Keeping It Simple Not That Simple
Yesterday's "Good Morning America" tried to do us a favor by explaining toxic assets in a way most friendly to an audience still shaking off its morning stupor.
Correspondent John Hendren likened them to a couple of bad apples at a fruit stand standing in for a bank. The apples look great on the outside but are all gnarly once you bite into them. Buyers can't tell which apples are bad so they stop buying them altogether. And so on.
A good analogy. And if it's one that sounds like something you'd hear from the "Planet Money" folks at NPR, well, that's probably no accident.
In fact, the sole person interviewed in the GMA piece was NPR's international business and economics correspondent Adam Davidson (above), who's adept at explaining abstruse economic ideas in a gee-whiz, common-sense way.
I don't know whether Davidson has used some variation of the "bad apples" to explain toxic assets, but it wouldn't surprise me.
GMA may have felt it was better to go to someone who could help them do Toxic Assets For Dummies better than they could rather than re-invent the wheel. That makes sense. As for how all those assets got so toxic in the first place, that's a different matter.