“Crisis,” “mess,” “meltdown.” The ways journalists describe Wall Street carry more impact as financial markets are passing scary and moving into worse territory. While politicians and businessmen are the ones trying to fix the problems, journalists are left describing them to everyone.
It isn’t easy.
Journalists don’t agree if they should take a measured tone to calm their audience, a la the fabled newsmen of yesteryear. Or perhaps they should stand atop their desks and scream the sky is falling.
By and large, news outlets choose the latter approach. Sometimes the sky is falling, they would argue correctly. Sometimes.
But the rest of the time, the news media stop being the town crier and turn into the Boy Who Cried Wolf. It’s that tendency toward hype, sensationalism and stupidity that serves as the back-drop for the current Wall Street problems.
To believe the media, the last few years have been filled with crises.
In 2005, the three broadcast channels mentioned “crisis” more than 1,000 times according to LexisNexis. We had a “fuel crisis,” a “hospital crisis,” a “crisis in customer service,” even a “credit card crisis.” That was the same year CBS warned us the “world is not prepared to handle the crisis” stemming from bird flu.
Somehow we survived those, especially the nonexistent bird flue pandemic.
But for all of the many scary stories, one story has held particular sway with reporters: the economy. The economy has been depicted at death’s door since we escaped the last recession. Back in 2005, the story was jobs.
ABC, CBS and NBC focused on job losses in more than half the job stories that year. “CBS Evening News” reporter Jim Acosta’s pre-Thanksgiving story depicted the 8,700 job cuts at General Motors as GM “carving up its work force like a Butterball turkey.”
Going into the last election, we encountered the same spin. CNN’s Jack Cafferty, who talks and thinks but can’t do both at the same time, blamed a conspiracy by oil companies to drive down gas prices and boost the GOP with happy consumers. The networks were less excitable, but still downbeat.
ABC, CBS and NBC spent from Aug. 1, 2005, to July 31, 2006, making the case that we are at risk of sending “the economy into recession.”
This year, it’s been the Great Depression theme. Everything anybody does in financial markets is reminiscent of the worst economic time period in U.S. history. The tally of Great Depression mentions was more than 70 the first half of the year. That number has more than doubled in the last month alone.
Yet the New York Times claims journalists are handling this crisis responsibly because of the impact of “rumor, speculation and fear.” “That has reporters and editors, so often accused of hyperbole and sowing alarm, parsing their words with unusual care,” claimed Richard Pérez-Peña on Sept. 21. He needs to read his own paper or turn on the TV.
A Wall Street Journal spokesman told Pérez-Peña that “‘crash,’ ‘panic,’ ‘pandemonium,’ ‘apocalypse,’” were all words the paper was “staying away from.”
CNN’s senior business correspondent Ali Velshi took a similar responsible approach.
“We’re very careful not to throw words around like ‘meltdown’ and ‘free fall,’” Ali Velshi, senior business correspondent at CNN, said. “If someone wants to say the markets are in free fall, we’ll discuss it first,” he said, and the outcome is most likely to be a change in wording.
We’re about a year after media sages like CNBC’s Maria Bartiromo and Fox’s Neil Cavuto warned that loose lips could talk us into a recession. At least a few in the media listen.
“But these days, the media are taking their good intentions too far. They're failing to describe accurately the bloodbath (and, you bet, “bloodbath” is an acceptable word, too),” he wrote on Sept. 29.
Imagine an ordinary investor reading that. Friedman basically asks journalists to scream “Fire!” in the theater.
Thankfully, not everyone, even not everyone at Marketwatch agrees. Irwin Kellner, the chief economist for MarketWatch, says the financial stories are “replete with scare words.” Kellner pointed out that things aren’t great, but they aren’t Great Depression either. “I am not saying things aren't serious out there, but another Great Depression? I don't think so.”
Unfortunately, not enough journalists see it that way.