When the 'Business Daily' Falls in Love with a Narrative

Yesterday the Business Daily had some “breaking news”! A Citibank economist had proclaimed that interest rate capping is upsetting the Central Bank of Kenya’s monetary policy conduct.

The economist – David Cowan – knows what he is talking about; and his observations in the research note that underpins the story are entirely valid.
What is interesting, at least to me, is the timing of the decision by the Business Daily to give the story prominence.
First, it is not breaking news. When the Monetary Policy Committee (MPC) of the Central Bank Kenya (CBK) said as much in its communique of March27, 2017, it wasn’t news worth of Business Daily’s prominence.
 Instead, all we got was the nonsensical argument that the decision to retain the policy signalling rate – the Central Bank Rate (CBR) – which is also the base for capping at 10% was a reprieve to borrowers.
My colleagues and I have elaborately argued twice [here (March 2017) and here (June 2017)] that, if for no other reason, the capping of monetary affects monetary policy consequences; and the consequences of that is damning to the well-functioning of the money pricing regime and the economy as a whole.
But I guess I have been around the block enough to know how masquerade to thought leadership in newsrooms operate: it is not about the logic and the merit in the argument; it is who makes the argument and as a consequence how will it sell the newspaper for a day.
Second, it is a reflection of the thinking that is compartmentalised – monetary policy is now hamstrung is one compartment and banks are engaging in blackmail through reducing credit to the private sector is the other.
I must be quick to excuse such thinking, to the extent that it happens in the newsroom; the reason why I do so is because I do not expect a “general equilibrium” way of thinking – where one looks at all possible connections – to happen there.
If I am right is so arguing, then it is easy for me to see why people are now making the lazy argument of there being a nexus between banks’ decision to rationalise their branch network and the “blackmail” conspiracy theory.
What I know for sure is that the decision by a bank to open (and close) a branch or extent credit is tough to make than that of wring a careless newspaper story or a pretentious editorial like today's where there is an assertion that “removing the caps demands that all other distortions are dealt with at once”. 
One wonders whether there is really an understanding at the Business Daily of (a) what the distortions that they are talking are (b) whether it is practical to imagine that those distortions can be dealt with “at once” (c) how it doesn’t make any economic, even logical sense to start putting a sequencing (more accurately a condition) that the removal of the distortionary caps needs at happen once all the other distortions have been removed “at once” – why not remove all of them “at once” then?
 But hey, I am not naïve to expect a newspaper that has fallen in love with a narrative to let soberness come in its way.