The Economics of Journalism of Economics

In a post that uncharacteristically portrays a (former) member of the Bush administration in a positive light, Brad DeLong continues his criticism of the mainstream media:

The world is a complex and intricate place. How is anyone to understand it--even a particular piece of it, for example the United States government in Washington DC and its economic policies? It is a big problem, for the standard sources that I was taught (perhaps wrongly) as a child to rely on--the Washington Post, the New York Times, Walter Cronkhite on the evening news--are breaking down.

I will suggest that he was in fact taught wrongly. But first I note that he later makes some important exceptions:

If you want to understand Washington DC, the American government, and American economic policy, then: trust the news pages of the Wall Street Journal, trust the Financial Times, trust the political and lobbying coverage of the National Journal. Trust Bloomberg and Knight-Ridder to try as best they can to get the story straight under immense time pressure.

I know very little about the National Journal, so I won’t comment on that, but the other four media outlets mentioned here have something obvious in common: they are all business and financial media. That orientation stands in contrast to those mentioned disparagingly in the earlier citation.

I am regular reader of the Wall Street Journal myself. (To be honest, I usually only make it through column 2 of the front page, and perhaps column 3, depending on how much fiber I ate the previous day.) The Journal’s coverage is far from perfect, but since it is the only paper that I read (even one column of) regularly, revealed preference would suggest that I tend to agree with Brad.

But even if I had never read the New York Times, it wouldn’t surprise me that the Journal has more reliable coverage. Business media are designed to provide news as useful information; general media are designed to provide news as a form of entertainment. Times readers want to find out what’s happening in the world because they enjoy finding out what’s happening in the world. In principle it doesn’t make much difference whether what they find out is what’s actually happening or some contrived alternate reality. In practice the distinction matters only to the extent that readers are likely to check the information against other sources.

Journal readers want to find out what’s happening in the world because they are going to make practical decisions based on that information – not just ineffectual decisions (from the individual perspective) like who to vote for, but decisions – like what investments to choose, how many widgets to produce, or whether to accept a merger offer – that will have noticeable effects on their lives. If the Journal gets a story wrong, it makes a practical difference to readers. Unlike the case of the Times, whether a story is substantively accurate makes more difference than whether the story is enjoyable to read. Naturally it is in the Journal’s interest to allocate more of its resources toward getting the stories right.