FACULTY POINT OF VIEW: NEWS MEDIA AND THE FINANCIAL CRISIS
What is the role of the media in the financial crisis? How can communication studies contribute to the understanding of the crisis and the social responses to the problem? The media, often called the “fourth estate”, are powerful social institutions due to their ability to perform certain key social functions such as disseminating information, setting the public agenda and framing public discourse. The media therefore play a crucial role in “representing” economic crises and shaping public opinion about the issues surrounding them.
Communication studies dealing with the global financial crisis of 2008 and other local or regional crises have demonstrated how informational, media and cultural processes participate in defining, representing, understanding and even triggering or sustaining a crisis. In other words, a severe global or local economic crisis cannot be understood only through financial parameters; one should also investigate the role of media, and their interplay with financial, political and cultural factors.
In the last two years there has been a growing interest in academic research on the role of the media in the global financial crisis. Academic conferences and scholarly articles on both sides of the Atlantic have raised questions regarding the way the media reported or failed to report the crisis. Most analysts focus their critique on what they call “media failure” “media myopia” or “media blindness” in covering the crisis. Journalists, especially in the USA, have been criticized for their ever-rosy forecasts before the crisis and the negative rhetoric during the crisis which, many believe, contributed to creating public panic and worsening the problem.
Similar grievances have been heard across Europe as the business media came under siege from commentators, professional groups and the public at large.The case of British bank Northern Rock is an example of how a particular institution can collapse following the mass hysteria created by a news report, in this case one crafted by a well known BBC business editor. This raises questions regarding the tension between the much valued principle of press freedom and the principle of social responsibility and accountability of the media which is equally important.
The international conference on Covering the Crisis, organized in Brussels by the European Journalism Centre, focused on the world of financial journalism and generated a fruitful debate over these issues. Key questions asked referred to the complexity of economic issues and the lack of proper training of financial reporters, the challenge of “sources” and to what extent financial editors have accepted the market logic as the only logic:
“With regard to sourcing, most speakers at Covering the Crisis accepted that business journalists are stuck in an unfair competition. Journalists all normally stumble upon the barriers set up by public relations staff. PR staff aim to protect the interests of the companies they represent. The growing distance between the journalism industry, which is insufficiently funded, and public relations teams, often sophisticated and powerful lobby machines, is worsening the confrontation between the interests of the two. Who win will this battle? Only the future will tell.” (Romero, 2009)
But it is not only the public relations industry which puts pressures or constraints on news content. Media organizations can also be influenced by advertiser pressure, especially those whose sole source of revenue is advertising, or when competition is heavy (Picard, 2004; McManus, 1994). There is extensive research on how advertisers influence media content. In a reflective manner, an article in the Irish Times acknowledges part of the problem in Ireland, a country which has been severely hit by the crisis:
“Perhaps, in spite of the proliferation of journalists engaged in political coverage, the news media did not sufficiently grasp the nexus that ran between political corruption, ideological arrogance, regulatory abdication and greed – all of which created the conditions for the development of the present crisis... Perhaps some of the news media organisations, riding high with buoyant revenues and plentiful advertising, also became complacent and preferred not to see the stormy waters ahead.”
In a book titled Bad News: How America's Business Press Missed the Story of the Century, to be published in March 2011, the editor Anya Schiffrin, who is the director of the media and communications program at Columbia University’s School of International and Public Affairs, and a team of leading journalists and scholars provide the first systematic attempt to analyze this issue, shedding light on the role of the business press in the current crisis.
Greek media, amidst the most severe post World War II financial crisis in the country, struggling over declining advertising revenues and heavy job losses, have developed different frames of analysis built mainly around the dichotomy of a “pro-memorandum” and an “anti-memorandum” position, supporting or criticizing the IMF-EU financial support mechanism. The majority of the Greek press is supportive of the government’s efforts because there is a much awaited social reform component in the new policies. However, austerity measures, rising unemployment, and the lack of a convincing national plan for economic growth and recovery have been heavily criticized by all media, regardless of their political affiliation.
Very often Greek news media are blamed by professional groups for creating a bleak image for the country and a negative mood which deepens the recession. Television and radio newscasts through commentary and choice of music have used fear appeals and highly pessimistic modes of reporting. Of course the financial, social and political parameters of the Greek crisis are very different from those of countries such as the U.S., Iceland or Ireland. There are certainly some similarities between the Greek and international media response but there are also considerable differences due to country-specific variables regarding the structure of the media industry, politics and culture which must be investigated before valid conclusions are drawn about the media’s role in the crisis.
Thorough research of the role of the media in the crisis should take into account the interplay of structural, technological, professional and organizational, socio-political and financial parameters in shaping dominant media frames. First, regarding the structural aspect, one should consider issues of ownership and the relationship between the media and the state. Political clientelism has been shown to have a particular effect on Greek news media and journalistic practices. (Hallin & Papathanassopoulos, 2002)
Second, on the technological front, it is important to know that media convergence and advances in new media technologies have generated a new informational environment and a financial blogosphere which have accelerated the 24/7 business news cycle creating a discrepancy between “real time” and “internet time” and a “real time myopia” in the business world (Hope, 2010). In addition to the time-related impact of high-speed financial networks on financial journalism, changes in the use of language have drastically altered the world of financial reporting.
In a forthcoming book titled Front Page Economics, the authors examine the coverage of two major economic crashes—in 1929 and 1987—in order to systematically analyze the way newspapers present crises. The book demonstrates how changes in the language and the vocabulary used to describe each crisis led to the development of a new economic language and caused deep alterations in business journalism. Comparing media coverage in 1987 and 2008 crisis is complicated by the fact that the digital media did not exist in 1987 but in 2008 constitute one of the primary media through which crisis was covered.
Last but not least, in the context of this unprecedented global connectivity of financial activities and media coverage, when it comes to smaller, peripheral or developing economies one should examine the role of international media frames and their impact on local economies and the public image of a country, an issue discussed in Greek media with regard to German or other European media frames “representing” the Greek financial crisis. A recent international conference held in Athens examined how the European press covered the Greek financial crisis and how certain tabloids and periodicals used extremely negative and in some cases “humiliating” language and name calling in their reporting.
The complexity of the issue presents a real challenge for media researchers in their attempt to understand, interpret or “deconstruct” media representations of a world in a constant flux and transformation. The call to “turn crisis into an opportunity” has become a cliché expression lately used by politicians and economists alike. For the academic community, let’s call it “a challenge” to debate, generate new ideas, and propose alternative frames as a contribution to the search for viable solutions.
Argyro Kefala, Ph.D., Professor of Communication and Program Coordinator- MA in Communication
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REFERENCES
Brady C. (2010, March 6). Did the media fail to sound alarm bells before the financial crisis? The Irish Times. Retrieved from www.irishtimes.com
CBC News (2009, February 4). UK committee grills journalists over financial crisis reporting. Retrieved from http://www.cbc.ca/arts/media/story/2009/02/04/uk-banking-journalists.html
European Journalism Centre Conference (2009, September 7). Covering the Crisis.
Retrieved from http://www.coveringthecrisis.eu/
European Parliament, Greece (2010, November 18). International Conference, The Greek Financial Crisis and the European Media. Retrieved from
Hallin D. & Papathanassopoulos S. (2002) Political clientelism and the media: Southern Europe and Latin America in comparative perspective. Media, Culture & Society (24): 175-195
Hope, W. (2010). Time, communication, and financial collapse. International Journal of Communication 4(2010): 649-669
McManus, J.H. (1994). Market-driven journalism: Let the citizen beware. Thousand Oaks, CA: Sage
Picard, R.G, (2004). Commercialism and newspaper quality. Newspaper Research Journal 25 (1): 54-65
Romero Ch., (2009, November 16). Reporting the financial crisis; a media failure?
Retrieved from http://www.ejc.net/magazine/article/Reporting_the_financial_crisis_a_media_failure/
Schiffrin, A. (ed) (2011). Bad news: How America’s business press missed the story of the century. New York, NY: New Press
Suttles, G.D. & Jacobs M. (2011). Front page economics. Chicago, IL: Chicago University Press
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