Busted coverage.

• Author: Silverstein, Ken
• Position: Media coverage of Latin American economies

The New York Times headline ran "Mexico: No More `Miracle'." The story: an abrupt collapse of the Mexican economy. The factors: "growing inflationary pressure, a heavy external debt, and a massive trade deficit." The date: January 28, 1972.

For years, right up to the collapse, the Times and other American papers had celebrated Mexico's imminent emergence as an economic power. Then the bottom dropped out, and the papers delivered a round of preachy post-mortems on what went wrong.

Sound familiar? It should. This cycle repeated itself just recently. The Washington Post, for example, highlighted the benefits of free trade in its profile of a "Mexican boom town" last December. By March it was reciting the Department of Treasury's line that "Mexican Missteps Caused Peso Woes."

Indeed, premature sightings of Latin American booms are a time-honored tradition, dating back at least four decades. The signs are always the same: moderate GNP growth, overtures to foreign capital, reduced trade barriers, and soaring stock markets. In short, U.S. firms and local companies are making a killing. Unfortunately, with the benefits of economic growth flowing to the (often corrupt) elites, "progress" is inherently unstable, and growth inevitably short-lived.

In 1955, for example, The New York Times found Argentina - "her stocks soar" - on the upswing, with government officials "looking forward to another excellent harvest." Peru was "exploiting great resources' " Even the tiny Dominican Republic was "embarking on a huge construction program," helping to explain why the nation's citizens looked ahead "confidently and expectantly."

Two years later, the paper was even more ebullient. Latin America was "forging ahead" with trade "at a peak." Mexico was "prospering despite drought"; Venezuela was exploiting a "growing bonanza"; and Argentina was on "the road to recovery."

Within a few years most of the region had tottered into economic and political crisis. A 1964 military coup in Brazil foreshadowed one of the bleakest periods in Latin American history. By 1976, generals had seized power in seven more of the region's countries: Argentina, Peru, Panama, Ecuador, Honduras, Chile, and Uruguay.

Mexico may provide the most obvious example of lapses in foreign economic coverage. If the press' past predictions had been accurate, Mexico City would today rival New York, Tokyo, and London as a throne of international financial power. In 1964, the Times reported that "[A Mexican] confronted with the phrase `underdeveloped nation' is apt to assume the expression of a man trying desperately to recall something vaguely familiar, but far, far away." It would have been hard to imagine that just eight years later a headline on Mexico in the same paper would read, "No More `Miracle.'"

Brazil is another case of journalistic missteps. Between 1968 and 1974, newspapers hailed the robust growth rates - topping 11 percent - as indicative of economic strength. In 1971, Business Week praised the dictatorship, enthusiastically telling readers that profit opportunities in Brazil were among the best in the world. A Times dispatch the following year ("The Bloom is on the Boom") said that economists considered the country to be a "second Japan" and announced that for Brazil, "the future is at hand."

But this was also the period when...