On the fifth day of Christmas...


My true love sent to me: five gold rings. It probably means the first five books of the Old Testament, but to me five rings means the Olympics, which are coming to London in 2012.

Well, they say that. But it's a typical government-led project, so who knows? The London bid for the games put the cost at £3,375m, but in March last year Tessa Jowell revealed that the cost had risen to £9,325m - a tripling of the costs in just a few months. Something of a black hole, which the hole-vaulting Culture Secretary explained as due to VAT, inflation, and a whopping £2,700m 'just in case things go wrong' fund (a figure larger than that the original estimate for building the entire Olympic Park). And that's unlikely to be the end of it, since officials are said to be working to a £12bn target. With the credit crunch, private financing and sponsorship deals now look shaky, and after Mumbai the cost of security has been ramped up, so taxpayers are likely to find the Olympics rather expensive.

The Media's Top 10 Economic Myths of 2008 (No.3)

Equidex President Phillip Gotthelf pointed out on Bloomberg TV on Oct. 7, "I think that the commodities really outlived their, their useful rallies because they've exceeded the elasticity of the consumer."

 "And commodities are consumables, they're not investments. They're speculative equals sometimes, but they're certainly not investments."

According to Gotthelf, those commodities include oil, which he said was poised to go to $40 a barrel or lower in the wake of the global economic turmoil.

 "I'm somewhat amused. Goldman Sachs was forecasting $200 a barrel for oil," Gotthelf said. "I see that their forecasts are getting more and more conservative. I said $200 a barrel was ridiculous. Even $150 I thought was ridiculous. We were looking at $24 a barrel in 2004. Everybody is now making comparisons in the financial sector to the implosion of stocks in 2002, 2003 – the last stock recession. Why shouldn't we see oil return to $40, maybe even below $40 a barrel?"


3. Oil prices will skyrocket to $200 a barrel, gas to $15.

Media myth: Journalists warned of super-high oil and gas prices, but then the bubble burst.

Originally published by the Business & Media Institute

Journalists predicted skyrocketing oil prices in 2008 up to $400 a barrel.

NBC News chief foreign correspondent Richard Engel warned on the July 1 "NBC Nightly News" an attack by Israel could send oil prices soaring – sending gas prices into territories never imagined.

 "I asked an oil analyst that very question," Engel said. "He said, 'The price of a barrel of oil: Name your price – $300-$400 a barrel.'"

What would oil at those levels mean? A June 11 Time magazine story by Robert Baer put the price of a gallon of gas at $12 if oil goes to $300 a barrel. In May, Management Information Services Senior Energy Advisor Robert Hirsch told CNBC's "Squawk Box" the oil at those prices could mean $15-a-gallon gas.

NBC "Nightly News" asked CNBC's Jim Cramer about those $12-15 predictions. Cramer said "I think that $12 isn't in the cards. I do see $5 to $6-a-gallon by end of the summer." But even that prediction turned out to be wrong. Gas prices peaked at $4.11 on July 11 and have since fallen to $1.68 according to AAA.

The news media didn't anticipate the end of the oil bubble with prices sinking from about $147 at its peak to around $45 Dec. 10.

But there were experts who disagreed. [Click 'read more' to continue]

Film of the Year No. 3


3. Gomorrah

It’s not easy to summarize the plot of Gomorrah, mostly because there isn’t one. Rather than taking a narrative approach, the film simply follows a group of loosely connected characters around a grim Neapolitan estate ruled by the Camorra, the local mafia. Based on the 2006 non-fiction book by Roberto Savianno (who has been in police protection ever since), Gomorrah is a bleak, brutal film that pulls no punches and offers no easy answers. Indeed, such is the film’s commitment to realism that even Italian audiences needed subtitles to understand the heavy dialect it is filmed in.

If you sit down to watch Gomorrah expecting ‘the Italian Goodfellas’, you are going to be sorely disappointed. There are no characters to root for, and no compromises made for the sake of entertainment. And at no point in the film is it possible to vicariously enjoy the gangsterism being depicted. But that, surely, is as it should be. Real-life organized crime isn’t glamorous – it is a vile force that corrupts and destroys everything it touches. Gomorrah is a deeply powerful reminder of that. Watch the trailer here.

Blog Review 823


Minister announces a direct attack on free speech and insists that it is not an attack upon free speech. Just don't expect us to cooperate.

This isn't a new idea but that doesn't stop it being a very good one.

A look at how the BBC created its editorial line on climate change. Not, you won't be surprised to hear, a pretty sight.

Sometimes it doesn't matter which decision you make: just that you do indeed make a decision. Dithering simply makes things worse.

A report from the front lines of the green generating revolution.

Labour's campaign song all the way back in 1997 was "Things Can Only Get Better". And so it goes.

And finally, these aren't the seven best criminal capers of 2008, for the best are the ones that have gone undiscovered. 

On the fourth day of Christmas...


My true love sent to me: four calling (or colly) birds, which in A Partridge in a Pear Tree are said represent the four gospels or the four evangelists, Matthew, Mark, Luke, and John.

Well, my true love is now breaking the Animal Welfare Act 2006, which makes it illegal to sell wild animals. It also demands that animals are given a suitable environment, diet and housing.

Regulations proposed under the legislation tell pet owners not to feed their dogs chocolate or let their cats sit on the toaster. Although feeding your dog chocolate is not actually a criminal offence, it can be used in a court of law as evidence of your guilt on other charges, which can leave you open to a prison sentence of a fine of £20,000.

The Media's Top 10 Economic Myths of 2008 (No.4)


4. Attack of the Killer Tomatoes

Media myth: A salmonella scare frightened everyone and upset one CNN anchor so much that he called for the impeachment of President Bush – but it turned out peppers were the culprit.

Originally published by the Business & Media Institute

CNN's Lou Dobbs, host of "Lou Dobbs Tonight," called for the impeachment of President George W. Bush on June 19, 2008 – but this wasn't about the Iraq war or some sort of atrocity. It was over tomatoes.

Dobbs placed the blame for the salmonella outbreak that had sickened 383 people by April 2008.

"You know, I have heard a lot of reasons over the years as to why George W. Bush should be impeached," Dobbs said. "For them to leave the Food and Drug Administration (FDA) in this state, its leadership in this sorry condition and to have no capacity apparently or will to protect the American consumer – that is alone to me sufficient reason to impeach a president who has made this agency possible and has ripped its guts out in its ability to protect the American consumer."

The media spread fear of tomatoes to the public. In the first four days of the scare – June 8 through June 12 – the three broadcast networks aired 20 stories hyping the salmonella outbreak and pointing the finger at tomatoes.

Ultimately, the misplaced blame cost the tomato industry at least $100 million according to an Associated Press story. The Food and Drug Administration later cleared tomatoes and found the true culprit of the Saint Paul salmonella outbreak: jalapeno or serrano peppers.

Film of the Year No. 4


4. Changeling

Who would ever have thought that Clint Eastwood, once Hollywood’s drifter/cowboy/anti-hero par excellence, would also become one of America’s most celebrated directors? And yet his recent filmography – Mystic River, Million Dollar Baby, Flags of Our Fathers, Letters from Iwo Jima – really says it all. He still appears to be improving with age though, since his latest effort, Changeling, is undoubtedly his best to date.

The (true) story centres on Christine Collins (Angelina Jolie), a single-mother in 1920s Los Angeles who comes home from work one day to find her young son, Walter, has disappeared. Some months later the LAPD (seemingly mired in prohibition-era corruption) find a child and claim it is Collins’ son. It isn’t. But when Collins’ tries to tell the police that they turn against her, insisting she is mentally unstable and an unfit mother. But what happened to the real Walter? Can he be found before it is too late?

Changeling is flawless cinema, and it would be surprising if it did not feature heavily in 2009’s Oscars. Jolie is superb, and Eastwood’s classical style and mastery of tone and atmosphere makes Changeling reminiscent of Roman Polanski’s 1974 masterpiece Chinatown – high praise indeed. It may sound like mere melodrama, but the narrative shift that occurs part way through the film turns Changeling into something altogether darker and more disturbing. It’s still showing in cinemas, so be sure to catch it if you can. Watch the trailer here.

Blog Review 822


Looking at charts of industrial output makes some think that this is the Great Depression Part II. Others think that looking at industrial production isn't all that important or informative.

The idea that government action opened up opportunity and competition is so ahistorical as to be breathtaking....

Something we forget at our peril, voluntary transactions benefit all of the participants in them.

The last time the government started throwing money around like a drunken sailor there was no corruption, oh no. But it does rather matter what you consider to be corruption.

Some thoughts on not spending money like a drunken sailor.

Rough figures, but some individual blogs seem to be getting about 15% of the web traffic of national newspapers.

And finally, the turth in a quiz answer.

On the third day of Christmas...


My true love sent to me: three french hens, which in the song apparently represent the theological virtues of faith, hope, and charity. I'm not sure there is much of any of them around today, though.

On the faith side, we might be making progress. Dorothy Glenn of South Shields was told by her Housing Association to remove her four-foot Santa and Christmas lights in case it offended non-Christians. However, her non-Christian neighbours said their kids loved the lights, the Council repudiated the demand, and the Housing Association was forced to apologise. Councillor Ahmed Khan, who represents Mrs Glenn's ward, commented: "It's this kind of nonsense that sets race relations back twenty years." Quite.

As for hope, well, I don’t hold out much hope for our economy in 2009. And charity: it's remarkable how many things that should be done through charity are in fact done through coercion as government takes money out of our pockets to do them. And then take the credit, of course.

The trouble is, that when governments intervene, private funding dries up. The Royal National Lifeboat Institution found that in the 1800s, when it started to accept government money. It found that for every £1 it took from the government, it lost £1.40 in private donations. People couldn't see why they should fund something that the government was paying for. Now the RNLI proudly refuses all government money. Bravo!

The Media's Top 10 Economic Myths of 2008 (No.5)


5. The economy has a fever and the only prescription is more bailouts.

Media myth: From the economic stimulus early in 2008 to the call for a Big Three auto bailout in December the media couldn't find a bailout it disliked.

Originally published by the Business & Media Institute

Bear Stearns, AIG, Fannie Mae and Freddie Mac. 2008 was the year of the government bailout and the news media supported such interventions time and time again.

One particularly vocal advocate for bailouts was CNBC's Jim Cramer who warned that without a financial bailout the U.S. could face a second Great Depression. He said the same thing months later about an auto industry rescue. Before AIG was given a loan package from the Federal Reserve, Cramer warned that the company absolutely "cannot fail."

When public opinion was turned against the $700-billion bailout CNN correspondent Carol Costello admitted that the network's experts were confused. Costello said, "I talked to our own polling experts and they are perplexed by the numbers" which showed a majority against the bailout.

The $25 billion housing bailout of Fannie Mae and Freddie Mac was also embraced by the media. "CBS Evening News" called the bill a "lifeline" for the government-sponsored enterprises, but correspondent Jim Axelrod didn't explain that the "unlimited capital from the government" would come from taxpayers.

But Jerry Bowyer, the chief economist for the Benchmark Financial Network, criticized the Fannie/Freddie bailout: "It's bad in the short run, unless you are either a highly paid Fannie executive or currently a staffer for any Democratic member of a Congressional Banking Oversight Committee, in other words, a future highly paid Fannie execute [sic]," Bowyer wrote. "In the long run, this will be a huge transfer of wealth to a corrupt bureaucratic and inefficient bureaucracy from the rest of us tax payers."

Bowyer and other free-market economists have criticized the many bailouts, but their perspective was rarely included in bailout stories.