-Caveat Lector-
From the Columbia Journalism Review. For the same reasons why the
Establishment Media do not cover political protest adequately, they don't
cover the economy well either.
Michael Pugliese
November/December 2000 | Contents
BLINDED BY THE BOOM:
What's Missing in the Coverage of the New Economy?
BY MERRILL GOOZNER
The latest and largest generation of business reporters has
come of age under economic conditions far different from those that shaped
their immediate predecessors. The crises that forced business news onto the
front page from the mid-1970s to the mid-1990s -- oil shocks,
de-industrialization, insider trading, the 1987 crash, massive budget and
trade deficits, the savings and loan fiasco, downsizing -- are about as
relevant now as yellowed clips in a file folder. (Though an oil shock is
auditioning for a revival.)
It's the new economy, stupid. Fortunes are being made in high-
and bio-tech. Productivity is soaring. The stock market is off the
historical charts. Unemployment is low and minorities, women, and some inner
cities are benefiting in ways that haven't been seen for generations.
The boom has its echo in financial reporting. Not only is there
a great deal more of it, but reporters have gravitated to what is obviously
the biggest story of the day: the stock market explosion and what pundits
and political candidates are (incorrectly) calling this unprecedented era of
economic growth. High technology, market coverage, and personal finance
dominate the news holes and time slots reserved for business and economics
news.
Some hyperbole has spilled over into the reportage. Coverage of
the current prosperity can read like a sports page when the home team is on
a roll: cheerleading can drown out the occasional story pointing out
weaknesses in the squad or the challenges coming up in the schedule.
Journalistic scorn is reserved for the players -- or in this case stocks --
that don't make their numbers.
But with the election behind us, it's time for the media to take
a deeper look. It's not as if we haven't shined some light on the economy's
darker corners. We have. But a series of interviews with top editors at news
organizations and an informal search of Lexis-Nexis has confirmed my own
recent experience as a business and economics journalist: the press has
largely abandoned sustained coverage of pressing economic problems in favor
of the occasional piece that temporarily highlights an issue.
This approach is unlikely to disturb many readers or move many
politicians. The new administration will either tackle the nation's
unfinished economic business or allow it to fester. If the media turn a
brighter light on those who are missing out on the good times, it's more
likely that the decisions made will be better informed.
WHO GETS HEARD
One way to gauge media coverage of economic problems is to
listen to complaints about the press from both sides of the ideological
divide, since both left and right tend to put economic issues near the top
of their agendas. For years critics on the right flailed the media for an
antagonistic attitude toward business, claiming that inaccurate and
inflammatory stories about either the economy or corporate wrongdoing had
led to excessive regulation. That, in turn, they said, hampered the U.S.
business community's ability to compete. Some on the right still make such
complaints.
But these days it's the other side -- including the Green Party
candidate Ralph Nader and his ideological allies -- that is doing the most
screaming. "Twenty years ago you had high-profile cases that gave the
impression that the media had a vendetta against big business," says Richard
Kaplar, vice president of the Media Institute, a conservative communications
policy think tank, and a contributor to publications from the libertarian
Cato Institute. "It's definitely different today, a completely different
environment."
The liberal press watchdog, Fairness & Accuracy In Reporting,
agrees. Journalists are overly proud of the single stories they do on issues
like the problems of low-wage workers, says Seth Ackerman, who monitors
economics coverage for FAIR. "But the bulk of the reporters like to
gravitate to the big story, which is the new economy, the booming economy."
FAIR commissioned a study of journalistic attitudes at the
nation's leading media outlets, including all the top papers and the
television networks. Some results from the 1998 survey: 71 percent of the
141 capital correspondents and bureau chiefs polled by David Croteau of
Virginia Commonwealth University supported fast-track trade negotiating
authority for the president, a hot issue at the time. Concurrent newspaper
polls of the general public showed just the opposite: 56 percent were
opposed. It went down to defeat. On health insurance: journalists were
roughly split on a government guarantee for people without it, 43 percent in
favor and 35 percent opposed. The public was much more open to the idea.
Citing a 1996 New York Times poll, FAIR said the public supported a federal
guarantee on health insurance by more than two-to-one.
Has the rush to embrace the new economy and celebrate the new
wealth caused well-paid reporters at elite media institutions to play down
the woes and concerns of people who are not doing as well? Perhaps no issue
dramatizes this possibility better than trade. Most mainstream economists
agree that the domestic boom has been carried along in part by the expansion
in trade and investment enabled by lower trade barriers. But those same
economists would also agree that not everyone in America benefits from freer
trade. There are winners and losers when barriers fall, and it can be argued
that the press has ignored the losers' issues and concerns (as opposed to
their demonstrations).
Certainly the nation's op-ed pundits and editorialists have
expressed near-universal hostility toward them. During last year's World
Trade Organization protests in Seattle, for instance, Thomas Friedman of The
New York Times set the tone by referring to the demonstrators as "a Noah's
ark of flat-earth advocates, protectionist trade unions, and yuppies looking
for their 1960s fix." Similar demonstrations during the World Bank and
International Monetary Fund meetings in Prague in late September were, to
Friedman, held by "a rogues' gallery of Communists, anarchists,
protectionist unions and over-fed yuppies out for their 1960s fix."
Has such hostility affected reporting? By the time of last
spring's vote on whether to allow what is called Permanent Normal Trading
Relations with the People's Republic of China, opponents could legitimately
gripe that their arguments were not being given much of an airing in the
press. The bill passed the House last May. Only the day after that did a
story in The Wall Street Journal, by the veteran trade reporter Helene
Cooper, reveal that business leaders were not primarily interested in
selling more goods to China (the stance of President Clinton and the
business media blitz in favor of the bill). It was instead seen as a bill to
open China's door wider for U.S. investment -- which could cost some
Americans their jobs. Many union opponents had been saying that all along,
but had trouble getting journalists to listen.
Again, several weeks after the vote, the New York Times's trade
reporter, Joseph Kahn, traveled to Tulsa, Oklahoma, to report the poignant
story of 240 workers who were losing their jobs because their employer was
moving to China. This was the kind of story that had appeared with great
frequency during the debate leading up to passage of the North American Free
Trade Agreement seven years earlier. But the angle now came as an
afterthought (and was completely ignored when the bill passed the Senate in
September). This can be taken as one measure of how prosperity has changed
the journalistic environment.
THE WASHINGTON SHUFFLE
The increasingly sporadic coverage of government regulatory
agencies also reflects the media's shifting priorities during this
expansion. The consensus view among business leaders and mainstream
economists is that reduced regulation of both markets and corporate behavior
has been a major contributor to prosperity. The press has largely adopted
this conventional wisdom. And that may be blinding reporters to stories they
once covered with vigor. Consider, for example, coverage of the dangerously
flawed Firestone tires. A National Highway Transportation Safety
Administration probe was spurred in part by local television accounts last
February by Anna Werner of KHOU-TV in Houston, who based her reports on
suits filed by local trial lawyers. The reports triggered a slew of consumer
complaints to the government, which eventually led to the probe.
Yet despite the local press accounts and a number of lawsuits,
it took a half-year for the story to get national attention. "We assume in
an Internet environment that every piece of information becomes universally
shared very fast," says Doyle McManus, Washington bureau chief for the Los
Angeles Times. "This story was out there and nobody tried to put the larger
pieces together."
Why? Perhaps rollovers by sports utility vehicles and unraveling
tires were considered old stories. SUV rollovers (for other reasons) had
received extensive coverage earlier in the decade. Or perhaps the business
community's unrelenting attack on trial lawyers has made them suspect as a
source. Or, maybe stories that investigate corporate wrongdoing do not have
the same priority they did in the years before business was king.
The history of the last century suggests there will always be a
role for government oversight of financial institutions, securities trading,
the environment, and the workplace. It remains the press's job to monitor
both the regulators and the regulated.
Editors bristle at the charge they are not performing the
watchdog role when it comes to corporations. "Do corporations get a freer
ride than they deserve? Sometimes," says Paul Steiger, managing editor of
The Wall Street Journal. "But in the past, they were sometimes unnecessarily
pilloried." Doyle McManus argues that "institutional biases" of the press
are much less significant "than critics on either the left or right would
say."
Still, a 1999 survey by the Project for Excellence in Journalism
found that major news organizations have substantially shifted their
Washington coverage in recent years. There is less coverage of people and
environment-oriented agencies, like the Labor Department and the Interior
Department. Meanwhile, more reporters are watching the Treasury Department,
the Federal Reserve Board, and agencies like the Securities and Exchange
Commission, the Federal Communications Commission, and the Federal Trade
Commission -- all places that generate news primarily of interest to
investors, corporate leaders, and their attorneys.
Clearly the latest shift in interest rates, the business
implications of the big merger, or a major antitrust trial can affect
millions of consumers. They deserve extensive coverage. But it's worth
noting that it is relatively easy coverage. Well-paid public relations firms
are usually available to articulate all sides of a dispute. Wall Street
economists offer quick sound bites. Dozens of reporters can be found on
these kinds of stories, often busily scribbling the same notes.
Meanwhile, there are only a handful of reporters trying to
uncover stories at the Environmental Protection Agency or Occupational
Safety and Health Administration, where sorting out the truth of competing
claims can be a much more difficult task. Big firms have become adept at
deploying small armies of scientists and experts to rebut charges by the
public interest groups or trial lawyers seeking to represent aggrieved
citizens and communities. Too many news organizations have simply thrown up
their hands at the welter of charges and counter-charges and sharply cut
back on the press's traditional watchdog role.
THE ELEPHANT UNSEEN
And then there's the elephant in the new economy's living room:
the growing inequality in both income and wealth.
We're living through a sort of Gilded Age that hasn't yet been
given its label. But when the age does go down in history, inequality of
wealth and income will be a major hallmark.
Leaders of the nation's opinion-molding news outlets scoff at
the notion that the media have ignored inequality. "We've covered that
forever and ever," says Steiger. To its credit, despite its natural
audience, the Journal does indeed pay attention to the downside of the
economy. And its annual survey of c.e.o. pay -- and similar surveys at
dozens of the nation's leading newspapers and magazines -- early-on
highlighted the expanding ratio of executive compensation to pay in the
ranks. Revealing studies about wealth and income-distribution trends
published by left-leaning think-tanks like the Economic Policy Institute and
the Center for Budget Policy and Priorities are routinely reported in the
press and on television.
One-shot features about families struggling in the shadow of
plenty have also become a staple. Indeed, editors at The New York Times,
which sets the tone for journalists across the country, met in the run-up to
the presidential election to discuss coverage of how the new wealth was
affecting society. They rejected the idea of running a series similar to one
on downsizing that ran during primary season in 1996. "The outcome was that
each desk would handle the issues individually," says Claudia Payne, a
senior editor for investigative news at the Times. "There would be an
attempt to take snapshots without the rubric."
But snapshots can be overwhelmed by routine coverage that
suggests that because more people own stocks, the largess of the new economy
is being shared more equitably. That assumption is dead wrong. In 1998, the
top 20 percent of families pulled in 47.3 percent or nearly half of national
income (earnings, not investment) -- up from 44.6 percent in 1989 and 41.4
percent a decade before that. The share of national income going to every
other group in society fell consistently across those two decades.
The distribution of wealth (stocks, bonds, real estate, and the
like) also grew more unequal over the period, although that was reversed
slightly in the late 1990s because of the stock market boom. Still, the top
fifth of households' share of national wealth stood at 83.4 percent in 1998,
compared to 81.3 percent in 1983. Every group in the bottom 80 percent of
the population fell over the period, largely because of rising household
debt. The bottom line is that many Americans are falling behind, not just
compared to the wealthy, but compared to where they were a few decades ago.
It is difficult to illustrate growing inequality, and "it's
difficult to pound the table and say injustice is being done because average
income is rising," says Jill Dutt, business editor of The Washington Post.
"There is also this sense with the new economy that we have true
rags-to-riches stories. Many more people know somebody who got into the
entrepreneurial boom and succeeded."
Yet the result seems to be a virtual media blackout on the most
important question related to the new economy: What impact is the growing
disparity in income and wealth having on our democracy, and on our notion of
who we are as a people? This issue troubled the Founding Fathers, and has
come to the fore at other times of rapid economic change. "The day will come
when our Republic will be an impossibility," warned President James Madison
in a interview with the New York Post. "It will be an impossibility because
wealth will be concentrated in the hands of a few."
McManus of the Los Angeles Times is one journalist who sees the
problem: "What does it do to American society, American communities, and
American democracy when citizens are increasingly divided into two classes,
one educated and one not, one advantaged and one not?
"What story needs to be done now?" he asks. "It's hard to do,
but it's the story that looks at the 'so-what' of income inequality."
Merrill Goozner recently left the Chicago Tribune to teach
business and economics journalism at New York University.
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