Recession talk: do journalists really know what they are talking about?
In an analysis in the Columbia Journalism Review, Zainab Sultan examines the way media cover recession talk and poses the simple question: Does anyone know what they’re talking about?
The succint answer is probably not.
The Associated Press, the New York Times and CNBC and a host of other media outlets have all recently published stories postulating about a coming recession. But again, do they really know?
Sultan’s article quotes Julia Chatterly, an anchor and correspondent for CNN International as saying, “I think the biggest risk here is that we talk ourselves into a downturn and we talk about it so much that we end up with a self-fulfilling prophecy.” She added, “I do think there is a tendency, perhaps, for certain aspects of the financial media to be very alarmist.”
She is not alone in this view.
Myles Udland, a markets reporter at Yahoo Finance, agrees. “People are weaponizing pretty benign economic data, which is leading to a lot of irresponsible bullshit in the business media world,” he says. “You call up an economist and you ask, ‘Do you think there is going to be a recession?’ And they are going to say something like, ‘It is possible in the next 18 months.’ So your story is, like, economists say it is possible,” he explains. “If enough people just say the word ‘recession,’ then people start getting worried about a recession.”
How much do journalists really know about what the market will do anyway? asks Zainab.
The article quotes journalists from Reuters, the New York Times and Bloomberg Economics who say they really can’t predict a recession and that economic data can be interpreted in a variety of ways.
Dean Starkman, an investigative reporter and author of The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism (2014), a book on how the press failed in its reporting on the 2008 financial crisis, said that there is more of a chance that the U.S. won’t be in a recession by next year. In situations like these, there is always a “stampede to join the conventional wisdom,” Starkman says. “You really have to be disciplined to tie back your analysis to what the data is showing.”
The other issue here is just how much sway do journalists have in sparking a recession merely by talking about it so much.
Fox News guests and hosts have accused the media of deliberately trying to cause a recession to undermine President Donald Trump’s re-election prospects. (https://www.businessinsider.com/fox-news-guests-hosts-accuse-media-cause-recession-undermine-trump-2019-8)
President Donald Trump has gone so far as to even suggest to aides that the Federal Reserve Bank, the media and other countries are all conspiring against him to cause a recession specifically to target him. The New York Times reported.
However, research has shown that the media have little influence on the economy.
In an article by Daniel J. Hopkins, Eunji Kim Soojong Kim published in Sage Journals, the authors raise the question: Does newspaper coverage influence or reflect public perceptions of the economy? (https://journals.sagepub.com/doi/full/10.1177/2053168017737900)
They conclude it does not, stating that research has shown media influence on public perceptions in this realm is more commonly assumed than demonstrated. (https://talkingbiznews.com/we-talk-biz-news/fox-news-trump-a…ause-a-recession/ )
So even though journalists don’t appear to be great prognosticators on the economy, does it really matter?