In my first-ever blog post (apart from a Hello World! announcement), I commented on the fact that, whereas trade and current account deficits were big news in Australia, US papers buried them in the back pages. At least in the online edition of the New York Times, this is no longer the case. The latest US Trade deficit ($58.3 billion in January) is front-page news.
Despite this catch-up, it’s still true that anyone wanting coverage of economic issues in the US would do far better to read blogs than to follow either the NY Times or the WSJ, and no other mainstream media even come close. It isn’t even true, as it is in other cases, that bloggers need the established media to get the facts on which they can then comment. The NY Times story linked above is basically a rewrite of the Bureau of Economic Analysis press release which you can get by automatic email if you want.
The competition is much tougher in Australia. Media coverage of economic issues is better, the number of economist-bloggers is smaller and quite a few of us play both sides of the street anyway.
John Quiggin 
I would agree that both MSM and blog commentary on the economy in Australia is better than in the US. I think this is partly due to Australia having more of an open economy mindset. The US has been a relatively closed economy and much economic commentary reflects a Bretton Woods-era mindset.
I was listening to bbcamerica on the radio tonight as I was driving home. A fellow from the Cato Institute used Australia as an example of why the US shouldnt be worried about the trade deficit being around the 6% mark. He said Australia had been having those kind of deficits (percent GDP) for nearly twenty years and currently had a strong economy.
It is interesting how and when Australia makes it into the US news.
Cameron,
Did he mention that for all but about one year of that twenty year period unemployment was higher in Australia than the US? Or that for much of that time the Australia government was running significant surpluses?
Ian, No. There was also no mention of interest rates being higher in Au than in the US during that period either. The Cato fellow was interviewed as a counter-point to doom and gloom economists.
The Cato Institute used to be quite interesting (in a rather scary way) for the sheer logical consistency of their libertarian positions.
Unfortunately they seem to have simply become another neo-con cheer-squad.
The mainstream media in the US sing from the song sheet provided them by Cheney. Hymn No. 1, “Deficits Don’t Matter”.
And the subject of current account deficits isn’t the only underreported subject. The enormous cost of US foreign policy adventurism is only glanced at sidewards. Critics of the Bushites are much more fixated on the moral ramifications of the policy as if the US were immune from structural constraints.
US credit creation agencies who fund the private debt binge which has helped fuel the growing US current account deficits have, to a degree, been insulated from the costs of overenthusiastic borrowing by virtue of the status of the US Dollar as the major international exchange currency.
However, many major non-American banks are attempting to divest themselves of the risk associated with dealing in US dollars, perceiving them to carry a significant devaluation risk.
The short term consequence of this may be quite a sudden depreciation in the value ofthe US dollar as that trickle of rats quitting the sinking ship turns into a stampede.
The longer term consequence may be the rise of the Euro as an alternative reserve currency. Therefore, the US may have relinquished its privileged position in the world financial system because of a set of egregious, avoidable and ideological domestic and international agendas, to wit., thoroughgoing privatisation and upward redistribution of wealth and an unsupportably aggressive and expensive foreign and military policy.
Ian Gould — 12/3/2005 @ 4:43 pm
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No. Cato opposed the war from the start and for the right reasons. See Galen Carpenter’s articles.
Jack,
I wasn’t thinking about Iraq specifically. I know the neo-cons are now identified pretty definitively with the Bush Doctrine but they started out with a wider agenda.
Given the history of problems caused in Austrailia by large current account deficits and the lack of similar problems in the US it is not surprising that news in this area gets bigger notice in the Australian than the US press. As you mentioned in “The Unsustainability of U.S. Trade Deficits”,
http://www.bepress.com/ev/vol1/iss3/art2 :
“On the way to stabilizing the current account deficit, the Australian economy went through a severe recession, largely driven by contractionary monetary policies, including interest rates of up to 17 percent”
The US has not recently experienced (as far as I know) such serious consequences from a large trade or current account deficit.
By the way in another part of the same article you state: “In order to have a stable current account deficit, a country must run a goods and services surplus to keep its net foreign debt from growing faster than GDP” The accompanying footnote is: “This assumes that the average rate of return on foreign-owned assets is greater than the rate of growth of GDP, as is normally the case.” Is this assumption currently true for the US ?
Finally I agree that the mainstream US press does not do a good job of covering economics. Brad DeLong, http://www.j-bradford-delong.net/movable_type/ , gives an example of this almost daily on his web site. In combination with the sheer ignorance of economics the attempts to be “objective” leads to gossip style, he said she said, reporting.
Ultimately it is the American public’s ignorance of economics that allows the press to get away with uninformed economic reporting. I think the ultimate fix, or at least a start, for this is to make sure that all high school students study economics
“The US has not recently experienced (as far as I know) such serious consequences from a large trade or current account deficit. ”
GC, it all depends on your definition of “recent”. In the late 1960s the simultaneous collapse of LBJ’s Great Society Program, the collapse of the war effort in Vietnam, the end of the Bretton Woods system and the first oil shock can all be sheeted back to burgeoning US current account deficits.
See Gabriel Kolko, “Anatomy of a War, Vietnam …” for a discussion of some of these issues.
That link to Brad De Long will soon be obsolete. He is switching to different blogging software.
Cato has long been hostage to Old Right isolationism, a pathology peculiar to classical liberalism in the US.
Guys, you may be used to reading the SMH and the Age, Fin review etc, but for the courier mail or the herald sun (the two biggest newspapers) you will find the same quality tabloid journalism as the states.