Tuesday, July 18, 2006

Easterbook's Law

I don't know how I missed it, but Andrew Coyne has written another compelling piece. This one is on the lame job that the media has done covering the GST cut.

You get the picture. One story even warned readers, “Booze buyers beware: July 1 GST cut could actually hike price of spirits.” It wouldn’t do anything of the kind, of course: the rise in booze prices, as logic would suggest, was due to an increase in another, entirely separate tax. But it fit the prevailing media frame, that the GST cut was much ado about very little, if not an outright con job. Or as a Vancouver Sun story groused, “GST cut won’t benefit people on pensions.” (Why? Because it would lead to lower prices, and therefore a smaller adjustment for inflation. Oh my.)

This remarkable waving away of what would otherwise appear to be a sizeable windfall for consumers is in part a variant of Easterbrook’s Law, named for the American journalist Gregg Easterbook, who first conclusively proved that all economic news is bad: all news means change, and all change, no matter how broadly beneficial, makes some people worse off -- who are invariably the focus of media attention. In the case of the GST cut, troublingly, there are no losers, so the media instinctively switched to the next best thing: the winners don’t benefit as much as all that.

I'll comment on this subject later. But for now I'll echoe Mike Moffat's sentiment:

Easterbrook's law is alive and well in Canada. It's funny, pretty much every proposal I've seen that would help Canada meet it's Kyoto targets has been dismissed by newspapers that support Kyoto, such as the Toronto Star. Why? Because of Easterbrook's Law. With a detailed policy proposal, you can always identify someone who is going to have to pay more for electricity or gas or will be made worse off in some manner. But if you leave the discussion fairly general "we should cut emissions!" without specifying how, those progressive newspapers seem to be for it, because you cannot identify the losers. Easterbrook's Law in action.

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