One obstacle to productive public debate in the United States is the media’s tendency to engage in “false imbalance” when reporting on economic policies. No, I don’t mean “false balance.” False imbalance refers instead to the temptation to disparage policies that are in fact reasonable attempts to balance competing objectives. We have recently seen examples of this in US health care reform, as well as fiscal and monetary policy.

The problem of false balance is well known. For example, media reports on climate sometimes give the impression that skeptics who question the scientific case for anthropogenic climate change warrant comparable weight to experts who say global warming is a genuine problem that needs to be addressed. The net effect is to give a false impression of where the overwhelming preponderance of scientific evidence lies.

False imbalance, by contrast, is not a familiar concept -- but it should be. It describes reporting that suggests that a particular policy is generally considered bad or unpopular, when in reality it appropriately seeks to reconcile rival forces or goals. Typically, news coverage misleadingly lumps together critics coming from different directions, leaving audiences with the impression that most people hate the policy.

A prime example of false imbalance arose in reporting on the 2010 Affordable Care Act (ACA, or “Obamacare”). In the years after the ACA was passed, many journalists, citing opinion polls, reported that a majority of Americans opposed it. But their reports tended to combine respondents who thought Obamacare went too far and gave government too big a role in people’s lives with respondents who believed the ACA should have extended health insurance coverage further than it did.

For example, the media reported that 62 percent of respondents in a 2013 CNN poll opposed the ACA. But that included 15 percent of Americans -- 24 percent of the 62 percent classified as opposed -- who thought the law did not go far enough.

After Donald Trump was elected president, the percentage of Americans who wanted to extend the ACA rose sharply, and the share favoring its repeal declined. In a November 2017 Kaiser poll, for example, 62 percent of respondents favored a “Medicare for All” single-payer system.

Most of the time, the best economic policies lie somewhere in the middle of a public-private spectrum. Relatively few Americans want all health care to be administered by a government agency like the United Kingdom’s National Health Service. But probably even fewer are so obsessed with individual responsibility that they want to prohibit ambulance drivers from picking up an accident victim lying on the side of a highway until they have established whether he or she has health insurance. The key is to find the right balance.

And Americans have come to support a balanced health care policy. They recognize that Republicans failed for ten years to propose a viable alternative with which to replace Obamacare. At the same time, more voters have become aware that “Medicare for All” would take away people’s existing private health insurance.

By March 2020, a whopping 73 percent of voters had come to favor a sensible way of further increasing the number of Americans with health-insurance coverage: allowing them to participate in a public option. Barack Obama himself wanted this feature as part of the ACA, but judged it politically unviable, and Joe Biden supported it in his 2020 presidential campaign. The media’s earlier false imbalance did not help the public deliberative process.

Biden’s fiscal policy represents another balance between extremes. His $1.9 trillion American Rescue Plan, enacted in March, included large increases in social spending for priorities such as fighting COVID-19 and providing relief for affected workers. And he is currently seeking congressional approval for a major infrastructure spending package.

Traditional fiscal conservatives regard these as excessive expenditures. But Biden has consistently opposed some left-wing Democrats’ unaffordable proposals, such as forgiving all student debt or introducing a universal basic income. And opinion polls suggest that his fiscal stance is popular.

To help pay for the increased spending, Biden proposes to collect more of the taxes owed to the federal government under current law, and to increase taxes substantially on Americans earning more than $400,000 a year and those with billion-dollar estates. But he has avoided less practical proposals such as an annual wealth tax. Although tax increases seldom poll well in isolation, Biden’s combined package of infrastructure spending and tax proposals strikes an intelligent balance.

Then there is the case of monetary policy. Like most central banks, the US Federal Reserve has long sought to strike a Goldilocks balance between excessively loose monetary policy, which could fuel inflation, and too much tightening, which threatens to slow growth and increase unemployment.

Over the last decade or so, some have accused the Fed and other central banks of making inequality worse. But a careful reading of reports reveals that the critics follow two opposing lines of logic. Some argue that easy money exacerbates inequality because low interest rates and quantitative easing help to push up prices of stocks and other assets, largely benefiting the rich.

But others think that monetary easing reduces inequality, and complain that central banks have often worsened income disparities by tightening policy earlier than necessary. On this view, a “high-pressure economy” brings into employment not only the conventionally unemployed, but also people on the margins of the labor force -- including the long-term unemployed, minorities, and the disabled, as well as those who have a criminal record or lack a persuasive employment history. Also, inflation is clearly good for debtors, who tend to have lower incomes on average than creditors.

These hypothesized effects, though they run in opposite directions, are both genuine. For most countries, it is not clear which effect dominates. To accuse a central bank of exacerbating inequality without recognizing this tension is to fall prey to false imbalance.

These three examples are revealing, but they are hardly exhaustive. False imbalance is everywhere. It’s time we recognize it for what it is.


Jeffrey Frankel
Jeffrey Frankel is professor of capital formation and growth at Harvard University. -- Ed.

(Project Syndicate)