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

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.

 

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.

 

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.

 

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.

 

Bing.

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

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.

 

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.

 

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.