By N.S. Palmer, Ph.D.
Did the news media fail to do their jobs in covering the real-estate bubble that led to our current economic crisis?
Yes and no. Journalists have different roles. In particular, they function sometimes as news reporters and sometimes as commentators. Ideally, those roles are strictly separated, though it’s impossible to separate them completely.
When journalists function as news reporters, their job is simply to report the facts. Their personal opinions, no matter how true or well-founded, have no place in news reporting. Facts, facts, facts. Period. On the other hand, when journalists function as commentators, they’re free to analyze the facts and give their opinions.
As news reporters covering the real-estate bubble, they might have investigated and thought more deeply about the issues. They might have tried to find facts and sources that would expose the flaws, deceptions, and delusions involved in risky real estate practices, shady investment packages, and unrealistic expectations about mortgage-backed securities. On the other hand, even reporters assigned to a particular “beat” must cover a tremendous number of stories. They might have some expertise in the area, but can’t really be experts on the subject of every story. They have to rely on their sources and their instincts. If all the usual “expert witnesses” say that a financial practice is fine, and if it’s backed up by a lot of arcane mathematical models that no non-specialist could understand, then what’s a reporter to do?
As commentators, journalists are free to say what they think instead of simply reciting facts and quoting sources. But they’re still non-specialists trying to make sense of some fairly complicated issues.
There are two other aspects of the situation that merit attention. First, markets are moved not merely by facts but also by feelings: “animal spirits,” as the economist John Maynard Keynes phrased it. When people are feeling optimistic, markets go up and everyone is happy. When people are feeling pessimistic, markets go down and everyone is gloomy. When the market is going up, reporters don’t want to be the ones to say that on the basis of the facts, it should be going down. That’s especially true if all or most of the “experts” contradict them.
Second, even if reporters write something that challenges conventional wisdom, their editors often won’t print it. In this era of giant news media conglomerates, you usually don’t get to be the editor of a major newspaper or media outlet by being a good, principled journalist: you usually get there by being a ruthless, unprincipled corporate politician. A reporter who writes stories that challenge conventional wisdom probably won’t get them printed and almost certainly will hurt his or her career. Even if the articles are printed, it’ll be on page B14 beneath the fold, just under a story about the city councilman who was arrested in a raid on a brothel.
For example, search The New York Times archive for stories in 2002-2003 questioning the “Iraqi WMDs” propaganda that Times reporter Judith Miller wrote for the front pages. You won’t find much, and what you do find is very tepidly worded when compared to the stark assertions contained in the pro-WMD articles.
Yes, I wish that more reporters would rock the boat, and I wish that more editors were principled and honest. But it’s easy for me to criticize: my career isn’t on the line. Of course, it was on the line when I was a beat reporter in Washington DC and I rocked the boat. That’s one reason why I’m no longer in that line of work.
Copyright 2008 by N.S. Palmer. May be reproduced as long as credit and URL (https://ashesblog.wordpress.com) are included.