For years network news reporters declared that government industrial planning, especially the East Asian variety but also as practiced in Europe, was a form of capitalism superior to the laissez-faire American model.

However, with East Asia currently in the throes of a financial meltdown and the American economy in better shape than the European economy, there hasn’t been a reappraisal of these views. In fact, Asia’s woes are reported as if they were occurring in a vacuum, with no reference to Asian industrial policy.

Correspondent Bob Schieffer, in a January 18, 1992 CBS Evening News report, made the typical media case for industrial policy in the U.S. According to Scheiffer, "Federal seed money...could help develop high-risk, new technologies," adding that "government has worked with businesses for decades, mobilizing to fight World War II, building the first atomic bomb, landing on the moon, and Star Wars."

He ran a soundbite from Jeff Faux of the Economic Policy Institute, who said, "The question is which industries are so important. That’s what the Europeans and Japanese are arguing about. That’s what we ought to be arguing about."

As late as 1994, when it was increasingly clear to many that America’s trading partners were in economic trouble, network reporters still were singing the praises of government planning. On the February 14 episode of 60 Minutes that year, CBS correspondent Steve Kroft ran a report advocating policies to make the U.S. more like Germany. The entire segment was a long interview with industrial-policy advocate Lester Thurow.

According to Kroft, "In order to find out what America is doing wrong, you have to look at what our competitors are doing right." Kroft and Thurow then proposed that the U.S. mimic German infrastructure spending, German industrial policy, and German apprenticeship programs.

And in January of 1994, former New York Times Washington Bureau Chief Hedrick Smith produced a four-part special for PBS called "Challenge to America." Smith’s challenge to America: Be more like Germany and Japan. Smith lamented that American businesses were short-sighted. "In America the market decides everything," he reported. "Germany and Japan don’t totally trust the market. They value long-term relationships and social harmony." Germany and Japan were superior because "in troubled times, the government helps to provide a safety net and in good times, vital support for fragile new industries." He concluded that "a new American Renaissance requires a new mindset, a willingness to learn from rivals as they once learned from us."

But now that Asian economies have imploded, industrial policy is not mentioned as a culprit. For instance, on November 24 all of the network evening news shows devoted at least one story to the bankruptcy of Yamaichi Securities, one of Japan’s largest brokerage houses. Many even reported this in the context of sliding Asian economic fortunes. (Correspondent Barry Petersen, on that night’s CBS Evening News, noted that Japan’s stock market has lost half of its value since 1990.) But none mentioned the argument that government planning may be part of Asia’s problem.

It’s not as if there aren’t many economists making this argument. "For some years," notes Bruce Bartlett in a December 15 Washington Times column, "a number of economists have been throwing cold water on the idea there was something special about Asian economic policies and have criticized industrial policy for misallocating investment and distorting Asia’s economic success."

Bartlett also argues that "a major factor in Asia’s phenomenal growth during much of the postwar era was very low taxes" and that now Asians are taxed far more. But this, too, is an argument you won’t hear about on the evening news.

— Rich Noyes