As CNBC‘s senior economics reporter, Steve Liesman reports on all aspects of the economy including the Federal Reserve Bank and major economic indicators. He appears on “Squawk Box” as well as other CNBC programs throughout the day.
Liesman joined CNBC from The Wall Street Journal where he served as a senior economics reporter covering monetary policy, international economics, academic research and productivity. At the Journal, Liesman previously worked as an energy reporter and, from 1996 to 1998, as the Journal’s Moscow bureau chief. He was a member of the reporting team recognized with a Pulitzer Prize for stories chronicling the crash of the Russian financial markets.
Prior to joining the Journal in 1994, Liesman was the business editor for The Moscow Times, where, as the founding business editor for the country’s first English language daily newspaper, he helped create the publication’s stock index, which was the country’s first. He previously was a business reporter for the St. Petersburg Times and the Sarasota Herald-Tribune.
Liesman recently talked via e-mail with Talking Biz News about his job and his career. (Disclosure: Liesman and I worked together at the Sarasota paper. In addition, he has come to UNC to speak to my Economics Reporting class.) What follows is an edited transcript.
First, how did you get into business journalism?
I suppose I was lucky in the sense that I began my career when business news reporting was beginning to explode in the mid-’80s. I’d had a job at trade magazine out of college and when I got out of grad school, I migrated to Florida — where the jobs were — and to a new business job in a remote bureau for the Sarasota Herald-Tribune. In fact, I never replaced anyone for my first three jobs, at the Sarasota Herald-Tribune, the St. Petersburg Times and then the Moscow Times. They were all posts that hadn’t previously existed.
It didn’t take time to notice something about business reporting: they never called on me to write stories about the Memorial Day Parade, or the Rotary Club’s bake sale. I liked that.
After working for newspapers in Florida, you left the country and went to Russia. How did that help you?
Going overseas has helped me in so many ways, it’s hard to count. If I had to pick one, it would be perspective. Watching Russia change from the Soviet Union into a mostly corrupt, capitalist quasi-democracy with glimmers of hope provided bold relief for understanding the United States and the Western world and its institutions. I began to appreciate things we take for granted, like the rule of law or a functioning legislature, the sanctity of contracts and a functioning economy. It’s one reason why, as much as people here complain about government, I can say with some certainty they have no idea how good it is or how bad it can be.
There were little things: like walking to work in the morning and buying a Snickers for 60 rubles and seeing it change to 75 rubles on the way home. And there were big things: like talking to a governor of a region far from Moscow who didn’t understand how the oil he needed would get there if the central government didn’t order it there and trying to explain to him how prices and the market would work; or talking to the head of a missile factory who wanted to begin selling hunting rifles who had no concept of the relationship of his costs to his sales price or return on investment or even knowing if there was a market for his product. It was a once-in-a-lifetime way to learn about a market economy because so little of it existed and so much needed to be done.
Strange as it may sound, it’s really where I learned economics. All of the great principles of macroeconomics were at work but writ large: the impact of government spending on inflation, the value of currency, international finance, central banking, the price mechanism and unemployment were all huge issues. I would spend long dinners talking with Russian reformers and (sometimes reformed, sometimes not) Communists and IMF representatives and businessmen and women about these and other issues. Everything was a blank slate so you could see it all form, collapse and sometimes succeed.
When did you first get interested in writing about the economy instead of just business?
I didn’t really begin writing about just the economy until I got back to the states in ’98. For a while, I covered the international energy beat and then moved over to the economy. We were going through a huge technology boom and the economics of that were not entirely clear to anyone. During that time I also became interested in something I do a lot of now: the intersection of finance and economics, that is, the economic effects of how companies finance themselves and the economic impact of Wall Street and the banks and, of course, now, the derivative markets and hedge funds. I’m not saying I do either really well, but there just aren’t many people doing both
How do you think writing about the economy is different than writing about companies?
They aren’t really that different. Most people see the economy as dry — just a load of boring statistics. I love numbers and I love crunching data. But the reason I love it is because they tell stories. Data is full of drama and the tensions of real life. You can look at workforce data from the ’60s and see loads of women entering the workforce. Demographic data now will show you the leading edge of baby boomers retiring and the great financial challenges facing this country in coming decades. The inflation data is like a trip down memory lane, with the oil embargo of the ’70s and the economic upheaval that, in part, led to the Reagan presidency.
The rise in productivity explains why we bought all those computers in the ’90s. The growing share of corporate profits as a percent of GDP may explain why so many people feel so unsatisfied with the current economy, even while the growth numbers are healthy.
The data itself is full of cultural artifacts. We collect lots of statistics from when we were an industrial and even agricultural society (the government has raw, processed, wholesale and retail data on turkeys, fresh and frozen, for example) but very little data on the service industry that we’ve become.
The challenge in reporting about the economy is to bring out the drama and find examples that tell the story.
One of the biggest complaints about economics coverage is that it quotes a lot of economists and not real people. Do you think that’s a valid criticism?
It’s definitely a valid criticism and I’m as guilty as anyone. The problem with economics reporting is the same problem that economics has in general: anecdote is not evidence. The best example for the story, because it’s the most dramatic, is probably the worst example for getting the economics right. As journalists, we like to focus on extremes. Economists think there is more truth in the average. I try to split the difference, remembering that my basic mission is to tell the story accurately but that it does me no good if it’s not compelling. Who cares if you got the economics right if no one’s watching?
What are the difficulties in covering the economy for TV when it’s hard to find visuals?
We’ve explored a lot of different techniques. By far the best has been to get out in the field and find real world examples of economic ideas in action. I did a story on behavioral economics from the set of “Deal or No Deal.” We’ve done stories on inflation with live shots from the produce department and we went to a solar factory for a story on the rise of “green jobs.”
Another technique has been to use actual paper perched on an easel. This has been a sort of antediluvian idea, where we take a step back from the fancy charts and Power Point and try to connect with the data directly. Viewers seem to like it. All that said, there is more we can and should be doing to bring the story to life.
How much emphasis does CNBC place on economics coverage?
Economics is one of the core coverage areas for CNBC. Markets are influenced by a variety of different factors, but the fundamentals of the economy are one of the most important.
How do you report stories about economic data so that the average person can understand their importance?
I make a point of explaining all of our economic terms, be it the Fed Funds rate or GDP. It’s a difficult balance, given that we have a pretty sophisticated audience and it’s an ongoing conversation. But I’d like people to be able to come in in the middle of the conversation and understand what’s going on.
I get mixed feedback: Some people say they saw me on TV and had no idea what I was talking about, but I looked good; others thank me for making this stuff understandable and that they finally get it. Others say I just didn’t look good.
You recently had President Bush’s economic advisors on for an economic summit. How did that come about?
We have an ongoing dialogue with the White House about getting their economic team on in different configurations and at different times.
How much of your Fed coverage is interpreting their statements vs. getting information from the governors and Bernanke?
Fed coverage is a mix between interpreting and getting info. Given how much more transparent the Fed is now compared to how it used to be, I know my job is much easier in some respects from my predecessors. But that just raises the premium on being ahead of the pack. Everyone has the same basic set of facts now, so you’ve got to work harder to add value.
What have been the biggest issues in covering how the sub-prime mortgage fallout is affecting the economy?
The biggest issue has been exactly what you ask: ‘covering how the subprime mortgage fallout affects the economy.’ When this story first became apparent more than a year ago, its impact wasn’t obvious. Everyone from the Fed to the Treasury to Wall Street experts said it wouldn’t affect the markets or the economy. Reporting the story has meant leaning against that at times. Given that we reported the story for nearly nine months before the August credit blow-up, there were more than a few difficult days where you questioned whether you had the story right.
