Friday 21 September, 2018

Too much uninformed noise on Jamaica’s economy - Eriksen

Bank of Jamaica (BOJ) Governor Brian Wynter used an interesting phrase, borrowed from physics, not economics, at BOJ’s last Quarterly Monetary Policy Report Press Conference.

The phrase was “signal-to-noise-ratio.”

Signal-to-noise ratio is a formula originating in physics and used in engineering and science to measure the level of a desired signal compared to the level of background noise around it. Any ratio higher than one to one indicates more signal than noise, which is what would be required in most cases.

It was almost a throwaway comment, not in the prepared speech, and not at all what the press conference was really about, but on reflection, it was a subtle but astute reference to a problem facing the economy that was more evident than usual in recent weeks.

That problem is uninformed noise, specifically about economic matters. In recent weeks, it has been mostly about, but not limited to, the exchange rate.

Having questions and concerns is one thing, but having the temerity to write articles and columns and appear on talk shows as some kind of expert when one has no clue what one is talking about is quite another, and it’s a problem.

It’s a major problem when our media houses allows one to do that. It seems anyone can claim to be an economic expert and get time on our talk shows or get a column in the papers to spout nonsense, all without any vetting.

It’s very simple. When people in a country understand economic matters, that country’s economy will perform better, as people with better understanding will make better decisions.

If, on the contrary, people refuse to educate themselves on economic matters, refuse to pay attention to information that is publicly available, and in addition are bombarded with uninformed noise by ignorant or partisan self-proclaimed “experts,” then whatever economic progress we hope for will surely be delayed if not compromised.

It’s easy to blame others for our ignorance, so some blame the Central Bank for not communicating enough, and parrot the phrase ‘lacking transparency,’ which is ludicrous.

In addition to the host of information available on its website, which it seems nobody bothers to read before they start talking, the Bank of Jamaica routinely hosts journalists at its quarterly press conferences and holds itself to a published schedule of semi-quarterly monetary policy decisions and public announcements of those decisions.

The BOJ publishes full details of its weekly foreign exchange transactions  in addition to a daily market report, and even publishes its balance sheet every two weeks. What public or private sector entity in Jamaica can claim to match that consistent level of transparency?

Yes, economic progress means a greater need for information, but while we can reasonably ask BOJ to communicate even more, let us also appreciate the greater levels of communication and outreach it already produces with limited resources.

The Governor’s speeches have become noticeably better than in in his first couple of years on the job. There are a number of educational ads in the newspapers and online, there are jingles on the radio, I have seen series of educational op-ed articles in the newspapers.

I’ve repeatedly heard the Governor and other BOJ officials talking economics on several radio talk shows and even on morning TV. I’ve never seen all this from our Central Bank before. In one week, I even saw the Governor pull off the rare feat of appearing live on both prime time TV newscasts in successive evenings. I’ve never even seen a politician do that in election season! He deserves commendation for already giving more interviews and making more appearances than all other Governors before him combined. In addition to all this, through the creation of various committees involving private sector members, BOJ now provides a greater level of access and consultation on economic matters that is quite simply unprecedented.

So no, BOJ is not the problem when it comes to communication; it’s just an easy target.

The Governor was not trying to hit out at the journalists in the room when he made the comment.  The recent  chatter on the exchange rate and inflation has little or nothing to do with actual journalists.

The major problem is the non-journalism sector of the media –  those who forget that  the media is always supposed to be a gatekeeper and provider of credible and accurate public information.

You can’t reliably be a source of either accurate or credible information when you provide a platform for every political hack intent on spreading mischief and every self-proclaimed pundit intent on confusing the public with a vast repository of ignorance. Yet several media houses - print and electronic, shamelessly continue to do this, to the embarrassment of their own journalists, to the confusion of the public, and to the detriment of the economy. Part of the problem is that too many operators in the media are just as ignorant and know no better.

It is time for media houses to be more accountable, and time for the Media Association of Jamaica to wake up and act more responsibly to protect the integrity of journalism and the journalistic principles which should guide all media houses.

It is time for the Press Association of Jamaica to be even more strident in protecting the integrity of its journalists from their own bosses, even as it encourages those journalists to do more to educate the public on economic matters.

It is time for all of us to stick to the facts, to educate ourselves before we start talking, and encourage others to do the same. It is time for all media houses to stick to credible subject experts who add value and can be valid sources of information and education, and time to shun the mischief makers, rumour mongers and deluded self-proclaimed experts who are only experts in ignorance and stupidity.

It is time for the media to do better, to stop being a source of the problem, and finally do its job of properly managing the nation’s signal to nose ratio, especially on economic matters. The progress we all want might depend on it.