Archive for the ‘Headline’ Category

Service of When a Headline Underplays Scary News

Monday, January 20th, 2020

Photo: thoughtco.com

I’ve mentioned here before that I passed college economics by figuring out the answers to exam questions and writing the opposite. Economic theories made no sense. I’m not comfortable writing about the economy but this post is also about the delivery of news which is something I’ve studied.

The headlines to Josh Zumbrun and Anthony DeBarros’ Wall Street Journal article soft-sold some daunting repercussions of the administration’s tariff war with China. The online headline was “Trade War With China Took Toll on U.S., but Not Big One,” and the print version was “Trade War Takes a Muted Toll on U.S. Economy.” The words I focused on were “but Not Big One” and “Muted Toll.”

Photo: rfdtv.com

Readers don’t have far to read before alarms ring. Following are the first two paragraphs:

  • “Farmers took a big hit. Importers of auto parts, furniture and machinery choked down punishing tariffs. Investment between the world’s two largest economies dropped.
  • “Much of the U.S. economy is largely unscathed by two turbulent years of trade war with China, economic indicators show. Yet economic growth is trending near 2% in 2019, well short of the Trump administration’s goal of 3%.”

According to Zumbrun and DeBarros the administration says the war is worth it. “The deal ‘protects American innovation and creates a level playing field for our great farmers, ranchers, manufacturers, and entrepreneurs,’ said Judd Deere, a White House spokesman, adding, ‘President Trump protected the American worker and fundamentally changed our relationship with China.'”

Photo: focusmagazine.org

The reporters wrote that Benn Steil, who directs international economics at the Council on Foreign Relations, claimed that the president could have achieved the same deal without side effects two years ago. Economists predict years may go by before we can realize the actual repercussions.

Zumbrun and DeBarros subsequently reported in detail on the impact of the tariffs on agriculture, inflation and prices, bilateral trade, investment and economic growth. A few excerpts:

  • Agriculture: “Annual S. farm exports to China plunged from nearly $25 billion in recent years to below $7 billion at its low point in the 12 months through April 2019.”
  • Inflation and Prices: “While Mr. Trump frequently claimed China would pay the tariffs, they have been paid by S. importers.”
  • Bilateral Trade: “After decades of surging commerce between the world’s two largest economies, trade took a sharp step back. S. exports to China dropped by nearly $30 billion, while imports from China fell by over $70 billion, for a decline of over $100 billion in trade.”
  • Investment: “Investment in the S. economy slumped. Foreign direct investment slowed to nearly a halt in the early part of 2018, and was weak again in mid-2019.” Nancy McLernon, president of the Organization for International Investment, pointed to trade tensions as the cause.
  • Photo: vox.com

    Economic Growth: In early 2018, the Trump administration celebrated 3 percent growth and forecast the same through 2019 along with a prediction that the Federal Reserve would raise interest rates. “Instead, as the trade war wore on, the administration began imploring the Fed to slash interest rates to bolster the economy. The Fed cut rates three times. Even so, the economy has cooled toward 2%.” In addition, “the boost from the 2017 tax overhaul was beginning to fade” wrote  Zumbrun and DeBarros and last, the reporters ID’d the impact of uncertainty–“the constant unpredictability of what happens next,” said Ayhan Kose, director of the World Bank’s global macroeconomic outlook.

Do you think the gap between the news in the article and the headline occurred because the headline writers hadn’t read the article or because the facts don’t match the philosophy of the Wall Street Journal‘s publisher and the staff wanted to be sure that the story ran? Do tariffs worry or impact you?

Photo: 123rf.com

 

 

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