Media: Journalism and Crisis B
The financial crisis of 2007 was a major development, which affected large numbers of individual and institutional investors. After the emergence of this crisis, scholars and citizens began to search for the reasons for the development of this event. The media was also questioned because it had not warned the public concerning the imminent crisis. Journalists claimed that they were not aware of the event. However, there are evidences to suggest that the media was aware of the event, but it failed to alert people concerning this event.
Journalists, traditionally, are expected to show objectivity. However, in many cases, they may fail to exhibit objectivity in their analysis. In this context, it is important to define objectivity, as it is the principal goal of an ideal journalist. Objectivity can be defined as the performance of the journalist based on truth (Boudana 2011, p. 385).
Further, it is important that the journalist should be able to defend empirically his or her argument or report. At the same time, one category of scholars would argue that objectivity in journalism is not achievable. The reason for their inability to stick to the principle of objectivity is the fact that they fail to defend their arguments or performance based on empirical evidence. Consequently, journalists who fail to give strong evidence for their arguments fail to respect the principle of objectivity. The journalists should understand the meaning and scope of the term “objectivity” (Boudana 2011, p. 385).
Journalism has been defined as “professional ideology”, as journalists need to exhibit professionalism while reporting and discussing various issues (Deuze 2005, p. 443). They also provide service to the society, as their reports have positive or negative impact on the community. The sociocultural developments including multiculturalism and new media can affect professionalism of journalists. At the same time, they are expected to show objectivity. Journalists, who attempt to achieve the ideal of objectivity, tend to remain detached from the news material. However, some scholars suggest that journalists who are detached from their subjects are not able to do justice to their work, as they may miss a few important perspectives (Deuze 2005, p. 448). At the same time, it is suggested that journalists should enjoy autonomy and freedom so that they are able to express their views without fear or favour. Restrictions imposed on journalists by the media houses can be counter-productive, as journalists are not able to present an objective analysis of the news item. At the same time, newspapers and magazines owned by corporate houses are not likely to represent objectivity, as journalists do not enjoy freedom to express their views (Deuze 2005, p. 448).
The 2007 financial crisis was a major event that affected the U.S. and other major economies. Interestingly, the media played a passive role in alerting the investors concerning the impending crisis. On the contrary, the CNBC attempted to popularize financial investment, thereby giving the confidence to the ordinary investor to dream of earning millions by trading in the stock market. The print media had an opportunity to alert the investor concerning the imminent crisis. However, the newspapers such as The Wall Street Journal (WSJ) and the New York Times decided to remain silent on this issue. Consequently, the “watch dogs” would not sound the gullible investor (Usher 2014).
The newspapers indulged in access reporting, by giving information while at the same time avoiding accountability journalism (Usher 2014, p. 1439). However, in 2000 and 2004, a few reports indicated that the subprime crisis was emerging. The media houses have been linked, traditionally, to the business houses. In 2007, the media company News Corp bought WSJ, which suffered from financial losses. This development affected the ability of the WSJ journalists to develop news concerning the relationship between subprime lending and the financial crisis (Usher 2014, p. 1439).
News reporting and analysis involves “frame-building process” (Falasca 2014, p. 1). It also involves the interaction between the political forces and the media. The political force, in this context, is the government. Interestingly, during the financial crisis, the government controlled the frame-building process, as the journalists obtained information from the government and reported the same in their newspapers. Consequently, journalists could not maintain their independence (Falasca 2014, p. 1). The political actors dominate the frame-building process by providing information to the journalists. In the process, journalists do not collect information from other sources. Consequently, they represent the views of the government actors. Unforeseen events are likely to compel the journalists to seek information from various sources apart from the government. Interestingly, contrary to this expectation during the financial crisis, the newspapers depended mostly on the information provided by the government authorities. At the same time, journalists in Sweden explored the views of citizens and experts concerning the crisis (Falasca 2014, p. 11). As the journalists failed to find new sources of information, they could not maintain objectivity in their reporting, and they lacked professionalism, as they depended largely on the information provided by the government authorities (Falasca 2014, p. 11).
It becomes important to analyse the source of information that initiated the news coverage. Before 2008, the banks in Europe acted as the dominant agencies that initiated the news coverage, as they gave information to the journalists concerning the event. However, after 2008, banks played less dominating role in initiating news coverage. The journalists also claimed to have initiated the news coverage (Picard et al 2014, p. 13). In Britain, majority of the cases originated from the journalists. In Germany, however, most of the news originated from banks. The public relation officer of banks needed to defend the decisions of the banks, and this explains the reason for involvement of banks in creating news concerning the crisis (Picard et al 2014, p. 14).
Before the emergence of the crisis, the banks followed the policy of inviting journalists for lunches and conferences. They invited journalists belonging to newspapers such as Financial Times Deutschland. However, the financial experts from organizations such as BNP Paribas did not discuss concerning the imminent crisis. The journalists claimed that they obtained information regarding the crisis in 2007. The German journalists respected the views of the bankers, and they did not question them. On the other hand, France gave importance to the views of politicians (Picard et al 2014, pp. 15-16).
Evan Davis was the host of the BBC Radio’s Today programme. He suggested that the journalists committed an error by not informing the audience concerning the emergence of a financial crisis. As humans, journalists have committed this error. Many journalists were not trained in financial reporting. They did not have the experience of a major crisis, and this is mostly applicable to young reporters. Financial reporters lacked objectivity. Journalists are also prone to present either positive or negative picture of a story, and they fail to present a balanced picture. It is important to study various facets of an event. In the case of the financial crisis, a few journalists preferred to ignore the imminent crisis. Consequently, journalists have caused immense misery to large numbers of small investors who lack accurate information regarding the stock market (Haddon 2009).
The journalists are expected to monitor the behaviour of the corporate houses. However, they are influenced by the opinion of the business leaders. Consequently, journalists are not able to discern limitations of the business houses. The government, at the same time, has bailed large numbers of businesses based on the argument that their collapse would affect the citizens of the country. In the process, the government spends billions of dollars of the taxpayers’ money (Watson 2009).
Journalists lack a detached perspective while dealing with large businesses. They are not disturbed by the fact that large businesses gave millions of dollars in bonus to their chief executives. At the same time, they are impressed by the decisions of the corporate houses that spend billions of dollars on production and unproductive activities. However, journalists fail to note the impact of such avoidable expenditure on the public. Large numbers of journalists maintain a cordial relationship with large enterprises. Consequently, they fail to question them (Watson 2009).
Attempts have been made to analyse the failure of the journalists to report regarding the imminent financial crisis. Dean Starkman studied 700 newspaper articles published between 2000 and 2007, and he did not find any evidence regarding the awareness in the media concerning this crisis. Consequently, the public was not informed regarding this development (Manning 2010, p. 4).
The journalists claim that they were affected by the political and economic power of the corporate houses. They also claim that business establishments used complex financial instruments, and journalists could not understand their actual implications. However, it is apparent there were clear signals concerning the crisis. After the 2001 Enron scandal, the U.S. financial institutions such as J.P. Morgan Chase and the City group were penalized for their risky financial behaviour. In 2003, it was found that the company HBOS in UK faced a major credit-related crisis. This development was also discussed in the UK parliament. In 2006, financial experts, brokers, and bankers showed awareness regarding the crisis. It is also revealed that the media joined the government and the business houses to ignore warning signals, thereby affecting millions of investors in the countries such as U.S. and UK (Manning 2010, p. 5).
It is apparent that journalists did not alert the public concerning the financial crisis, even though they were aware of the suspicious dealings of the financial institution such as Lehman Brothers. The duty of the business press is to inform the reader concerning the threat to their savings and investments. The business journalists are the only link between the businesses, regulators and the ordinary investors (Starkman 2009). However, before 2008, the business press failed to perform this duty. It failed to analyse the facts relating to the imminent financial problems that affected the U.S., UK, and other economies (Starkman 2009).
The failure of the print media to predict the crisis has resulted in the emergence of the digital media, which can be used by the readers to spread the message in their community. Social media such as Twitter are emerging as powerful sources of news. The news agencies allow social media to carry the titles of the news item published by them (Sun et al 2010, p. 51). It is suggested that print media failed to warn people regarding the subprime crisis because it depended on the revenues from the real estate-related advertisement. The fall of the housing market would potentially harm the media houses (Flynn 2012, p. 59).
The media did not represent the views of diverse categories of people. Instead, it represented the views of the government and the dominant corporate class. It attempted to defend government policies and the corporate sector from public criticism. However, there were instances when newspapers carried news relating the imminent crisis. All the same, the media did not carry large numbers of articles showing the pessimistic state of the economy. The government could use the media to form the public opinion concerning its policies (Mercille 2015, p. 2).
The media, after the emergence of the crisis, attempted to defend its inaction by stating that the crisis was an “accident”. It is suggested that it is not possible to blame any individual or factor for this development. The accident was the result of the limitations in the financial system. The suggestion is that the media cannot be blamed for the sudden explosion of the news concerning a global financial crisis (Mercille 2012, p. 4).
The political parties need a considerable amount of money to fight elections and to carry out propaganda regarding their achievements. Consequently, they depend on the financial support of the corporate houses. The elite groups attempted to control the media, which could not speak regarding the financial crisis, which potentially affected the integrity of the business organizations (Engelen et al 2011, p. 243).
The media performs the function of gatekeeping, as it selects the news, deliberates on it, and publicizes the news. Gatekeeping process leads to the selection of some news while ignoring a few others. The media does not claim to represent actual events. In many cases, it can manipulate the original events to suit its agenda. The media is influenced by ideological, organizational, and individual factors. It is influenced by its own ideology and the ideology of the dominant class including the government. Media also represents the views of the majority. In the case of financial crisis, the media did not consider the events related to the crisis as important. Consequently, it ignored the news that would have alerted the investors regarding the gloomy economic situation (Stromback et al 2012, p. 160).
Media has a considerable impact on stock market investors. For example, the recommendations of financial experts led to rise and fall of the stock prices without any justifiable reason. At the same time, the experts failed to predict the crisis. For example, Bill Gross had achieved considerable fame for his predictions concerning the financial markets. However, he could not alert the investors concerning the crisis. This event also affected the popularity of CNBC, which claimed to educate ordinary investors concerning the art of the investment. The experts who regularly appeared in the CNBC programmes did not warn the investor concerning the imminent crisis. It showed that media had highlighted individuals who possessed money. The media could not recognize the limitations of such experts. It also did not depend on actual experts, the academicians, who could predict accurately regarding a crisis (Zandi et al 2009, p. 96).
According to a study, the media has covered the government’s views regarding the financial crisis while ignoring the views of the citizens who were mainly affected by this development (Pew Research Center 2009). The Obama administration, after the emergence of the crisis, introduced various measures. The media highlighted those measures, and ignored the tribulation of the citizens. For example, the media gave importance to the debate regarding the stimulus package and support given to banking institutions even though they committed blunders by giving unsecured loans (Pew Research Center 2009).
The reporters followed a cautious policy while reporting the economic problems affecting the companies. For example, it was reported that companies faced major economic challenges. At the same time, reporters did not state that companies had reached the stage of bankruptcy. Such reports would affect the reputation of the companies. However, they had the potential to protect the cause of ordinary investors. The financial reporters lacked objectivity, as they did not represent the reality. They did not use a critical approach while analysing the economic trends affecting business organisations (Dickinson 2010, pp. 2-3).
Ordinary investors have blamed the media for its inability to cover the crisis properly and inform them regarding the crisis. The journalists, however, defended themselves when they argued that their duty was to report and not to analyse the event (Greenslade 2011). It is suggested that financial journalists are trained to give a positive view of the financial situation. They, in actuality, are criticized for expressing pessimistic view regarding the present economic situation. They need to deal with pressures from the business organizations. At the same time, scholars such as Nouriel Roubini have addressed the serious nature of recession that is likely to affect the world economy. The media needs to give platform to such scholars to alert ordinary citizens concerning problems that would affect the stock market (Carr 2009).
The media addressed its audience – the investors. Journalists, consequently, did not address the concerns of the citizens. The crisis also shows that citizens need to improve their financial literacy, as they cannot afford to depend on business journalists. In Europe, the corporate houses controlled the media. The journalists, consequently, did not enjoy the autonomy and freedom, and they could not do justice to their profession (Ojha 2010).
Politicians have compelled the media to show restraint during the times of crisis. For example, the news story regarding Northern Rock bank led to panic reactions from the people who went to the bank demanding their money. The media was blamed for creating a crisis, which affected large numbers of corporate houses. However, journalists have refuted this claim (Moore 2009).
The media only reacted to the event. It did not show interest to analyse the issue of the financial crisis. For example, newspapers did not discuss, in advance, regarding the crisis affecting the Lehman Brothers. The media reflected on the events, and did not attempt to predict such developments (Dreijere 2013, p. 8).
The media has attempted to protect the hegemony, which was not challenged particularly before 2008. The media has mostly depended on the government and the business enterprises to obtain information regarding important events. Consequently, business journalists could not exhibit professional ideology, and they lacked objectivity while analyzing the developments, which had the potential to emerge as major crises.
The media has attempted to protect the hegemony, which was not challenged particularly before 2008. The media has mostly depended on the government and the business enterprises to obtain information regarding important events. Consequently, the business journalists could not exhibit professional ideology, and they lacked objectivity while analyzing the developments, which had the potential to emerge as major crises.
The business press was expected to provide information to the citizens concerning the imminent financial crisis, even though journalists had access to considerable empirical data related to this development. Journalists need to exhibit professionalism while discharging their duty. They are also expected to provide an objective analysis of various events. However, journalists were constrained by various factors. First, politicians used the media to defend their policies leading to the financial crisis. Second, many newspapers were bought by corporate houses. Consequently, media could not oppose the business organisations. It is also argued that revelation of the crisis would have affected large numbers of banks. At the same time, scholars have showed that the media did not analyse the business news to alert the ordinary investor. It appears that institutional investors comprised a major audience of the media. It ignored the interest of ordinary investors for the sake of corporate houses. Even after 2008, the government and the financial institutions played a dominating role in publishing news related to the crisis.
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