Are journalists to blame for the financial crisis?

There has been a lot of brow beating lately about the role of the media in the global economic crisis. To what extent did the media contribute to the crisis? Did the media do enough to forewarn their audiences, and are they doing enough now to help people understand where we’re going? An excellent panel discussion, hosted by the Centre for African Economics Journalism here at Rhodes University, tackled the issue last night. The panellists were Reg Rumney, former financial journalist and now director of CEJA; Caroline Southey, former editor of the Financial Mail; Andrew Donaldson, deputy director-general at trhe Treasury; and Richard Lapper, African bureau chief for the Financial Times.

Some of the points the speakers made:

  • It took rather long for the penny to drop with the South African media. While the global financial system was tumbling down, our news media concentrated on local issues, as if we were inured from the fall-out.
  • South African media have not allocated adequate resources to covering the crisis. No news organisation has put together a team of journalists to cover the crisis.
  • Journalists have failed to make – and are still failing to make – the connections and linkages between the banking crisis, the global recession, and the local economy.
  • Journalists are not going out to find the story. This story doesn’t come to you in a press release. It has to be found – job losses in the automotive industry; the drying-up of credit; the slowdown inthe construction sector; and so on.
  • Economics journalism should not be seen as a specialist beat. All journalists have to understand basic economics, and economics should be “mainstreamed” – pardon the terrible academic jargon ! – in journalism.
  • Journalists have to understand numbers.
  • When it comes to apportioning blame for the crisis, journalists are fairly low down the list. Sure, few journalists saw it coming, but who did? Central bankers, finance ministers, regulatory agencies, market participants – most of them missed it too.
  • Journalists are not good at covering processes. They prefer events. The financial crisis is not a tsunami. It unfolded slowly, and it was difficult to recognise the seminal events – such as the Lehmann Brothers failure – as they happened.
  • Whatever the inadequacies of our coverage, this is the biggest story of the decade, perhaps of the century. It is the end of an epoch; the beginning of a new paradigm. It presents opportunities for great journalism.

Some questions remained unanswered:

  • If journalists are not equipped to make sense of this crisis, whose fault is it? University journalism programmes, which ignore economics? Media houses, which are not prepared to invest in training? The journalists themselves, for not being interested?
  • What should be done about it?
  • How culpable were the media in helping to spread some of the mythologies that made this crisis inevitable, such as the belief that asset prices will always rise (the equity cult and property cult are examples of this)?

CEJA is running a five-day training course – the first module of a planned Post-Graduate Diploma in Economics Journalism – starting today. Perhaps that will make a small difference.

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2 Responses to Are journalists to blame for the financial crisis?

  1. On the Money says:

    Yes they are!!! Journalists are to blame! It had nothing to do with the bankers now being bribed to keep quiet …

  2. re: turn on says:

    Even largely in retrospect the financial crisis is so complex many news articles have trouble making sense of it. But I wonder whether that’s laziness or an unwillingness to point fingers at the rich and powerful?

    Criticism is also going around that the media exacerbates the effects of the financial crisis by sensationalizing it?

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