Reading the Wall Street Journal
Reading the Wall Street Journal[(]
The Wall Street Journal, when you first look at it, is daunting. A likely first impression is “There is no way I am going to be able to read that whole paper every day and have time for anything else.” We agree; if you try to read every page it will take the entire day. If you are retired and looking to fill up your time, that may be a good strategy, but it isn’t a good strategy for most students. Most students have about 30 minutes a day to read the entire paper. Luckily, that’s enough time to extract the information that is most relevant for your course.
Reading the Wall Street Journal quickly is good training for later life, because most successful business people are busier than students and seldom have more that 30 minutes to spend on reading the Journal. (Those who spend less, or more, often aren’t successful.) So, here’s a brief introduction to The Wall Street Journal for an efficient introductory economics student with about 30 minutes a day to spend on reading the paper.
The key to getting the needed information in a short period of time is efficient information processing—scanning the headlines and the places in the Journal where the relevant information will likely appear and then reading carefully only those articles about those issues you are studying or need to know. This process of efficient information processing is central to succeeding as a student and as a businessperson.
To process information efficiently, you must know what you are looking for. As an economics student you are naturally interested in economics, which means that 80% of the newspaper can be scanned briefly and is not directly relevant to the course. We focus here on the 20% of the journal that most directly relates to your economics class.
Structure and Layout
The first step in efficient information processing is to know the structure and layout of the information source, so let’s discuss that structure and layout. Note first that the Journal consists of four sections—A, B, C, and a fourth rotating section. Section A is the primary section. Section B, titled Marketplace, addresses lots of micro issues including advertising, distributing, packaging, law, and technology. The third section, Money & Investing, is an in-depth review of financial data and statistics. The fourth section changes depending on the day. The Personal Journal appears Tuesday through Thursday. On Mondays the fourth section is Technology and on Fridays it is the Weekend Section. Most principles of economics students need only look at the fourth section briefly.
Exhibit 1 gives you the general layout of the six pages of the Journal that are of primary focus for economics students.
Main Section Marketplace Money & Investing
Page A2 International Editorial Page
Let’s go through a general introduction, and then talk about specific strategies for reading The Wall Street Journal in reference to the pages listed above.
For the general reader, or the beginning student of economics, the first page of the first three sections is the most important. That is why they are included as three of the crucial pages. Inside the subsections are of interest to particular subgroups. Economics students are interested in page A2 (page 2 of section A), the International page, and the Editorial page. That is why these three pages are shown in the above exhibit. There are other sections you should take a quick look at, but these are the six most important pages. Six pages should sound more manageable.
Must Reading for Economics Students
First Page, Section A
The first page of section A is a central page for students enrolled in either macroeconomics or microeconomics classes. It often has articles on economic topics and also provides you with an overview of articles inside the paper. If you look at several front pages from different days you will notice that they are arranged in a similar way. The front page has six columns, each of which is home to a different set of columns, an index on the lower left, and another small box, Inside Today’s Journal, on the lower right.
What’s News, in columns two and three, provides a glance at the contents of the newspaper and other summary stories. The leders (an old British term that implied a story that “led” the paper) appear in columns one, five and six. These are the leading stories about business and the economy. Column four is the A-hed, so named because the box around the headline and the asterisks below the main headline look something like an A. The A-hed is often an amusing report of a story that piqued the interest of a reporter.
What’s News. Business executives are busy people without the time to read everything, so their news is predigested for them in the two-column What’s News. The right-hand column of What’s News is a rundown of world events — the rebuilding of Iraq, conflict between the Palestine and Israel, the latest action taken by Congress, etc. While knowledge of these events is only indirectly related to your understanding of economics, it is good to know what is going on in the world outside. There is more to life than economics. Really. But finding out that information is on your time, not on our 30 minutes.
The left-hand column of What’s News is a summary of business and finance events that are covered in more complete stories in the paper. Skim this for topics that are covered in your courses, since these are likely to contain an article or two that is a must read. For example, a Friday June 6, 2003 issue’s list of events includes an interest rate cut by the European Central Bank, which is important information for any macro student. The articles related to this news item reinforce the explanation of monetary policy given in Chapter 28 of Colander’s Economics (Chapter 12 in Macroeconomics). So if you are in a macroeconomics class, you probably should read that article.
Another item in the June 6th What’s News mentions a planned merger between Palm and Handspring, two hand-held computer makers. This raises issues regarding competition in a market of rapidly changing technology discussed in Chapters 14 and 15 of Colander’s Microeconomics and Economics. So if you are in a microeconomics class, you should probably read that article.
What’s News, combined with the Index and the Inside Today’s Journal boxes at the lower right and the lower left are essential for you to mapping your exploration of the inside sections of the Journal.
The Leders. After scanning What’s News, look at the titles of the right- and left-hand leders. These are the day’s feature stories and cover a wide range of topics, which may or may not be significant to an introductory class in economics. A glance at the title usually tells you. The June 4, 2003, issue’s right-hand leder, “U.S. and Europe Signal the Rates May be Cut Soon,” intertwines the subjects of inflation and weak currency, raised in your macroeconomics textbook, with a microeconomics discussion of the changing definition of the Russian middle class. The right-hand leder on June 6, 2003 is titled “Want to Lift Your Firm’s Rating on Governance? Buy The Test” provides some nice insights into incentives of rating firms’ governance procedures, and the way in which real business often works. That’s an important insight about incentives that you’re expected to learn in microeconomics.
The June 5, 2003 right-hand leder, “Amid Shortages, New U.S. Agency Tries to Run Iraq” includes a discussion of the interaction of supply and demand in the electricity and gasoline markets. If there is a shortage, you can be sure that the pricing system is not being allowed to operate freely. This article is also relevant to macroeconomics because it shows the importance of a well-functioning government to growth. The various roles of government presented in the textbook make sense as one reads about the need for the protection of property rights for a market to function. The leders do not always apply to economics, but you should always look at the titles, and skim any article that looks pertinent, reading carefully any that are.
The A-hed. Next, take a look at the A-hed, the fourth column. This column is often offbeat and humorous. It may not address any economics concerns you thought you had, but you will probably enjoy the story. “Poultry in Motion: Chicken Catching Goes High-Tech” crows a June 4, 2003, A-hed. Laughing all the way through the commentary on the challenges of nabbing eight billion chickens from the coop by hand and a new mechanical chicken harvester, one also obtains an understanding of the incentive for technological innovation. But recognize that reading this fun stuff is generally on your time, and does not count for the 30 minutes.
Editorial and Opinions Page
After reading the front page, flip to the editorial page and glance at the opinion headlines. First, look at the editorials. This is supply-side conservatism at its strongest. Usually well written and well argued, but almost never objective, they are worthwhile to look at, especially if you are a liberal who needs some exposure to conservative arguments. (If you’re a conservative, we suggest you read The New York Times editorials for some exposure to arguments on the other side.) Despite their bias, once in a while these editorials directly address a topic relevant for the principles course, so they are worth a look. But remember these are opinion pieces and combine normative and positive arguments.
After skimming the editorial titles, skim the op-ed article titles. An op-ed piece is so named because it is positioned opposite the editorial. Unlike the custom in many newspapers, most Wall Street Journal op-ed pieces are written from the perspective of a businessperson or economist, so a number of them may well be relevant to an economics course.
The majority of these op-ed pieces generally have a strong conservative, supply-side, bias, although not as conservative as the editorials. But every so often, for a stab at fairness, a liberal piece is included. Whatever the political persuasion of the author, these pieces are usually skillful and knowledgeable. They are models for essay writing, with a well-defined theme, supporting arguments, and an animated and engaging style.
The debates in these pages sometimes expand upon the economics principles presented in your textbook, so it is worthwhile to glance through the headlines and read the relevant pieces. For example, a June 4, 2003, op-ed is titled “Is the Euro Working?” The piece explores the political issues regarding the euro—whether Britain will leave open the door for joining the monetary union in the future and whether the euro has changed the welfare policies in Germany. The reader can draw on the textbook analysis to evaluate the columnist’s arguments, just as the columnist’s arguments challenge the reader to reevaluate the concepts presented in the textbook.
Section A, Page 2
Now that you have made it through page A1 and the editorial pages, you need to follow up on the relevant portions of What’s News. For macroeconomics this usually means turning to page A2 where most macroeconomic issues are discussed. Page A2, June 5, 2004, provides an example of what you will find on this page. It contains four stories. Of these “Workers’ Productivity Beat Previous Estimate” leads at the top of the page, and is the most relevant to economics. This story reports on nonfarm business productivity data as well as raises questions about deflation, unemployment, business cycles, and activist monetary policy. The others are less relevant.
On Mondays and Thursdays, look for two special columns. Monday’s Outlook contains information useful for macroeconomics. Articles in this column are both domestic and international in nature and cover mainly markets and investing. Articles here, unlike the others on page A2, are written with a specific point of view. They begin with a statement regarding a trend or policy and then provide evidence to support their perspective. This column is open to any Journal reporter, and articles are chosen by competition.
An example of what you will find there is the Monday June 2nd, 2003 column, “Developing World Enlivens Animation.” This article reports on ever-increasing competition among developing countries to produce goods and services products destined for the U.S. market, in this case animated films such as Scooby-Doo. Thursday’s “Capital” column, written by David Wessel, covers stories about growth and the health of economies. On June 5th, 2003 “Use Words Wisely When Moving Markets,” discusses the importance of rhetoric by government officials to policy. This story is definitely pertinent to the study of macroeconomics.
Not all of the stories on page A2 are worth reading for the principles course. Do not bother to read about the retirement of a firm’s chairman. Names, faces, and even dates are not usually as important as actions and ideas unless, of course, the names and faces are biggies. (Who is the Chairman of the Fed?) The articles you are primarily interested in should involve questions of policy—articles such as: What are the economic motives behind actions taken by companies, consumers, or the government? and: What patterns of behavior do the models and statistics demonstrate?
Along with your print subscription you get an online subscription at www.wsj.com. Most articles is the same, but without the cost constraints of a printed newspaper, the online subscription can offers a few extras such as Tracking the Economy, a table published on Fridays that lists the key statistics scheduled to be released during the coming week. It will give the economic indicator, the period it covers, the release date, the indicator’s most recent value, and the consensus forecast for the release. For major economic indicators, make a note of the release date and look for an article covering the release on the day following the release. The following box lists the major economic statistics reported by The Wall Street Journal and their approximate release dates.