It's better late than never, but Howard Kurtz, the Post's media columnist still misses some very fundamental points on the media's reporting on the economy. First, reporters should recognize that people employed by an industry lobby have an ax to grind. They are not neutral observers. This means that it was incredibly irresponsible to have David Lereah, the chief economist for the National Association of Realtors, as the Post's most widely cited expert on the housing market. Lereah was in the business of selling homes, not helping Post readers understand the economics of housing. The paper's reporters and editors should have known this. The second point is that it is reasonable to take into account experts' past performance when assessing the quality of their analysis. Specifically, it would have been reasonable to downgrade the analysis of any expert who failed to recognize the stock bubble and the inevitable recession that resulted from its collapse. If an economist was unable to recognize a $10 billion stock bubble, there was little reason to believe that they would be capable of detecting a bubble in the housing market. In other words, when assessing the situation in the housing market, the Post should not have relied almost exclusively on experts who were wrong about the most important economic development in the 90s. The Post seems to still be following this practice, as its economic reporting relies almost exclusively on experts who managed to overlook both the stock market bubble and the housing bubble.
--Dean Baker
