For your consideration — Covering the financial mess and journalism in general

[JayFarrar]

Just to start a conversation, I was thinking about the coverage of the financial crisis.

Here's what I think. I figure only about a dozen journalists have the background and the chops to report smartly about the specifics of the financial mess. Those 12 or so work in various platforms — web, TV, newspaper, magazines — and that means the vast majority of the coverage was not good.

It has occurred to me, that, and since I've done this myself, when I write about a topic I don't understand, I break the story done to as simple as possible. Frame a narrative where it is one side versus another side. Get quotes from both factions. Put it together and add in color to lengthen it out.

My reasoning tends to be is if the topic is extremely complex the vast majority of the readers won't get it either and it follows the KISS, or Keep it Simple, Stupid, principle.

It, in many cases, does a disservice to the readers who do understand or want to know more and I'm not providing what they need.

I know it is lazy. But at the same time, even when you work a beat you still stumble on stuff that gets you out of your depth.

But, it has also seemed, that more and more stories are falling on that one side versus the other narrative and missing vast amounts of context.

Just some thoughts.

 

[YankeeFan]

A lot more journalists than you think have the proper credentials to cover this. Many worked in the markets.

Now, some of them will have biases, but if you follow them, you'll know that going in.

Does the average generalist, or blow dried anchor have the knowledge to cover it? No.

Don't listen to them. Listen to experts.

 

[baddecision]

A good start. We'll learn that one of the biggest failings of the recent move to young/bloggy/fresh-voice journalism is a whole lot of people who are a) out of their depth and b) blissfully unaware of that or stubbornly unwilling to recognize that. Which leads to d) lots of mistakes and knee-jerk stuff and e) a media that can be easily manipulated. This was always the case to a degree -- which is why crusty old editors once were so valuable -- but what happens now is anyone's guess.

 

[YankeeFan]

A good start. We'll learn that one of the biggest failings of the recent move to young/bloggy/fresh-voice journalism is a whole lot of people who are a) out of their depth and b) blissfully unaware of that or stubbornly unwilling to recognize that. Which leads to d) lots of mistakes and knee-jerk stuff and e) a media that can be easily manipulated. This was always the case to a degree -- which is why crusty old editors once were so valuable -- but what happens now is anyone's guess.

Too many people don't expect the markets to change.

Housing prices will always go up. Stocks will always go up. They don't have the historical knowledge of the markets and think time started the day they started working in the markets or following/covering them.

The whole internet bubble saw people trying to redefine how the world works.

I don't get my baseball news from MankyJimy. Don't get your financial news from someone who looks at markets the same way.

 

[Turtle Wexler]

One of the issues I have with business journalism is that it's traditionally very pro-business.

For example, every story about housing prices going down is done with a sad or negative tone. But it's not a bad thing for everyone, such as people who had previously been priced out of the market or people buying an investment property to increase their income. Yet articles never lead with those perspectives and are rarely written with those views as the focus.

 

[Ace]

Clearly, many bankers, brokers, government officials and fed execs don't have a grasp of the financial crisis, either.

 

[dixiehack]

One thing that used to drive me batty was the AP's daily stock market story. Every day they had to have an explanation of why the Dow was up or down, as though they spent all day surveying folks logging into to their brokerage accounts.

 

[Ace]

One thing that used to drive me batty was the AP's daily stock market story. Every day they had to have an explanation of why the Dow was up or down, as though they spent all day surveying folks logging into to their brokerage accounts.

Me too.

"A lower-than-forecast $10 billion quarterly profit for GE drove the Dow Jones Industrial average down 1,200 points today. The company had expected to make $10.1 billion for the first quarter."

 

[YankeeFan]

Speaking of financial reporters, if you're not reading James B. Stewart in the Times, you should be:

http://www.nytimes.com/2011/08/13/business/financial-aftershocks-with-precedent-in-history.html?_r=1&hp=&pagewanted=all

 

[poindexter]

A lot more journalists than you think have the proper credentials to cover this. Many worked in the markets.

Now, some of them will have biases, but if you follow them, you'll know that going in.

Does the average generalist, or blow dried anchor have the knowledge to cover it? No.

Don't listen to them. Listen to experts.

I completely disagree. Go back and read the the overwhelming majority of business articles in 2006, 2007 and up to October 2008. None of that stuff should have been a surprise.

 

[poindexter]

One of the issues I have with business journalism is that it's traditionally very pro-business.

For example, every story about housing prices going down is done with a sad or negative tone. But it's not a bad thing for everyone, such as people who had previously been priced out of the market or people buying an investment property to increase their income. Yet articles never lead with those perspectives and are rarely written with those views as the focus.

Great point. Housing articles almost seem to be ghost written by the National Association of Realtors.

 

[poindexter]

Clearly, many bankers, brokers, government officials and fed execs don't have a grasp of the financial crisis, either.

Bingo.

 

[YankeeFan]

A lot more journalists than you think have the proper credentials to cover this. Many worked in the markets.

Now, some of them will have biases, but if you follow them, you'll know that going in.

Does the average generalist, or blow dried anchor have the knowledge to cover it? No.

Don't listen to them. Listen to experts.

I completely disagree. Go back and read the the overwhelming majority of business articles in 2006, 2007 and up to October 2008. None of that stuff should have been a surprise.

So, it was better or worse than how sports writers covered McGwire & Sosa, and the entire PED era?

Or how they covered Tiger Woods?

I agree that there was too much cheer leading. It's what I meant by biases.

Too many guys (and gals) that came out of the markets to cover them, maintain a "rah rah" attitude about the markets.

They also rely on a network of sources/contacts who are invested (literally) in the markets continued growth.

CNBC was particularly guilty of this.

But, while many of the most prominent (i.e. on TV) reporters could be accused of this, there were plenty of contrary voices.

Hell, on Wall St., there are always contrary voices.

 

[jlee]

One of the issues I have with business journalism is that it's traditionally very pro-business.

For example, every story about housing prices going down is done with a sad or negative tone. But it's not a bad thing for everyone, such as people who had previously been priced out of the market or people buying an investment property to increase their income. Yet articles never lead with those perspectives and are rarely written with those views as the focus.

Great point. Housing articles almost seem to be ghost written by the National Association of Realtors.

In the give and take of it all, a steep decline in housing prices hurts more of the community than it helps. Those being priced into the market are certainly worthy of a sidebar or to note in the nut graf and describe later. But falling house prices dry up local government coffers (possibly less jobs, worse or fewer services); decrease construction and remodeling (less jobs); and defer or eliminate big-ticket purchases like cars. It's also an outside indicator of local economic heath, including jobs and income.

 

[Dick Whitman]

Just to start a conversation, I was thinking about the coverage of the financial crisis.

Here's what I think. I figure only about a dozen journalists have the background and the chops to report smartly about the specifics of the financial mess. Those 12 or so work in various platforms — web, TV, newspaper, magazines — and that means the vast majority of the coverage was not good.

It has occurred to me, that, and since I've done this myself, when I write about a topic I don't understand, I break the story done to as simple as possible. Frame a narrative where it is one side versus another side. Get quotes from both factions. Put it together and add in color to lengthen it out.

My reasoning tends to be is if the topic is extremely complex the vast majority of the readers won't get it either and it follows the KISS, or Keep it Simple, Stupid, principle.

It, in many cases, does a disservice to the readers who do understand or want to know more and I'm not providing what they need.

I know it is lazy. But at the same time, even when you work a beat you still stumble on stuff that gets you out of your depth.

But, it has also seemed, that more and more stories are falling on that one side versus the other narrative and missing vast amounts of context.

Just some thoughts.

I have always felt the same way about science reporting, in particular engineering crises like the Minnesota bridge collapse or, even more glaringly, the BP oil spill. Or, hell, the evolution "debate."

Also, sports writers not being up to snuff on developments in the game when the whole sabermetrics revolution hit. Paved the way for all of the blogs and independent sites where a lot of serious fans now go for their analysis.

Journalists should get a second degree in something like economics, statistics, foreign relations, engineering, etc., etc. Or a first degree.

 

[J-School Blue]

There was actually some pretty good reporting being down in the WSJ about the dangers of the sub-prime lending market in 2007. Not everyone was drinking Kool-Aid. The people who should've been keeping an eye on the danger signs just chose to ignore them.

 

[YankeeFan]

Journalists should get a second degree in something like economics, statistics, foreign relations, engineering, etc., etc. Or a first degree.

Bing.

The best medical reporters are (former) doctors. The best legal reporters are (former) lawyers, etc.

There was actually some pretty good reporting being down in the WSJ about the dangers of the sub-prime lending market in 2007. Not everyone was drinking Kool-Aid. The people who should've been keeping an eye on the danger signs just chose to ignore them.

Yep. Lots of people saw the danger signs.

Lots of people predicted the internet bubble.

But, no one wants to bet against the market. If you're not right immediately, it's as if you're wrong.

But, picking market tops & bottoms is nearly impossible. People want to ride the wave -- consequences be damned.

 

[Turtle Wexler]

One of the issues I have with business journalism is that it's traditionally very pro-business.

For example, every story about housing prices going down is done with a sad or negative tone. But it's not a bad thing for everyone, such as people who had previously been priced out of the market or people buying an investment property to increase their income. Yet articles never lead with those perspectives and are rarely written with those views as the focus.

Great point. Housing articles almost seem to be ghost written by the National Association of Realtors.

I'll also add that the business section is generally the only 'hard news' section where companies can get press releases run almost verbatim. Quarterly earnings, mergers and acquisitions, charitable efforts, people on the move, etc. Never do you read a brief like "Company X issued a press release stating they donated $1 million to A Good Cause. However, Company X outsourced 23 percent of its local workforce to China last year."

And I'm referring mostly to local publications, not business-specific newspapers or magazines, which do a much better job of providing context.

 

[YankeeFan]

U.S. business journalists reported a median salary of $56,220 for 2010-11, according to research for the Donald W. Reynolds National Center for Business Journalism.

Other findings: 14 percent of those business journalists surveyed in mid-July said their newsroom was currently hiring full-time journalists, and one in five said their newsroom had shrunk in the past six months.

The research also found this breakdown for median salaries by place of employment in 2010-11:

* Print: $50,100
* Freelancing: $54,091
* Broadcast: $55,588
* Online: $57,308
* Wire services: $78,438.

For editors and supervisors overall, the median was $57,308, and for reporters, it was $55,714.


http://businessjournalism.org/2011/08/15/survey-median-salary-business-journalists-2011/

 

[lcjjdnh]

Re: For your consideration — Covering the financial mess and journalism in general

A number of factors are at play. A few examples:

Complexity

Our economic system is extraordinarily complex. Even the "experts" don't really know how it all fits together (and we would, indeed, be better served by admitting this and designing the system around it). Sure, plenty of people probably recognized that we had a housing bubble long before it popped. Many of them probably even realized how this drove the consumer culture. But only a very, very small number of them understood the effects this would have on global financial system.

Further, most reporters don't focus on the broader issues. Business reporters don't cover "business"--they usually have a much narrower beat. They--and, more importantly, their sources--aren't necessarily focused on the "bigger issues."

Narrative

Traditional journalism storyforms drive poor business reporting. Much like political reporters, business journalists--in an effort to simplify the story--often turn their beats into sporting events. Companies battle for market share. CEOs emerge as heros. The traditional inverted pyramid story and even long-form narrative force journalists into stories that don't necessarily fit reality or convey information in the most effective way.

The problem is not necessarily finding the language to boil down complex topics to readers, but rather rethinking the structure in which we do it. Blogs have done a far better job of covering the financial crisis than most newspapers because they're willing to depart from traditional structures. Blogs, for instance, can explain CDOs with a simple <a href="http://accruedint.blogspot.com/2007/03/how-does-cdo-work.html">"how it works" post</a> or <a href="http://www.portfolio.com/interactive-features/2007/12/cdo">interactive graphic</a> that's not showing up on the front page of newspapers.

Interest

I also question how interested most business reporters are in what they cover. Most sports reporters--to start out, at least--love sports. Most political reporters love politics. Most business reporters probably don't love business.

It's often easier to get a business reporting job to start out with than any other--especially in big cities. Aside from having almost no knowledge of business, many of these reporters probably don't have much interest in it either. And, to the extent they do, it's often driven by the narratives listed above rather than any innate desire in learning about Basel capital regulations or the shadow banking system.