< Supply and Command

Transcript

Friday, July 18, 2008

BROOKE GLADSTONE:
From WNYC in New York, this is NPR's On the Media. I’m Brooke Gladstone.
BOB GARFIELD:
And, I'm Bob Garfield. The credit crisis, foreclosures, the weak dollar, inflation — the headlines this week were dominated by the economy. Amid all the turmoil, the part of the story most obvious to most Americans is the price of oil, and, more particularly, the price of gasoline at the pump.

The media therefore have spent a lot of time dealing with the oil price bubble, often framing it as an issue of supply and demand.
[CLIPS]
MALE CORRESPONDENT:
First of all, from economics we know that there’s supply and demand. We are not going to solve the oil problem without dealing with both the supply problem, which means drilling-
FEMALE CORRESPONDENT:
It very well might lower demand for energy prices. We can't do much in the near term about supply. We can do a lot about the demand.
MALE CORRESPONDENT:
— see a bigger collapse in demand and we'll see lower prices for sure.
FEMALE CORRESPONDENT:
Oil’s down 18 dollars. Why? It all comes down to the basic law of supply and demand.
[END CLIPS]
BOB GARFIELD:
But Howell Raines, media columnist for Portfolio Magazine and former executive editor for The New York Times, says journalists generally haven't been asking the right questions about oil prices.
HOWELL RAINES:
The oil companies have gotten away with a very simplistic explanation, that this is purely supply and demand. And they cast themselves as helpless victims of supply and demand.

We have a supply crunch because of a calculated decision on their part to 1) cut back on exploration, 2) close half of the refineries that we had only a few years ago, and 3) to redirect all of their spending from things like research and development into profits. So, none of these things are unpredictable or accidental.
BOB GARFIELD:
Now, in your piece in Portfolio, you portray us as kind of unwitting victims to the superior public relations tactics of the oil companies in particular. You [LAUGHS] focused on poor Matt Lauer, who has often invited the chairman of Exxon Mobil, Rex Tillerson, onto the program, and you say that Lauer just gets played for a chump.
HOWELL RAINES:
What I actually did was give Matt credit for gamely asking questions. The problem is that in a five minute format he’s up against this PR superstar in Rex Tillerson.
[CLIP]
REX TILLERSON:
This is a demand driven price run-up, no question about it. I think all of your viewers are well aware of the rapidly growing economies in China, India, other parts of the world. And with those rapidly growing economies, tens of millions of people have been lifted out of poverty. That’s a good thing. The negative effect is —
MATT LAUER:
The demand on fuel.
HOWELL RAINES:
— the huge demand on energy, and that’s put a lot of pressure on the price.
[END CLIP]
HOWELL RAINES:
For them to depict supply and demand as if it was as inevitable as gravity and as random as lightning is simply asking us to take a very naive view of business practices.
BOB GARFIELD:
Has no reporter worked that story?
HOWELL RAINES:
No, there've been a number of excellent series, starting about five years ago with Bartlett and Steele, the Pulitzer winning team from Time Magazine, and other papers have done good work in this area.

You know, one of the real problems of any —reporting any complex subject, is that every story can't be a complete explanation of the whole subject matter. Once my column came out, I got an email from an energy reporter in Texas, the heart of the oil patch, saying that her editors were only interested in stories about consumer price rather than stories that raised these fundamental questions.

You know, one of the real problems of any —reporting any complex subject is that every story can't be a complete explanation of the whole subject matter.
BOB GARFIELD:
You make an assertion early in your piece that this generation of reporters, unlike, let's say, your generation and mine, are children of Reaganomics and not of kind of the FDR ethic that so informed journalism, let's say, up until the '80s.
HOWELL RAINES:
We're all creatures of our moment in history and our larger society. The cultural ethos that flowed out of the Depression and World War II was one that was very challenging toward the prerogatives of corporations.

The business culture that took root in the Reagan administration is one in which the idea that taxes are evil has become deeply entrenched and the idea that corporate prerogatives ought not to be regulated.

So I'm saying that there is a less challenging mentality in the press as a whole than there was 40 years ago. And let me say that I did not envision my column as a blanket condemnation of the press but as commentary on how we need here a more vigorous journalism that’s less relaxed about corporate public relations.
BOB GARFIELD:
So, while you've said now that you didn't mean to condemn an entire industry for its coverage of the oil crisis, you came just short of that.
HOWELL RAINES:
[LAUGHS]
BOB GARFIELD:
What would you propose for every daily newspaper and other media organization in covering this story?

HOWELL RAINES:
Well, I think right now it’s very important to examine the research and development and exploration figures. If you look at the fact that 80 percent of the lands under lease are not explored, then that casts a whole new light on two primary oil company claims — one, that supply and demand is purely driven by momentary market forces that they can't control, and the other argument that falls apart is that they need ANWR.
BOB GARFIELD:
When you say ANWR, you’re talking about the Arctic Wildlife Refuge?
HOWELL RAINES:
Yeah, yeah, right. There’s simply no way that ANWR would come online in time to have any price impact, and, indeed, any long term impact on the problem that we are facing as a society and as a world culture, which is to use the dwindling resources from petroleum to find the energy sources for tomorrow.

And, you know, there are lovely pictures of windmill farms on the advertising, but if you look at the statistical information, the oil companies have made a decision to divert money not into exploration, research and infrastructure development, but into profits. This is not illegal, but it is good to be honest about it.
BOB GARFIELD:
Howell, thank you very much.
HOWELL RAINES:
Thanks, Bob.
BOB GARFIELD:
Howell Raines is contributing editor and media columnist for Portfolio Magazine.