Ashlee Willis

December 9, 2008

Ethics in Journalism Capstone

Patti Newberry

Crisis Mode: the Economic Recession and how it was Covered by the Press

As the stock market crashed, the housing bubbled burst and gas prices rose

journalists descended upon the American economic crisis eager to tell a story. Equipped

with analysts and expert opinions, reporters told the public just how bad it was and just

how bad it was going to get. Reporters who once quipped about cold weather light-

heartedly on air were suddenly instead talking about the latest market drop or the new

price in gas. The economy slowly took over the news landscape.

As the story became larger coverage became more problematic. Business

reporting had once been a small part of newscasts and had been quickly thrown to the

front burner. The nature of media coverage, the type of language used by reporters and a

lack of expertise on economic issues paired with confusion of the American public led to

reporting that can be characterized as frenzied or, possibly, reckless. This type of

reporting was especially evident on 24-hour cable news stations, who had more time to

fill with analysis of the economic predicament.

The nature of reporting on the crisis has only fueled the fire that is destroying the

American economy. Rather than always finding rational coverage of the situation, the

public often found journalists in crisis mode. Because of the market’s reliance on

consumer confidence, this type of reporting takes a toll. While journalists, of course,
don’t have an obligation to keep the public at bay concerning the economy, they

shouldn’t aim to agitate them further through their reporting.

When the economic crisis began to hit 24 hour news stations often turned to

anchors they already had rather than recruiting new experts. While some of these anchors

had business or market experience, they would be dealing with a new audience filled with

the general public who were simply terrified about what was happening to their money.

Rather than changing the way they reported, 24-hour cable stations typically kept with

their traditions of using anchors that have more personality than expertise and leaning

upon theatrics to fill time slots.

One example of an anchor turned expert is CNN’s Chief Business Correspondent

Ali Velshi. Velshi graduated from Queens University in Canada with a degree in religion,

not business. While CNN claims Velshi to be a “veteran of financial news,” when he has

in the past covered everything from hurricanes to elections. It’s not entirely clear why he

was tapped to become “chief business correspondent” over colleagues that have degrees

in business, such as anchor Gerri Willis.

Velshi is less theatrical than most of his counterparts but is definitely charming.

He breaks economic issues down for viewers, which isn’t necessarily a bad thing. The

only ethical question is what CNN is saying by having a chief correspondent who didn’t

specialize in the field until the moment that it became more predominant. CNN certainly

had qualified anchors to fill the spot but instead leaned upon Velshi who, while somewhat

versed on the issue, is no expert.

Fox News relies heavily on Neil Cavuto for their business reporting. Cavuto is

known for his blunt , brash statements and reliance on celebrity interviews as much as for
his business reporting. On Nov. 22, Cavuto screamed his way through an interview with

celebrity Ben Stein on the bailout of the financial industry. Cavuto began the segment by

stating that the US had spent $2 trillion to fix the economic crisis, a number that was

proven exaggerated at best and blatantly false at worst. When Stein corrected the anchor

a shouting match broke out over the rest of the five minute segment.

Stein isn’t the only celebrity Cavuto has brought on his business show. He has

interviewed reality star Omarosa Manigault-Stallworth from The Apprentice to discuss

the Obama presidency and actor Kelsey Grammer to talk about Grammer’s prediction of

the economic crisis. Cavuto rarely invites guests that are scholars in business or CEOs of

major corporations. His show relies upon personality and the ability to engage in debate

rather than rational conversation.

By engaging in shouting matches with guests and inviting commentary from

celebrities, Cavuto sensationalizes the story rather than adding meaningful information.

This type of debate only serves as a juicy stand-in for lucid, logical discussions. Viewers

who tune into Cavuto’s show are certainly entertained by watching the host banter with

guests, but they come away with little sense enlightenment. In fact, by embellishing facts

in order to make a point, such as he did in his interview with Stein, Cavuto only makes

matters worse rather than informing the public.

MSNBC has been banking on the success of Mad Money host Jim Cramer for

much of their economic coverage. His show is part market news and part theatrics. The

host becomes riled easily by good or bad news. When Fannie Mae and Freddie Mac

collapsed, Cramer went on NBC’s Today Show and advised investors to take their money

out of the stock market. When Bear Sterns started to collapse in August 2007, Cramer
went on a rampage, blaming Federal Reserve Chairman Ben Bernanke for the economic

landscape.

While Cramer certainly has a track record for his market knowledge and has a lot

of viable opinions, they are often overshadowed by his emotional deliveries and drastic

conclusions. Telling investors to pull their money out of the stock market was not only

extreme, but also irresponsible. While Cramer is not really a journalist, he must still be

held to the same ethical standards as any other host that is giving information and opinion

that could influence viewers.

The complexities of the economic crisis are difficult for the average news

consumer to comprehend and are typically dry, so anchors with big personalities, such as

Velshi, Cavuto and Cramer are typically brought in to tell the story in an interesting way.

Unlike most major news stories, its not one major event that has set off the crisis but

rather a series of behaviors, decisions and policies. This element to the story makes it

infinitely harder for the public to understand and even harder for journalists to tell.

Regional President for US Bancorp Carey Curtis feels that perhaps journalists shouldn’t

be attempting to elucidate what happened with the economic meltdown.

“Part of it is you don’t want journalists trying to explain something 90 percent of

the public doesn’t understand,” Curtis said.

Curtis takes with the nature of reporting has been the oversimplification of the

entirety of economic issues. He states that the current crisis is the result of a

“combination of interest rates, qualifications [for loans] that went down, products [that]

became more aggressive and government programs that became more lax,” plus a

willingness for borrowers to overextend their budget. Coverage of the crisis has often
simply highlighted bad lending practices rather than a blend of different elements

forming what Curtis refers to as “the perfect storm.”

While it seemed that the economy fell overnight, it takes years to create such

conditions. Often missing from coverage is any historical context into the programs and

market demands that produced the housing bubble and, subsequently, caused it to burst.

What is rarely discussed is the specifics of how the sub-prime market came into place and

how it was a large part of the current crisis.

Another aspect Curtis claims the media misconstrued was the amount of large,

commercial banks that were responsible for the sub-prime mortgage crisis. Only up to 10

percent of the sub-prime market consists of large banks while the majority were

dominated by smaller, fringe mortgage companies. These companies dissolved when the

housing bubble burst, leaving their bad loans to Fannie Mae and Freddie Mac.

Curtis also perceives that financial institutions have been given some blows in the

reporting of the crisis, perhaps beyond what they deserved. He sees much of the

coverage to be oversimplified, lumping all banks together despite the reputation and

ethics of individual institutions. He senses that this may be a larger bias against large

corporations, as much as it is a reaction to what is occurring in the financial industry.

“I do think the press overall would be more likely to write a story more critical of

big business,” Curtis said.

Some of the disconnect between the economy and the news could be blamed on

the difference on how the two are understood. Economics depends on some knowledge

of different theories, themes and models to be understood in a meaningful way. The

news, on the other hand, tends to lean upon stories that are episodic in nature, stories that
consist of events that begin and end rather than those that are continuous, and tend to

report in this context. When the economy is reported on, typically it because there are

quarterly reports being released, gains or losses in the stock market or significant job loss.

According to the Project for Excellence in Journalism (PEJ), one issue with

coverage of an economic event is the lag between the happening and the publishing of the

report that details the incident. Typically, a full description of any economic rise or gain

takes a quarter to produce. These intervals paired with the attention deficiency of a 24-

hour news cycle results in economic stories that either lack essential details that aren’t

available at the time of the event or stories that get less attention because the event has

passed.

Different mediums cover different aspects of the economic story with more or less

prominence. According to PEJ, television typically gravitates to stories on rising gas

prices, especially local outlets. Stories about banking or the housing market tend to get

more attention in print. Stories that lack the ability to be spun politically have a tendency

to be ignored by cable news and their talk radio counter parts. Stories on the economy,

overall, get less television air time. Since mediums cover chunks of the story with

eminence and merely skimming the surface on other pieces, consumers have difficulty

grasping the story without seeking multiple sources.

The language used by journalists has had a large part in inciting viewers and

readers into crisis mode. Business and economic reporting has been notorious in the past

for dry, borderline dull language due to its typical reliance on experts. Insider’s jargon

can drive a typical story because in normal times the average viewer doesn’t tune into this

type of reporting. These subjects are usually only interesting businesspeople or financial
types who rely on the information for their jobs. However, when the economy is in crisis,

more average citizens are concerned about their own financial situation enough to tune

into this type of reporting and that’s when the language begins to change.

CNN’s Velshi said on a Dec. 5 broadcast that the economy had “fallen off a cliff.”

The same day, Fox News anchor Chris Wallace stated that America was “hemorrhaging

jobs.” Cramer went so far as to call the economic situation “the Great Depression, the

sequel” in an interview with NBC host Brian Williams. By using such drastic and

embellished language, the journalists perpetuate the emotion of fear, causing an erosion

in consumer confidence that doesn’t help the situation.

Beyond language, there are also news topics that naturally encourage anxiety by

their mere mention. While it is certainly hard to ignore institutions that are struggling

and a flailing stock market, reporters have to tread upon the subjects lightly to reduce the

potential hysteria their mentioning might create.

One topic that produces alarm with its mere mention is FDIC insurance limits.

While it is certainly responsible to let consumers know what is protected and what isn’t,

constant discussion of limits continuously can lead news consumers to infer that there is a

reasonable expectation for the insurance to be necessary in the near future. What was

never discussed was often other means of insurance on money and that investments are

often insured by other institutions by the FDIC.

Another topic continually visited throughout the economic meltdown was the

potential of bank failures. The failures or near-failures of a number of large investment

houses, including Lehman Brothers and Goldman Sachs, and the sales of many retail

banks, already gave due cause to put the public on edge. By re-enforcing the idea that
banks could fail, reports can push the public to remove deposit dollars from banks and,

even more frightening, encourages banks to not lend to each other.

Television reporting, especially 24 hour stations, rely a great deal on theatrics to

draw in viewers and to keep reporting from being monotonous. This type of coverage

typically does very well in the political arena where often issues are arbitrary and

politicians rely entirely on their own talking points. However, with a story such as an

economy downfall a dependence on this form of reporting falls short of what’s expected

from a journalist. Exaggeration, drastic metaphors and doomsday language does more

harm than good. While this type of language draws viewers into the story, it leaves them

with a distorted view of the reality of the economic situation.

The fatal flaw in the coverage of the economic crisis was that journalists allowed

themselves to become openly emotional about the story. While few went so far as to look

hopeless on air, when discussing the crisis most anchors had a difficult time not showing

frustration or contempt for the situation. While it is certainly understandable that

journalists would have some emotion concerning the crisis, after all journalists have

401ks and mortgages just like any one else, it is important that reporters understand the

potential effects of their outpourings.

An economic crisis is not the typical story that journalists, especially television

reporters, like to cover. It doesn’t fit well within the time and space constraints that

typically drive journalism and is a complex issue consisting of multiple layers. What is

evident from the reporting of the current disaster is the unwillingness of 24-hour news

stations to change their methods or reporting, or even their prominent anchors, to better

tell the story. This unwillingness is not without unfortunate consequences.

 Works Cited

“America’s Recession Deepens; Hillary’s Replacement?” The Situation Room. Host

Wolf Blitzer. CNN. 5 Dec. 2008.

“Another Dow Drop.” Today Show. Host Meredith Viera. NBC. 6 Oct. 2008.

“Bernanke, Wake Up.” Stop Trading. Host Jim Cramer. CNBC. 3 Aug. 2007

Curtis, Carey. Personal interview. 19 Nov. 2008.

“The Great Depression 2.0.” NBC Nightly News. Host Brian Williams. NBC. 19 Sept.

2008

“Stein and Cavuto on Bailout.” Cavuto on Business. Host Neil Cavuto. Fox News. 22

Nov. 2008.

“Tracking the Economic Slowdown.” The Project for Excellence in Journalism. 2008

Aug. 18. Pew Research Center. 2008 Dec. 1. <http://www.journalism.org/

node/12377>

“What to Do About the Economy?” Fox Special Report with Brit Hume. Host Chris

Wallace. Fox News. 5 Dec. 2008.