Democratic economics: learning to use a powerful tool
In her latest column, Stephanomics, the BBC's economics editor says Canadians deserve an award for being most prepared to withstand an economic crisis. In the only slightly tongue-in-cheek commentary, Stephanie Flanders says our "goodie-two-shoes economy" puts us at the head of the global pack.
Well, if we were smart before, we should be even better soon. There is evidence that Canadians are pulling out the stops to educate themselves about economics. With luck, that won't just let us withstand the current crisis, it will create a crucial change in how we pull out of it.
Until very recently, thinking in detail about the economy was a fringe pursuit. That job was left to the experts. A few pointy-headed university professors. And people like bankers and company executives. You know, the people who had to understand all that stuff so that their banks and companies wouldn't go broke. There were also the personal investment companies that offered messages like "leave the worrying to us."
For the other few who did want to understand, we business and economics journalists were the middlemen.
About two years ago, the small but substantial group of people who watched our daily half-hour Newsworld program, CBC News Business, were getting an inkling that things were going wrong. There were voices saying markets were getting too hot, that borrowing had gone crazy.
But reaching a wider audience was difficult.
News coverage nowadays isn't just a list of facts. News, especially on TV, is partly entertainment. Making people sit up and listen means telling peppy stories that affect ordinary people in their daily lives. The abstract world of economics and the complexity of finance didn't fit the model. "Credit crunch?" we asked ourselves at news meetings. "What does that mean to regular people?"
Understanding economics is no harder than understanding cascading sports draft choices or the rules of baseball; it's no more difficult than scheduling lunches, lessons, soccer, daycare and play-dates for a family of four.
Now, of course, we know.
It means millions of Americans losing their houses. It means millions of retired Canadians having to live on less. It means more Canadians losing their jobs. It means vacant store fronts. It means young people not being able to get work. It means higher taxes in the future to pay for spending and tax breaks now. The list goes on and on. We all know it's important.
Suddenly, from being bland and boring, business and economics are things that affect each of us, personally, now. Our audience at CBC News Business is growing, and letters from viewers indicate it's not just people worrying about their stock portfolios.
People want to understand. And there is no reason why they shouldn't be able to. Understanding economics is no harder than understanding cascading sports draft choices or the rules of baseball; it's no more difficult than scheduling lunches, lessons, soccer, daycare and play-dates for a family of four. It reminds me of the "uneducated" Hong Kong labourers who I watched placing the most complex bets at the track. They just educated themselves about the things they wanted to learn. After that, it's just a matter of putting in the time.
That's what Canadians are doing now. And they are not just coming to CBC News Business for their dose of fiscal vitamins. The Hour's George Stroumboulopoulos, who was supposed to take us away from all this with sunny youthful entertainment, is doing serious economic interviews. Shows across CBC Radio and Television are talking hard economics. And people are tuning in.
Recently CBC Radio's Sunday Edition host, Michael Enright, hosted a two-hour economics forum. Every Canadian should listen in (click the March 29 show). The great thing about the Enright forum is that it reminded us that economics is not just for bankers and business owners. Economics is for everyone. When we delegate responsibility for running such an important part of the world we are in danger of losing control.
One of the issues debated in the forum was whether this was an opportunity for change, or whether we had to get the old clunker of an economy chugging away again before we could afford to make the changes we wanted.
The traditionalists voted for stasis. Fix up General Motors. Cut taxes.
The interesting voices said use changes to our economy to yank us out of the mud.
An axiom of old economics is that if people wanted something good, like clean air and no climate change, we would vote with our purchasing power. Yet polls repeatedly show that we care about the environment. This week, China announced it was becoming a leader in electric cars. And while the government will be using its power to order the change, it is capitalism and business that will make it happen. The U.S. and Canadian governments could have made the same kind of decision years ago, but they decided to let car companies keep on making gas guzzlers. Now we are bailing them out with our tax money.
Understanding how that happened will keep it from happening again. One of my standard lectures to friends around the newsroom is that when you see politics and other kinds of news happening, what you are seeing is the tip of an iceberg. The rest, the part you can't see, is economics and business. Unless you look.
If we wash our hands of that huge part of the world and through our ignorance leave the bankers and company executives in charge, it's no wonder we don't get the world we want. But if we make an effort to understand something we realize is really important to everything — our lives, our future and our children's future — we have a much better chance of making things go the way we want them to.
Economics is a powerful tool, but you must learn how to grasp it.
Don Pittis has reported on business for Radio Hong Kong, the BBC and the CBC. He is senior producer of CBC News Business.