I don't know if you had the pleasure of watching Evan Davis' BBC documentary "The City Uncovered" at 9pm last night. It examined in detail the operation of markets, how bubbles form and what happens when they burst. All very current and relevant, and it linked past events through to the current crisis in an interesting, eloquent and comprehensible-to-a-layman way. All of which is exactly what readers of Evan's old economics blog on the BBC website would expect.
So far, so good. However, 55 minutes out of the 60 were spent interviewing Americans and talking about the horrendous, inevitable bust that has occurred there. Included in this, by way of example:
- a segment where a US marine is sold a subprime mortgage at 16x salary by a mortgage salesman who used to live the highlife and has now gone broke because he could sell the loan on to a banker in New York, who has since been fired. Interviews with all three, including a touching part where the marine breaks down in tears because he has had to use his son's hard-saved college fund to keep up mortgage repayments;
- an analysis of part American bubbles and crashes, including railways in C19, the Wall St Crash and the dotcom bust; and
- a discussion of how Lehman, Goldman Sachs, Merrills and other Wall St banks created these horrible derivatives which permitted this to occur (no mention of any UK-based institution during this segment).
The British mentions were:
- a City banker (who could make a career playing an odious Tory toff, and talked like that Harry Enfield character who used to say "considerably richer than yow" all the time) who analysed why the markets in America went wrong;
- a token mention of how far RBS shares had fallen, although with the implication that they were hit because the US markets collapsed; and
- an even more token shot of Evan talking about bubbles with London Bridge in the background and Gordon's voice saying "we've abolished boom and bust" in the background.
Anyone watching this programme who did not understand markets or the full story around the crisis would have come to the conclusion that it was all America's fault. There was no other conclusion to draw from the evidence presented. Indeed, my wife drew exactly that conclusion. And whose party line, lifeline, soundbite is "it was all America's fault"? Oh yes...
On an macro-economic level, it was a fascinating and informative programme. On a political level, it was disgraceful propaganda and should be named and shamed.
Thursday, January 29, 2009
Evan Davis: A Reader Writes...
Just had an email from a reader who watched the Evan Davis programme last night on BBC2 called THE CITY UNCOVERED. I didn't see it as I was otherwise engaged on important matters of State on Sky Sports 2 (West Ham 2 Hull City 0, since you ask). Did others see it? Do they agree with the point this reader is making?