Misplaced Emotions
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The people are the only censors of their governors: and even their errors will tend to keep [their governors true]. To punish these errors too severely would be to suppress the only safeguard of the public liberty. The way to prevent these irregular interpositions of the people is to give them full information of their affairs thro’ the channel of the public papers, and to contrive that those papers should penetrate the whole mass of the people. The basis of our governments being the opinion of the people, the very first object should be to keep that right; and were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate a moment to prefer the latter.

Cherish therefore the spirit of our people, and keep alive their attention. Do not be too severe upon their errors, but reclaim them by enlightening them. If once they become inattentive to the public affairs, you and I, and Congress, and Assemblies, judges and governors shall all become wolves. It seems to be the law of our general nature, in spite of individual exceptions; and experience declares that man is the only animal which devours his own kind, for I can apply no milder term to [governments], and to the general prey of the rich on the poor.

Thomas Jefferson
Letter to Edward Carrington
(16 January 1787)

The public and the public papers have been much occupied lately in placing us in a point of opposition to each other. I trust with confidence that less of it has been felt by ourselves personally. In the retired canton where I am, I learn little of what is passing: pamphlets I see never; papers but a few; and the fewer the happier.

Thomas Jefferson
Letter to John Adams
(28 December 1796)

Misplaced Emotions and Misguided Politicians

Approximately sixteen months ago, the armed forces of Australia, Britain and the U.S.A. invaded, conquered and occupied Iraq. Not for the first time – the Boer War, Great War, Second World War, Korean War, Malayan Emergency, Konfrontasi with Indonesia, Vietnam War and Iraq War I also spring to mind – Australian politicians, with considerable support from the general public, deliberately placed their compatriots in harm’s way. As in the past, so too today: the government sent others into the fray in order to honour the terms of a military alliance and to affirm its allegiance to the principal Anglo-American power of the day. (Alliance and loyalty have been so closely intertwined throughout Australian history that they are almost indistinguishable.)

Generally speaking, in other words, Australian soldiers, sailors and airmen have not fought and died in order to defend Australia. On only one occasion – in the Top End during the Second World War – have foreigners threatened Australians’ property and liberty. In every other instance, politicians implicated Australians in others’ quarrels and against people having neither the means nor the intention to harm us. Even the senior advisors of U.S. Presidents implicitly agree. Twice (i.e., during Indonesian disputes with Malaysia and Dutch New Guinea) Canberra has sought guarantees of security from Washington. Each time the Americans sensibly declined to intrude.

Historically, American, British and therefore Australian politicians have used a mixture of half-truths, misrepresentations, deceptions and outright lies to justify their wars. But war does not achieve what its proponents claim; and in addition to death and destruction it also generates unexpected and harmful consequences that afflict the victors as much as the vanquished (see in particular two recent books by Thomas Fleming: The New Dealers’ War: FDR and the War Within World War II, Basic Books, 2001, ISBN: 0465024653 and The Illusion of Victory: America in World War I, Basic Books, 2003, ISBN: 046502467X).

The historical pattern is that politicians’ egos, illusions and delusions lead to war; in turn, war unleashes various unintended consequences; and these consequences, plus politicians’ egos, illusions and delusions, generate more war. As H.L. Mencken put it, “the whole aim of practical politics is to keep the populace alarmed – and hence clamorous to be led to safety – by menacing it with an endless series of hobgoblins.” For a host of reasons, then, Australians have much greater reason to fear their own misplaced emotions and their own misguided politicians than any individual, organisation or idea beyond the continental shelf.

Plus ça change, plus c’est la même chose: American, Australian and British politicians have advanced several – temporally shifting, logically inconsistent and collectively disingenuous – justifications for last year’s invasion. They have also stridently defended themselves against critics who claim that it was unnecessary or unwise or immoral. According to Robert Higgs (Taking Stock One Year After the U.S. Invasion of Iraq), “for everyone except those blinded by partisan loyalty ... the truth is now all too obvious. [These three governments were] wrong and the critics were right.” Moreover, “what we see in Iraq one year after the invasion might have been foreseen, and in fact was foreseen, by anybody who cared to take the trouble to look into the matter without ideological or religious blinders and with a modicum of historical background on the conduct of U.S. foreign policy during the past century” (see also Higgs’ excellent Crisis and Leviathan: Critical Episodes in the Growth of American Government, Oxford University Press, 1987, ASIN: 0195049675 and the comments and analyses of Pat Buchanan, Congressman Ron Paul (Republican-Texas), Justin Raimondo, Charley Reese, Paul Craig Roberts, Lew Rockwell and Joseph Sobran).

The people who opposed the war before it started included not only advocates of limited government at home and non-interventionism abroad: senior (and therefore prominent) and recently-retired (and therefore able to speak their minds) military officers also did so. Unlike the laptop bombardiers of the editorial pages and the cappuccino commandos of the think tanks and parliaments, many officers in these three countries have experienced war at first hand. That experience, plus a native common sense (as opposed to partisan rat cunning) which seems utterly to elude politicians and their many sycophants, has enabled the soldiers to see what the civilian chicken hawks in Canberra, London and Washington could not or would not – and thereby to avoid the broken window fallacy (see also Letter 38).

Gen. Anthony Zinni, the retired U.S. Marine Corps commander, for example, said in a speech to the Florida Economic Club (23 August 2002) “attacking Iraq now will cause a lot of problems. I think the debate right now that’s going on is very healthy. If you ask me my opinion, [as well as that of] General [Brent] Scowcroft, General [Colin] Powell [and] General [Norman] Schwarzkopf, maybe all see this the same way. It might be interesting to wonder why all the generals see it the same way, and all those that never fired a shot in anger and [are] really hell-bent to go to war see it a different way. That’s usually the way it is in history.” Former Army Chief of Staff Eric Shinseki and Marine Corps Commandant James Jones were also ambivalent or cool towards the war; several Australian and British commanders opposed it outright (see in particular The Case Against War with Iraq by Gen. Peter Gration); and Lt. Col. Karen Kwiatkowski, who spent her final years in uniform at the Pentagon, exposed much of the neoconservative chicanery that underlay the push for war.

Perhaps most presciently, Gen. Norman Schwartzkopf was quoted in The Australian (18 March 2003) just hours before the invasion began. “Analysts write about war as if it’s a ballet. Like it’s choreographed ahead of time and when the orchestra strikes up and starts playing, everyone goes out there and plays a set piece. It is choreographed ... [but] what happens is [that] the orchestra starts playing and then some son of a bitch climbs out of the orchestra pit with a bayonet and starts chasing you around the stage. And the choreography goes right out the window.”

The débâcle that has unfolded in Iraq has vindicated these officers’ concerns – and revealed for all to see the idiocy of the civilian chicken hawks’ shrill hubris. Perhaps for this reason, during the past year retired military people have extended and elaborated their criticisms of the invasion. Gen. Zinni says in his forthcoming book Battle Ready “in the lead-up to the Iraq war and its later conduct, I saw, at a minimum, true dereliction, negligence and irresponsibility; at worst, lying, incompetence and corruption.” This criticism has been seconded by another former head of the Central Command. Gen. Joseph Hoar told the Foreign Relations Committee of the U.S. Senate on 20 May that “I believe we are absolutely on the brink of failure. We are looking into the abyss.”

William E. Odom, a retired three-star general and former Director of the U.S. National Security Agency, has urged that American armed forces be removed “from that shattered country as rapidly as possible.” Gen. Odom stated bluntly in The Wall Street Journal (25 April) “we have failed” and “the issue is how high a price we’re going to pay – less by getting out sooner, or more by getting out later.” What have the invasion, occupation, billions of dollars and thousands of deaths achieved? According to Gen. Odom, they have encouraged “the radicalisation of Saudi Arabia and probably Egypt, too. And the longer we stay in Iraq, the more isolated America will become.” Gen. Odom elaborated his views on The Today Show (29 April):

Alan Bock, a senior writer at The Orange County Register and the author of Ambush at Ruby Ridge: How Government Agents Set Randy Weaver Up and Took His Family Down (Dickens Press, 1995, ISBN: 1880741482), put to Odom the proposition that the Americans should immediately release all Abu Ghraib photos and other evidence – no matter how disturbing and grisly. “The Bush administration would have the best chance of getting this thing behind it,” wrote Bock on 14 May, “if it went for openness and making everything public – which would be out of character, of course – and moved beyond.” But “I’m not sure I want to help the administration move on,” Gen. Odom replied. “I’d rather impeach them.”

Discerning what they have wrought and recoiling from what is coming into view, a few laptop bombardiers have begun belatedly to change their minds. Robert Kagan, senior editor of The Weekly Standard, wrote in The Washington Post (2 May) that “calls for a withdrawal from Iraq are starting to pop up all over the place now and will proliferate in the coming days and weeks. I find even the administration’s strongest supporters, including fervent advocates of the war a year ago and even some who could be labelled neo-conservatives, [are] now despairing and looking for an exit.” George Will went further. In The Washington Post (4 May), he concluded “this administration cannot be trusted to govern if it cannot be counted on to think and, having thought, to have second thoughts.... Being steadfast in defence of carefully considered convictions is a virtue. Being blankly incapable of distinguishing cherished hopes from disappointing facts, or of reassessing comforting doctrines in the face of contrary evidence, is a crippling political vice.... [This country needs] traditional conservatism. Nothing neo about it. This administration needs a dose of conservatism without the prefix.”

War: Yet Another Failed Big Government Program

America’s former chief weapons inspector, David Kay, told BBC Radio 4’s Today program (5 June) that WMDs do not exist in Iraq and that it is “delusional” to think they will be found. Hence the war’s instigators “should apologise and admit that they were wrong.” Fat chance – they continue to insist not just that they are correct and steadfast but also that their critics are misguided and irresolute. In a press conference on 13 April, President Bush was asked several times whether he believed that he had made any mistakes in Iraq or elsewhere. His reply belied absolutely no doubt about his policies: “I feel strong [sic] about what we’re doing.... I feel strongly it’s the course this administration is taking that will make America more secure and the world more free and, therefore, the world more peaceful. It’s a conviction that’s deep in my soul” (click here for a translation of that day’s BushSpeak into a semblance of coherent English).

Mr Howard, in a speech delivered at a Liberal Party backslap on 20 May in order to commemorate the thirtieth anniversary of his entry into parliament, said “as we go around the world we are constantly reminded of the sense of respect in which this nation is held. It’s undoubtedly due to our economic performance; it’s also due to the way in which we have stood up for what we believed in, as we did ... in relation to Iraq and the ongoing war against terrorism.... And over the last eight and a half years the government that I have been privileged to lead has always performed best when it stood for the things that it really believed in. When I think of some of those examples, I think [among other things] of ... the difficult, very difficult but crucial decision we took to join the United States, the United Kingdom and other nations in military action in Iraq . . .”

Tony Blair is equally impenitent. On 17 May he vowed to keep British troops in Iraq until its stability returns. “We are not going to have any so-called quick exit, [and] there will be no cutting and running. We will continue until the job is done.” During the past year Mr Blair has stated repeatedly that he does not regret his decision to commit British troops to the invasion. He was and is “proud of what we did” and insists that the overthrow of Saddam Hussein was “the right thing to do.” Like Mr Howard, Mr Blair has stated repeatedly that the threat from al-Qa’eda would have increased if Iraq had not been invaded, and that this threat will also increase if armed forced are removed from the country prematurely. Both have implicitly acknowledged that this and other like-minded groups are now entrenched in Iraq: yet they strenuously reject the very possibility that the chaos and bloodshed created within the country by the Anglo-American invasion and occupation have created conditions that will help these groups to recruit more followers and to retaliate against their archenemies.

According to significant numbers of people who have experienced war at first hand, then, the invasion of Iraq was some combination of unnecessary, unwise and immoral. According to its proponents (whose ranks are composed disproportionately of people who are devoid of combat experience but excel at bureaucratic infighting), on the other hand, the invasion was a necessary response to a great and urgent danger. Although many of the old soldiers, outsiders, unwashed, ratbags, etc., were and remain misguided and oblivious to the danger, it is fortunate – say the intervention’s boosters – that the political élite was and is alert. Thank your little cotton socks, they relentlessly remind us, that politicians responded so forcefully to avert the impending catastrophe. Subjects should not just be grateful: they should express their thanks in the form of unstinting praise for their government. To criticise or oppose it is to reject its irreproachable intentions. Any such criticism or opposition can therefore be dismissed as either uninformed or motivated by unworthy purposes.

Detect anything familiar here? Replace references to the defence of the realm, “national security,” etc. with aid to the poor, families and various minorities, the subsidisation of medical, educational and myriad other services, and gun control, price control and countless other regulations. In The Vision of the Anointed: Self-Congratulation as a Basis for Social Policy (Basic Books, 1995, ISBN: 0465089941) Thomas Sowell describes and distinguishes a “tragic vision” and a “vision of the anointed.” Sowell shows how the latter vision, which for three-quarters of a century or more has underwritten most policy and at whose heart lies the notion that governments provide “solutions” to “problems,” leads ineluctably to disaster (see also Sowell’s A Conflict of Visions: Ideological Origins of Political Struggles, Basic Books, 2002, ISBN: 0465081428). Sowell summarises the mess wrought by élites’ interventionist programs and policies in terms of a four-step process:

Stage #1: The “Crisis”

There exists some situation whose negative aspects the anointed cannot tolerate and therefore propose to eliminate. This situation is characterised as a “crisis” even though all states of human affairs have negative aspects and evidence is seldom requested or given showing how the situation is either intolerably bad or likely to worsen. (Keep it under your hat, but often the situation bewailed as a “crisis” – such as the number and severity of terrorist incidents around the world – is actually improving before politicians succumb to the temptation to meddle or declare war upon it. See also U.S. Will Revise Data on Terror).

Stage #2: The “Solution”

Interventionist policies, programs and the like, which require much money and many staff, are devised and enthusiastically advocated by the anointed. These policies, insist the anointed, will end the “crisis” and lead to Beneficial Result A. Critics, who consciously or otherwise express the tragic vision, retort that these policies will not beget A but rather Detrimental Result Z. The anointed dismiss these claims as simplistic, taken out of context, unhelpful, dishonest, cruel and heartless and even treasonous.

Stage #3: The Results

The policies are implemented and produce Detrimental Result Z.

Stage #4: The Denial

People who attribute Detrimental Result Z to the policies of the anointed élite are vociferously dismissed by that élite and its mascots as simpletons who are incapable of grasping the complexities of the context involved. Many complicated factors, assert the anointed, determined the unintended and detrimental outcome.

All the News That’s Fit to Slant

Forget Prince Fredrik and Princess Mary: the vision of the anointed and the modern mass media are the real marriage made in heaven (see also The Mass Media and Value Investing). Contemporary politicians reduce “problems” and “solutions” to concise slogans, sound-bites and images because TV, radio and newspapers are tailor-made to dramatise and emotionalise them. Irrespective of the views of print and broadcast journalists, this bias not only imbues but defines modern mass communications. Many breasts are beaten and much ink spilt in Australia about “media bias.” A favourite distraction of Liberal-National Coalition politicians is to denounce the socialist predispositions of journalists at the state-owned ABC. Of course the Red Channel’s journos tend to be left-wingers: but so too do the hacks employed by Seven, Nine, Ten and Sky, the Fairfax and Murdoch press and the Australian Radio Network, Macquarie and Southern Cross. As John Henningham’s analyses of sample surveys have demonstrated, Australian journalists as a group are, relative to the general public, lefties.

And as the authors of the Australian Candidate Study (a survey of the attitudes of candidates at Commonwealth elections during the 1990s) have found, Australian politicians’ policy preferences, irrespective of party or faction, tend to be strongly interventionist. Pollies are perhaps not as pinko as journalists, but on a range of matters they are significantly more Bolshie than the average man in the street (who, in turn, is much more tolerant than his pioneering forebears of confiscations of property and infringements upon liberty). Politicians and journalists thereby resemble one another more than politicians reflect their constituents or journalists echo their audience.

But if Australian political parties and media organisations attract and breed meddlers, which to a considerable extent they do, it is at least partly because Australians as a whole worship fervently at the altar of big government. And if journalists tend to be lazy, brainless and credulous, and demand a full day’s pay for a half-day’s half-arsed work, it is because at least a few Australians – and virtually all of their politicians – also possess these attributes. A bit of Homer Simpson lurks within all of us, and much of him resides within some of us; and so the indifference and inattention of many Australians reinforces politicians’ and journalists’ self-importance and predisposition to intrude.

Hence an enduring farce: epitomising the utter and perennial confusion of Antipodean conservatism and the charade of politics in Australia, “conservative” politicians relentlessly denounce “socialist” journalists whose views on most matters differ only marginally and inconsequentially. Journalists and politicians alike demand that the state intervene: they disagree only with respect to which Peter will be looted in order to favour which Paul. The synonymous (and oxymoronic) phrases “objective journalism” and “compassionate politics” refer to the championship of every possible Paul and the disregard or denigration of every existing Peter. Accordingly, these phrases never refer to any consideration of The Ethics of Redistribution (The Liberty Fund, 1952, 1990, ISBN: 0865970858).

The interminable babble about media bias in Australia thus obscures the underlying reality that journalists and politicians are engaged in a three-legged race. The more quickly they run in tandem the more they legitimise and praise the interventionist vision of the anointed. In this race journalists seldom strive to produce the most news or the most detailed news; and still less do they attempt to provide the best-researched analyses. Instead, to provide the incentive to buy a paper every day or to listen as often as possible, they endeavour to produce the most up-to-the-minute news. The day’s events tend therefore to be presented as discrete actions rather than the ongoing results of underlying processes. The emphasis is upon timeliness and “scoops;” and there is only superficial analysis and little or none of the reasoning, evidence and perspective required to document the calamities of the anointed. As The New York Times (30 May) put it, “even in the quietest of times, newspaper people live to be first. When a [momentous] story ... comes into view, when caution and doubt could not be more necessary, they can instead be drowned in a flood of adrenalin.... There was a period in the not-too-distant past when editors stressed the maxim ‘don’t get it first, get it right.’ That soon mutated into ‘get it first and get it right.’ The next devolution was an obvious one.”

More generally, news published and broadcast in Australia tends to take the form of anecdote, gossip and rumour rather than patterns of valid and reliable data; of immediate consequences rather than long-term considerations; of shock, outrage, scares and the assignment of blame rather than the assessment of evidence; and of meaningless slogans (“justice for families”) rather than concrete words and actions (“your taxes are rising”). Hence journalists in this country are usually uninterested in and pig ignorant of the trade-offs – i.e., the comparison long-term costs and benefits – that inhere in various alternate courses of action.

Whatever the personal predilections or integrity of individual journalists, news reports also tend to sensationalise individual situations. But because the background, bigger picture and causal processes which underlie individual situations are much more difficult to dramatise, they tend to be de-emphasised or dropped entirely from consideration. A television camera, for example, can and will record the devastation wrought upon farmers by drought, flood or pestilence. Similarly, a print journalist can observe the closure of a factory and interview the workers who have been dismissed. And a radio bulletin can announce the relief and exultation which erupts upon receipt of the word that the government will come to the rescue.

Short-term and directly-observable costs and benefits, then, are relatively easy to record. But long-run and less-observable consequences – and cause-and-effect sequences more generally – are vastly more difficult to capture (see also Henry Hazlitt, Economics in One Lesson, Laissez Faire Books 50 th Anniversary Edition, 1996, ISBN: 0930073207). No camera, microphone or scribe can directly observe the dependency created by government subsidisation that over the decades cripples a (say) clothing, motor or sugar industry. No videotape can show the crops which would have been grown here and elsewhere – or the other products which would have been manufactured using other processes by other people in other places – in the absence of such intervention. And there are no ready means by which a journalist can identify and interview those unemployed people who would have had jobs if minimum wage laws had not made them too dear to hire at their current levels of skill and experience.

John Stossel, is perhaps the only contemporary journalist able to convey how the welfare-warfare state punishes the poor; how regulation throttles enterprise; How Rich Bastards Rip Off Taxpayers For Millions of Dollars; how governments assault natural liberties and intimidate individuals and businesses; how politicians have become addicted to a “war on drugs” – in short, how the mass media unquestioningly disseminate Lies, Myths and Downright Stupidity. In his own words (The Oregonian, 26 October 1994), “I started out by viewing the marketplace as a cruel place, where you need intervention by government and lawyers to protect people. But after watching the regulators work, I have come to believe that markets are magical and the best protectors of the consumer. It is my job to explain the beauties of the free market.”

“As a consumer reporter,” Stossel told The Chicago Sun-Times (15 February), “[I] was proud of exposing businesses and con men, ambushing them with a TV crew, and sending some of them to jail.” But over the years “the more reporting I did the more it dawned on me that government is often the problem rather than the solution. Free markets, not coercive governments, are the consumer’s best friend. The people who are really ripping us off are the lawyers, the politicians and the regulators. The evidence was in the stories I’d been reporting all along. It had just taken me 15 years to see it.” After listening to the victims of government and its hangers-on, Stossel experienced an epiphany. What was the purpose of government if it hurt more people than it helped? He recounts that “occasionally the government did act, but its actions rarely worked out well. Every regulation seemed to have an unintended consequence. Taxpayers’ dollars wound up in the pockets of the rich instead of the poor. Well-meaning regulations designed to protect consumers often hurt them by narrowing their choices and raising prices.” Stossel also noticed the sharp contrast between the rules the government imposes upon others and the rules it applies to itself. “Government almost never polices itself. When government agencies lose money, or fail at their missions, they ask for more money. They usually get it, citing their failure to achieve their goals as proof that they need more funds.”

These realisations, as Stossel explains in his new book (Give Me a Break: How I Exposed Hucksters, Cheats, and Scam Artists and Became the Scourge of the Liberal Media, HarperCollins, 2004, ISBN: 0060529148), changed his life. “I was once a heroic consumer reporter. Now I’m a threat to journalism. My colleagues liked it when I offended people. They called my reporting ‘hard-hitting’ and a ‘public service.’ I won 18 Emmys and a lot of other journalism awards. Then I did a terrible thing. Instead of just applying my scepticism to business, I applied it to government and ‘public interest’ groups. This apparently violated a religious tenet of journalism. Suddenly, I was no longer ‘objective.’ These days, I rarely get awards from my peers. Some of my colleagues look away when they see me in the halls.... People now e-mail me, calling me a ‘corporate whore’ and a ‘sell-out.’” Whether they realise it or not – but as their treatment of John Stossel shows – the vast majority of today’s journalists energetically carry the water of politicians and disseminate the aggressive interventionist vision of the anointed.

The New York Times Apologises (Sort Of)

The Times acknowledged that it published allegations that were neither corroborated by its reporters nor challenged by its editors. Many of its stories relied upon Iraqi exiles. They opposed Saddam Hussein and urged the Americans to oust him; but reporters did not sufficiently note (and on a few occasions actively obscured) the exiles’ incentive to bend, stretch, ration and sometimes simply falsify facts in order to advance this overriding objective. “In some cases, information that was controversial then, and seems questionable now, was insufficiently qualified or allowed to stand unchallenged. Looking back, we wish we had been more aggressive in re-examining the claims as new evidence emerged or failed to emerge.”

On 30 May Daniel Okrent extended and elaborated this point. In Weapons of Mass Destruction? Or Mass Distraction? he noted that “to anyone who read the paper between September 2002 and June 2003, the impression that Saddam Hussein possessed, or was acquiring, a frightening arsenal of WMD seemed unmistakable. Except, of course, it appears to have been mistaken.... Some of [our] coverage in the months leading up to the invasion of Iraq was credulous; much of it was inappropriately italicised by lavish front-page display and heavy-breathing headlines; and several fine articles ... that provided perspective or challenged information in the faulty stories were played as quietly as a lullaby.” According to Okrent, “the failure was not individual, but institutional.” He believes that the authors of the article of 26 May were “mostly” right. His caveat “arises from their inadequate explanation of the journalistic imperatives and practices that led The Times down this unfortunate path.” These imperatives and practices included the hunger for scoops, “front-page syndrome,” “hit-and-run journalism,” coddling of sources and “end-run editing.”

Okrun recollects that Walter Lippmann and Charles Merz wrote in 1920 that The Times missed the real story of the Bolshevik Revolution because its writers and editors “were nervously excited by exciting events.” He concludes “that could have been said about The Times and the war in Iraq. The excitement’s over; now the work begins.”

Not so fast – what grounds have we to believe that lessons have been learnt and a calmer, more thorough and sceptical mindset adopted? The articles of 26 and 30 May do not, for example, mention the complicity of The Times in the Wen Ho Lee affair. This man, a Taiwanese-born scientist at the Los Alamos Nuclear Laboratory, was accused in the mid-1990s of stealing American secrets that found their way to China. After a meandering five-year investigation, he was gaoled “and all but threatened with execution by a federal agent for not admitting spying.” But prosecutors were not able to mount a case (never mind secure a conviction) that he committed espionage. He was eventually released with a judge’s apology after pleading guilty to one count of mishandling state secrets.

The U.S. Government’s prosecution of the case was widely criticised. So too was the coverage of the media, particularly The Times; and in an effort to clear and correct the record it undertook an extensive re-examination of the affair and its part therein. Its lesson is that a reporter must detect a biased source when he encounters one – and then treat it very carefully if at all. This danger is compounded when the reporter then talks to a second biased source which, without the reporter’s knowledge, also comes from the ranks of the first biased source. What looks like corroboration then becomes confusion or worse. So why did The Times so quickly repeat exactly the same blunder on an even greater scale with respect to Iraq and WMD?

Nor do the articles of 26 and 30 May mention Jayson Blair. This NYT reporter sent dispatches purportedly from Maryland, Texas and elsewhere although he was really in New York; and he fabricated comments, concocted scenes and lifted material from other newspapers and wire services. The articles of 26 and 30 May are a rather mild 3,000 words; and although some were clearly more negligent than others they do not mention particular reporters. In sharp contrast, The Times conducted an unsparing 7,400-word scrutiny of Blair’s infractions. The disparity between the length and tone of the two treatments tempts one to infer that, in the minds of its editors, the Blair scandal injured the paper’s reputation more than the Iraq-WMD imbroglio.

Finally, there is not a word in the 26 and 30 May articles about the uproar surrounding the 1932 Pulitzer Prize. In that year Walter Duranty, a correspondent of The Times in Moscow and one of the most prominent newspapermen of his day, won the prize on the basis of 13 despatches published in 1931. Since then numerous people – including other NYT correspondents – have completely discredited his coverage. Here, too, The Times has taken (in this case very belated) steps to correct the erroneous and misleading stories it published. Mark von Hagan, a professor of history at Columbia University, said in a recent report commissioned by the paper that Duranty “frequently writes in the enthusiastically propagandistic language of his sources” and that “there is a serious lack of balance in his writing.” Further, “much of the ‘factual’ material is a dull and largely uncritical recitation of Soviet sources, whereas his efforts at ‘analysis’ are very effective renditions of the Stalinist leadership’s self-understanding of their murderous and progressive project to defeat the backwardness of Slavic, Asiatic peasant Russia.” According to Sally J. Taylor (Stalin’s Apologist: Walter Duranty, The New York Times Man in Moscow, Oxford University Press, 1990, ISBN: 0195057007), Duranty knew about Stalin’s crimes but ignored and obscured them in order to preserve his access to the dictator.

The Times itself has stated in a recent press release that “Duranty’s analyses relied on official sources as his primary source of information, accounting for the most significant flaw in his coverage – his consistent underestimation of Stalin’s brutality.” Describing the plan to “liquidate” five million kulaks, the relatively well-to-do farmers who opposed the collectivisation of agriculture, Duranty wrote “must all of them and their families be physically abolished? Of course not – they must be ‘liquidated’ or melted in the hot fire of exile and labour into the proletarian mass.” The Times acknowledges that “taking Soviet propaganda at face value this way was completely misleading.” Collectivisation was the main cause of a famine that killed at least three million and perhaps as many as seven million Ukrainians in 1932 and 1933. The Times concedes that their reporter in Moscow “dismissed more diligent writers’ reports that people were starving.” Duranty wrote in March 1933 that “conditions are bad, but there is no famine.... To put it brutally – you can’t make an omelette without breaking eggs.”

Some of Duranty’s editors criticised his reporting as tendentious (as opposed to being flatly false Communist propaganda) yet The Times retained him until 1941. Since the 1980s, it has admitted that the standard of his coverage was atrocious; and Ukrainian-American and other organisations have repeatedly demanded that the Pulitzer Prize Board withdraw his prize. The Board has twice declined to do so, most recently in November 2003, finding “no clear and convincing evidence of deliberate deception” in the dispatches that won Duranty the cherished accolade. (A Pulitzer has never been revoked but one has been returned: Janet Cooke of The Washington Post surrendered her prize in 1981 after admitting that she had fabricated the stories on which it was based.)

Compared to politicians’ pathetic standards, The New York Times has been admirably – indeed, astonishingly – forthcoming about its various mistakes; and as a columnist in Slate has put it, “as a demonstration of accountability, [the articles of 26 and 30 May exceed] what most of the rest of the errant press corps has done by a factor of 100.” No Australian paper or broadcaster remotely approaches its ability to criticise itself, and in this respect The Times deserves its reputation in the front rank of American journalism.

Still, its recent mea culpa is more a “mini culpa” that leaves little impression that mistakes from past scandals have been recognised and lessons learnt. Jayson Blair’s mischief caused his dismissal and the resignation of the paper’s editor-in-chief. But Blair invented no story and his shenanigans were relatively inconsequential. They did not contribute to the imprisonment of any individual; nor did they encourage a drift towards war; and they neither glorified totalitarianism nor obscured the mass murder of millions. Yet the Wen Ho Lee, Iraq-WMD and Duranty affairs cost no journalist his job. The unwritten rule, then, seems to be: tell insignificant porkies and you and your boss get sacked; utter much bigger misrepresentations and nothing much happens; and deliberately tell the most monstrous lies imaginable and you win a Pulitzer Prize. Journalistic “ethics” is a curious thing.

So too is the routinised and superficial media coverage of Western governments’ economic interventionism. Not even a hint of an apology for it has ever been uttered; and given the three-legged race run by journalists and politicians, none can be expected. But just imagine, muses Jeffrey Tucker, what The Times and innumerable lesser organs of print and broadcast media would have to confess if they caught a severe case of the honesty bug and offered a completely frank account of and apology for their seventy-plus years of cravenly statist economic coverage. “We have consistently reported that fiscal and monetary policies stabilise economic conditions and facilitate economic growth. We have relentlessly repeated politicians’ mantra that they can solve problems. We now admit that interventionist policies generate instability, exacerbate difficulties and otherwise make a mess of things. We regret that we relied so heavily upon politicians and economists. We admit biased politicians led us to biased economists and back again; and we acknowledge that it never entered our heads to seek any independent verification of their (as we now realise, patently absurd) claims. We undertake henceforth to report economic and financial matters objectively and honestly.”

Some Enduring Lessons for Investors

The more credulously you respond to what you read, hear and see in modern mass media the more directly you stand in the path of the débâcles that accompany the crusades of the anointed. Whether the subject matter is war or money, Australians have much greater reason to fear their own emotions, politicians and journalists than any foreign individual, organisation or idea.

“The freedom of the press,” said George Mason in Article 12 of the Virginia Declaration of Rights (1776), “is one of the greatest bulwarks of liberty and can never be restrained but by despotic governments.” Non-totalitarian media are indeed a potent means to restrain ever-predatory governments. In recent decades, the publication of the Pentagon Papers and the enquiries of Woodward and Bernstein are probably the most significant demonstrations that media can fulfil the role that Thomas Jefferson’s letter to Edward Carrington attributed to them. Alas, these demonstrations are rare. Normally, journalists are indifferent or oblivious to politicians’ attacks upon businesses and individuals. Indeed, the many journalists afflicted with the vision of the anointed are dupes of big government who actively assist politicians to assault property and liberty. Under normal circumstances, the quip attributed to Jefferson – namely that “the man who reads nothing at all is better educated than the man who reads nothing but newspapers” – is a good rule of thumb.

Conrad Black, the Anglo-Canadian media owner also known (at least for the moment) as Lord Black of Crossharbour, is also of two minds about media and journalists. He told the Royal Commission on Newspapers, established by the Canadian government in 1981, that “my experience with journalists authorises me to record that a very large number of them are ignorant, lazy, opinionated, intellectually dishonest and inadequately supervised. The profession is heavily cluttered with abrasive youngsters who substitute ‘commitment’ for insight, and to a lesser extent, with aged hacks toiling through a miasma of mounting decrepitude. Alcoholism is endemic in both groups.” In his memoir (Conrad Black: A Life in Progress, Random House, 1993, ISBN: 091828651) he “generally attacked the Canadian media for lack of rigour, a dreary and impenetrable soft-Left group-think, a gross disparity in its aptitudes for dispensing and receiving criticism, insufficient literacy, an almost complete lack of flair and a predilection for behaving like a rampaging industrial union whilst pretending absurdly to be a learned profession.” But no hard feelings: his “view was, and remains, that ... most journalists, like most people, are conscientious men and women doing their jobs as well as they can . . .”

Clearly, then, non-totalitarian media and credible media are two very distinct things. “News is what somebody somewhere wants to suppress” said Lord Northcliffe. “All the rest is advertising.” (Northcliffe should know – as a owner of prominent newspapers he suppressed more than his share of news and propagated many blatant lies.) If so, then the vast bulk of the stuff that normally appears in Australian print and broadcast media is bereft of news and replete with subliminal and unpaid government advertising.

But what on earth have one’s views about Iraq, pollies and journos to do with investing? Surely they are chalk and cheese? Alas, if it were only so. According to Robert Higgs, “this [most recent] war, like all the others, has been not so much a case of who knew what when, of well-intentioned mistakes and tragic miscalculations. It has been more a case of who told what lies to whom, to serve what personal, political, and ideological ends; of who paid the price in blood and treasure and who came out smelling like a rose; of mendacity and irresponsibility in high places and of colossal public gullibility in the face of relentless opportunism.” Not much different, really, from the raids upon the public launched by many analysts, brokers and funds managers during The Great Bubble. Ilana Mercer states in Pundits, Heal Thyselves! that “today’s news is not what it used to be because a dumbed-down population, well represented in newsrooms, cannot distinguish evidence from assertion and fact from feel-good fiction. News is now nothing but a slick product designed to please – not inform – the populace.” In that respect it is pretty similar, really, to the glossy brochures and smooth words of many financial advisors and planners.

Jonathan Clements, in his article “Nothing in the News Is Actually New” (The Wall Street Journal, 27 July 2003), wrote that “to be sure, newspapers are supposed to carry news, so reporting the latest Wall Street developments might seem reasonable. But despite financial journalists’ obsession with the news, there’s actually very little that’s new on Wall Street.... I would argue that a focus on the news is scant help to investors, and it can be downright dangerous.” Paul Andreasson, a psychologist who has studied the behaviour of investors, has corroborated this hunch (see Gary Belsky and Thomas Gilovich, Why Smart People Make Big Money Mistakes and How to Correct Them: Lessons from the New Science of Behavioral Economics, Simon & Schuster, 1999, ISBN: 0684844931). He compared the “performance” of four groups of mock investors. Using real stock prices and real news reports, two of these groups made simulated investment decisions about a relatively stable stock (i.e., one whose price varied little over the course of the experiment). One was subjected to constant news about the company, and the other received no news. A similar test was administered to a third and fourth group (here, however, the price of the stock was more volatile).

Andreasson found that investors who received no news produced better results than those who received a constant stream of information – regardless of whether the news was good or bad. If you wish to invest intelligently, it therefore makes sense to ignore most financial “news” such as the current price of X Ltd or the closing level of the All Ordinaries or the buzz about profits or the gossip about next week’s batch of economic statistics. Indeed, the best investors produce such good results partly because they resolutely ignore what passes for financial news. In 1993, Mr Buffett wrote that “after we buy a stock ... we would not be disturbed if markets closed for a year or two. We don’t need a daily quote on our 100% position in See’s Candies or H.H. Brown [Shoes] to validate our well-being. Why, then, should we need a quote on our 7% interest in Coke?” Mr Buffett has also said “if Fed Chairman Alan Greenspan were to whisper to me what his monetary policy was going to be over the next two years, it wouldn’t change one thing I do.”

Whatever your views about journalists and politicians (or analysts, brokers, financial planners or funds managers), and whatever credence you attach to their words (whether in a particular instance or across the board), you are neither right nor wrong because somebody, however articulate or influential, agrees or disagrees with you. Rather, as Benjamin Graham stoutly emphasised, “you are right because your data and reasoning are right.” The hallmark of a free man is the ability to disentangle himself from his emotions; to detect and disregard myths, cant and lies; and to reason through the facts he has assembled. A free man has a much greater incentive to reason validly and collect reliable information than any politician or journalist. Accordingly, if the price of liberty is unceasing vigilance of politicians, then the price of financial independence – a necessary condition of liberty – is relentless scepticism towards journalists. Ron Paul and John Stossel are honourable exceptions. Otherwise distrust pollies and journos, take every opportunity to disparage them, think for yourself and enjoy yourself whilst doing so. As Graham also stressed, “the right kind of investor [takes] added satisfaction from the thought that his operations are exactly opposite to those of the crowd.”

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