‘Embattled’ chancellor Angela Merkel. Photograph: Andrew Medichini/AP
If you’re prone to stress, you could be excused for tuning out the news. Top-of-the-hour radio bulletins and screaming newspaper headlines warn of a eurozone tearing itself apart with apocalyptic consequences all round. Whatever fixes politicians and technocrats come up with, financial markets seem to dismiss them within hours and move to their next victims. Our only option, the Economist intones, is a eurozone superstate or currency collapse. Not exactly the thing to calm the nerves.
Friday morning’s news was typical. The Daily Telegraph talked of the IMF confronting Germany ahead of a «critical summit» for an «embattled» chancellor, a move the paper said was timed to tip debate away from Angela Merkel. The Guardian had the Italian prime minister, Mario Monti, outlining «a potential death spiral» that threatened Europe’s political and economic future. The Daily Mail reported euros tumbling and world stock markets being hammered in Thursday trading, one of 2012’s bleakest days for financial markets. As fear mounted, it said, Spain was expected to be «the next domino to fall». And that’s before you even get to Moody’s downgrade of British banks, which the Telegraph says will «hit families».
The reports are typical of the doom-laden language our media use for financial stories. The fear they fuel does nothing for our fundamental understanding of what’s happening or what to do. They grossly simplify the story and misrepresent reality.
Little of the day-to-day coverage weaves in vital context on the origins of the crisis, the question of where all this debt came from and how it was created. It ignores our governors’ total surrender of power to markets, a simple question of under-regulation in the misplaced belief that rampant speculative trading has anything to do with rational pricing. It fails to reflect fairly what should be the shared responsibilities of reckless borrowers with those of equally reckless lenders and their shareholders. It presents us with nothing but the equally stark remedies of austerity on the one hand, or more debt on the other.
So why is it our media can’t get beyond metaphors of mayhem, or lay out anything more than two versions of deeply unpalatable?
The complexity of finance makes simplification attractive to reporters and to us, their audience. It’s too taxing to get into the detail, a level of mental laziness we allow ourselves at huge cost. Journalists’ lack of professional curiosity leaves the vast majority of us poorer, literally so.
To understand the media problem, we must differentiate two types of reporters. The first is the specialists, people with financial news agencies such as Thomson Reuters or Bloomberg, on bespoke business publications or newspaper business and finance pages. Their output feeds the generalists, who fold it into broader political stories, meaning the two groups are separate yet intertwined.
That makes the specialists a major source of the problem, for all their anonymity. Yet theirs is a tough job, something I say from experience having been a markets reporter for Reuters in the late 1990s into 2000. My time on gold and then the FTSE spanned the Asian financial crisis, the LTCM hedge fund meltdown and the dotcom boom and bust.
All carried elements of the same problems of market and banking mis-regulation playing out in today’s wider crisis.
Identifying those problems as a day-to-day reporter, never mind folding them into news stories as context, was way beyond me at the time. I had too little knowledge of their significance and lacked the time or professional incentive to learn more. My basic task was to report on the trading day’s price moves and quote a few traders or analysts as to the possible causes. It wasn’t to dig much beyond that, which is no great wonder.
The major clients of specialist financial news outlets are the industry itself, with media clients coming a distant second. It would be obvious commercial suicide for the news agencies to urge reporters to root out systemic problems or point fingers at clients. This is the specialists’ major flaw, the embarrassing reality no one likes to admit. With specialists so hamstrung, no wonder the generalists do such a bad job. Such arguments make hard reading for journalists – we like to think we’re the good guys.
Those constraints don’t bother Matt Taibbi, a Rolling Stone columnist and one of the most incisive writers on the global financial crisis. It was he who coined the «vampire squid» label for Goldman Sachs, a term that certainly wouldn’t have got past Reuters editors. His magazine has no worries about financial clients and runs stories at a length that allows complexity and supports research.
Maybe we don’t need Taibbi’s vivid imagery. We certainly do need the systemic critique his work encapsulates. None of the financial specialists come anywhere close to that. So what should we do to fathom the crisis and its possible solutions? The trick is to triangulate our daily media consumption and give ourselves a crash course in financial market literacy. The day-to-day coverage of conventional media won’t do it for us.
That would involve using multiple sources. Hypothetically, they could include the Telegraph’s Ambrose Evans-Pritchard, the Guardian’s Seumas Milne alongside Russia Today’s the Keiser Report and the Baseline Scenario by ex-IMF chief economist Simon Johnson. There are plenty of others. People could turn off their radio and TV news and turn instead to websites such as the New Economic Foundation and Positive Money. They might also read books by the likes of Ha-Joon Chang and watch documentaries such as Client 9 and Inside Job.
The prize for finding workable solutions would be to wrestle back unaccountable power from the hands of banks and finance. We would also relegate financial market stories back to the business pages and specialist wire services, where they belong.
• Follow Comment is free on Twitter @commentisfree
If you’re prone to stress, you could be excused for tuning out the news. Top-of-the-hour radio bulletins and screaming newspaper headlines warn of a eurozone tearing itself apart with apocalyptic consequences all round. Whatever fixes politicians and technocrats come up with, financial markets seem to dismiss them within hours and move to their next victims. Our only option, the Economist intones, is a eurozone superstate or currency collapse. Not exactly the thing to calm the nerves.
Friday morning’s news was typical. The Daily Telegraph talked of the IMF confronting Germany ahead of a «critical summit» for an «embattled» chancellor, a move the paper said was timed to tip debate away from Angela Merkel. The Guardian had the Italian prime minister, Mario Monti, outlining «a potential death spiral» that threatened Europe’s political and economic future. The Daily Mail reported euros tumbling and world stock markets being hammered in Thursday trading, one of 2012’s bleakest days for financial markets. As fear mounted, it said, Spain was expected to be «the next domino to fall». And that’s before you even get to Moody’s downgrade of British banks, which the Telegraph says will «hit families».
The reports are typical of the doom-laden language our media use for financial stories. The fear they fuel does nothing for our fundamental understanding of what’s happening or what to do. They grossly simplify the story and misrepresent reality.
Little of the day-to-day coverage weaves in vital context on the origins of the crisis, the question of where all this debt came from and how it was created. It ignores our governors’ total surrender of power to markets, a simple question of under-regulation in the misplaced belief that rampant speculative trading has anything to do with rational pricing. It fails to reflect fairly what should be the shared responsibilities of reckless borrowers with those of equally reckless lenders and their shareholders. It presents us with nothing but the equally stark remedies of austerity on the one hand, or more debt on the other.
So why is it our media can’t get beyond metaphors of mayhem, or lay out anything more than two versions of deeply unpalatable?
The complexity of finance makes simplification attractive to reporters and to us, their audience. It’s too taxing to get into the detail, a level of mental laziness we allow ourselves at huge cost. Journalists’ lack of professional curiosity leaves the vast majority of us poorer, literally so.
To understand the media problem, we must differentiate two types of reporters. The first is the specialists, people with financial news agencies such as Thomson Reuters or Bloomberg, on bespoke business publications or newspaper business and finance pages. Their output feeds the generalists, who fold it into broader political stories, meaning the two groups are separate yet intertwined.
That makes the specialists a major source of the problem, for all their anonymity. Yet theirs is a tough job, something I say from experience having been a markets reporter for Reuters in the late 1990s into 2000. My time on gold and then the FTSE spanned the Asian financial crisis, the LTCM hedge fund meltdown and the dotcom boom and bust.
All carried elements of the same problems of market and banking mis-regulation playing out in today’s wider crisis.
Identifying those problems as a day-to-day reporter, never mind folding them into news stories as context, was way beyond me at the time. I had too little knowledge of their significance and lacked the time or professional incentive to learn more. My basic task was to report on the trading day’s price moves and quote a few traders or analysts as to the possible causes. It wasn’t to dig much beyond that, which is no great wonder.
The major clients of specialist financial news outlets are the industry itself, with media clients coming a distant second. It would be obvious commercial suicide for the news agencies to urge reporters to root out systemic problems or point fingers at clients. This is the specialists’ major flaw, the embarrassing reality no one likes to admit. With specialists so hamstrung, no wonder the generalists do such a bad job. Such arguments make hard reading for journalists – we like to think we’re the good guys.
Those constraints don’t bother Matt Taibbi, a Rolling Stone columnist and one of the most incisive writers on the global financial crisis. It was he who coined the «vampire squid» label for Goldman Sachs, a term that certainly wouldn’t have got past Reuters editors. His magazine has no worries about financial clients and runs stories at a length that allows complexity and supports research.
Maybe we don’t need Taibbi’s vivid imagery. We certainly do need the systemic critique his work encapsulates. None of the financial specialists come anywhere close to that. So what should we do to fathom the crisis and its possible solutions? The trick is to triangulate our daily media consumption and give ourselves a crash course in financial market literacy. The day-to-day coverage of conventional media won’t do it for us.
That would involve using multiple sources. Hypothetically, they could include the Telegraph’s Ambrose Evans-Pritchard, the Guardian’s Seumas Milne alongside Russia Today’s the Keiser Report and the Baseline Scenario by ex-IMF chief economist Simon Johnson. There are plenty of others. People could turn off their radio and TV news and turn instead to websites such as the New Economic Foundation and Positive Money. They might also read books by the likes of Ha-Joon Chang and watch documentaries such as Client 9 and Inside Job.
The prize for finding workable solutions would be to wrestle back unaccountable power from the hands of banks and finance. We would also relegate financial market stories back to the business pages and specialist wire services, where they belong.
• Follow Comment is free on Twitter @commentisfree
