The Wall Street Journal Abandons Its Business Readers

The Wall Street Journal has become the Fox News of print journalism, another entertainment outlet of the Murdoch media empire. The paper's opinion pages are lively, clever, and increasingly fact free. Business leaders looking for serious analysis instead of entertainment should turn to The Financial Times and other leading business outlets.

The problem with Murdoch media is that ideology is both fun and highly profitable, and Murdoch is nothing if not profit oriented. The truth is of no particular interest; viewership and readership are paramount. And who wouldn't be charmed by a world in which science fact is fiction; the poor are greedy; the rich are worthy; and the plutocrats represent the common good against the evil conniving of government. The new season of House of Cards arrives once a year; The Wall Street Journal every day.

Yet American businesspeople, bless their hearts, often believe what they read in The Wall Street Journal. I was surprised to learn this. At a high-level meeting of CEOs of leading utility companies, a business leader asked me in full innocence: "Are you saying, Professor Sachs, that climate change is real? The Wall Street Journal says it isn't so."

I am reminded of all of this today, in the wake of the Paris Agreement on Climate Change. The world is changing rapidly. 195 countries all agreed to take strong action against human-induced warming. Tens of thousands of delegates, including 150 world leaders, the CEOs of many of the world's largest companies, hundreds of mayors, countless scientists and engineers, major investors, and the managers of dozens of the world's stock exchanges, reached a consensus in Paris on the need to decarbonize the world's energy system.

The lead editorial of The Financial Times reflects on the meaning of the Paris Agreement:

Paris is not the end of the matter. It is not even the beginning of the end. The problem will not be solved for years to come. The treaty does however provide a sensible foundation for international co-operation. This opens the door to greater ambition over time. Now a viable path lies before them, countries must show the courage and foresight to take the next crucial steps.

The lead editorial of The Wall Street Journal, by contrast, spews silly (albeit colorful) ideology:

Forgive us for looking through the legacy of smoke, but if climate change really does imperil the Earth, and we doubt it does, nothing coming out of a gaggle of governments and the United Nations will save it. What will help is human invention and the entrepreneurial spirit. To the extent that the Paris accord increases political control over human and natural resources, it will male the world poorer and technological progress less likely.

That the Journal doubts that climate change "really does imperil the Earth" is at this stage not really the relevant point for its business readers. 195 governments, 150 heads of state and government, the world's top scientists, and the world's leading business organizations have concluded otherwise.

For example, the International Chamber of Commerce, hardly the mouthpiece of left-wing radicalism, issued a call on behalf of its 6.5 million members for a strong climate agreement in Paris. The Wall Street Journal's business readership should indeed be interested in the words of the ICC:

We urge governments to secure a global climate deal at COP21 that works with business to speed emissions reductions, provide enabling conditions for investment and innovation, and build climate resilience in line with the UN Sustainable Development Goals (SDGs). In combination with a strong set of policy signals from all major nations, and in the context of open trade and investment, it will enable business and society to continue the evolution to a low-carbon, resilient economy that will generate growth, prosperity, and jobs for all.

The Journal's misinformation matters for its readers' bottom line. Journal business readers will get wrong the rapid change in the business environment that they will now face. Global investors understand that fossil fuel investments are at risk, that reserves of coal, oil sands, and other high-cost fossil-fuel assets are likely to be economically stranded. Politics did not kill the Keystone Pipeline: economics did. There was simply no room for profitable investments in high-carbon oil-sand transport in a climate-constrained world. The same is true for the US coal sector, much of which is facing bankruptcy and closure.

The job of business leaders is to look ahead and around corners, to see what is coming next. The Journal is failing them badly in this task. The Journal is a shiny entertainment, a window into Murdochland, a clever and vigorous defense of 19th century free-market liberalism. But it is deeply misleading for the business community.

For good and often surrealistic entertainment, read the Journal. I do every morning. For serious business analysis, it's The Financial Times and other specialized business outlets. Taking The Wall Street Journal editorials as fact would cost the US its global leadership in the era of the high-tech, low-carbon world economy.