Opinion

Felix Salmon

The WSJ’s unhelpful aggression

By Felix Salmon
August 12, 2009

The front page of today’s WSJ has a big headline: “A President as Micromanager: How Much Detail Is Enough?”. The lead anecdote?

In briefing President Barack Obama one day this spring, White House economist Jared Bernstein delved into such arcana as the yields on different forms of credit relative to the risk. Later, Paul Volcker pulled Mr. Bernstein aside. “Why would the president want to know that level of detail?” asked the former Federal Reserve chairman.

“That’s what he wants,” Mr. Bernstein replied.

This is astonishing stuff, coming from the Journal. Any other US newspaper might be forgiven for underestimating the importance of credit spreads. But for the WSJ, in its lead paragraph, to characterize credit spreads as “such arcana as the yields on different forms of credit relative to the risk” is not only inaccurate (“relative to the risk” makes no sense) but also comes across as unpleasantly faux-naive, in the service of a contentious thesis.

This is part of the new Murdoch Journal, of course — the same paper which has for months been desperately trying to drum up some kind of Congressional expenses scandal by leveraging the power of its front page, to almost no visible effect. It’s aggressive, yes, and that’s normally a good thing. The problem is that it’s aggressive in a particularly unhelpful and often disingenuous way, and there’s no reason to believe that anybody at the Journal is going to stop this carrying through past the silly season of August.

The Journal is clearly desperate for a big political scoop, or at very least a scalp. But it’s sad that it’s letting its desperation show so obviously.

Comments
13 comments so far | RSS Comments RSS

Not related, but what’s the deal with the spam postings in your comments section lately? Can we do something about that.

Posted by ab | Report as abusive
 

Except the Journal article doesn’t seem to be anti-Obama at all, aside from the slightly negative connotation of “micromanager” in the headline.

Posted by right | Report as abusive
 

The article mentions Volcker, who perhaps is fishing a little more these days than having his views made known. That;s a little surprising, considering the historical heft his FED term carries.

Maybe he needs to shout above the din of Bernstein or Goolsbee to be heard, i dunno

Posted by Griff | Report as abusive
 

President Jimmy Carter was into details. My take is President Barack Obama is focused on the trees instead of the forest. Doesn’t see the big picture. Typical for someone in their first management position.

Posted by RM3 Frisker FTN | Report as abusive
 

You are too young to remember President Carter, but he was our last micromanager-in-chief. His policies and priorities were remarkably similar to Obama’s, alternative fuels, national healtcare, a naive belief in talking to dictators, trust in government to do the right thing, and distrust in free markets. Hopefully, we’ll end this 4 years in better shape than those 4 years.

Posted by FT4 | Report as abusive
 

To put micromanaging in perspective, it was reported that to settle arguments by his aides over use of the tennis court, Mr Carter actually scheduled the court time. (My assumption is this was in the context of a staff meeting, so it’s not a big deal.)

The WSJ conflates understanding detail with managing. Mr Obama doesn’t manage credit spreads but he does, it seems, want to understand them.

Posted by jonathan | Report as abusive
 

I agree with the commentator above who noted that while the headline seemed negative, the article itself showed a President who was remarkably engaged in the issues.

What is enjoyable to me is that most of the Wall Street CEOs who didn’t understand the products related to credit spread they were sending out the door would find President Obama’s insistence that he be informed about the details of something (vaguely or indefinably, as Felix points out) related to them “micromanaging.”

 

frank rich’s saturday nyt piece seemed to be aggressive

Posted by ac | Report as abusive
 

I remember reading (in Michael Lewis’ “The End”, I think) how CEOs didn’t ask how their firms were making so much money, they just accepted it. And look where they got them.

I don’t see what’s wrong with the president wanting to understand details of plans that are presented to him. It’s not like the plans that reach his desk for approval won’t benefit some more than others.

Carter micromanaged things like who got to have access to the White house tennis court. Obama making sure he understands how some new financial initiative might impact the economy is not on the same level. If we want another MBA president, we need one who knows what questions to ask, and when the answers are full of $hit.

Or maybe we can have a president who signs off on a $700 billion expenditure that, among other things, makes whole Goldman Sachs’ credit swaps (which were probably purchased without the CEO’s knowledge), because he’s been told “if we don’t (spend all that money) the whole sucker is going to blow up”.

Posted by KenG | Report as abusive
 

If it weren’t for Terry Teachout, I’d probably let my WSJ subscription lapse. Still plan to keep paying for Barron’s, though.

 

[You are too young to remember President Carter, but he was our last micromanager-in-chief.]

http://www.theonion.com/content/opinion/ i_got_what_america_needs_right?utm_sourc e=EMTF_Onion

Posted by dsquared | Report as abusive
 

Micromanager is one who dictates how things are done, not someone who asks how they are done. A micromanager is one who decides each and every matter, not one who asks why large matters are decided upon one way rather than another by his reports. The latter is what we call a manager, something we didn’t have for the eight years before Obama stepped into office. There is no sin in asking questions and gathering data. There is much sin in not doing so, although there may be deniability, something that has denied himself the luxury of having–welcome in a president for once.

 

Felix,
Jared is right and you’re dead wrong. Different types of credit instruments have different levels of risk to the borrower and to the lender or investor. The yields on those instruments reflect that risk, e.g. low rates on adjusted rate debt than fixed rate debt for example. Discussing the yield without the risk is what does not make sense.
Randall Dodd

Posted by Randall | Report as abusive
 

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