Recent market tremors renew a challenge for the press
By Jon Allsop
Last week, market jitters rose up the news cycle, if not quite to the top of it. Three days after striking an apparent trade truce with China at the Group of 20 meeting in Buenos Aires, President Trump imperilled it when, last Tuesday, he tweeted that he is “a Tariff Man” on a mission to “MAKE AMERICA RICH AGAIN.” On Wednesday, markets were closed to mark the funeral of George H.W. Bush. When they reopened on Thursday, they fell. As the headline of Matt Phillips’s New York Times write-through noted, “Wall Street ignored signs of trouble for months. Now it sees risks everywhere.”
Since Trump took office, the news cycle has been consumed by a pervading sense of political crisis, bolstered by the rise of destabilizing populist forces worldwide. Market indicators in the US, by contrast, have consistently been strong. Financial coverage, accordingly, has taken something of a back seat. When it has come to the fore, it’s tracked more closely than usual with political developments. “The fact is that politics is driving the economy to an extent that is very atypical… probably to the greatest extent that we’ve seen in our investing lifetime,” one analyst said over the weekend.
In this context, recent jitters pose a challenge for financial journalism. Is market volatility an understandable reaction to a highly volatile president and global political climate? Or does it signal something more alarming about an underlying weakness in the economy? While there is little consensus among commentators, some experts have warned the market is overdue a big fall—skeptics worry that the US could enter a recession as soon as 2020. “In recent months, the anxiety that we could be in for a replay of 1929—or 1987, or 2000, or 2008—has become palpable not just for the Aspen set, but for any American with a 401(k),” the Times’s Alex Williams wrote yesterday.
As the 10-year anniversary of the 2008 crash passed in September, financial journalists looked back on why they didn’t see it coming. While myopia around the recklessness of big financial institutions was not uniquely a failure of journalism, the media as a whole was overly credulous and did not connect visible dots. This oversight continues to haunt those in the industry: as Howard R. Gold asked in a comprehensive reflection for CJR, “If business journalists missed critical parts of the story before the crisis hit and didn’t see the need for fundamental change in its wake, what are the odds they’ll spot the next crisis, before it comes?”
Even if those lessons still loom large, the current moment is not really analogous to 2008. And predicting the market is, legitimately, a highly fraught exercise for reporters. “Basically, the press can't win with the stock market,” Dean Starkman, the author of The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism, told me this morning in an email. “When there's a big drop, everyone wants to know why, and when it gives a reason, everyone criticizes because, as ‘everyone knows,’ markets go up and down—that's what they do—and no one really knows why from one day to the next.”
Nonetheless, warning signs are present, and news outlets could, by and large, do a better job of communicating them beyond their financial pages and shows—situating them in a broader context and language that the lay reader can understand. It would be regrettable, should a new crisis hit, for the average news consumer to assume everything was totally fine until the day it was not.
Below, more on coverage of the markets:
- A broader context: Also in the Times yesterday, Stephen Grocer and Karl Russell wrote that despite the stock market having wiped out its 2018 gains, the longer-term picture looks rosier. “Even after the current sell-off, for instance, the S&P 500 through Monday’s close was up more than 16 percent since President Trump’s inauguration and more than 23 percent since Election Day 2016,” they write.
- The economy, stupid: Late last week, Politico’s Nancy Cook reported that recent market volatility has caused concern at the White House, where advisers fear a recession could hammer Trump’s re-election prospects in 2020.
- “The bigger they come, the harder they fall”: In an October article for Entrepreneur, financial security expert Pamela Yellen wrote that warning signs were already flashing. “The history of market crashes provides regular fodder for financial journalists, reminding us that we never really know when the next disaster is coming, or how bad it will be,” Yellen said. “However, the pattern of ‘the bigger they come, the harder they fall’ has repeated itself enough times that anyone who is paying attention should be wary of the current bull market.”
- An important reminder: The relative absence of markets coverage from our politics-laden news cycle is ironic given the 2008 crash was a key driver of the current populist moment.
Other notable stories:
- Breaking this morning: Time magazine has named the murdered Saudi dissident Jamal Khashoggi—and other journalists acting as “guardians” of the truth in the face of threats—as their people of the year for 2018. Covers of the magazine will feature Khashoggi; the staff of the Capital Gazette newspaper group in Annapolis, Maryland; imprisoned Reuters reporters Wa Lone and Kyaw Soe Oo; and the crusading journalist from the Philippines, Maria Ressa. The other candidates for person of the year were Trump, the March for Our Lives activists, families separated at the US–Mexico border, Christine Blasey Ford, Vladimir Putin, Robert Mueller, Ryan Coogler, Moon Jae-in, and Meghan Markle.
- Google CEO Sundar Pichai will testify before Congress for the first time today, facing lawmakers on the House Judiciary Committee. “Pichai’s scheduled appearance comes at the request of House Republicans, who may launch a rhetorical fusillade at Google over allegations of anti-conservative bias,” The Washington Post’s Tony Romm writes. Romm and Craig Timberg reported yesterday that Google will accelerate the closure of its social network, Google+, after a software bug allowed apps to access the personal data of 52 million users in November. (Google says there’s no evidence any data was taken.)
- A study by academics at Louisiana State University and Ferrum College, in Virginia, suggests news outlets should offer fact checks and more explicit defenses of their work to boost trust in what they do. “Our results contradict the claim that the most effective response is to ignore anti-media rhetoric and just do good journalism,” the researchers write.
- Post fact-checker Glenn Kessler yesterday introduced “the Bottomless Pinocchio,” a new rating which “will be awarded to politicians who repeat a false claim so many times that they are, in effect, engaging in campaigns of disinformation.” Fourteen claims made by Trump already qualify for the distinction, including that Democrats colluded with Russia during the 2016 presidential election, that his tax cuts were “the biggest in history,” and that his proposed wall along the border with Mexico would stem the flow of drugs into the US.
- The Daily Beast asked more than 60 staffers at Bloomberg whether their boss, Michael Bloomberg, should run for president in 2020. Only one said he should. A dozen employees opposed his candidacy “because a Bloomberg bid would complicate the outlet’s coverage of him and politics in general, or possibly create internal upheaval that could jeopardize editorial jobs,” Maxwell Tani writes. Meanwhile, in the Post, Kathy Kiely—who resigned as a Bloomberg editor in 2016 when, she says, she was barred from covering her boss’s ambitions—says the company should be sold. “Give the terrific journalists who work for you what they deserve, Mr. Bloomberg: Set them free.”
- Migrants were described as “invaders” or an “invasion” on prime-time Fox News shows more times in the 30 days leading up to this year’s midterms than in 2015, 2016, and 2017 combined, HuffPost’s Cristina Lopez G. calculates.
- As Paul Ryan prepares to leave office, Vox’s Ezra Klein criticizes the positive coverage Ryan enjoyed during his time in Congress: “It is clear that his critics were correct and a credulous Washington press corps—including me—that took him at his word was wrong. In the trillions of long-term debt he racked up as speaker, in the anti-poverty proposals he promised but never passed, and in the many lies he told to sell unpopular policies, Ryan proved as much a practitioner of post-truth politics as Donald Trump.”
- And Tony Biasotti writes for CJR that after last month’s deadly wildfires in California, news outlets in the state are already prepping for the next one. “Wildfires in the West have become more deadly and destructive over the past decade, and covering them has grown more demanding, more dangerous, and more expensive,” Biasotti says. Ironically, improved technology has proved a danger: as TV reporters no longer need live trucks to broadcast, they can walk right into a fire with everything they need in their backpacks.