth period, not much different from the early 1990s. Things should pick up in the near term. In fact, the only thing that sends a tornado through my vision of blue sky and fluffy sheep is articles like the one by Stephen Moore in a recent issue of the Weekly Standard: "Bear Market for Bush?." The subtitle is "Why the president--and the economy--really need a tax cut." The tax cut in question would involve the elimination, or near elimination, of the tax on dividends. The argument is that President Bush has little hope of being reelected unless the DOW goes back over 10,000. So, simply as a matter of political survival, the Republican Administration has to cut taxes in a way that will ginger up the stock market directly.
May I point out that the last time the DOW was over 10,000 we were out of our collective mind? Pretty much everybody realizes that the dot-com boom was a morbid delusion. Doubtless the indices will again rise to their millennial levels, but we should hope for this only when the real economy has grown large enough to support numbers like that. The idea that you can fix the economy by deliberately blowing a securities bubble is not just crooked, it's anti-capitalist. Capitalism is a system under which prices are information. Arbitrary government manipulation of stock values is like trying to bring an aircraft out of a dive by altering the readings on the altimeter.
Still, there are even worse delusions. Consider the commentary in the Credit Bubble Bulletin of May 9: "The Stark Contrast between Competing Central Banks." The argument here is that the United States Federal Reserve has lost all credibility by keeping interest rates low. It is really maintaining an asset bubble: this time not of stocks, but of home values. The Fed's fear of deflation is disingenuous or delusional. The European Central Bank, in contrast, is doing everything just about right. That institution is right to tighten credit. In fact, a little deflation would be a central banker's paradise.
This is the kind of thinking that could destroy the euro. The European economy is becoming like those illustrations of General Relativity as a taut rubber sheet in which depressions represent gravitational force. There are places in that sheet, such as Germany, that are becoming so depressed that the material threatens to rupture, creating a singularity. That is what runaway deflation would mean. Like a singularity, there would be no way out.
Copyright © 2003 by John J. Reilly