Does the biz media get stories wrong?

Conor Friedersdorf of The Atlantic responds to “The American Pravda,” a provocative article by Ron Unz of The American Conservative that dissects why American media is so bad.

Here is the argument regarding business journalism, and Friedersdorf’s response:

Having described the failure of the press to uncover impending doom at Enron or Bernie Madoff’s hedge fund, Unz writes, “In many respects, the non-detection of these business frauds is far more alarming than failure to uncover governmental malfeasance. Politics is a partisan team sport, and it is easy to imagine Democrats or Republicans closing ranks and protecting their own, despite damage to society. Furthermore, success or failure in public policies is often ambiguous and subject to propagandistic spin. But investors in a fraudulent company lose their money and therefore have an enormous incentive to detect those risks, with the same being true for business journalists. If the media cannot be trusted to catch and report simple financial misconduct, its reliability on more politically charged matters will surely be lower.”

This is unpersuasive. As a matter of both law and prevailing norms, journalists have a lot more access to government officials and public information than to goings-on in most private enterprises. The typical journalist also understands the worlds of politics, policy, and government better than business or finance. And while almost every journalist would agree that furnishing the information a democracy needs to function is a core duty of the profession, it is unclear, at least to me, that saving wealthy New Yorkers from unscrupulous hedge-fund managers is something media outlets ought to develop a capacity to do better, even having failed. No one had a better incentive to detect the risks of investing with Madoff than his investors. If they couldn’t succeed in doing so, why would journalists be expected to do better?

Why would they prioritize trying?

As a public company that got its share of fawning profiles before its collapse, Enron is a much more damning example. It is still false to suggest that business journalists had as big an incentive to catch the fraud as investors. In fact, my sense is that business journalists generally have an incentive to cheerlead for “hot” companies rather than questioning their apparent success, which inevitably results in push-back from powerful actors and less access granted. (I am unfamiliar with the trade press, which may well perform a lot better on this metric.)

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