The media reported the financial crisis and stimulus poorly. Now the story is deficit and cuts, is it equal to the task? Anya Schiffrin
The drama of Wisconsin and the fights down in DC about the state of government finances are a chance for US journalists to write about an economic story that affects everyone. It would be good to see more articles on the big picture questions of what sort of policies make sense, rather than just ones about the political processes of what sort of legislation will get passed.
Five months after the stimulus passed, the unemployment rate was still climbing. (It was 8.2% in February, 9.4% in July and 9.7% in August 2009, and today stands around 9.0%, depending on how it's counted.) That led to a spate of articles about whether or not the stimulus would work or had worked. These articles mostly said it wouldn't and mostly didn't mention the fact that the majority of the money had still not been spent. Instead, a number of the articles argued that since the stimulus had failed, the US government should not consider a second one.
A recent report in the Christian Science Monitor was a good example of the kind of drill-down coverage we need more of. By contrast, it's been disappointing to see the news pages (though not the opinion columns) of the New York Times report on the deficit as though there is no room for debate about whether cutting spending is even a good idea right now.
Business and economics journalism is not that different from other forms of journalism. Reporters and editors mostly cover events that have already happened, not write about what could happen. They also have a tendency to rely on official and business sources, rather than on person-on-the-street interviews. This is partly because most of the people who read business news are from the worlds of money and business. Historically (the first business news sheets date to the 16th century), they relied on the business press for information that will help their investments. Sadly, this means that press reports about business and economics are often not much help to the ordinary reader trying to understand these subjects.
In recent weeks, there have been a lot of stories about how normal people would be affected by the budget cuts, and the media have certainly voiced the argument that reducing government spending is a bad idea while unemployment is above 9%. But there is room for more reporting about the larger macroeconomic picture, so I hope the media will learn from their lacklustre coverage of the 2009 stimulus package.Business and economics journalism is not that different from other forms of journalism. Reporters and editors mostly cover events that have already happened, not write about what could happen. They also have a tendency to rely on official and business sources, rather than on person-on-the-street interviews. This is partly because most of the people who read business news are from the worlds of money and business. Historically (the first business news sheets date to the 16th century), they relied on the business press for information that will help their investments. Sadly, this means that press reports about business and economics are often not much help to the ordinary reader trying to understand these subjects.
A study I did at Columbia University last year with Ryan Fagan ("Are We All Keynesians Now? Press Coverage of the US Stimulus Package", forthcoming) looked at press coverage of the $787m American Recovery and Reinvestment Act of 2009. We analysed 718 articles about the stimulus in the months before and after it was passed. We looked at all the key mainstream US publications including the New York Times, Barron's, Los Angeles Times, Associated Press, Time magazine and others. The coverage was not bad, but it was in no way innovative or forward-looking. Instead of discussing the likely effectiveness of the stimulus, for example, most of the articles before passage simply focused on whether or not it would pass.
"The concept of a Keynesian stimulus is not immediately intuitive. It would have been nice if there had been more in-depth explanations. As it was, there was more of 'what happened yesterday' than 'what are the long term implications?' but that's not unusual," said one national economic reporter, describing the press coverage.Five months after the stimulus passed, the unemployment rate was still climbing. (It was 8.2% in February, 9.4% in July and 9.7% in August 2009, and today stands around 9.0%, depending on how it's counted.) That led to a spate of articles about whether or not the stimulus would work or had worked. These articles mostly said it wouldn't and mostly didn't mention the fact that the majority of the money had still not been spent. Instead, a number of the articles argued that since the stimulus had failed, the US government should not consider a second one.
Later, after the stimulus money was spent, there was some coverage about what it was used for and what difference it had made (especially Michael Grunwald's pieces in Time magazine), but there was certainly room for more detail about what the money was used for and why this kind of spending makes a difference.
This time around, journalists have the chance to write more economic stories about what is actually an economic story. Let's hope they do.
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