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?
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22 comments:
sheer paranoia. To suggest that Evan Davis would associate with bias is stupid - he is one of the BBC's best assets
and here was I thinking that the City of London was in the UK!
Stupid me, thankyou BBC for putting me right
It's true that the programme did focus quite heavily on the USA. If you were watching it purely through "Which side of Gordon and Dave's weekly It'sAGlobalProblem/It'sAllYourFault arguments does this come down on" goggles, then it would indeed be hard to call it impartial. But since that wasn't really the point of it, you'd have to be a pretty odd person to dismiss what was a very intelligent, well pitched programme on that basis.
I have never liked his broadcast demeanour which is "I am a very clever person explaining it all in very simple terms to you thickies."
When it comes to handling complex ideas and translating them into simplified versions,he has more in common with Mr Cholmondely-Warner than Kenneth Clark.
Oh, and there were generally nice stylistic reasons to use the places they did, eg. the Chicago markets, both the home of the "Chicago school" of free-marketeering, and also conveniently able to provide a market floor, a guy who does buying and selling from home, and a wheat farmer who is affected by the prices set by the market, all within an hour's drive of each other.
Isn't is lovely - the 'inner glow' that comes from a West Ham United win that was a joy to watch....
The extent to which the crisis was caused in America and the extent to which it arose here aren't matters of ideology or political opinion - they're matters of fact (albeit where the facts are difficult to measure and determine). Given this, it's entirely reasonable for Evan Davis to give his take on the true nature of the facts - it would be quite different if he was talking about the righteousness of the various solutions, or of the level of debt in society, for example.
Andy -
I'll own up to those being my comments. But:
a) I did not dismiss the programme at all, I actually called it "interesting, eloquent and comprehensible-to-a-layman" and "on a macro-economic level...fascinating and informative";
b) the PM is using every public appearance and every argument at his command to try to make the British public view the financial crisis through the "global problem" goggles, so it's not that silly a point - if you have read anything about the political blame game but are unsure who is right, that programme watches like a party political for GB;
c) the examples you quote from Chicago were very much in context and did "fit" stylistically. Nobody's trying to pretend the US had no involvement.
But surely any number of versions of the tripartite sub-prime mortgage sob story could have been found in the UK - why use an American equivalent?
And why talk so much about US investment banks and fail to mention any of Northern Rock, Lloyds, HBOS et al? Northern Rock failed long before Lehman did, and the others have failed just as spectacularly as any other US institution. I can understand Lehman, because it actually went bust, but plenty of UK banks would have followed them without government intervention.
I think it was the first episode of the series that spent a good deal of time looking at Northern Rock. Though did frequently rope in Wall Street types to explain things and implied Northern Rock was little more than a sub-prime front for Lehman Brothers.
Seemed arse about face at times. The suggestion was investment banks caused high street banks to lend to risky customers and generate CDOs for the investment banks to invest in. It's as much the other way - high street banks packeting up bad debts in a way to make mugs at investment banks part with investor's cash.
Perhaps I've got it completely wrong but it has seemed to me that this "bust" started in the USA. The near criminal complacency of Brown as chancellor and as PM meant that the UK, and UK banks were uniquely vulnerable.
The iceberg came from Greenland; it was the incompetence of the captain (PM) to hit it; it was the incompetence of the designer (chancellor) that the bloody ship sank.
Er -- this was a programme called "The City Uncovered". And yes, the first episode in the series did take a very in-depth look at Northern Rock.
Iain, I'm not really sure what your correspondent's point was. That the BBC makes a programme that does not contain the narration: "Gordon Brown is a one-eyed loony who has stitched this country up a treat and no mistake" and is therefore biased and evil?
Sigh.
I should add: the BBC bloody well ought to make a prog entitled "The Treasury Uncovered". Ed Stourton did a similar Radio 4 effort on the Foreign Office in the run-up to the Iraq war. Jolly good it was as well.
Perhaps I'll email a few commissioning editors.
I'll have to watch the programme. Generally I like Evan Davis, but like all BBC employees assuming a rose tinted bias has to be the starting point for healthy sceptical reviews.
On an aside I can see an emerging consensus of the current crisis and it has little to do with "it started in America", but much more to do with debt and the flow of capital from abroad into the US and USA. ( The Economist has a lot on this this week and should be required reading for all those interested in politics. )
The problem is the inflow of money from the Far East and Middle East that lead to a debt fuelled asset price bubble.
And guess who's watch that all happened on ?
So no mention of S&P and Moodys fraudulent rating of the toxic debt as AAA, eh?
Didn't see the programme (despite 'Europe' we can't get British programmes here) but was he really doing any more than describing what had happened - and after all, it did start in the USA.
Ian Dale - you deeply disappoint me. I have always had a mental picture of you in fur hat and scarf down at Upton Park, not glued in front of the box.
Absolute rubbish.
It was a fair exposition and one which anyone paying attention would have noticed contained a couple of major criticisms which went right to the heart of the recent Labour Governments.
The explanation of 'Confirmation bias', where one sees what one wants to see and ignores the contrary evidence, was accompanied by a recording of Tony Blair talking about weapons of mass destruction.
Davis later stated 'probably the golden years are better seen as a classic bubble' - this time with a recording of Gordon saying 'no more boom and bust no more stop/go etc, longest period of growth for 200 years"
This accusation against Davis is entirely unfounded.
I thought the series was pretty good and compared well with Niall Ferguson's similar recent one.
I agree Evan back peddled on Brown's poor performance, perhaps because Evan had one eye on being called on to interview the swine for the Today program.
Isn't it a series, which would mean that certain episodes focus on different areas?
@ BJ
You'd contend that Davis is in the same league as Stourton?
Why?
And, of course, excellent radio is so much cheaper to make than mediocre TV.
Bring back the Home Service.
God! Iain dale is insufferable enough without West Ham beating Hull City 2-0!
Liz McKean did a report for tonight's (29/01/09) Newsnight about the civil unrest in Greece, Iceland & France, asking the question 'What might happen in the UK?' What followed was a potted history of Thatcher's defenestration of the unions, a quick comparison with today's union-backed french protests & a virtual call to arms. Astounding.
It gets a lot worse than Evan Davis, but the BBC is generally awful.
My take on the causes of the recession and credit crunch are there...
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