As the biggest financial story in United States history has unfolded in recent days, financial journalists have done a generally solid job of reporting in spite of the fact that recent layoffs at major newspapers have left many newsrooms depleted. That is the assessment of Pamela Luecke, the Donald W. Reynolds Professor of Business Journalism at Washington and Lee University.
Luecke, formerly editor and senior vice president of the Lexington (Ky.) Herald-Leader, said that aside from the complexity of the story, one of the challenges that the reporters have faced is not feeding the frenzy with their choice of words.
“As I have read the New York Times and Wall Street Journal and other major newspapers and news magazines, I think that they have been trying to convey the drama and historic nature of the crisis while not fueling the panic,” said Luecke, who is teaching a business journalism course for W&L undergraduates this semester. “If you look at the words they’ve been choosing, they have stopped a few decibels short of what they could be using.”
Restraint in reporting such a major event is an ethical issue, according to Luecke. She notes that studies have examined whether or not financial reporters can actually trigger a recession by reporting on the fact that consumer sentiment is low.
“These studies suggest that you may well have a self-fulfilling prophecy in such instances. If you say the stock market is crashing, do you then ensure that it will crash? As a matter of professional responsibility, you not only try to avoid adding to the frenzy but you also try not to predict what may happen,” she said. “In other stories, predicting would be considered a journalistic technique. You would want to look ahead. Here, I think journalists are trying not to get too far ahead of the story.”
Luecke says the financial press also performed much better on the run-up to this story than it did on either the savings and loan crisis of the 1980s or the bursting of the dot.com bubble in the 1990s. She believes there has been solid reporting for many months as the subprime mortgage issues began to surface.
“There was a lot of good journalism that questioned the viability of the subprime mortgages before they began to fail,” she said.
If she were to find any areas where the financial press might improve the coverage, Luecke says that they may not always explain the basics. There have not been enough stories that offer overviews in which terms and concepts are defined for average readers who may get lost in the more technical issues.
“It’s easy for journalists covering a beat to forget what they didn’t know until they began covering that beat,” she said. “And there are a lot of us out here who want someone to hold our hands and take us through this story.”
What has also struck Luecke about the reporting is that it comes on the heels of massive buyouts and layoffs at many mainstream news organizations where veteran reporters who would have perspective on many of the issues may no longer be employed.
“That really is a shame,” Luecke said. “To a certain extent, newsrooms have lost a lot of institutional memory. A story like this underscores the value of reporters who have been covering the topic a long time. It shows that having veterans in the newsroom is valuable. So given that, I think they have generally done a tremendous job.”