The folks at NPR’s Planet Money podcast have already sort of repented for verbally badgering Elizabeth Warren, a Harvard professor and high government official who happens to be female, in an interview. But what interviewer Adam Davidson’s sort-of apology didn’t reexamine is the reason he gave for getting so combative in the first place: Warren’s thoughtful and reasonable economic critique differed from that of every other economist he’s interviewed in the past months. Faced with someone who was bucking the consensus he’d heard, Davidson temporarily lost it.
You know what else we’ve done in the recent past by consensus? Created the huge, destructive speculative bubbles – in housing prices, mortgage-backed securities, and other abstract financial instruments – that drove the world economy off a cliff.
If you think about it, financial market bubbles and crashes, which we now realize affect the rest of us so deeply, are by definition problems created by consensus. A large number of smart, reasonable, usually nice people, many of them with positions of prestige, advanced degrees, and/or sophisticated computer models, get together and, by failing to see the larger picture, create a huge disaster.
So here’s some advice to Davidson and journalists in general: When talking about the economy, throw out your normal rulebook of choosing sources based just on position of authority, or confirmation from an independent source. Instead, look for experts who bucked the consensus by seeing the problem ahead of time. Ask Brooksley Born, the Clinton-era government official who was considering regulating derivatives, over Alan Greenspan’s objections, until Congress passed a law to stop her. Ask Dean Baker, the economist who for years warned anyone who would listen about the housing bubble.
And the Obama administration – whose consensus-building efforts are laudable in so many areas – might want to consider just doing the opposite of what Wall Street consensus urges them to do. Actually, Dean Baker’s blog keeps pointing out back-door government giveaways to Wall Street, like converting the government’s preferred shares (i.e. “we get paid first”) to common stock at way-above-market prices. President Obama, you’re a great communicator – can you persuade Brooksley Born to come out of retirement and head the Treasury Department?
Elizabeth Palmberg is an assistant editor of Sojourners. Read about how the out-of-control buying and selling of money led to our current crisis in the latest issue of Sojourners Magazine.
