The PhD in financial journalism
Did you know that it’s possible to get a PhD in financial journalism? Lennie Fuller does — he’s a former Lehman executive who’s now thinking of doing exactly that at Stirling University. He asked me if I had any ideas about possible thesis topics, and I thought in my bloggy way that throwing the question open might be interesting. So what do you think the big open questions in or about financial journalism are?
Fuller is a qualified Scottish Chartered Accountant, and wonders whether something similar to the CFA might not be implemented in financial journalism: should journalists be regulated or qualified before going to work? If you don’t really understand something like structured finance, is it possible to write sensibly about it?
My feeling on this one is that the arguments against such a scheme are so overwhelming as to render any thesis on the subject pretty moot. Freedom-of-speech principles alone would more than suffice, as would the simple fact that the public would not be well served by any scheme which served to further perpetuate the degree to which journalists have been captured by the financial institutions they cover.
That said, one interesting thesis topic might be an empirical look at the expertise of the people who produced the best journalism of the crisis. Certainly the trade press, where one finds a great deal of narrow expertise, failed utterly to grasp the bigger picture. What kind of qualifications or knowledge, if any, did the best journalists of the crisis have in common? My feeling is that the main qualification that journalists needed was a strong and healthy skepticism of authority figures, including senior bankers, central bankers, and regulators. And that’s not a trait one learns by studying overcollateralization waterfalls in detail.
Fuller also wonders whether financial journalism “should only be investigatory as all other information is freely available in the market” — which seems to me to ignore the mechanism (journalism) by which an enormous amount of information enters the market. (There’s a reason why all those trading floors are surrounded by screens tuned to CNBC, while the trading screens themselves invariably have full feeds from Reuters and Bloomberg.) More generally, I think that people like Fuller, who are looking at financial journalism largely from the perspective of a financial-market professional, have to be careful to remember the crucial public role played by journalism. Just because information is “in the market” doesn’t mean that it’s known by the general public. And it’s the job of journalists to intermediate between the two.
More generally, it’s the job of journalists to interpret what financial-market professionals are doing and to explain it to a generalist audience. Yes, market activity can be complex, and as a result some of the subtleties will be missed. The professionals might not like that, but if they already know everything that the article is talking about, then it’s not aimed at them anyway. One of the biggest lessons that financial journalists have learned over this crisis is that we collectively spent much too much time writing about deals for bankers and lawyers, and much too little time writing big-picture articles for the general public which would require broad, rather than narrow, understanding of what was going on.
Finally, Fuller asks when sources become insider trading: the simple answer is never, if you don’t trade, and there’s really no reason for journalists to engage in such activities. More generally, the only insider information that journalists ever really have is the inside information of what is going to appear in tomorrow’s paper. If you trade in advance of a market-moving story appearing, that’s very bad. In other cases, you’re not an insider, so you can’t be guilty of insider trading.
But that’s just Fuller’s ideas. What other ones are there? I’d be interested in looking at the difference between the trade press and the consumer press, for starters, and how they can learn from each other. I’d also be interested in asking whether there’s a fundamental conflict of interest in the financial-press business model: how can we financial journalists be expected to hold the industry to account if we’re ultimately being paid by that very industry?
And does anybody know of any other PhD programs in financial journalism? What have the results been to date?