That, according to a CBC News story posted online Sunday, is the likely size of a bank bailout to be announced on Monday by U.K. Prime Minister Gordon Brown, based on a report in the Sunday Times. The next sentence of the CBC story adds that the “Sunday Telegraph said the figure could be as high as $368 billion Cdn.”
Isn’t it strange that two respected journalistic organizations would report such different, yet so very specific, figures? Isn’t it even stranger that two U.K. papers, reporting on a U.K. news event, would use Canadian dollar figures?
Of course, the Times did not predict a “$187-billion-Cdn” bailout; they predicted a £100 billion bailout. And the Telegraph did not mention a limit of “$368 billion Cdn”; they said the cost could get as high as £200 billion.
Admitably, the entire CBC story – a collection of rumours from other publications – looks like it was put together without much thought. But it got me thinking about how media report the numbers in the all-to-frequent stories of government interventions in faltering economies.
There are a couple of issues raised by the story. The most obvious is how to report on foreign currencies your readership may not be familiar with. More importantly (and completely overlooked in this little news brief), is how to convey the impact and significance of the numbers being thrown around.
On the issue of reporting currencies, I’m going to risk offending the style police and argue that there is a preferred way to do it: state the original figure, then follow it with the Canadian conversion in brackets. That way you’ve got the accuracy of the original and the convenience of the conversion. If you’re writing a two-inch news brief for a printed paper, there is some argument for avoiding duplication to save space, but online there is no such excuse. And even if space was limited, I’d argue for keeping the original and dropping the conversion.
Both Canwest’s Canada.com news site, in a story from Reuters, and the Globe and Mail, in an Associated Press story, use the dual format. However, both also use U.S. dollars as the converted value – the G&M story clearly identifying it as such, Canada.com leaving you to wonder what type of dollars they are talking about.
This is more than just a style issue. If you tell me the U.K. government is going to spend 187 billion dollars, it reads as if you know that number to the nearest billion. If you then say that someone else says the amount is $368 billion, that looks like a significant discrepancy.
If, instead, you say that media reports of the size of the bailout range from £100 billion to £200 billion, I immediately recognize that no one knows for sure the exact value, they just know it’s going to be big.
Furthermore, exchange rates change daily. The Bank of Canada rate on Friday was $1.8481 Cdn per pound sterling, but the CBC seem to have used $1.87 for their first conversion and $1.84 for the second number. Minor difference? Maybe, but it changes the numbers in this story by three or six billion dollars.
So what do you do when you’re dealing with numbers for which billions of dollars are just rounding errors? What do those numbers actually mean?
One thing I’ve found useful when trying to keep track of the various billion-dollar, billion-pound, billion-euro bailouts is to convert them into per capita values. For the U.K., then, it helps to know that the population is close to 61 million. That makes the proposed bailout in the range of 1,500 to 3,000 pounds per person (approximately 2,800 to 5,600 Canadian dollars per person).
That’s a pretty stunning amount of money. When you include the information that the U.K. Treasury’s total tax receipts for 2007-2008 amounted to just under £550 billion (see p.21 of their end of year report), it brings it into even clearer focus. The predicted expenditure would be one fifth (or more) of annual revenues. And of course, to get the full picture you have to add in the £37 billion the Treasury invested in U.K. banks just a few months ago.
If the actual financial package to be announced tomorrow matches the predictions, the total U.K. government intervention will match that of the U.S. in relative measures. The $700 billion US package approved by Congress in October 2008 works out as around $2,300 US (approx. $2,850 Cdn) per person. That’s about one quarter of the U.S. federal government’s annual revenues ($2.66 trillion US for the fiscal year ending in September 2008, see p.36 in the annual financial statements).
No matter how you write it, it’s a lot of money.