For close to two years now I have been royally peeved at one very specific portion of the media. The worst recession since 1929, according to the headline writers and the economists, is but the tip of the incompetent iceberg when it comes to economic and financial reporting. This becomes all together too clear when you go back to news stories just before the crash that predicted the economy was in great shape and the stock market and housing were not a bubble about to burst.
I know, many of you are going to produce the name of someone who was not duped, someone who wrote an article warning of the dire future of the markets. Isn’t it amazing how these predictions always come out after the fact. That isn’t to say they were not made, it is to say they were under reported at best and not taken seriously by the vast majority of the business press.
The business press has two very basic problems that it can never overcome and therefore should not be taken seriously by anyone. First, and this is really important and basic, and in this case not the media’s fault, it is impossible to read the future. Since one cannot predict the death of the President of Poland, the call for new elections in Thailand, the earthquakes in Haiti and Chile, the flooding in Brazil, the drought in western Canada and the United States, and a host of other factors that come to mind all of which can cause local and international markets to react in ways that are unpredictable, how can one take any economic prediction with more than a grain of salt. Yet the economic media are never slowed. They continue to pontificate as if they know where the world economy is going. Where were they in 2007? Where were they in 1979? Where were they in 1929?
The second very basic failing of the business press is that by their very nature they are in the pockets of the businesses they report on. They are mostly dependent on the information that is handed out by the corporate public relations people and spin doctors employed by the companies and organizations they are supposed to be investigating. When they get too negative they are cut off. If they are cut off they don’t get the “scoops” that go to their competition. Every business reporter knows where his or her bread is buttered and that is not with the consuming public or even the individuals who play the markets. If the opposite were true companies like Enron and Lehman Brothers would have been “outed” long before they ruined so many poor slobs like you and me. Ponzi schemers like Bernie Madoff could not have lasted as long as he did. The signs of failure were all there. Reporters like Matt Taibi continue to reconstruct the chains of events that should have been clear to anyone who called themselves an expert. The nay-sayers were voices in the wilderness unheard by the business media, unreported in the major media outlets because the newspapers and television stations are there the promote business, advertising, stocks and all the other intricate financial products on offer. What’s good for business is good for the media.
I have a few proposals of my own to help deal with the business media as it exists today.
My first proposal is that it should be against the law to name any stock or other financial product as something that the public should buy or sell. The practice is far to open to manipulation. Just as an example: CNBC says Amalgamated Baloney is a good buy. The suckers go out and buy up the shares driving the prices up. The guy at CNBC sells his shares at the inflated price. The suckers are left holding the worthless bag when the prices fall back to what they are really worth. Has something like this happened? I bet it has. Can anyone prove it hasn’t? In any case why allow a practice that is so open to manipulation and fraud. Ban the touts and the touting.
It is an old joke that if you ask 100 economists where the economy is going you get 100 different answers. If the so-called pros can’t agree, it should therefore be illegal for TV hosts and pundits to predict where the economies and markets of the world are going. There is far too much money being bet on the apparent expertise of these hosts and pundits. I say the business media should get out of the prediction game and report the facts, the facts that can be proven to be true, just like the rest of the journalists are forced to do. If you cannot prove it, you cannot report it. Finished. The end.
Finally, I think it’s time to remove business news, as a sub-heading, in mainstream news. Most people don’t care about the markets or the economic minutia. They want to know where their next pay cheque is coming from and what bread and milk are going to cost tomorrow. If something happens in the economy or the markets that is newsworthy it should have to compete with the political news, the murders and the car accidents for air time. When Chrysler adds jobs in Brampton, that’s a story. The unemployment figures and the budget are stories. The markets jumping or diving 150 points, that’s a story. But when Honda announces a dividend or the stock market climbs 0.2 percent what the heck is that doing on our TV newscasts and in our major newspapers?
You see the real point here is that the people who need to or really want to know the minutia will find out when the events happen on places like CNBC and Bloomberg. They may even have direct lines in to their brokers. To the rest of us it is meaningless filler. CBC’s ludicrous business interviews are a waste of time. Mostly they are not understandable to the audience and generally they are meaningless to those who don’t have a stake in the stock or sector being discussed.
Another adage of big business is that by the time you hear about something, it is too late. So why do we get The Globe’s Report on Business or The Financial Post? The news is too late to act upon and the pros have heard it 12 to 24 hours earlier.
I believe the business media only exists to curry favor with big business. They are the advertisers. They own the media outlets. They share directorships and cozy golf rounds at the club. They are the moneyed elite attempting to stay the moneyed elite at the expense of the rubes like us.
I know I’m pissing in the wind but it is time to pin the tail on the business media donkeys.