Time for some inside baseball. One of the most popular parlor games in the econo-blogosphere of late has been the ongoing speculation as to whether Fed chairman Ben Bernanke is his own man, or a clone of his predecessor Alan Greenspan. In other words, is he going to bail out the markets at every opportunity, as Greenspan is perceived to have done by a sizable contingent of commentators, or is he steering a more careful course?
The latest salvo to inspire chatter on this issue came from the Financial Times' Martin Wolf on Wednesday. Wolf lambasted Bernanke in a column for his "panic-driven politicization" and declared that he was under orders to "save Main Street and rescue Wall Street" -- just like Greenspan. Almost as if in direct response, along comes a story in Thursday's Wall Street Journal by the prolific reporter Greg Ip, declaring that "in handling his first financial crisis, Mr. Bernanke shows signs of a break with Alan Greenspan." Specifically, asserts Ip, Bernanke is less concerned with pacifying Wall Street with rate cuts than in his primary goal of controlling inflation.
Both stories are subscription-only, but good summaries can be found at Portfolio.com, where Naked Capitalism's Yves Smith, subbing for the on vacation Felix Salmon, has been gnawing on the nitty-gritty of the debate like a pit bull. On Thursday morning, in a post titled "The Wall Street Journal's Greg Ip Defends Bernanke Against Martin Wolf," Smith went on the warpath, calling Ip "pathetic." Along the way, he casually noted that:
"Ip is widely considered to be a preferred, if not the preferred, outlet for informal communications from the Fed."
If true, this is the kind of characterization that sticks in a discerning reader's mind forever. Even if not true, I won't be able to read another Greg Ip story without thinking this reporter has been accused of being a mouthpiece for the Fed. In an ideal world, this could be an example of the blogosphere providing the kind of added context essential for readers to be able to understand the forces shaping the "news" that they consume. But that's only if the assertion is true. If false, it just muddies the waters.
Smith's sourcing for the words "widely considered" turns out to be an earlier post by himself, dated March 2007, in which he references yet another post, by the Big Picture's Barry Ritholtz, in which Greg Ip is described as a "back door" used by the Fed to correct errors whenever it "says or does something that is subsequently misinterpreted."
Personally, given this sourcing, I would have chosen a more careful framing than "widely considered." Is that being too picky? I don't think so. Greg Ip covers the Federal Reserve as part of his regular beat, and markets around the world can rise and fall based on the Wall Street Journal's interpretation of Fed policy-making. You can't be too much of a stickler when parsing these mysteries.
I think Ip would agree. While looking around to see if there was an online chorus of critical Greg Ip watchers, I stumbled on a speech he gave two years ago, characterizing the evolution of economic journalism over the last 15 years. A couple of paragraphs are of interest here:
Obviously people have always had their preconceptions. But thanks to the Internet, cable television and satellite radio, people are increasingly able to read or watch only the news that fits these preconceptions. For example, many political web-logs, or "blogs," now attract as many readers as some mainstream media web sites. But these blogs do not follow mainstream journalism practices. They do not generally seek to be objective. They do not request comment from the people they write about. They may not disclose conflicts of interest. They may not run corrections when they get facts wrong. They may not honor "off the record."
...How do reporters respond to these challenges? First, amidst a more partisan atmosphere, we've found it more important than ever to ensure the accuracy and fairness of what we write. We must carefully consider our own preconceptions to ensure that we are not letting biases affect our reporting. Second, we must know our subject so well that we can explain exactly why we wrote what we did. When I write an article now, I am conscious that someone out there may be scanning each sentence for the smallest clue that I am biased or incompetent.
Ain't that the truth!
(Just for the record, I e-mailed Greg Ip for comment on Yves Smith's characterization of him, and received an "out-of-office" automated reply.)
UPDATE: Greg Ip responds: "I'd prefer not to comment."