Ideological reporting in Slovenia

There's an old joke that, in one of its incarnations, goes like this.

During the Cold War, the Soviets and the Americans decided to arrange a good-will running competition between the two presidents. The day of the competition arrived, and Reagan, being in better shape, outran Gorbachev. The next day, American newspapers proudly reported: "Reagan first, Gorbachev last!" On the other hand, the Soviet newspapers reported: "In yesterday's presidents' running competition, Gorbachev finished an excellent second, while Reagan was second-to-last."

Slovenia used to be part of Yugoslavia - not as bad as the Soviet Union, but still a decidedly socialist state. In its heyday, socialist Yugoslavia featured such boons as a single type of jeans (why would you need more than one type of jeans?); a single type of toothpaste; stores that were predominantly empty; essential goods that were sometimes available, and sometimes were not; for aspiring drivers, waiting lists of several years to buy a Yugo that would start falling apart in about a year.

These times are looked back upon fondly by socialist nostalgists, who emphasize how life was simpler then; how things were less hectic, and everyone lived in harmony, and so forth. Yes indeed, everyone lived in harmony, except the political dissidents who were sent to Goli Otok (Naked Island) - a forced labor camp on a barren rock with no escape, the Yugoslav equivalent of gulag. On the other hand, if you were smart and unscrupulous enough to abuse the system, it was indeed possible to live quite well.

People say that, in those days, everyone could have a house. Yes, indeed: during the times of high inflation, you could get a no-interest loan from a state bank to build a house, and you could repay that loan at a later date when the money became worthless. The hard part wasn't getting money: it was getting the materials to build a house. You needed to pull all sorts of connections to get cement; once you had cement, you didn't have bricks; once you had bricks, you didn't have tiles; etc. But yes, houses could be built on loans that effectively were not repaid, incurring foreign debt and leaving repayment to future generations.

Not to be too wordy, this is to illustrate the dis-economy of socialism, which wasn't even as bad in Yugoslavia as it was elsewhere.

Now, back to the starting joke. Indeed political ideological reporting was ubiquitous in socialist Slovenia. But now, the country has been out of socialism for some 18 years. You would think that, by now, the people working in the media might have changed, and that professional standards might have prevailed, right? No.

Here's an LA Times article titled House panel heaps blame on Alan Greenspan for financial crisis. The article describes the recent congressional hearing of Alan Greenspan, Christopher Cox and John Snow. You can read the article at the link and discover that it is fairly reasonably balanced.

Consider now an article about the same topic, published in dominant Slovenian newspaper Delo (Work). I translate:

Greenspan admitted his mistake

Washington - Former president of the American central bank Federal Reserve (Fed) Alan Greenspan, who led the central bank for a long 18 years and in the process acquired the reputation of an unerring prophet, on Thursday in Congress crushedly admitted that he was mistaken in his unwavering faith in free markets.

Greenspan was questioned by the House Oversight and Government Reform Committee along with Securities and Exchange Commission Chairman Christopher Cox and former Treasury Secretary John Snow. The committee, led by Henry Waxman, a California Democrat, is attempting to determine the causes for the outbreak of the worst financial crisis in the U.S. after the Great Depression in the 1930s. After the hearings of investment bank leaders and ratings agencies, congressmen were facing regulators on Thursday.

Greenspan admitted flaw in his lifelong faith in the free market ideology

Waxman told the three witnesses that, as regulators of the markets, they contributed to the outbreak of crisis due to their beliefs in the unmistakeability of markets without government regulation. Waxman brought Greenspan to admit a flaw in his lifelong faith in the free market ideology. "I don't know how fundamental and long-lasting this realization is, it shook me very much, because for 40 years I believed that the thing works," said Greenspan among else.

A tsunami that comes once in 100 years

The forerunner of Ben Bernanke at the helm of the Fed is under attack from critics that at the beginning of the decade he did not raise interest rates, or rather that he left them low for too long, which contributed to the explosion of the housing market. He also did not use the Fed's ability to regulate the issuing of new types of mortgages, such as subprimes, whose breakdown caused the crisis.

Congressmen faced him with his own statements at the time of the real estate boom, when he denied the probability of a collapse in real estate prices on a national level, and Greenspan apologized that he did not predict this because the United States had not yet faced such a crisis, which he named "a tsunami that comes once in 100 years".

Greenspan admitted that he believed that banks would act in their self-interest and protect their investors and their equity. In his words, there was an error in the economic models used to forecast the future. These models apparently took into account only the past two decades, which were decades of "enthusiasm".

After admitting that even he did not anticipate what happend, he also blamed investors who en masse bought mortgage-backed securities without worrying about a potential fall in condominium and house prices. Greenspan said that he doesn't see how the U.S. can now avoid an increase in layoffs and unemployment, while he also forecasted a fall in consumption. In his words, a necessary condition to end the crisis is stabilization of house and condominium prices, but this will not occur for several more months.

"Will someone go to jail, too?"

Congressmen asked Greenspan, along with the other two, how to ensure that something similar does not happen again. Greenspan said that regulatory reforms will be useful, but he also immediately added that they will mean less than market self-regulation, which ostensibly is already coming. Greenspan is convinced that, in the future, there will be a higher degree of self-restriction.

To questions in the sense of: "Will someone go to jail, too?", the three "wise men" were muted. Cox admitted that someone in this mess probably also broke the law, but he opined that cleansing with the help of the Justice Department is not "ideal", but that it is necessary to learn lessons from it all and prevent a repetition.

Congress Republicans replied to Democratic attacks on their faith in the free markets that the main responsible parties for the crisis were the para-governmental mortgage companies Fannie Mae and Freddie Mac, for which Democrats did not allow more regulation. Waxman asked the three witnesses about this, and they in turn admitted that the two companies were not responsible for the crisis, but contributed to it.
Similar article, different choice of words.

While reporting more or less the same things, the Delo article tries to portray Greenspan, especially to a casual reader, as "crushed", as thoroughly intellectually defeated, as wrong in everything he believed in for the past 40 years.

Yet, this is not the impression that one gets from the LA Times article, and indeed is probably far from the truth. Greenspan did trust the self-regulation of financial institutions more than he should have, and has admitted as much. But this does not change the fact that his trust in markets over regulation is, for the most part, well-founded and valid.

The editors of Delo, however, strive to make hay while the Sun shines. Once again, Gorbachev finished an excellent second, while Reagan was second-to-last.


Kolenkišta said...

It is a sad fact that in the beginning of the 90s it was only the political system that went through transition in SLovenia. All of the other subsystems of society havent changed a bit. How could they? Why would a journalist, who under comunism was in fact an employee of the regime suddenly change his ways? Why would someone, whose job and reputation were dependent solely of his popularity with the leading elite suddenly become a professional journalist.

I could go on and expand the topic all the way to slovenian justice system (role of judges now and then), medical care system and so on. Slovenia, despite its relative economic success, is essentially still a comunist country with a few democratic and capitalistic tweaks.

denis bider said...

Good points.

That being said, though, there is nevertheless a significant difference between a regime that enforces its ideology by force, and one that tries to spread it by the media.

With regard to the media, my impression is actually that the journalists themselves tend not to be as political as editors. On a number of occasions I have seen articles that would have been kind of reasonable if it wasn't for the introduction and the headings. My impression is that journalists tend to be unobjective due to ignorance, but editors tend to be unobjective due to malice.

Though Slovenia has a number of horrendous journalists, as long as the editors are malicious, it wouldn't make a lot of difference even if the journalists were great.

The root problem, of course, is the structure of power, which is such that leftists control the vast majority of Slovenian media.

Unfortunately I don't know enough about this power core, about it appears as though they are vilifying Western economic thought as part of broader political effort to exclude foreign competition, which enables them to capture the Slovenian economy in order to extract maximum benefit (for them, not for the economy).

Basically, there are a few people who really own Slovenia, and that is why it sucks so much to live and work there. It is a veiled form of feudalism, where the feudalists are behind the scenes, but a very strong force politically.

boris_kolar said...

Indeed it sucks here and no change is on sight. Denis, you've probably visited many countries before finding St. Kitts. Can you provide a survey of good countries to escape to, together with information about what you did or didn't like about them? I'm sure many from Slovenia will find that information helpful.

Things to consider:
- personal freedom in theory and practice
- economic freedom and taxes
- climate, entertainment, women,...
- safety and health care
- cost and quality of living

PS: my current favorite is Costa Rica, which I plan to visit in december - have you been there?

denis bider said...

There is no ideal country on Earth, and no really free country either. You need to find a place that offers the best compromise given your requirements.

Depending on your value system, even a moderate or high tax rate might be outweighed by other factors, such as the ability to work in the kind of place you want, or to hire the kinds of employees you want, or to live in a center of activity, etc.

Whichever thing you value most highly, maximizing that value will require you to sacrifice much of the rest.

Perhaps the free-est you can get is to structure your life and business in such a way as to pick the best aspects of multiple countries. Which countries that would be, however, depends highly on what you want, what you do, and what you have.

verbatim said...

I visited a lot of countries and personally I would say Switzerland is overall the best country to live in (low taxes, high quality of life, personal freedoms). In developed! world in general you have two systems:
1) English speaking countries where there is a liberal approach to economy and repressive/obsessive approach to how people live and should live (extreme example is Australia);
2) other countries where governments interfere less with how you should live but they interfere a lot with economy.

Too bad there is no number 3 which would have the best of both worlds.

Costa Rica is a good vacation spot but it is hard to live in a country where nothing is organized and nothing is working as someone would expect to work (but that is a general case for tropics). Such system should work for you if you are self-employed. Important aspect to me is also security concers and consequently if you need to live in gated/secured communities (some are like prisons, especially in USA and broad regions which share Caribbean sea). But then again this isn't important if you don't socialize much.

denis: I strongly agree with your opinion about how it sucks to work in Slovenia and how it sucks if someone own a company. But Slovenia is still one of the rare countries where people which enjoy being outdoors have much of the freedom in the public space.

denis bider said...

Indeed, all countries have their good and bad aspects, Slovenia included.

You argue that the English speaking world is repressive socially, but we have not found this in our travels. It's true that various states in the U.S. have ridiculous laws, but not all states. The internet makes it easy to find and associate with people who are on your wavelength and have a relaxed attitude. While we know that prudeness exists in the States, we did not feel limited by it.

We would gladly move to Vegas if the Federal Government stopped taxing income. And we're fairly wicked people, far from your average prudes. ;)

denis bider said...

That said, I don't have a personal problem with the drug laws, because we don't do any of that. I am against these ridiculous laws as a matter of principle, but it doesn't personally affect me, so it doesn't prevent me from considering a place.

verbatim said...

And we're fairly wicked people

Glad to hear. Dunno why I always thought you are the opposite type. :)

You argue that the English speaking world is repressive socially, but we have not found this in our travels.

Depends on your lifestyle. While I travelled in USA, I encounter repressiveness in that we couldn't drink a beer on the beach, that women weren't allowed to sunbath topless, that when there were high waves they didn't allow us to go into water etc. This are all victimless crimes which are typically more prevalent in english speaking countries than in western Europe.

denis bider said...

verbatim: While I travelled in USA, I encounter repressiveness in that we couldn't drink a beer on the beach,

Yeah, most communities in the U.S. do seem to have a somewhat prohibitionist attitude to alcohol.

verbatim: that women weren't allowed to sunbath topless,

There are dedicated topless beaches though. I'm not sure that nudity is legally permitted at most European beaches either, though this may be much less enforced.

verbatim: that when there were high waves they didn't allow us to go into water

This might be a litigation avoidance strategy. If you prevent people from drowning, you don't get sued for failing to do so.

verbatim said...

There are dedicated topless beaches though. I'm not sure that nudity is legally permitted at most European beaches either, though this may be much less enforced.

Thongs are allowed everywhere, topless is forbidden in Poland and Malta; France, Spain, Scandinavian countries, Czech, Slovakia, Slovenia (conditional in our law) even allow full nudity on the beaches or public space.

This might be a litigation avoidance strategy. If you prevent people from drowning, you don't get sued for failing to do so.

Yes, but this is ridiculous. Then they should also forbid me to drive bicycle in high density traffic hours because car might! hit me etc.

There are dedicated topless beaches though.

That depends on the state/county but most do not allow it. In Los Angeles they still put topless women on sexual offenders list next to child molesters...

denis bider said...

I agree. The sex offenders crap is just ridiculous.

When the majority opinion changes, I wish someone could come up with some "harmful prudery offenders list" or something to retaliate. Make the prudes' lives miserable for a change.