Blinded By The Boom

November 25, 2000

What’s Missing in the Coverage of the New Economy?

By Merrill Goozner

The latest and largest generation of business reporters has come of age under economic conditions far different from those that shaped their immediate predecessors. The crises that forced business news onto the front page from the mid-1970s to the mid-1990s — oil shocks, de-industrialization, insider trading, the 1987 crash, massive budget and trade deficits, the savings and loan fiasco, downsizing — are about as relevant now as yellowed clips in a file folder. (Though an oil shock is auditioning for a revival.)

It’s the new economy, stupid. Fortunes are being made in high- and bio-tech. Productivity is soaring. The stock market is off the historical charts. Unemployment is low and minorities, women, and some inner cities are benefiting in ways that haven’t been seen for generations.

The boom has its echo in financial reporting. Not only is there a great deal more of it, but reporters have gravitated to what is obviously the biggest story of the day: the stock market explosion and what pundits and political candidates are (incorrectly) calling this unprecedented era of economic growth. High technology, market coverage, and personal finance dominate the news holes and time slots reserved for business and economics news.

Some hyperbole has spilled over into the reportage. Coverage of the current prosperity can read like a sports page when the home team is on a roll: cheerleading can drown out the occasional story pointing out weaknesses in the squad or the challenges coming up in the schedule. Journalistic scorn is reserved for the players — or in this case stocks — that don’t make their numbers.

But with the election behind us, it’s time for the media to take a deeper look. It’s not as if we haven’t shined some light on the economy’s darker corners. We have. But a series of interviews with top editors at news organizations and an informal search of Lexis-Nexis has confirmed my own recent experience as a business and economics journalist: the press has largely abandoned sustained coverage of pressing economic problems in favor of the occasional piece that temporarily highlights an issue.

This approach is unlikely to disturb many readers or move many politicians. The new administration will either tackle the nation’s unfinished economic business or allow it to fester. If the media turn a brighter light on those who are missing out on the good times, it’s more likely that the decisions made will be better informed.


One way to gauge media coverage of economic problems is to listen to complaints about the press from both sides of the ideological divide, since both left and right tend to put economic issues near the top of their agendas. For years critics on the right flailed the media for an antagonistic attitude toward business, claiming that inaccurate and inflammatory stories about either the economy or corporate wrongdoing had led to excessive regulation. That, in turn, they said, hampered the U.S. business community’s ability to compete. Some on the right still make such complaints.

But these days it’s the other side — including the Green Party candidate Ralph Nader and his ideological allies — that is doing the most screaming. “Twenty years ago you had high-profile cases that gave the impression that the media had a vendetta against big business,” says Richard Kaplar, vice president of the Media Institute, a conservative communications policy think tank, and a contributor to publications from the libertarian Cato Institute. “It’s definitely different today, a completely different environment.”

The liberal press watchdog, Fairness & Accuracy In Reporting, agrees. Journalists are overly proud of the single stories they do on issues like the problems of low-wage workers, says Seth Ackerman, who monitors economics coverage for FAIR. “But the bulk of the reporters like to gravitate to the big story, which is the new economy, the booming economy.”

FAIR commissioned a study of journalistic attitudes at the nation’s leading media outlets, including all the top papers and the television networks. Some results from the 1998 survey: 71 percent of the 141 capital correspondents and bureau chiefs polled by David Croteau of Virginia Commonwealth University supported fast-track trade negotiating authority for the president, a hot issue at the time. Concurrent newspaper polls of the general public showed just the opposite: 56 percent were opposed. It went down to defeat. On health insurance: journalists were roughly split on a government guarantee for people without it, 43 percent in favor and 35 percent opposed. The public was much more open to the idea. Citing a 1996 New York Times poll, FAIR said the public supported a federal guarantee on health insurance by more than two-to-one.

Has the rush to embrace the new economy and celebrate the new wealth caused well-paid reporters at elite media institutions to play down the woes and concerns of people who are not doing as well? Perhaps no issue dramatizes this possibility better than trade. Most mainstream economists agree that the domestic boom has been carried along in part by the expansion in trade and investment enabled by lower trade barriers. But those same economists would also agree that not everyone in America benefits from freer trade. There are winners and losers when barriers fall, and it can be argued that the press has ignored the losers’ issues and concerns (as opposed to their demonstrations).

Certainly the nation’s op-ed pundits and editorialists have expressed near-universal hostility toward them. During last year’s World Trade Organization protests in Seattle, for instance, Thomas Friedman of The New York Times set the tone by referring to the demonstrators as “a Noah’s ark of flat-earth advocates, protectionist trade unions, and yuppies looking for their 1960s fix.” Similar demonstrations during the World Bank and International Monetary Fund meetings in Prague in late September were, to Friedman, held by “a rogues’ gallery of Communists, anarchists, protectionist unions and over-fed yuppies out for their 1960s fix.”

Has such hostility affected reporting? By the time of last spring’s vote on whether to allow what is called Permanent Normal Trading Relations with the People’s Republic of China, opponents could legitimately gripe that their arguments were not being given much of an airing in the press. The bill passed the House last May. Only the day after that did a story in The Wall Street Journal, by the veteran trade reporter Helene Cooper, reveal that business leaders were not primarily interested in selling more goods to China (the stance of President Clinton and the business media blitz in favor of the bill). It was instead seen as a bill to open China’s door wider for U.S. investment — which could cost some Americans their jobs. Many union opponents had been saying that all along, but had trouble getting journalists to listen.

Again, several weeks after the vote, the New York Times’s trade reporter, Joseph Kahn, traveled to Tulsa, Oklahoma, to report the poignant story of 240 workers who were losing their jobs because their employer was moving to China. This was the kind of story that had appeared with great frequency during the debate leading up to passage of the North American Free Trade Agreement seven years earlier. But the angle now came as an afterthought (and was completely ignored when the bill passed the Senate in September). This can be taken as one measure of how prosperity has changed the journalistic environment.


The increasingly sporadic coverage of government regulatory agencies also reflects the media’s shifting priorities during this expansion. The consensus view among business leaders and mainstream economists is that reduced regulation of both markets and corporate behavior has been a major contributor to prosperity. The press has largely adopted this conventional wisdom. And that may be blinding reporters to stories they once covered with vigor. Consider, for example, coverage of the dangerously flawed Firestone tires. A National Highway Transportation Safety Administration probe was spurred in part by local television accounts last February by Anna Werner of KHOU-TV in Houston, who based her reports on suits filed by local trial lawyers. The reports triggered a slew of consumer complaints to the government, which eventually led to the probe.

Yet despite the local press accounts and a number of lawsuits, it took a half-year for the story to get national attention. “We assume in an Internet environment that every piece of information becomes universally shared very fast,” says Doyle McManus, Washington bureau chief for the Los Angeles Times. “This story was out there and nobody tried to put the larger pieces together.”

Why? Perhaps rollovers by sports utility vehicles and unraveling tires were considered old stories. SUV rollovers (for other reasons) had received extensive coverage earlier in the decade. Or perhaps the business community’s unrelenting attack on trial lawyers has made them suspect as a source. Or, maybe stories that investigate corporate wrongdoing do not have the same priority they did in the years before business was king.

The history of the last century suggests there will always be a role for government oversight of financial institutions, securities trading, the environment, and the workplace. It remains the press’s job to monitor both the regulators and the regulated.

Editors bristle at the charge they are not performing the watchdog role when it comes to corporations. “Do corporations get a freer ride than they deserve? Sometimes,” says Paul Steiger, managing editor of The Wall Street Journal. “But in the past, they were sometimes unnecessarily pilloried.” Doyle McManus argues that “institutional biases” of the press are much less significant “than critics on either the left or right would say.”

Still, a 1999 survey by the Project for Excellence in Journalism found that major news organizations have substantially shifted their Washington coverage in recent years. There is less coverage of people and environment-oriented agencies, like the Labor Department and the Interior Department. Meanwhile, more reporters are watching the Treasury Department, the Federal Reserve Board, and agencies like the Securities and Exchange Commission, the Federal Communications Commission, and the Federal Trade Commission — all places that generate news primarily of interest to investors, corporate leaders, and their attorneys.

Clearly the latest shift in interest rates, the business implications of the big merger, or a major antitrust trial can affect millions of consumers. They deserve extensive coverage. But it’s worth noting that it is relatively easy coverage. Well-paid public relations firms are usually available to articulate all sides of a dispute. Wall Street economists offer quick sound bites. Dozens of reporters can be found on these kinds of stories, often busily scribbling the same notes.

Meanwhile, there are only a handful of reporters trying to uncover stories at the Environmental Protection Agency or Occupational Safety and Health Administration, where sorting out the truth of competing claims can be a much more difficult task. Big firms have become adept at deploying small armies of scientists and experts to rebut charges by the public interest groups or trial lawyers seeking to represent aggrieved citizens and communities. Too many news organizations have simply thrown up their hands at the welter of charges and counter-charges and sharply cut back on the press’s traditional watchdog role.


And then there’s the elephant in the new economy’s living room: the growing inequality in both income and wealth.

We’re living through a sort of Gilded Age that hasn’t yet been given its label. But when the age does go down in history, inequality of wealth and income will be a major hallmark.

Leaders of the nation’s opinion-molding news outlets scoff at the notion that the media have ignored inequality. “We’ve covered that forever and ever,” says Steiger. To its credit, despite its natural audience, the Journal does indeed pay attention to the downside of the economy. And its annual survey of c.e.o. pay — and similar surveys at dozens of the nation’s leading newspapers and magazines — early-on highlighted the expanding ratio of executive compensation to pay in the ranks. Revealing studies about wealth and income-distribution trends published by left-leaning think-tanks like the Economic Policy Institute and the Center for Budget Policy and Priorities are routinely reported in the press and on television.

One-shot features about families struggling in the shadow of plenty have also become a staple. Indeed, editors at The New York Times, which sets the tone for journalists across the country, met in the run-up to the presidential election to discuss coverage of how the new wealth was affecting society. They rejected the idea of running a series similar to one on downsizing that ran during primary season in 1996. “The outcome was that each desk would handle the issues individually,” says Claudia Payne, a senior editor for investigative news at the Times. “There would be an attempt to take snapshots without the rubric.”

But snapshots can be overwhelmed by routine coverage that suggests that because more people own stocks, the largess of the new economy is being shared more equitably. That assumption is dead wrong. In 1998, the top 20 percent of families pulled in 47.3 percent or nearly half of national income (earnings, not investment) — up from 44.6 percent in 1989 and 41.4 percent a decade before that. The share of national income going to every other group in society fell consistently across those two decades.

The distribution of wealth (stocks, bonds, real estate, and the like) also grew more unequal over the period, although that was reversed slightly in the late 1990s because of the stock market boom. Still, the top fifth of households’ share of national wealth stood at 83.4 percent in 1998, compared to 81.3 percent in 1983. Every group in the bottom 80 percent of the population fell over the period, largely because of rising household debt. The bottom line is that many Americans are falling behind, not just compared to the wealthy, but compared to where they were a few decades ago.

It is difficult to illustrate growing inequality, and “it’s difficult to pound the table and say injustice is being done because average income is rising,” says Jill Dutt, business editor of The Washington Post. “There is also this sense with the new economy that we have true rags-to-riches stories. Many more people know somebody who got into the entrepreneurial boom and succeeded.”

Yet the result seems to be a virtual media blackout on the most important question related to the new economy: What impact is the growing disparity in income and wealth having on our democracy, and on our notion of who we are as a people? This issue troubled the Founding Fathers, and has come to the fore at other times of rapid economic change. “The day will come when our Republic will be an impossibility,” warned President James Madison in a interview with the New York Post. “It will be an impossibility because wealth will be concentrated in the hands of a few.”

McManus of the Los Angeles Times is one journalist who sees the problem: “What does it do to American society, American communities, and American democracy when citizens are increasingly divided into two classes, one educated and one not, one advantaged and one not?

“What story needs to be done now?” he asks. “It’s hard to do, but it’s the story that looks at the ‘so-what’ of income inequality.”

Merrill Goozner recently left the Chicago Tribune to teach business and economics journalism at New York University.From Columbia Journalism Review

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