Just because they’re on television doesn’t mean that they’re experts. Watching this video from Fox News Cavuto On Business, August 18th, 2007, we have five experts talking about the economy: Ben Stein, Tracy Burns, Charles Payne, Stuart Varney, and Peter Schiff.
[video http://www.europac.net/media/Schiff-Fox-8-18-07_lg.wmv nolink]
Because of hindsight, we are able to analyze what these “experts” are saying through the retrospective lens of a housing market collapse, a CDS scandal, the ravages of rampant unemployment, and the price of enormous government bailouts to prevent worldwide economic collapse. In other words, these five “experts” sit on the edge of economic collapse, but for some reason all but one is extraordinarily optimistic. If they are experts, why is it that they don’t all see the storm clouds on the horizon?
According to Stein, the credit crunch is overblown. He tells us that that the subprime problem is a “problem but it’s a tiny problem in the context of this economy.” Tracy agrees that the subprime problem is a small numerically but that it has damaged investor confidence. The economic downturn on Wall Street under discussion is essentially, as Tracy Burns seems to intimate, all in the heads of the American investor. As she puts it, the subprime thing is “affecting their psyche.” What one notices immediately from the video is that these “experts” are not about to stop to explain the rather complicated ideas that they’re putting forward. They refer to the things like “the subprime thing” as if it’s a hiccup in the market. No one explains its significance, or more to the point, why we ought to consider it insignificant. They offer no explanation as to why the viewer should believe them. They’re on television, and that seems to be credential enough for their expertise.
When Peter Schiff enters this conversation, immediately following Tracy Burns, he rattles off numerous reasons that America should predict that the “subprime thing” is going to mean total disaster. My point here is not to applaud Schiff, though he’s certainly correct in his thinking. The point is that Schiff, when asked his opinion explains why he thinks what he thinks. He’s trying to offer some kind of argument that validates his concerns.
After Schiff, Stuart Varney enters the conversation lukewarm by letting us all know that in the short term some stocks are going to pay off a bit, but he sees a slight downturn in the market, mostly related to tax hikes…which he doesn’t bother to explain. When the camera turns to Charles Payne he uses his time to explain that Peter Schiff’s “rant is un-American under the guise of financial advice.” No argument, just insult. He then stresses his patriotism by talking about the strength of the American market in relation to the world’s market. To his credit, Charles Payne does offer a reason for his observation about the strength of the dollar, but it is amazingly short sighted. He suggests that America’s market hasn’t toppled to the same extent as the foreign markets so America is safe (though he concedes that the operators of hedge funds have lost their discipline…without example or explanation).
In what becomes an obvious pattern, Schiff retorts to Pain’s allegations about the global market by explaining the foreign market’s behavior: “foreign markets went down along with ours, but it’s because of the money they’re losing on the money they lent us. It’s because of the problems of the U.S, dollar denominated acid backed debt that they own.” The others reply without a sense of argument by stressing unfounded opinions that Schiff is wrong. They do not berate him based on his logic, they do not present evidence that another economic scheme is in operation alternative to the one forwarded by Schiff. They simply begin to argue until the moderator chastises them for slipping into chaos, but as we know now, they were all wrong. They shouldn’t have been listened to. Later, Stein will tell the audience to invest in Merrill Lynch and Charles Payne will suggest that people invest in Bear Sterns.
What went wrong? First, except for Schiff, these people have no argument. They simply give their opinions and expected to be accepted as if their expertise were above suspicion. They don’t even bother to explain themselves when other members of the roundtable disagree with them. Except for Schiff who is radically different than the others, they accept each others opinions as equally valid without need to negotiate their obvious differences. One “expert” thinks the market’s going to go up, another down, but as long as no one suggests total disaster, there isn’t even acknowledgement that they’ve disagreed.
What’s worse is that these people whose opinion is to be taken as expertise are far from experts at all. Have any of them ever held a senior position in a financial company? Ben Stein is a self-professed expert – his media career has certainly lent him celebrity which he has channeled into the image of a political and economic expert, but aside from playing an economics expert on television, what else is there to recommend his opinion? Tracy Burns and Stuart Varney are financial reporters. Out of the lot, Payne seems to be the only one who has actually worked as a stock analyst, and Schiff who is treated like an ignorant radical by his “peers,” is the only one on the show who actually works as a stock broker. He, in fact, is the president of a brokerage firm. And even though he is one of only two people in the show out of five who actually is an expert, he is the only member of the panel who is willing to explain the reasoning behind his opinions—the only panel member who doesn’t expect that the audience take his expertise for granted. The others, who have neither argument nor pedigree for their expertise, offer advice as if they’re simply being on television is enough to render their opinion into financial wisdom.
And now, a year and a half later, we should note that these people are still being asked their opinion. Ben Stein is a regular on Larry King Live. They remain “experts” precisely because they keep getting put on television as if they were experts.