More on JournoList

In the previous post ("Where Left-Leaning Pundits and Bloggers Compare Notes"), we linked to and excerpted from Michael Calderone's Politico article, "JournoList: Inside the Echo Chamber". One of the critics of JournoList who Calderone quoted in that article was the centrist Democrat blogger Mickey Kaus. Kaus wrote about Calderone's article on his Kausfiles blog yesterday ("The Uninvited"). From Kaus's blog post:

Brad DeLong objects to the hed--"Inside the echo chamber"--on Michael Calderone's piece discussing the underknown leftish email cabal organized by Ezra Klein:

It's not an echo chamber. I have never seen a less echo chamber-like space in my life. The headline is simply wrong.

Fair enough. But I think the headline-writers' worry was that an "echo chamber" is what the outside world tends to get from members of JournoList once they've vigorously hashed out their disagreements in secret. "Inside the Echo Factory" would be a headline more accurately reflecting that concern. It's noisy in a factory but the product is often standardized.

[...]

We non-elite writers¹ learn something just from watching the sausage get made.  One thing we learn is it's just sausage. Ezra Klein has taken a lot of what could be highly informative back and forth on the World Wide Web and privatized it, much as rich people in gated communities reclaim green space from the public sphere and wall it off behind guards and fences. It's not an egalitarian or democratic impulse.

P.S.: Here's DeLong's preferred description of JournoList:

[I]t is the people whom Ezra thinks are smart enough, committed enough to discussion and learning and education, and good-hearted enough to be worth emailing regularly--and the rest of us free-ride on the virtual space that is Ezra's network. [E.A.]

False modesty? Check. Suck up to the organizer? Check. Underlying, self-satisfied exclusionary impulse? Check. ... 

¹Kaus is engaging in a little of his own false modesty here, I think, given that his blog is published online on Slate, which is owned by the Washington Post -- not the typical set-up of a Pajamahadeen.

McCain's Base

In the 2000 Republican presidential primary, Senator McCain and his campaign staffers used to joke that "the press is our base". McCain had long had favorable relations with the press, particularly when he bucked his party on various issues, and that continued during his insurgent primary campaign against then-Governor George W. Bush. McCain enjoyed some favorable press during this year's Republican primary as well, but once the general election campaign between McCain and Senator Obama began, McCain's press 'base' largely deserted him. The Pew Research Center study released last week provides some evidence of this (see: "Canvasing Campaign Media: An Analysis of Time, Tone and Topics"; the histogram above comes from this study). According to the Pew study,

In the six weeks following the conventions through the final debate, unfavorable stories about McCain outweighed favorable ones by a factor of more than three-to-one [...]

The Pew Research Center study summary report asks whether media bias has played a role in this negative coverage,

One question likely to be posed is whether these findings provide evidence that the news media are pro-Obama. Is there some element in these numbers that reflects a rooting by journalists for Obama and against McCain, unconscious or otherwise?

Maybe not, says Pew:

The data do not provide conclusive answers. They do offer a strong suggestion that winning in politics begets winning coverage, thanks in part to the relentless tendency of the press to frame its coverage of national elections as running narratives about the relative position of the candidates in the polls and internal tactical maneuvering to alter those positions.

Many conservatives have long complained that since most journalists tend to be Democrats, the mainstream media is inherently biased against conservatives (although they are sometimes more tolerant of liberal Republicans). This week the Washington Post Company's online magazine Slate was open enough to publish a piece detailing who its staff members and contributors were supporting in the upcoming presidential election. The results won't do anything to assuage conservative complaints of media bias: 55 Slate staff members and contributors are supporting Obama, versus 1 (Deputy Managing Editor and Copy Chief Rachel Larimore, who hopefully doesn't have to eat lunch by herself) supporting McCain (you can read their explanations of their votes here, "How we're voting: Obama wins Slate in a landslide").

Is the Credit Crisis hurting the Real Economy?

That is, after all, the political rationale for enacting the Paulson plan: that the credit crisis on Wall Street is, or will cause significant harm on Main Street. That was also the subject of many of the questions Congressmen asked of Secretary Paulson during his testimony last week. Doubts that the problems on Wall Street will effect Main Street are one explanation proposed for the popular opposition to the Paulson Plan. Although the conventional wisdom among pundits seems to be that, if unchecked, the credit crisis on Wall Street will have dire consequences on Main Street, there are some skeptics. Below are a few examples.

- Binyamin Appelbaum, writing in the Washington Post last week ("Smaller Banks Thrive out of the Fray of Crisis"):

Banks throughout the United States carried on with the business of making loans yesterday even as federal officials warned again that their industry is on the verge of collapse, suggesting that the overheated language on Capitol Hill may not reflect the reality on many Main Streets.

[...]

"We collect money from local savers, and we lend it in the local community," said William Dunkelberg, chairman of Liberty Bell Bank in Cherry Hill, N.J. "We're doing fine. There are 9,000 financial institutions out there, and most of them are small and most of them are doing fine."

- Alex Tabarrok, writing on his blog Marginal Revolution last week ("Where is the Credit Crisis"?):

[H]ere we are in September and bank credit continues to look very robust.  As Robert Higgs points out consumer loans are up, commercial and industrial loans are up, even real estate loans are up.  Overall, total  bank credit is up with just a slight sign of leveling off in recent weeks.  So where is the credit crunch?

[...]

I wonder how much real lending was actually being generated by asset backed securities. Could it not be that most of the funds generated were used to buy more asset backed securities? (The growth in these securities is certainly suggestive of that possibility). If that is the case then it explains why the real economy has been remarkably resilient to the "credit crunch."

- Alan Reynolds, writing in Forbes yesterday ("Bank Loans Have Not 'Dried Up'):

Contrary to many comments, consumer and industrial loans actually increased in the latest week. Troubled giant banks have cut back on lending, but smaller banks have picked up the slack. Consumer and real estate loans dipped insignificantly through Sept. 17, remaining much higher than they were a year earlier.

If all the recent hysterical chatter about lending being "frozen" or "shut down" refers to anything real, it is not about banks loans (through Sept. 17) but about such arcane financial markets as asset-backed commercial paper or loans between banks. But this too is mainly about financial firms, not Main Street. Non-financial commercial paper increased from $156 billion at the start of the year to more than $204 billion from Sept. 3 to Sept. 17, dipping only modestly since then."

Bill Gross Estimates the Yield-to-Government on an RTC-like Rescue Plan

In an op/ed in today's Washington Post ("How Main Street Will Profit"), PIMCO's Bill Gross estimates that the government could make 7%-8% by investing in distressed mortgage assets:

I estimate the average price of distressed mortgages that pass from "troubled financial institutions" to the Treasury at auction will be 65 cents on the dollar, representing a loss of one-third of the original purchase price to the seller, and a prospective yield of 10 to 15 percent to the Treasury. Financed at 3 to 4 percent via the sale of Treasury bonds, the Treasury will therefore be in a position to earn a positive carry or yield spread of at least 7 to 8 percent.

This doesn't take into account the proposals for the government to take equity stakes in the institutions that participate in these auctions, but as Wharton Prof. Jeremy Siegel noted earlier today on CNBC, if the government takes equity stakes in participating companies, it may be willing to offer higher prices that it would offer otherwise for the troubled assets.

Another Op/Ed in support of Increased Infrastructure Spending in the U.S.

The latest call for increased U.S. infrastructure spending comes in this column by Felix Rohatyn and Everett Erlich in today's Financial Times, "Measures to avoid the worst recession in 30 years". One of the measures the authors recommend is the creation of a national infrastructure bank, as proposed by Senators Chris Dodd and Chuck Hagel,

which would provide assistance to state and local governments to inc­rease investment in infrastructure. With an initial capital base of $60bn and the ability to insure the bonds of state and local governments, provide targeted and precise subsidies and issue its own 30-50-year bonds, the bank could easily provide $250bn of new capital to invest in local infrastructure over five years, which would also create several million new jobs, just as the domestic recession threatens to gain momentum.

This isn't the first time Rohatyn has advocated increasing spending on infrastructure. See, for example, this Washington Post op/ed from 2005 coauthored by him and Warren Rudman, "It's Time to Rebuild America: A Plan for Spending More -- and Wisely -- on Our Decaying Infrastructure". In March of this year, Rohatyn and Rudman teamed up again in a Financial Times column titled Infrastructure is America's best Investment". Someone more politically astute than me might know how much influence Rohatyn retains within the Democratic Party. He was prominent during the Clinton administration, and was rewarded with the ambassadorship to France for his efforts, as I recall. It's worth noting that in today's column, Rohatyn teamed up with a fellow Democrat, the former Clinton administration official Erlich, instead of with his Republican friend Warren Rudman. Perhaps Rohatyn sees the current political environment as so tilted toward Democrats that he is less interested in making a bipartisan pitch for his proposals? Or perhaps I am reading too much into his choice of coauthors this time around.

This FT op/ed comes less than a month after the Economist editorialized about the need for increased infrastructure spending in the U.S., as I noted and commented on in this post, The Economist: "The Cracks are Showing".