Should the media have seen the financial crisis coming? A new book examines the evidence
Ever since the U.S. banking system triggered a global financial crisis in 2007, journalists have been accused of failing to cover the story early enough. Financial experts and even journalists have asked if better coverage of economic developments early on could have prompted political action to prevent the banking crisis from becoming a global recession that has forced millions of people out of their jobs.
This discussion is the crux of a new book, entitled Covering the Crisis: The Role of Media in the Financial Crisis, published recently by the Netherlands-based European Journalism Center (EJC). The book was published under a Non-Commercial Creative Commons License.
It includes transcripts from a 2009 EJC conference that was held in Brussels under the same title. There, politicians, social scientists, financial regulators, bankers and other experts from Europe and the United States discussed the role of financial reporting and the international monetary system.
"The idea [behind the conference] was to get everybody in one room, close the door and let everybody speak as freely as possible," said EJC Director Wilfried Ruetten. They explored whether journalists could have--and should have--seen the crisis coming.
Journalists covering financial markets were "too close" to the topic, Ruetten said. "They didn’t step back and look at the bigger picture."
Bloomberg News London bureau chief Mark Gilbert disagrees, and in the book, defends the coverage. "I am [going to] argue that we did see the crisis coming. We commented on it. We pointed it out and all of the signs were there that this was [going to] to be big, bad and nasty," he said.
Media critic Danny Schechter, nicknamed "The News Dissector,” thinks the financial crisis should have been covered as a crime story, not a financial one. Schechter is the author of The Crime of Our Time, a book on the theme.
"If [crime reporters] had been actually looking at how these scams and schemes were taking place, they would have brought us to our senses a lot quicker than the financial journalists did," he said in a speech at the conference.
A recent study by Pew Research Center’s Project for Excellence in Journalism sheds light on the question of how aggressive the press was in covering the story in the United States. The study finds that overall, about one-fifth of financial stories were triggered primarily by the initiative of journalists. But the degree of media enterprise varied notably depending on the topic; bigger topics tended to get less enterprise reporting while smaller ones had more.
That, according to Ruetten, is mainly because journalists are deadline-driven. "A lot of the blame falls with assignment editors and senior editors," he said. "They should have seen so many little stories coming and asked 'Is there a bigger picture behind this?' "