The Washington Post story today about the Supreme Court’s scheduled oral arguments Tuesday in the Stoneridge securities case rubbed the wrong way, mostly because like so many other media accounts it makes Enron the prism for viewing the case.
But, no, Stoneridge isn’t about whether Enron was wrong and people got hurt, it’s about whether the law should punish companies that only tangentially are involved in securities fraud — no causation, no blame — and what that would do to the U.S. investment environment. (NAM materials here.)
It’s not a horrible story, and the reporters make an effort toward balance. But, still…
By coincidence, we happened upon this post by George Mason economist Arnold Kling about journalists and their economic prejudices, siting his colleague Tyler Cowen.
Tyler Cowen makes 8 remarks about journalism. The one that most reinforces what I believe is:
Journalists tend to favor visible stories and neglect invisible opportunity costs and invisible hand mechanisms, which often but not always puts them against the side of the market.
Journalists write stories. The best stories have villains and victims. The villain-victim framework is often ill-suited to capturing economic phenomena.
Well, that’s it. Enron had villains and victims, so it makes an accessible way to explain a complex securities case. Which explains, but doesn’t excuse …
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