The need to be more critical in business journalism

Columbia University professor Anya Schiffrin, who recently edited the book “Bad News: How America’s Business Press Missed the Story of the Century,” writes for Reuters about how she recently reviewed early business journalism and how it compares to current business reporting.

Schiffrin writes, “Few today would accept the vagaries and obvious imprecision of those centuries-old dispatches. Yet reading recent press coverage of the parlous state of the U.S. economy, I often have the feeling that reporters and economists are just as confused today as they were in West Bengal in the 18^th century. A recent New York Times story about new job numbers, showing that only 36,000 jobs were created  but that the unemployment rate fell from 9.4% to 9.0%, left me perplexed, especially when I turned to Bob Herbert’s column saying the numbers didn’t really make sense. Floyd Norris also offered a partial explanation of why the numbers often aren’t reliable.

“Media critics and academics give many reasons for why economic reporting often falls short. They note that economists are often uncertain as to where the economy is headed, and that reporters lack the knowledge to analyze the data they receive. Writing a short piece to a tight deadline means there often isn’t the time and space to delve into deeper economic questions. And then there is the question of ‘cognitive capture’ (a term coined by economist Willem Buiter) which Financial Times editor Gillian Tett has used to describe the fact that journalists often take on the worldview of the people they cover. In the case of business journalism this means the view that markets work well and that U.S.-style capitalism is the best in the world.

“Today’s business journalism is more sophisticated than it was 200 years ago. And the financial crisis has produced some superb reporting from people like Michael Hudson, Gretchen Morgenson, and the late Mark Pittman. But since my book has come out I’ve heard many stories of journalists being told by their editors to downplay their warnings of how badly the economy is doing.  If business journalists want to do an even better job, they would  serve their readers well if they could be a bit more critical and follow their instincts as to what seems wrong, distorted or missing — even if it means questioning the conventional wisdom.”

Read more here.

DISCLOSURE: I contributed a chapter to “Bad News.”