The New York Times may have revealed more than intended with a September 22 piece headlined "Amid Market Turmoil, Some Journalists Try to Tone Down Emotion." The article, by Richard Pérez-Peña, said that reporters are being very careful in choosing words to describe the ongoing meltdown in financial markets—not because reporters should always choose their words with care, but because financial companies are "uniquely vulnerable" to a "loss of confidence" due to rumor, speculation or fear.
The business cable channel CNBC, readers are told, while still prizing "scoops" that can move stock prices, is taking care to "stress that some of what they say represents someone else's view, that the source might have ulterior motives and that the information is unsubstantiated and could be wrong." That's the sort of rule viewers might've hoped was in play all the time, but journalists from CNN, the Washington Post and the Wall Street Journal all explain that, unlike other industries or issues, financial companies require a special degree of caution and prudence.
Pérez-Peña noted that "a number of news reports over the summer about predicted bank failures refrained from saying which were most at risk"; Times business editor Lawrence Ingrassia explained, "It's one thing to say an industrial company is having trouble paying its debts, and another thing to say it about a financial institution."
Business Week (10/29/08) covered similar ground, though framing it as a question whether reporting could "actually be contributing to the very crisis" being covered. A source points out that "the facts themselves are scary enough" and haven't required media hype, but not before "downbeat headlines and bearish market analysis" have been matter-of-factly described as a "media frenzy."
Another source's comment that media can contribute to swings "in optimism and pessimism by investors" invites the obvious question both Business Week and the New York Times evade: why it's only the perceived pessimism that occasions media soul-searching about the impact of their words.
Where was the circumspection in the heady "new economy" days, when Newsweek (7/5/99) confidently declared that "the bull market, powered by the cyberboom" was a "pre-millennium party that's blowing the roof off the American Dream," and every roundtable featured an "expert" like CNBC's Larry Kudlow predicting "even higher stock prices and even more economic growth as far as the eye can see" (Washington Times, 7/24/97)?
Those with working memories recall that the rising Dow's power to (eventually) lift all boats was a journalistic given, generating cover stories like Money magazine's "Everyone's Getting Rich" (5/99) and TV discussions premised on the notion that "behind the mind-boggling wealth of Bill Gates, there are more billionaires and millionaires than ever before, and it might seem as if everyone you know is in on the action" (CNN, 6/30/99).
Reference to persistent inequality was rare and quickly dismissed, as with Newsweek's note that "the income gap remains a thorny problem, but wealth is increasingly spread out as businesses give workers more of a stake. And as everybody starts to pick up his own dot.com business plan, that picks up the pace of innovation." Ah, those were the days, weren't they, when everyone picked up his own dot.com business plan?
There was some pushback, certainly. Business channels—specifically CNBC—were subsequently criticized for, for example, filling the air with "Wall Streeters who were extolling stocks that those same analysts were privately calling 'crap'" (CJR, 11-12/03). But they were hardly alone. The truth is, much of big media has spent years stumping wildly for one bubble after the next, with nary a murmur to the effect that, as CNBC's on-air editor noted recently (New York Times, 9/22/08) about a federal takeover of bad mortgage loans, their "Wall Street sources . . . all have vested interests in this happening."