"Planet Money" Reporter Paints Elizabeth Warren As Agenda-Driven
Yesterday, CJR's Ryan Chittum posted a blistering critique of NPR's Adam Davidson's attempt at an interview with TARP overseer Elizabeth Warren on "Planet Money," and, baby, it is a well-deserved dilly and a half! Chittum calls the interview "cringeworthy," a "disaster," and, most appropriately, a "dismal example of bubble thinking." If that last blast reminds you of comedienne Tina Fey's explication on "the bubble" -- the safe space from which the privileged and coddled project their incompetence without concern for consequences -- you couldn't be more right! Check out some of this nonsense!
As Chittum details (and you may listen to the entire interview here) the entire foundation of Davidson's exchange is that Warren is fueled entirely by populist animus and cannot be considered a fair arbiter from the point of view of bankers. Warren objects to this premise, saying, "I just think you're wrong. I'm somebody who believes in free markets. The American middle class is under assault... basically since the 70's... I'm not an advocate. i don't get paid for anything. I'm an empiricist. I'm data driven."
The "bubble thinking" then starts in earnest:
DAVIDSON: I think you're well known... as someone whose work points to a conclusion that banks and credit-card companies are giving a raw deal to consumers -- I think it would not be terribly hard to find people who would agree with you -- that your work is in opposition to the banks.
WARREN: If you don't have somebody who cares about American families, then they don't have a seat at the table in this debate. I think this point is really important. We have a little tight insider world who understand exactly what synthetic derivatives are. My job in this world is to make sure that when these enormous profound decisions are being made, that the American family is there. That they are part of that process... because the decisions that are made will be different.
And that's exactly right! Ordinary Americans don't understand the world of synthetic derivatives. This is precisely the sort of thing that gets discussed in the business press entirely from the perspective of clucking, cliquish, insiders. This is precisely why Julie Satow and I did a video that started to scratch the surface of what derivatives are. Since we did so, by the way, people have sent us emails, thanking us, but there's no need to do that! The derivatives market exploded and landed on everyone's head, and people are entitled to know why that happened. Ordinary people deserve answers! I believe that journalists are obligated to at least attempt to provide them! And Elizabeth Warren simply agrees with that contention. Bully for her!
But, wow, Adam Davidson? He is simply NOT OF THIS EARTH. Read this nonsense!
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.
WARREN: I'm sorry. That is not a narrow view. What you are saying is that it is the broad view to think only about trying to save the banks [Davidson sputters] and say "Hey! the American economy will recover at some point and we'll worry about the families [Davidson talking over]." I think that is the narrow view and I think I have the broad view. The broad view is that these two things are connected to each other. And the notion that you can save the banking system while the American economy goes down the tubes is just foolish.
Davidson seriously DOES NOT BELIEVE there is an acute household debt crisis? Isn't household debt at the very root of the subprime mortgage crisis? Isn't the issue of household debt at the very root of the health care crisis? For years, major industries have depended on American consumers being willing to drive themselves deeper and deeper into debt in order to keep spending and spending and spending. And those same inducements were made in the mortgage market, the same false dreams, sold by the same insiders, who can't be bothered to explain what synthetic derivatives are to ordinary people.
But now, those mortgages are resetting, and, unsurprisingly, tons of people are defaulting on them. And those that will avoid default will only do so by vastly curtailing spending. They won't be buying that new car, or that new furniture, or the cool new gadget, or going on vacation. This is going to cause the market to reel. And beyond avoiding future debt, households will start paying down their debt as well. They'll look to get out from under their credit card burden -- and the threat of zeroing those balances is causing the credit card companies to retaliate by lowering credit limits and jacking up interest rates. This is precisely the "assault on the middle class" that Warren describes. All of this ENTIRELY ELUDES Davidson, who is straight up livin' in that bubble!
Planet Money might want to think about returning to our own solar system, maybe!
UPDATE: It has been pointed out that since this interview occurred, Davidson has apologized for the overall tenor of this interview, which seems pretty appropriate!
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First Posted: 05-15-09 12:12 PM | Updated: 05-15-09 03:42 PM