Flawed Beckonomics

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In the past five years, Glenn Beck has gone from a little-known talk radio host to the preeminent sage of conservative America.
His political theories, in which he often targets those he sees as leaders of a progressive revolution, have inspired a newly energized skepticism of government in conservatives across the country.
At best, he creates a more vigilant society. At worst, he uses his visibility to spread conspiracy theories.
But it’s not his politics that are dangerous.  Rather, his theories about phenomena in the macro economy spread misleading information, oversimplifications and fear.
Beck has used the turmoil caused by the recession to give his own take on why suffering exists in America and what economic agents are responsible.
Beck’s angry and vulnerable viewership with little understanding of the economy’s complexity feels enlightened by his explanations of who is to blame for the recession and why.
Lately, though, Beck has paired his explanations of who is responsible for economic problems with what future events people need to fear and prepare for.
He has spread a theory that the U.S. is approaching a period of high inflation and the dollar’s collapse, and on his Nov. 5th, 2010 show, he constructed for his viewers a 15-day scenario of the eminent collapse of the global economy.
The scenario begins with China ending purchase of bonds from the U.S. government, and from there, the stock markets of the world crash, hyperinflation ensues when the dollar becomes worthless, and the international financial institutions respond by ushering in a “New World Order.”
Beck mischaracterizes China’s purchase of U.S. debt as the crutch that keeps our government funded.  China’s purchase of government debt is not, in fact, because we need funding.  The reserve of dollars China creates from selling us goods is invested in U.S. securities, including Treasury bonds.
With regard to expectations of inflation, nearly all mainstream economists do not see it as a worry.  In fact, the more common problem has been a risk of deflation.
Beck’s theories wouldn’t be so dangerous if he were able to gather economists to support them – he can’t.
Moreover, his analyses of economic events always conveniently fit into his show’s theme that those running the government and economy are incompetent and out to cause chaos.
It should at the very least raise eyebrows that Beck is the primary paid spokesperson for Goldline International, a gold investment firm, and Food Insurance, an emergency food storage service.
Beck, therefore, has a financial interest in perpetuating his theory of economic collapse to continue encouraging viewers to convert their dollars into gold and buy food in the case of societal chaos.
It would be understated to say that Beck’s views of the economy are influential.  His show was the fourth most watched cable news program in February, so his ideas reach into many homes and even to Capitol Hill.
In a Feb. 19 speech about the federal budget, tea party Rep. Michelle Bachmann said, “We need to simply tell people the facts, like Glenn Beck, with that chalkboard, that man can explain anything. I think if we give Glenn Beck the numbers, he can solve this.”