Ben the Optimist

Papers focus on the sunny side of Fed chairman’s economic-growth statement

On the heels of Federal Reserve Chairman Ben Bernanke’s remarks on the economy to the congressional Joint Economic Committee yesterday, news headlines are tinged with varying shades of optimism. The Washington Post and the Los Angeles Times both run the headline: “Bernanke expects growth later this year.” The New York Times, meanwhile, takes a more sober and qualified route: “Bernanke sees hopeful signs but no quick recovery.”

Different focus, different vibe, no? The varied focus—the rosy outlook for the Post and the LAT versus the more muted, don’t-get-excited-yet caution from the NYT—is interesting, because it raises the question: How do you responsibly report the quality and substance of a speech that is as much about projection (and inarguably, a certain measure of public relations-mandated reassurance) as it is about present economic indicators?

Carefully, and with a constant eye toward the bigger picture—that’s how. That bigger picture includes the fact that tomorrow, the much-anticipated results of the bank stress tests will be released (making it a timely moment for heady headlines to circulate), and also the fact that Bernanke’s projections are almost entirely tied to actions that the administration is taking to deal with the country’s economic problems—actions for which the final results aren’t yet in.

So it seems a bit premature, and more than a little wide-eyed, to lead a story about it, as the LAT does, with the following breezy sentence: “Federal Reserve Chairman Ben S. Bernanke added to the recent upbeat mood on the economy today, telling Congress that the recession was easing and that growth should begin by the end of the year.”

This is a confidence-inducing sentence if ever there were one, and it’s not entirely responsible, both because solving our economic woes isn’t that easy and because Bernanke’s statement definitely wasn’t that buoyant. (The LAT article goes on to relay Bernanke’s warnings as well, but that doesn’t quite forgive the unqualified optimism of its lede.) Bernanke qualified every positive statement he made: “Sales of existing homes have been fairly stable since late last year” but “remain at depressed levels”; “the decline in foreign economic activity may also be moderating,” but only “quite tentatively”; etc.

To its credit, the NYT, with the most conservative interpretation, opens with some of those reservations, noting that though the economy “appeared to be stabilizing,” Bernanke “cautioned that a recovery was still months away and that ‘further sizable job losses’ will continue even after an upturn begins.”

And despite its headline, the Post uses a surprisingly philosophical tone to underscore the fact that most of Bernanke’s assurances came with warnings, writing, “a recurring theme in Bernanke’s testimony was the juxtaposition of reasons for hope and reasons that hope could ultimately be dashed.” That hits at the vicissitudinous nature of economic recovery, and the tensile balancing act that people like Bernanke must always engage in—people and investors want good news, but positive economic indicators don’t always play out at the struggling individual level, which means that politically speaking, it’s wise, even necessary, to serve up both optimism and restraint.

But while the reports give space to the cautionary side of Bernanke’s message, the less popular portion of the message runs the risk of being subsumed under such umbrella pronouncements as “decidedly more optimistic” (Post) and “his most upbeat assessment” since the beginning of the crisis (NYT). (The AP also reported that it was “his most optimistic assessment of the country’s financial health.”) These umbrella summaries are the takeaway, because they are the most electric of statements. Who, after all, doesn’t want to hear that the Fed chairman is optimistic about the country’s economic growth? But they also underplay the other equally important half of the message, which not only warns of ample challenges to come, but notes that these “optimistic” assessments are based on “tentative” signs.

And a narrow focus on Bernanke’s words means that the reports mostly miss an opportunity to paint a larger picture—of why his words are so politically important right now (again, bank stress tests come to mind) and of whether they mean much beyond encouraging investor confidence and providing a sort of rhetorical relief for a weary public. Here’s a word game to play: What comes after “upbeat” and “optimistic”?

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Jane Kim is a writer in New York.