An Uneasy Marriage

JOURNALISM & ECONOMICS

UNDERSTANDING THE ECONOMY

SUMMER 2010

EMILY DRESSARSTEPHEN DAVIS

The Rift

Economics and Journalism collide

Stewart vs. Cramer

Famous analyst call "You know, you are the

only financial institution that can't produce a balance sheet or a cash flow statement with their earnings," Grubman said. Skilling, laughing, shot back, "Thank you very much, we appreciate it ... asshole."

Who’s covering the economy?

The industry leaders Wall Street Journal, New York Times, Washington Post, LA Times, Financial Times Fox News, CNN, CNBC, Bloomberg TV The Economist, Forbes, Barron’s, Financial Times

And the bloggers

Major Media Blogs

The blogs supported by major media outlets:

David Geffen at WSJ.com,Fortune.com’s Apple 2.0 blogBusinesWeek.com’s Fine on MediaBloggingStocks at AOLMarketBeat at WSJ.comPaul La Monica at CNN Money

Independent Blogs

24/7 wall streetwww.calculatedriskblog.compaul.kedrosky.comseekingalpha.comDailyreckoning.comGlobalEconomonitor.com (Roubini)

What are they covering? Pew Research Center’s Project for Excellence in Journalism

The Highs and LowsPew Research Center’s Project for Excellence in Journalism

After accounting for 46% of the overall news coverage in February and March coverage of the economic crisis dropped by more than half

And in July and August, it fell even further (to 16%). The clearest example came in cable news. Once the political battles subsided, coverage fell by about two-thirds from March to April.

A Typical Story: Banking, New York, Obama

Top three stories: efforts to help revive the banking sector, the battle over the stimulus package and the struggles of the U.S. auto industry

At the bottom: all reporting of retail sales, food prices, the impact of the crisis on Social Security and Medicare, its effect on education and the implications for health care combined accounted = 2% of economic coverage.

Driving coverage: Actions by government officials and business leaders drove much of the coverage. The White House and federal agencies alone initiated nearly a third (32%) of economic stories studied through July 3. Business triggered another 21%. About a quarter of the stories (23%) was initiated by the press itself and did not rely on an external news trigger.

Not driving coverage: Ordinary citizens, union workers = 2% of the stories  

Dateline: New York City Fully 76% of the datelines on economic stories studied during the first five months of the Obama presidency were New York (44%) or metro Washington D.C. (32%). Only about one-fifth (21%) of the stories originated in any other city in the U.S.

Who’s quoted: When it came to which phrases and ideas reverberated most in a broad array of media, an analysis of some 1.6 million news websites, blogs and other online sources finds that the president dominated. Nine of the top 20 most-quoted phrases came from him.

The Business Model

Media companies owned the news processNews was expensive to produceThe payoff was profitableSold 2 things- advertising and audienceMonopoly on the process

The Internet breaks the barrier to entry and media companies lose exclusivity of audience and content

LOCAL NEWS EFFORT FINANCIAL CRISIS

WELL DEFINED TARGET FOR COVERAGECORE SAVVY BUSINESS READERTARGET IS INTEREST OVER DEMOGRAPHIC

NEWSPAPER BREAKS STORIES

5 BILLION DOLLAR DEBT FOR LOCAL GOVERNMENT

RESULT IS MAJOR FINANCIAL OUTLETS PICK UP STORIES

LOCAL WATCHDOGLOCAL STORIES HAVE NATIONAL IMPACT

SOURCE FOR BLOOMBERGSOURCE FOR WSJ

CONCENTRATED TEAM EFFORT WITH GOVERNMENT REPORTERS CONTRIBUTING WITH BUSINESS REPORTERS

LESS RELIANCE ON NEWS WIRES

NATIONAL STORIES USED AS CONTEXT TO LOCAL COVERAGE

AUTHORITATIVE SOURCE FOR READERS

SOURCE CHUCK CLARK/MANAGING EDITOR BIRMINGHAM NEWS STAFF

MAJOR BENEFITS OF NEWHOUSE OWNERSHIP

THIS COMPANY WIDE OUTLOOK PRESERVES THE QUALITY OF THE NEWSPAPER.

COMMITMENT KEEPS OWNERS FROM “TAKING EASY ROUTE TO GETTING PAPER OUT” EACH DAY.

THIS HAS ALLOWED EXPANDED COVERAGE AND CONTENT.

PROVIDES COMMUNITY WITH A STABLE NEWSPAPER AND HELPS RECRUIT UPCOMING JOURNALISTS

MAJOR REASON FOR SUCCESS

“ WE ARE A PRIVATELY HELD COMPANY THAT GOES BEYOND A ONE QUARTER HORIZON.”

SOURCE- CHUCK CLARK/MANAGING EDITOR, BIRMINGHAM NEWS

Who’s impacting financial journalism?

Other News Leaders

Robert Peston, BBC business editor.◦ “For many months I was very

concerned about the explosive growth of CDOs and I tried to explain them through my reporting. Doing so was a challenge, when even bankers creating the CDOs were unable to describe them in terms that make sense to non-specialists.”

Matt Taibbi, Chief Political Reporter for Rolling Stone

Michael Lewis, author, “The Big Short” Has been called “the best piece of financial journalism ever written.”

Wall Street Journal news team: “The Financial Crisis: The Weekend That Wall Street Died” ◦ 10-article series produced by 15 reporters

won the Institute on Political Journalism's prestigious Excellence in Economic Reporting Award for 2009.

◦ Coverage was detailed, dramatic, precise and contained too many revelations to count, said the judges

‘Obscure, clubby and unhelpful’

“Finance writers and bloggers are often willfully obscure, tradey, impenetrable and

even at times useless to any audience who actually isn't working at (or recently laid off from) a bank. Why are

they so willing to abandon us when they should be

explaining things to use more than ever?”

Choire Sicha, The Awl blog

Why?

Crisis in the system

The study addressed the following questions:

Why didn’t we know this was coming?

Did journalists fail to scrutinize the financial system?

Can journalists cover this continuing, complex story?

In November 2009, POLIS, a joint public policy research project of the London School of Economics and the London College of Communication, released a study analysis the state of financial journalism in the UK and US

Why ?

Speed: economic stories move quickly through digital means. Financial data is updated digitally, the advent of the 24/7 news cycle (cable news)

Complexity: Financial systems and new products are increasingly complex (hedge funds, derivatives)

Strategy: The rise of corporate Public Relations

places more and more limits on information exchange

Why ?

Sustainability: Lack of resources: The business of news has taken a severe hit resulting in less resources dedicated to reporting.

Globalization: Markets are increasingly interconnected and globalised; shrinking newsroom resources have declined original international reportage.

Blurring the Lines: Renewed debate on ethics: market manipulation? Who is a financial journalist?

Is this the future?

http://vimeo.com/11139124

“Behind the Scenes”

PLANET MONEY

Planet Money

This American Life producer Alex Blumberg teamed up with NPR's Adam Davidson to tell the surprisingly entertaining story of how the U.S. got itself into a housing crisis. “The Giant Pool of Money” spawned more stories led to the creation of NPR’s Planet Money - a multimedia team covering the global economy.

The Giant Pool of Money: originally aired May 9, 2008 on This American Life, produced in collaboration with NPR News

Planet Money

http://vimeo.com/10864430

Original song from Planet Money

“Bet Against the American Dream”

Moving forward

Collaboration between mediums/reportersUse of new technologyGrowth of audience insightJournalism supported by foundation or

government grantsGeneral assignment reporting morphs into

specialization

Questions?