Monday, October 20, 2008

BBC has only one way to skin a cat

Ben Bernanke has been offering some support to proposed fiscal boost in the US during is Testimony to the US Representative. So far so Keynesian (and so now).

What is the most interesting about the story is how the BBC reported it. The headline is "Bernanke supports higher spending". The first paragraph was:
US Federal Reserve chief Ben Bernanke has said more government spending may be needed to combat economic weakness.
It was if Ben was channeling Gordon Brown, in his new found love for spend, spend (after all, it helped the Japanese no end).

The thing is that Bernanke made no such direct comment. He did offer qualified support for a fiscal package, saying:
... consideration of a fiscal package by the Congress at this juncture [of weak economic growth] seems appropriate.
But what the BBC seem to have forgot is that a fiscal package can be a tax cut as much as a spending increase (or as Bernanke says himself, "increased federal expenditure or lost revenue"). The first US fiscal stimulus was a tax cut after all. The BBC could not however entertain such as ridiculous idea.

I admit I'm being a pedant, but there are two serious points here:
  1. Whatever the advisability of attempting to fiscally fine-tune the economy (the consensus has been don't for around 20 years now), why do most governments consider only spending increases, which typically become permanent structural spending?
  2. Why is the level of economic knowledge so low in the BBC, they have bought the new Brown narrative that only spending increases are somehow a worthy response. I thought it was their job to give people information about the present downturn and policy solutions?
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