Yves Smith has a very good post on how hard much of the mainstream media has fallen for the “everything is OK, go on with your lives” theme. She cites the Pew Research Center to show that media coverage of the financial crisis and recession has focused primarily on political battles – stimulus, bailouts, etc. – rather than on problems in the real economy. What’s more, economic coverage in general has fallen off since the stock market rebound earlier this year and the Obama administration’s “all clear” signal. She also discusses psychological research that shows that people can be easily influenced to believe things that are not true, simply because people around them seem to believe those things.
Smith traces this phenomenon to two main sources: the steady evolution of journalism into a traditional profit-oriented business than can no longer afford to invest heavily in investigative journalism; and the increased ability of political leaders, following the lead of private corporations, to control the message that is transmitted via the media. The Bush administration was allegedly the master of the latter, although the fact that they were so obvious about it sort of undermines that claim. (Although probably their attitude was that they didn’t care if the “New York liberal elite” saw how they were manipulating press coverage.) But the Obama administration is no slouch either.
I had my first experience with modern PR during the Internet boom, when I was in marketing at Ariba. (Remember us? Market value of $40 billion at a time when our revenues were less than $100 million per quarter.) We would be planning an acquisition, and I would meet with these nice people from our PR firm who understood nothing about our technology, or our products, or our markets, or the company we were buying. And they would decide that our top-level messages needed to be X, Y, and Z, which were so devoid of content that they couldn’t even be accused of being false. And that’s what we would use in our press release and our analyst call, and a few hours later we would see it echoed in the news stories and the analyst comments.
Now, if you’re a company of only middling interest (even when we were the hottest thing in Silicon Valley, we were not one of America’s major companies), this is easy. You don’t have the New York Times or Wall Street Journal trying to bust you, and, it’s true, most of the people covering you tend to be nice — in part because they don’t want to lose their access, but probably more because, at the time, they wanted to be a part of our success. Calling a spade a spade would not only have been impolite, but it would have exposed the lie that all these Internet-era financial journalists and research analysts were living just as much as we were.
However, it should be a little harder for the government. But the fear of alienating sources no doubt plays a big role. And then there is the fact that the financial crisis and the recession are just complicated. On some levels they are simple, but on others — like the relationship between banking profits and bank lending (there isn’t necessarily one), they are complicated. In a situation like that, the person with the biggest megaphone has an advantage — if he can tell a simple, plausibly believable story. And the administration and the Fed have hit on one: “We were on the brink of the abyss, so we had to do a lot of unpleasant things to pull us back. But now things are back to normal in the financial system, and we’re just dealing with an ordinary recession, so things will be tough for a while, but we’ll pull through.”
Smith and I probably agree on the major problems with this story: it enables the government to avoid tackling the flaws in our financial and political systems that caused the crisis in the first place, and so, in a real sense, nothing has changed; it also minimizes an extremely severe recession and implies that there is little more to be done at this point to help the millions of people who are hurting from it. But that’s the message the government is putting out, and there’s not a lot that a few people who are crazy enough to spend their free time writing blogs can do about it.
I should add that there are good people doing good work in the mainstream media. Off the top of my head (apologies to people I leave out), there were the articles David Cho wrote about the aftermath of the crisis and, in particular, the concentration of the banking system; Joe Nocera still has his outrage; and there is Bloomberg’s lawsuit trying to force the Federal Reserve to comply with Mark Pittman’s FOIA request. But this is wonk stuff for crisis and policy junkies, not top-of-the-evening-news material. Out on Main Street, people may be out of work, unhappy, and confused, but there’s no political momentum for change, at least not on the real issues that affect their economic well-being.
By James Kwak