Media talks debt

How to characterize the mainstream media reaction to the unfolding debt negotiations between Greece and Europe (not the financial press mind you, which knows what it’s about though sides largely with the creditors)? For those looking for the simplest angle, it is merely a stand-off without context: a horse race or Wild West shoot-out. Here, the problem is not so much a particular internalized economic doctrine, though that’s there too, but an additional utter lack of context.

A significant chunk of reporting, however, tries to give at least some context. Often, it starts with the “fundamental fact” of the debt: hark! there’s a huge pile of debt. Even this choice of starting point is already open to significant unacknowledged assumptions. One such natural assumption is “oh it’s probably the result of profligacy” or some variation on this theme. Debt is moralized from the outset rather than a search begun for potential structural causes. (Krugman is actually quite good on critiquing this.)

A second theme often almost immediately follows, “well, clearly belt-tightening is in order” — austerity is the natural remedy to the crisis. This is the household budget view of government finances that has little basis in economic theory, but is a central plank of excuses given for the politics of austerity: you’re in debt so save your way out, pinch pennies even if starts to cause immense suffering. The suffering is acknowledged but in similar terms as collateral damage is in so much mainstream war reporting.

Yet while the focus is often the sum of debt and how it can be repaid, both are in many ways meaningless if the debt is truly unsustainable. Greece, with the Troika and the other European states, is involved in an argument partly over symbols, albeit symbols with very real effects. If Greece is insolvent, then further repayment on harsh terms brought about via financial lifelines to enable this repayment is also disciplining device, one that conveniently also sends a message to other EU states. The tool is the austerity program, which produces real suffering, dislocation, enormous unemployment and massive shrinkage of the social sphere.

All this is too often left out. The amount of debt figures large in reports, the billions and debt/GDP ratios frightening and pushing the austerity narrative. Sometimes, the fact that 25 percent of Greeks are unemployed sneaks in, or 50 percent of youth. But how often is it mentioned that the Greek government needs to be able to redirect spending towards its social programme, which at a basic calculation provided by Syriza before the election actually amounts to a modest 11 billion Euros? Similarly, the question of how the state can even collect revenues to pay for anything — measures to end the tax strike by the oligarchs and clientelist state-business relations — is a side issue at best.

This interplay between media assumptions and reality was in rather full effect in the recent interview with Yanis Varoufakis on BBC Newsnight. Take the phrase “structural reforms” — clearly the presenter and the interviewee meant very different things but assumptions obscured this away. The other elements were there: the Wild West metaphor, surface level yes/no questions, the eschwing of ambiguity in favour of a horserace. Entertaining if demoralizing to watch:

[This is an extended version of a short commentary I was asked to provide for Al-Jazeera’s Listening Post on the mainstream media’s handling of the Greek debt talks.]

3 thoughts on “Media talks debt

      1. Super, je savais bien que c’était pertinent… DUH! 😎
        (I’m only a physicist and political/macro/economics just lately began interesting me)

        As always, JW’s current entry (about Greek capital flows) is worth reading… A crazy Idea: do you think Varoufakis has, currently, time to read blogs? He should… You interviewed him, maybe a ‘head up’ would do the trick: tout va se jouer très vite… (Greece VS eurogroup/technocrats) so every bit of advice count (if Signal/Nois ration is not too high).

        Oh et voici une traduction de l’article de Lordon I referenced above:

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