Better business journalism

David Indiviglio of The Atlantic writes about how business journalism could be better in response to an interview with Chrystia Freeland, the U.S. managing editor of The Financial Times, who states that even better journalism would not have prevented the economic crisis.

Indiviglio writes, “I’ve noticed the vast, vast majority of business news coverage can be grouped neatly into two categories: arguments for the consensus and arguments by wackos. There’s very, very little voice given to those who wish to thoughtfully challenge the prevailing views in the market. Why is this?

“First, I have noticed a sort of strange difference between business news and other news. When it comes to general news, lots of people complain that journalists only focus on the bad news, while rarely doing stories on good news. That’s because good news doesn’t get eyeballs. Which headline’s story do you think more people will read: ‘Local Man Named Teacher Of The Year’ or ‘Local Man Murders Entire Family’?

“But with business news, it’s sort of the opposite. The business community likes reporting that accentuates the positive. It’s almost as though many of those in business like their news to make them feel better. Maybe they want their egos stroked to believe their stock portfolios are safe. Most of this community wants the news they consume to reflect market optimism.

“And that makes sense, because business news can affect the market. In the rare event that legitimate business news hits with a negative view of a company, then people can lose money. Since far more market participants are long stocks, instead of short, pessimism can actually cause tangible harm. That’s why the consensus — which tends to be optimistic — is a touchy thing to buck for some news outlets.”

Read more here.