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And the band played on: covering the economic crisis

December 11, 2008

dean-150I recently visited one of the most frightening sites on the Web—the place where I look at my shrinking retirement account.

As I calculated the investment loss since the steep decline in the markets began, and particularly since the collapse of Lehman Brothers in mid-September, some questions arose (in addition to: Will I ever be able to retire?).

–Did we in the media do our job in reporting on the run-up to the crisis?

–Now that an “official” recession has been declared in the U.S. and the depth of the crisis is becoming clearer around the world, are we in the media keeping things in perspective? Should we even be using words like “crisis” or “meltdown?”

On the first question, I can’t help thinking of Claude Rains’ “Casablanca” character Captain Renault, who was “shocked, shocked to find that gambling is going on” in Rick’s club. In hindsight, given the current state of the financial markets, wasn’t it obvious a problem was brewing?

Not necessarily. And it probably wouldn’t have been obvious to anyone reading online or print coverage or watching television news in the United States.

A look at a study by the Pew Center’s Project for Excellence in Journalism indicates that, in the United States, coverage of the economy was pretty much drowned out by coverage of the presidential election—at least until the two stories converged in mid-September. Indeed, as the Pew material shows, in the month preceding the week of Sept. 15, which saw the Lehman bankruptcy, the Merrill Lynch sale, the AIG bailout and large drops in share prices, the proportion of the news hole devoted to the economy reached a low for the year, filling only 4.8 percent of the time on television and radio and space in the print and online media. Since then, that focus has shifted, as the presidential campaign narrative became, again, “it’s the economy, stupid,” and as the presidential transition has focused on U.S. economic problems.

Reuters News Editor-in-Chief David Schlesinger is skeptical that financial journalists could have done much more to predict the depth of the crisis.

“Journalists do best when reporting what’s happening and giving the news context and analysis,” he said. “We also do well when we look backwards and discuss past events from the perspective of the present. We do least well when we prognosticate. While our reporting and commentary did discuss potential weak points in the economy, we did not — and nor frankly could we — accurately predict the calamitous events of this year.”

Schlesinger worries, though, that there was a certain inevitability to the crisis and that the media played a role.

“I do worry about the narrative lines of reporting that contributed to the crisis,” he said. “To take just one example, much of the crisis was caused by banks taking on excess risks in the pursuit of higher profits. Yet had a major bank president stepped back from that fray and declined to participate, the ‘grammar’ of our results reporting would surely have compared that bank’s results negatively against expectations and against its peers.

“That brave bank president would surely have lost at least his bonus and probably his job.The very fear of that kind of negative comparison helped spur things on — as Citibank’s ex-CEO Charles Prince said (while still in his job), ‘As long as the music is playing, you’ve got to get up and dance.’

“We in the media help play that music, probably exacerbating the highs on the way up and the lows on the way down.”

So did our reporting help change the tune that was being played? Did it raise questions about the factors that contributed to the crisis, including complex financial instruments, subprime mortgage lending and excessive risk?

To fully answer that would require a deeper analysis than we have room for in this space, but there is evidence that questioning notes were sounded.

As early as Aug. 18, 2003, a Reuters story quoted Fed governor Edward Gramlich citing the dangers of “predatory lending” in extending subprime credit. By 2006, the pace had accelerated. A Factiva search of Reuters News found 128 stories that mentioned the phrase “subprime mortgage” that year, including a number in which analysts predicted a deterioration in credit quality. The crescendo came in 2007, when there were more than 10,000 stories that referenced subprime mortgages and when built a special section to house material on the issue. That section developed into the current Crisis in Credit and Housing Market sections.

Still, the overall “music” was loud and infectious and it’s easy to understand why so many couldn’t stay off the dance floor.

Now that the crisis is here, some are accusing the media of deepening the problems. Richard Lambert, director general of the CBI, a U.K. employers group and a former editor of the Financial Times, said “careless headlines or injudicious reporting risk becoming self-fulfilling prophecies of a very serious nature.” He urged journalists to be especially vigilant in their fact-checking and called on the press to avoid such words as “panic,” “fear” and “chaos.”

He also suggested that journalists should cut bankers, regulators and politicians a little slack, since “precious few journalists gave any hint at all of what was about to come.”

The FT’s Lex column (Note: subscription required) accused Lambert of shooting the messenger and lamented that some would “seek to clamp down on the fourth estate…, hoping regulation will recreate a golden age when the business press was a tamer, more deferential beast” that “could be hushed up in times of financial turbulence.”

But those days are gone, as Lex put it. “The digital revolution, by lowering entry barriers and intensifying competition, has put paid to all that. It will not return.”

And good riddance. As a card-carrying lover of the First Amendment and the digital revolution, I’m happy those days are gone. But with our freedom comes a sometimes frightening responsibility, especially in troubled economic waters.

As Schlesinger says, “We have a responsibility to be careful, and most of our reporting has been very careful. But we too have played some discordant notes and we need to learn from that.”

What do you think? Did we in the media do our job in reporting on the financial crisis, both before the market collapse in September and since? Are we being careful enough not to sow panic and make things worse? How can our reporting help you weather the storm?

Please post your comments here.

I’ll be using this space regularly to explore issues arising from Reuters and other media coverage of the world and to have a discussion with you. Among the topics I plan to look at: the dangers and rewards of covering religion; the use of anonymous sources; the debate over shield laws for journalists, and much more. I’ll also be providing lots of space for you to have your say.

In the meantime, I’ll be watching that retirement account.

Dean Wright, Global Editor, Ethics, Innovation and News Standards


I don’t believe the media is telling us the complete truth. I believe American are being told things are not that bad when things are really about to crumble. Millions more are going to lose their jobs. This means that millions more won’t be able to purchase goods. As a result, more companies will have layoffs until we reach a ground zero.Where is that ground zero? Only time will tell. I believe that someone will step in and want to setup a world government while things are really bad all around the world. If I were a world leader and wanted control over everything, I would propose such a plan when people are crying out for anything that can possibly help.I think the automobile bailout will only bring about one thing, delaying the inevitable. Consumer still won’t be able to purchase new cars because they are losing jobs.The only thing that I can think of that can stop the world from entering a depression, is if the government and rich people around the world, gift money to all taxpaying citizens under that had less than say 200K filed on their last tax return. The gift would be a substantial amount, maybe $40K. This would delay bankruptcy filings. This would allow people to purchase goods, meaning more goods need to be produced, meaning more people need jobs to fill orders and make stuff. Before any gifting of money is to be made, a law must be put in place that does one of two things. Either gives a tax break to companies for each person that works in the United States or an incentive such as donations for having work moved back to the United States. Only with both things in place at once, can something turn the tidal wave that has already started.

Posted by Kyp Hexler | Report as abusive

I think that the media is a part, if not all of the problem. All you report is the negative and continue to put the fear out for the people. If the media reported good news for a change, the world would be a better place.


The Financial crisis was very predictable.The effect of the crisis, a recession was also very predictable if you understand the basic principals for credit and realise that credit = money.Minsky had a credit theorem on ponzi schemes and identified three factors, all prevalent in US speculation bubble, not unlike Sweden in 1992.”I quote: Minsky argued that a key mechanism that pushes an economy towards a crisis is the accumulation of debt. He identified 3 types of borrowers that contribute to the accumulation of insolvent debt: Hedge Borrowers; Speculative Borrowers; and Ponzi Borrowers.”The knowledge is out there, media chooses not to report it and concentrate on nonsense explanations as irrational exuberance.The low interest rate policy combined with legislation making an explosion in credit available, this time with derivatives, is the cause of the crisis. It was fully predictable. The exact same thing happened in Sweden, that to was fully predictable.Stop reporting on the effects and concentrate on the cause.Your central bank is private and takes no public interest.Your government is blindsided by its ineptitude to realize that a government can’t possibly be liable for interest on its own money.The whole financial system is geared towards speculation and not investment, don’t believe me? Where are the big tax brakes?


Mr. Wright,I’ve been writing on this topic, for a couple of years, on — If you are so inclined, look at the archive feature under “housing crash” and “Miami Herald” for an independent opinion on the culpability of the mainstream media in the place where the housing crash originated.Alan Farago


The media needs to let Washington and the politicians know what the people want. We don’t want 2Million of us in prisons! we don’t want those bums who are behind this financial mess to go free and get paid off by the Govt. and we don’t want a person in prison for smoking a joint. We don’t want our precious Constitution changed by whats Habeas Corpus and whats money backed by, gold or silver. A free press lets us all know whats happening please keep it that way! John

Posted by ginsengjohn | Report as abusive

I believe the general perception, given that we were in a so-called sustained period of recovery and growth, any minor market dips could be dismissed. People who didn’t quite understand how high spending levels could be sustained in light of the enormous cumulative debt and who expressed their sentiments were branded as negative individuals. Then we had market insiders and institutional players with great stakes in the market not providing up-to-date or accurate information. The SEC became accounting experts, telling companies not to depreciate their capitalized expenditures. Governments started buying shares in the markets – something we learned of publically just in recent months although it has probably been happening for years through covert operations. You don’t actually think all of the money spent on Iraq and homeland security got used immediately. To distribute project expenditures over exceptionally long time periods, the funds must sit somewhere and be managed. So really we have a systematic level of delirium, incompetence and dishonesty. Anyways, I haven’t lost anything. If anything, I’m trying to find out ways of getting money out of my portfolio so I can spend more. These bureaucrats have their hands in everything we do.

Posted by Don | Report as abusive

and the media played on is right. Ron Paul, Peter Schiff, Alex Jones ( all have been talking about this for a while and the propaganda media acts like they are spewing lies and everything is fine until we all loose our houses. NICE!you are being outsourced to alternative media because you did not do your job. you are supposed to be a check on the gov’t and corporate facism has taken over. I am sure there are good reporter that are just trying to feed and cloth their families, but this is going too far and we the people need to rally to stop it.

Posted by mike | Report as abusive

Is journalism about reporting or investigating? We can all blog and report and describe what’s happening, the media is no longer needed for that. We can all report numbers and say what other people told us they mean. What we need is investigative journalism that tests the assumptions that are being made, that shines the spotlight on those who gave bad predictions and that helps us understand where and why did we get it so wrong.

Posted by Firas | Report as abusive

Dear Mr. Wright,Thanks for your contemplative article. As a journalist myself, I believe we could do more to prevent this crisis from happening. We could try to be more sceptic to the ‘music’ played at the time, and give more rooms to dissenting voices. However, as Reuters News Editor-in-Chief Mr David Schlesinger rightly pointed out, we do our best when reporting what currently happened.


NO – the media does not report on anything…ever since Reagan, the media just repeats, bombarding us with dumbed-down gossip that is pandered as news.You guys in Reporterland simply find a story from the AP wire or a rogue website, then comment about nothing over and over – to death. From Terry Schiavo to girls this week bathing in a KFC sink, for God’s sake!Financially, now that the Republican-led media is over,it is time to come clean that Reagan and Thatcher – the idiot architects of globalization – are responsible for this global mess.All of you Pundits (formerly known as ‘media’) have to start using the 30-year Reagan legacy of endless, meaningless Commentaries to bang the drum with intelligence once again that globalization now must be killed.We must return the US and every other country back to the financial arenas of 1979 and all will be better… especially the return of mortgage porfolios at our local banks, for starters!Also – give up Thatcher/ Reagan’s evil tri-lateralist EU concept – Germany and the Nordic states carry Spain, Italy and all the happier places in Europe!Since you missed The Great Re-Pression which occurred right after 9/11 and never abated…do the world a favor.Admit we’re maybe now halfway through this mess; so the perception is we’re conquering things, although you just woke up to the problem a year ago.Also, instill the idealogay to the other mantle of business present since World War One up to 1979 and let your vendors make a profit.Back then the world used to do busines with the motto -”You mark it up, I mark it up, we all make a buck…”However, the B-movie guy with a monkey, Ronald Reagan, ushered in the “Internet concept” of finances that everyone under 35 adheres to: “You skim it down to the bone, I skim it down the bone and we hope like hell we sell a lot of them….” This does not work, obviously.The world is not full cheap, devalued off-the-shelf commodities…ideas and services have a real value.We are all a vendor to somebody – let the other guy make money and we all have money again!It’s time for the media to teach the world how to makeprofit: let people make a buck on a local level.

Posted by lazy b@stards | Report as abusive

I think there is also just the plain old question of whether the constant barrage of hyperbolic reporting is scaring the heck out of people. The phrase “since the great depression” should be banned, perhaps more to the point, I can’t see how a journalist allows himself/herself to even type it.

Posted by jim croft | Report as abusive

The analogy of a bank president being lambasted for being truthful concerning his earnings % being compromised by sub-prime loans is correct. After all, the thinking was “We’re getting people into homes that never had a chance at home ownership.” That is the cornerstone of the American dream, where we worship with Home Depot, homebuilders, contractors, etc.. Calling the house of cards a house of cards was happening in the media, but who hears you when everybody is making money, and there is no-where else to fund our greedy lifestyles than the home atm.

Posted by Dave54 | Report as abusive

It was inevitable that a slow down/recession near the end of this decade was in the cards if only because of the top down greed and excesses of prior years and a poorly regulated global financial sector. What goes up must come down. However, I also have no doubt that the speed and depth of the swing downwards in the last couple of months is at least 50% worse than it should be due to a sensationalist, mostly irresponsible media. The negative reporting alone gave much more momentum to the downfall and souring consumer sentiment than would or should have otherwise occurred… perhaps that sector too needs regulation. Freedom of speech has a price.

Posted by JF Chalmers | Report as abusive

I feel that what has been missing in reporting over the last decades has been a sense of reality. Finance is a house of cards. People trading paper with other people. It sure makes a lot of paper (money) and supposedly helps real businesses that trade things with other people who make things, and consume things.Reuters core customers are the paper traders, not the thing traders (except perhaps commodities). So as much as Reuters can try and excuse itself or admit guilt, it is built on the very house of cards that has brought us to this brink. There is surely a moral hazard there, in that the total collapse of the house of cards, aka financial markets, would bring down Reuters with it.

Posted by Nic Fulton | Report as abusive

The media for the most part failed miserably during the entire Bush administration, and in almost every area– not just in the matter of our current economic disaster. In countless articles and television spots the explosion of speculation in housing, and the obscene excesses in the number and sizes of houses people were buying, were more or less celebrated; treated like the latest crazy fad, with no more introspection and serious analysis than the hoola hoop got. I feel like puking when I STILL see story after story in papers like the NY Times about “what $350,000, $650,000, or $1,250,000 buys,” or about the latest pretentious do-over of some mansion or other.I owned my own mortgage company for almost 15 years. We didn’t offer sub-prime loans or the Option ARMs that are getting so many people into trouble. We watched as many of our competitors got a tremendous amount of business doing just that. We received as many as 20 calls a week from investors trying to get us to sign up to sell these products. But they were not the only ones at fault. I can give hundreds of examples of the sense of entitlement to a house that Americans have come to have, like that of a young woman two weeks into her first job with a boyfriend repeatedly late with his prior mortgage who simply could not understand why they had to pay anything (not even closing costs) to get into a new four-bedroom house, and that of the couple six months out of bankruptcy who came to us one September announcing, “We have to be in a house by Christmas.”Fannie Mae and Freddie Mac were right in there designing and pushing loans with questionable credit guidelines.Even Nobel-prize winning economist and New York Times columnist Paul Krugman was unaware that Fannie and Freddie offered “no-doc” and stated-income loans until I, and other readers, informed him that he was incorrect in writing that these agencies only made fully-documented loans.

Posted by Perry Fisher | Report as abusive

There’s usually some tension for financial reporters to follow a company by the numbers or by the people running it. Taking their cue from the trading desks and analyst spreadsheets, many in the financial media have leaned on the numbers and the mix of comparatives those numbers generate to determine the health of a company. Still, as we well know, numbers can be used to show any range of prospects. We’ve lost sight of the people who are making those numbers. When you talk to the numbers people, they say ‘what did the company report.’ People in the company pay more attention to executive personalities and carefully track ‘who reports to whom’ to determine the prospects of the company or a key division. Some CEOs, meanwhile, spend a lot of their time managing up to placate their own fickle bosses, the board. When stuck with bland ‘forward-looking’ comments from executives, financial journalists turn to the numbers to tell the story. You can’t really blame them but just a little more writing on the good bosses vs the excessive risk-takers or the me-too CYA losers might have helped investors see this trainwreck coming.

Posted by EmChurch | Report as abusive

The mass media IS mostly big commercialized business.Bottom line; cut staff; break news; make news; coddle power; inside sources. Nothing like a panic to get viewers, listeners, readers. Bring it on!The Fourth Estate as a protector of truth seems a joke. I’m still looking for a continuing report from inside Iraq– still a story? What about the new US embassy?The internet news is hopeful but it’s no easy place to traverse. Lots of dead ends or dead heads.I’m retired and the “gamble” part of my retirement has tanked!

Posted by Don H | Report as abusive

If there is any one area where the news media fell down in its coverage, it is the reporting after the crisis began. That would have been the time to remind people that this didn’t come out of nowhere, unforeseen and unforeseeable. Had this fact been more widely reported, it just might have been more difficult for the money men and the “oversight” agencies to shuffle their way out of any accountability.

Posted by MJ Kuhns | Report as abusive

The US mainstream media is now owned by a handful of corporations.The reporting of financial matters has been abysmal, inept, virtually reading business press releases and quoting paid spokespeople for business funded thinktanks.Even now the reporting of events has been pathetically superficial, and pro-business pro-financial sector to a fault.Happily the internet is a freer domain at the moment and the facts and other perspectives are available there.We are in an Orwellian moment. From what I see the UK is even further along, which is sad indeed.


It would be hard for anyone non partisan not to believe that politics didn’t play a huge roll in these events. The media seemed to go out of their way to destroy the Republicans handling of the economy the war leading up to the election. A big mess was the plan in order to point a finger. Careful for what you wish for because they now have a mess to deal with and a majority of Democrats in congress to deal with the problems.The media played a huge roll in electing Obama. He’ll be lucky if not indicted before the inauguration. Here’s the play from the Clinton’s “it the right wing conspiracy”.

Posted by Paulie the Clam | Report as abusive

The media is an archaic artifact that has lost its value to society. Media has become nothing but valueless message conduits for organizations with agendas to influence politics and the markets. Journalism lost its capability to identify the “real” story and provide objective information for the viewer. Fox News is the ultimate representation of the decline of media quality. Media has gotten so good at its goal of controlling the message and influencing the public consumer it has lost any connection with reality. That’s why blogging is so interesting. Real people with real knowledge about the issues that are affecting our lives now can bypass the media bottleneck. No PR agencies, no “editors”, no journalists with delusions that they are the actual experts, no misquotes to fit a pre-defined story. There is a lot of horrible content in the blogosphere, but if you’re smart enough, you can find the real content and recognize it as being orders of magnitude more valuable than traditional media sources.


Let GM and Chrysler go into Chapter 11 sooner rather than later and save the taxpayers a lot of money. It is obvious the UAW will not make concessions to bring down labor costs to equal that of the foreign car makers; it is time to bust that union up. Furthermore, given the debt load and other obligations of GM there is no way, even if it were to quickly (1 yr) return to some degree of profitability that it would be able to meet the long term debt as it is now. Finally, since when are the bondholders and stock holders “guaranteed” a return on their alleged investment. An investment constitutes risk. You make the investment and you take the risk that you will not get a return or lose the money. Let the bondholders and the shareholders take the hit as they should as investors, not guaranteed return holders. Bankruptcy will straighten the mess out and relieve GM of the burdensome UAW and their sanctimonious leader Gettlefinger who along with the rest of the Union, have milked the industry dry.

Posted by bgc | Report as abusive

In September 2007 my sis and I sold the stock we had inherited, paid off our mortgages and put the remainder in guaranteed money market accounts. House prices were ruinously expensive. It just couldn’t last. No financial training here, but I could read Reuters & confirm there was no reason for the stock market to be so high. Many thanks.

Posted by Carolyn James | Report as abusive

“In hindsight, given the current state of the financial markets, wasn’t it obvious a problem was brewing? Not necessarily.”Ridiculous. Of course it was obvious. It just wasn’t entertaining, so it got buried. The media has a great excuse: they report “news”. If its not “new” then it doesn’t have to be reported.Frankly, the world would be better served if the “news” media posted stories on the front page or headline news based on the importance of all outstanding issues, not on the importance of stories that day. As far as I am concerned, the headline “Massive ARM Problem still not addressed: day 623″ is news.That’ll never happen of course and we all know why, but my respect for you and your reporting has just dropped dramatically by this “how could we have known?” whining.

Posted by J Briant | Report as abusive

When Citi was bailed out they had 2 trillion in assets and 40 trillon in derivatives obligations. So, the vast majority of that bailout probably went to postpone the derivatives collapse. The end result was money down the drain and no long term increase in liquidity. If you don’t talk about the derivatives, then you aren’t telling the relevant part of the story. Since the assorted financial institutions owe over 650 trillion in derivatives, per the IBS, how could 8.5 trillion from the treasury or 750 billion in bailouts possibly make an impact on these large gambling debts?

Posted by ClydeR | Report as abusive

The only warning notes I heard in 2007 came from my financial adviser and the CEO of Zulauf Asset Management AG. Fortunately, for me, I listened to those warnings.

Posted by Jim Kinder | Report as abusive

I see some blame resting with the media. Certainly even the most reputable instutions still cannot resist a scandelous headline, even if the story is balanced. After all readers need to be inticed and ads sold.But I also see a lot of the blame resting with the public. Why is Wikipedia controversial, because it doesn’t hide the fact that the reader must be aware. People want a trusted source, where all statements are truths. Clearly this doesn’t and has never existed. Until the public is more aware, they are perhaps a greater danger than the media.What I would suggest, and I do see it more and more, is that journalists put forward stories in ways that encourage readers to be aware and to seek diverse opinions, even if those opinions are not from their institution. I’d like to see more links to refered material when it is publicly available. If an article is about an IMF report, why not link to it? The BBC has started to do this and I applaud them for it.

Posted by mike | Report as abusive

Dean – most people at street level knew there was a crisis looming ,a better question for you to ask yourself and other journalists right now is why arent you out there looking for those on the inside who had a pretty good idea of what was going on rather than wasting your time speculating about how the potential threat of negative reporting may have prevented conscientious bank presidents from acting more honestly and responsibility than they were doing with other peoples money?Didnt Eichmann argue something similar to justify his actions?Do we really have to forget about investigative journalism and just wait and hope that people like former chairman of the Nasdaq stock market Bernard Madoff sheepishly turn themselves in? Again, most people who arent journalists or bankers understand pretty well that they have been stiffed into bailing out the banks because they were all flying Madoffian kites.Oh but wait a minute, there’s a difference right, Madoff was the schmuck caught running the non Fed sanctioned type of pyramid scheme.It seems to me mainstream journalism has abdicated any meaningful role in preventing the next crisis , you’ve become part of the problem and that does nothing to restore public confidence in the economy or your profession.


People will still be able to purchase new cars – or at least used cars. There will always be car companies. There will always be people who want cars. There will always be cars. The scale of production has to change to accommodate the environment. We should stop living in extremes – trying to tip the scale one way or the other. Market equillibrium does not represent a collapse. It means that we need people to adapt. But for people to adapt, we need accurate and timely information. So yes the media should have diverse representation.

Posted by Don | Report as abusive

As the Nasdaq was on its meteoric rise to 5,000 in March of 2000, a Wall Street analyst, Gail Dudack was a frequent guest on the PBS staple “Wall Street Week”. On each appearance as the Nasdaq continued to rise on the strength of the “new economy” and the new darlings of Wall Street, the dot coms, Ms. dudack would sound a warning of lack of correlation between price and reality.As time went by and the revolution carried the index ever higher, Ms. Dudack maintained her skepticism. I often wonder why she was removed as a guest on the show, was it by choice or because she refrained from the party line because of firmly held belief in her convictions.In time she was proven correct as the Nasdaq declined by alomost half, following its final peak in March of 2000.I guess no one likes to have someone rain on the parade.

Posted by David Wright | Report as abusive

We are still not taking this meltdown seriously enough. We may not be pulling out of this dive in a year or two or five or ten or ever. I have been expecting this to happen most of my life. The bursting of the bubble means the bursting of unsustainable growth syndrome. A society with entirely different parameters may be on the horizon.

Posted by esso | Report as abusive

I’m a financial reporter/aggregator at Institutional Investor and the founder of the Webzine Trendcetera. I think that the corporatization of media has forced editors and publishers to produce more fluff because of concerns over the bottom line–to dumb down the news to appeal to a nation more concerned about the fate of Britney than the fate of Zimbabwe. Could reporters have shaken things up more? Maybe? But in the current state of denial, who is to say anything different would have ensued. A nation and a people must be ready to assume the responsibilities required to change and strengthen America. Perhaps the real question is–could reporters have focused more on government oversight committees and the SEC and the systems in place that failed us?


I like to use the term “toxic symbiosis of fools” when describing the politicians, bureaucrats, bankers, business leaders, speculators, academics and economists who contributed to the financial crisis. When things were going well it was almost impossible to point fingers, and those who did were dismissed in the most arrogant fashion. As an old fashioned lending banker I highlighted the dangers of moronic lending practices as far back as 1995. I was treated with disdain by my managers and many of my peers. I was seen as being terminally behind the curve.To expect journalists to have anticipated the impending disaster is nothing less than ridiculous. Now that the crisis is upon us the least you can do is keep us informed no matter how unpalatable the news might be. This is an essential contrast to the veil of silence still used by the “toxic symbiosis of fools” to minimise the full extent of their stupidity

Posted by anton kleinschmidt | Report as abusive

You can answer your question with another question (or a few) …Why did consumers lose confidence and stop buying?Was there wide-spread reporting of the alternative strengths of our financial markets?Was there more wide-spread reporting and analysis of potential solutions or assignment of blame?Is there ANY current wide-spread reporting of recomendations to consumers?It makes you wonder… Would we ever have recovered from the Great Depression with this kind of reporting, this kind of message to our society and the world? And World Wars, the New Deal, Civil Rights… what if they were all reported on with the same negative bias as our current economic state? Just makes you wonder.

Posted by P A H | Report as abusive

One I think must also recognize that newsmedia is also an industry just as is finance. Rather than giving loans or taking deposits they attempt to collect viewers or listeners or readers. The way in which they attempt to collect or retain their audience may indeed color (at times significantly) the message they deliver and thus either helping to feed the frenzy or quench the fire whichever may be the case…So yes, I do believe media bias has contributed, I just do not know to what extent this is the case and if it is truly significant.

Posted by km | Report as abusive

I just shared this article with my wife and she reminded my of a public television show (NOW?) that reported on a couple in Southern California who had an annual income of approximately $100,000 and had just obtained a $1 milllion home loan. This was broadcast at least prior to mid-2006. To any finance person or any reasonably sane person, this scenario was a strong signal that something was amiss. There were also many online sites that documented the insanity.One consequence of 9/11 was that public radio and television suddenly lost their courage to report the hard-hitting stories. It goes without saying that the mainstream media stayed away from anything that was controversial. If the reporting/new production had been courageous, the story may have more widespread.Many people seem to forget that this bubble goes back to the 1980′s when all the pension monies started to flood into the market. An equities colleague of mine in an investment department for a large institution complained in the late 80′s that picking stocks was similar to going to the tables in Vegas.


first of all, sorry for my probably poor english.If I can understand that industry and/or financial officials tell us what they consider appropriate to their employers, shareholders, tehmselves and the rest, it is a bit more difficult to understand now that lots of journalists, anchormen, economics specialists, free lancers an the rest, tell us what happened.Next time, be kind enough to tell us things BEFORE things happen. Ist’n some more serius, you experts ?

Posted by walt | Report as abusive

evryone could see the economic downturn for over a year, but news media said there was no recession. That is one of America’s largest faults… we build a house of cards with credit and offer to help everyone, but cannot even help ourselves. The media didn’t want to start people thinking they needed to save instead of spend and people seem to believe everything is “MUST HAVE”.. how about don’t buy if you don’t have cash??? How about if a person overdraws thier bank account, freeze it! Don’t wait till 1000.00 overdrawn! How about bringing work home to our shores instead of off shore!?!

Posted by jacque | Report as abusive

OK, so the media helps, by not knowing/reporting, but the rating agencies knew, why are they still quoted, it like they have a free pass? They were paid to rate this JUNK and made a fortune doing so. Who would have bought bbb rated instruments? No one would have bought this JUNK without these guys. They rated these complex/mortgage/(subprime) instruments as AAA and made a lot of $$$ doing so. These instruments were at best bbb. Yet even today, Moody’s, S&P and the others are quoted regularly on stock issues. I would rather keep my money in a mattress until these guys are gone. I believe nothing they say. My mattress won’t make me $$ but then I won’t lose either.

Posted by Carl Rosenbaum | Report as abusive

The media plays a huge role in how the general public views the economy. Economic news lately focuses more on wealth redistribution rather than wealth creation. Socialism has the same focus. Are the media elite socialists?

Posted by sammy c | Report as abusive

I am a professional macroeconomist and freelance writer who in the past two years has (gladly) turned down several job offers at major media news outlets. In all cases, my would-be employers and I seemed to be speaking different languages: I was telling them that a better understanding of finance and economics was required in order for them to screen their sourced information, and furthermore, having answered phone calls from journalists for over a decade, I believed that the amount of ignorance and lack of sophistication implicit in most of their questions almost guaranteed they we were not being trusted with any complicated information containing any real value beyond the official press and releases. And regarding those official releases, I rarely saw competent handling of the information contained therein.I was criticized for focusing facts and not news, i.e. news leaks, rumors from the street, “policy” research (i.e. garnering unreliable information from confused Hill staffers), etc. I openly scoffed at several major rumors that they criticized me for being unaware of–they sounded utterly ludicrous to me, and to date, I am batting 1000–they were ludicrous. The reason for their infatuation with scoops over facts is that everyone has the facts; data makes everyone equal, whereas scoops are prestigious. So one can look like and idiot for weeks and weeks, and then finally look brilliant by posting the tiniest sliver of information before everyone else.I walked away from these companies with the same impression I walked in with: The financial press has absolutely no idea what it is talking about, adds absolutely no value to the public understanding and debate on the economy, and what’s worse, has no interest in reforming itself or exposing its own ignorance. It is especially perverse that any New York or DC paper would not have near perfect financial or economic topics (as things were understood at the time), seeing as they in cities FULL OF EXPERTS. It is either laziness, stupidity, or self-consciousness about having to deal with people much smarter than them. Whatever it is, it has made them collosal failures.Journalists, why not let the experts do the writing? I cannot imagine what you actually contribute. You can be a big help by fetching coffee or dry cleaning.Thank goodness many top academic economists are blogging.Thank goodness top corporate economists make their forecasts public, or go on news shows to set the record straight (brave they are, in front of the grotesque, uncomprehending faces and the absurd, hysterical questions of their interviewers).Thank goodness the Fed is releasing a lot of its analysis sooner.Thank goodness that the government releases piles of carefully-honed data in easily accessible and understandable form.Follow this stuff-it’s better and it is free.

Posted by Joe | Report as abusive

The media is on the same slippery slope as the US auto industry; build what the people want, drive up the numbers, don’t worry about the future because the future is the day AFTER our quarterly reports are published. If the news media doesn’t start reporting the facts and saving the opinions for the editoral page it will be begging for a bail out also.News is facts without bias; news reporting cannot be unbiased without hard labor and convictions.

Posted by Mac | Report as abusive

“That is one of America’s largest faults… we build a house of cards with credit and offer to help everyone, but cannot even help ourselves.”by jacque. I am of an age to remember when buying on credit was a last resort. Today, people buy everything on credit. As for banks, I was a compliance officer in the mid to late 90′s. I watched as on after another “Fair Lending Act” rule was deleted in favor of allowing creative loans. Did anyone in the media report on the bad business decisions this action caused? Didn’t any financial reporter notice that an 86% increase in home values in 6 years was terribly out of whack? It scared me to death to watch housing prices skyrocket and people getting mtg. loans with no id, no income verification and no debt to income ratio consideration. Where was the media discussion of the disaster those sub prime no income loans’ rate resets kicked in?

Posted by Peg B | Report as abusive

Is it the job of the media to add gasoline to an existing fire causing more panic and confusion than already exists? If so than the job of the media is more than satisfied. Will the job end when there’s nothing left to burn?

Posted by andrew | Report as abusive

Apparently the media people were either not smart enough to read the signs of the times or at worst were happy participants in the greedy dash for easy money.

Posted by I Ben | Report as abusive

thanks joe… you told it like i see it also..but more succinctly…i believe most journalist especially the network evening ones should be reporting on traffic jams and such, something much more on their intelligence level.


I’m a business reporter at a large daily newspaper outside the US who focuses on corporate coverage of natural resource stocks, not economics. But I can say that during the boom I was constantly criticized as being “too negative” on many companies, simply because the economics of their operations did not stack up based on historical –not the then-current boom-like — conditions.Now many of those companies have been frozen out of financing, seen their share prices plunges, or in a few cases, gone bankrupt. Yet when I see a company headed toward bankruptcy and report on that by citing negative cashflow, the upcoming need for debt repayments/refinancing and other warning signs, I again get slammed for being “too negative” by most, rather than being praised for protecting investors.Lately I have been finding that most analysts and so-called experts are afraid to call a spade a spade — at least in public. They will to their favorite clients, and sometimes off the record.The truth can sometimes be unpalatable, but I am of the school that it is important to report the facts and to be skeptical and check things out (including accounts) myself before believing what outsiders say.However, I’m afraid this time-consuming method is going out of vogue, to the ultimate detriment of investors. Wire service reporters are good, smart people in general, but they simply don’t have the time to do this sort of in-depth work, and barring The Wall Street Journal and The New York Times, I think the quality of corporate business reporting at most US papers leaves an awful lot to be desired, particularly since it is heavily reliant on basic earnings reports from wire services.

Posted by Jamie | Report as abusive

Once I wrote down all weather report for the coming week. They were seldom correct. Try the same with ecomony, you will find very amusing result. good fun.

Posted by Charles Rotchild | Report as abusive

Thank you for creating the forum, Dean. Thank you Joe and Schlesinger for being lone voices in the wilderness.This is my take on the problem. The Media are about 9 months to a year behind the bubble on any trend. It takes about 9 to 12 months for the Media to pick up on a story… and then they run it ad infinitum – building it in at every opportunity: “Now after that dismal Financial report, here’s Tom with the weather.” “Thanks Jim. It would seem that the financial mayhem extends to our weather for the next 24 hours…”And I ask… “Why? Why did you have to do that? Was it really necessary? Did it make your weather report better? More accurate?”More over – do we really need the opinion of 10-year old Mary, out shopping with her Mommy, on the Credit Crunch? We KNOW the world is burning. Do we need to be told that at every opportunity – and in the process, be given reports containing very few facts, and bloated out with half-baked opinions and questionable statements?In addition, because the Media are “Johnny-come-lately’s”, the chances are that they will keep this up until well after the event – effectively extending the crisis for an additional 9 – 12 months. Why is this? Two reasons:a. ‘Average Joe’ does not realise that the Media are not serious about their reporting and know as little (if not less) about the subject as the Average Joe. The Media have no interest in Fact, or indeed News. The Media only have interest in Sensation.b. The Media have no idea how powerful they are in terms of Influence and Opinion Forming. The Media do not realise that ‘Average Joe’ lacks the mechanisms to separate the chaff from the wheat.Could this be fixed? I think so, with some sound advice to reporters… rather than asking little Molly on the High Street what she thinks about Fanny and Freddy – do what Dean did. Report on your own investment, your own bank account, your own job fears. Realise that you are in this with us, that there is no exemption. The sooner you do this, the sooner you will realise that the rest of Mankind want this crisis to end – and quickly. And then, maybe you will join us in working towards that end… by providing timely, accurate and sensible reporting.

Posted by Quintin | Report as abusive

I think there was plenty of independent coverage in financial bloggs and that the media is blameless in this. We all recognize that media companies are indeed companies who’s interests are often aligned with a strong bull market mentality and divergent opinions were not popular outside of the blogosphere or should I say BLAGOsphere. There is a reason to evaluate when news becomes news and that the mainstream media is missing much news coverage by aprehension in coverage. Never too late to start


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