Is the business news for investors or citizens?
It’s an interesting question, and one that I haven’t given a lot of thought to in all honesty. The easy answer is that business news should be able to serve both – but can it really do that? Or is there a hopelessly ingrained conflict?
A review of Dean Starkman’s new book about the failings of the financial media just when it was needed most asks this very question…
From the New Yorker:
Just as dubious subprime practices seeped into Wall Street culture, newsrooms became least equipped to examine them. Even in the early aughts, when articles in the business press questioned the rise of housing prices and mortgage loans, they typically did so for audiences of investors: these were financial products to be avoided rather than evidence of systemic corruption. Likewise, pre-crash critiques of Lehman Brothers, Citigroup, and Washington Mutual focussed on their growth strategies and stock performance.
The premise is that with more middle class investors crowding into the stock markets during the 90’s and an explosion in demand for investing stories, the types of investigative journalism that might have stopped the credit bubble in its tracks simply disappeared. It’s an interesting point.
It should be noted that non-investors probably can’t be bothered to consume business media regularly, in most cases, so of course the tendency to cater to those who will read you is going to be hard to fight.
The other counterpoint you could make is that, in the wake of the crash, the media pendulum has probably swung all the way in the other direction. From 2010 on, it’s begun to seem as though EVERYONE wants to talk systemic risk, bubbles, the malfeasance of the banks, etc. The press’s default setting is now “Scandal!” and on Twitter – the financial media’s faculty lounge – we do a public hanging roughly once a week these days the moment there’s even a hint of impropriety alleged.
There’s even been quite a bit of Zero Hedge emulation in the mainstream press and some of the top financial journalists of the current era are closeted Marxists. There are also, it seems, more outlets for reporters to write at than ever, most of which are simply dying for a juicy story about some potential market scam or shock to the financial system.
So maybe the problem Starkman describes is, to some extent, already correcting itself.
Order the book on Amazon: