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koganbotHere are the first two paragraphs of an AP article by Pan Pylas and Frances D'Emilio ("Italian election inconclusive; global markets drop") on the market response to the Italian election results. I've bolded the text that I find questionable, my question being how do the writers know that what's worrying investors is that the next government won't carry on the austerity policy (as opposed to investors' worrying that the ECB won't continue to implicitly be willing to back Italian bonds in the case of a run)? The second bit of bold is for wondering how European leaders know that austerity reforms are a good way to deal with Italian debt (as opposed to such policies exacerbating the debt); and further, how do the writers know that this is what all European leaders believe?* Not that I in particular know better. Rather, I know that there are counter-explanations and counter-arguments (e.g., Paul Krugman's) that aren't mentioned in this supposedly hard-news story.
*In fairness to Pylas and D'Emilio, when they write "European leaders pleaded..." they don't explicitly say that all European leaders are on-board with the pleading; and Jolly uses the same "European leaders" trope that Pylas and D'Emilio do. But in both pieces, there's no hint that Europe's leaders might not be of one mind on this topic. (My impression from reading Krugman and DeLong is that the IMF — or at least some key players in the IMF — are in dissent on austerity, though I haven't read the IMF reports.)
My thought here (not knowing anything more about Pylas and D'Emilio, but guessing e.g. that they're college grads or at least people who've read up on and tried to understand economics) — and this applies pretty much in general, not just to reporting of economics — is that people trained to think don't actually know how to think. Or their thinking hits a wall, without their being aware that they're at a wall, and have crashed to stillness.
ROME (AP) — Italy emerged from elections Tuesday with no clear winner, driving markets around the world markedly lower as investors worried that one of Europe's biggest economies would be unable to build a governing coalition that can stay the course on unpopular austerity measures.In contrast, David Jolly in the New York Times assigns the market reaction to uncertainty, without specifying or speculating on what the market wants Italy's policies to be, though he quotes some foreign government figures on what they want the policies to be.
A day after polling ended, a few seats in Parliament based on Italians' voting abroad still remained to be decided, but their numbers won't ease the gridlock. European leaders pleaded with politicians in Italy to quickly form a government to continue to enact reforms to lower Italy's critically high debt and spare Europe another spike in its four-year financial crisis.
*In fairness to Pylas and D'Emilio, when they write "European leaders pleaded..." they don't explicitly say that all European leaders are on-board with the pleading; and Jolly uses the same "European leaders" trope that Pylas and D'Emilio do. But in both pieces, there's no hint that Europe's leaders might not be of one mind on this topic. (My impression from reading Krugman and DeLong is that the IMF — or at least some key players in the IMF — are in dissent on austerity, though I haven't read the IMF reports.)
My thought here (not knowing anything more about Pylas and D'Emilio, but guessing e.g. that they're college grads or at least people who've read up on and tried to understand economics) — and this applies pretty much in general, not just to reporting of economics — is that people trained to think don't actually know how to think. Or their thinking hits a wall, without their being aware that they're at a wall, and have crashed to stillness.
