But Lipin’s never-to-be-equaled run was part of a much larger wave, a transformation in business news itself. Business news was expanding greatly as the financial world itself ballooned and as millions of Americans began to invest in stocks in various forms in record numbers. The number of business-news stories, according to ProQuest’s business-news data, jumped from about 168,000 in 1989 to 322,000 a decade later, a rise of 92 percent. It kept rising, to 538,000, last year. (One category of business publication tracked by ProQuest doubled over the last decade, to more than 3,700.)
M&A reporting, once the concern of specialists, also took off, propelled in part by a dramatic rise in M&A itself. The volume of M&A stories jumped from about 1,100 to about 4,600, more than 300 percent, from 1989 to 1999. According to ProQuest’s tagging system, which provides a rough guide, this rise was even faster than the number of deals themselves, which rose 187 percent, from about 12,800 to 36,800 during the period, according to Thomson Financial. (Both deal stories and deals dropped and then rebounded after the Tech Wreck in 2000, but continued to grow to about 4,900 and 43,000, respectively, in 2009.)
Meanwhile the nature of business news was changing. The changes were reflected in the very names of the new outlets: The Street (launched in 1996), Marketwatch (1997), Fast Company (1995). The names promised an insider’s perspective, a fixed gaze on markets, and the latest news, no matter how granular.
But even as it expanded, business news, paradoxically, was narrowing. Following the middle-class stampede into stocks, business news ramped up quantity but increasingly shifted its gaze toward investor concerns.
I like to call this shift in emphasis the “CNBC-ization” of business news, after the network that so definitively represents it. CNBC emerged in its current form in 1991. Yet the shift also seems to represent something less modern: a return to the business press’s early twentieth-century roots as a servant to markets—and a retreat from its later role as watchdog over them.
CNBC-ized news emphasizes speed over depth, immediacy over context, internal metrics (e.g. earnings) over external costs (say, predatory lending and its aftermath, or income inequality and its roots). It is about insiderism, incrementalism, and scoopism. It tethers itself to the daily flow of corporate and government announcements (e.g. deals) and avoids the harder job of exploring systemic problems. Its definition of what is and isn’t a business-news story is as narrow as its definition of who is and isn’t a business-news source.
The conceit of providing news in “real time,” in fact, tends to substitute fragmented, context-free data for a comprehensible narrative. And let’s not kid ourselves: the latter is a lot harder, journalistically, than the former. This staccato news style suits the production imperatives of live TV, and, unfortunately, the Internet, at least for some journalists. It may cater in certain ways to the needs of the cognoscenti, the people already in the know. But it has little to do with the way in which a curious layperson—what historian Richard Hofstadter called the “literate citizen” (that is to say, most of us)—comes to understand complex problems.
Of course, CNBC-ized news isn’t all of business news, just a strain of it, just as investigative, accountability-oriented business reporting is another strain. The problem is that, since the 1990s, it’s become the Andromeda Strain. This is not about choosing between the two. It’s about balance.
In the aftermath of the financial crisis of 2008, an argument broke out between news professionals and a segment of the public over how well business media had performed its watchdog role in the years leading up to the crisis. The disconnect was crystallized in Jon Stewart’s celebrated interview/dressing down of Jim Cramer, the CNBC personality, in March 2009. Stewart’s critique wasn’t perfectly well articulated but it resonated as an essentially valid question: How could so many journalists covering a beat so closely miss something so big so completely?
Interesting idea, Dean. I wonder how it fits in the FONosphere though, given the idea, near universal, that anything other than market-actionable "scoops" are a generalized commodity, worth nothing at all.
Also, you call Pearson PLC's $160 million expansion, which gained the company 91,000 new readers, "a success." Really? At $1,700 per?
#1 Posted by Edward Ericson Jr., CJR on Tue 10 Jan 2012 at 03:56 PM
Dean - if M&A reporters jobs is to cozy up to dealmakers to get deal term scoops 1st (so readers can trade off it) than isn't the reporter just working for a few on Wall Street and not the reader. AR Sorkin's fail was to warn that any of those levered up 05-07 PE deals might also mean a fail for PE investors when the credit bubble burst. I didn't see Sorkin doing his main street investor readers(most of NYT Biz readers) any service by promoting his banker sources deals with out a few warnings on how the deal terms might bite shareholders in the rear.
#2 Posted by Teri Buhl, CJR on Tue 17 Jan 2012 at 01:17 PM
Most financial reporting can be summed up in a single word - "infomercial".
#3 Posted by Hugh Akston, CJR on Sat 21 Jan 2012 at 02:03 PM
Dean,
Quite agree. However there have been a few voices crying out in the wilderness. \
For years reporters have been pointing out that the rating agencies in the USA were corrupt; the companies being assessed are paying the rating agencies. Also the press pointed out the conflict of interest that Paulson had being a Goldman Sachs loyalist and yet working for the administration in the last crash. But the tank just keeps on rolling. Why? Most of the financial reporters are New Yorkers and steeped in that culture; accepting of Wall Street and its mores and unable to cast a critical eye over it. Like the money honey from Brooklyn, they just tell it how it is. Actually getting stuck into Wall Street is not on their radar. To get a good and aggressive business press, I suggest using more aggressive outsiders e.g. Harvard economics professors and Stanford experts too. It was a Stanford academic, a doctor with alzberger syndrome who finally worked out the mortgage CDO plot by going over k10 reports from 1 am to 5 am., according to a long piece in Vanity Fair.
But why did the press allow Pres. Clinton to abolish the Glass Steagall Act without a word? I think Americans are too much in awe of the office of President and the 'sacred' Constitution. Ridiculous. Clinton was a flawed as the rest of us. He only did it to allow the merger of Travellers and Citigroup( making along the way former Travellers CEO Sandy Weill rich beyond the dreams of avarice).
#4 Posted by Pamela Griffiths Clark , CJR on Tue 21 Feb 2012 at 07:51 AM
Hugh Akston called financial reporting an “informercial.” So it’s not really reporting. The financial media is now a trade publication, not journalism. They repeatedly interview propagandists (from Koch funded groups). It would be nice to have journalism.
Even the MSM now functions as press agent, he said she said, race barkers, and gotcha, rather than journalism. The media tells us we live in a globalized world, and then their Wall Street owners cut out investigative reporting and foreign correspondents.
Journalism is closely related to science. Throughout history, the arts and sciences have often been supported in some way by the state. They and journalism are essential public services that the market does not always support. (The cure for bad science is more science, for bad journalism is more journalism, etc.)
Successful nations have always managed their affairs and pursued their interests. Our important use of the free market is only one function. Laissez faire theory, that we should have ONLY a market, has no support in the historical record. “You can’t pick winners” is also false. Many technologies and products started with some gov’t support. We need both public policy and private entrepreneurship in a free market. A public private partnership may be needed to create business journalism.
On the issue raised by Pamela Clark, in the 1990s, the mantra of Republicans and Texas Gov. Bush was self-regulation. We saw how that worked out. Regarding deregulation under Clinton, since we do not have public funding of elections, another essential, Democrats serve business. They agreed to deregulation because the banks were doing so well, and the deal was that there would still be adequate regulation. They had no way to know that Bush/Cheney would run an orgy of deregulation, due their appointees. (Some states tried to regulate the growing subprime mess and were block by the Bush administration.)
Recall the other deals that Bush violated?
(It wasn’t a war act, it was a war powers act. Hank Paulson would not need to use what he called his bazooka if we gave it to him. Limit CO2 and other similarities to Gore. Be a uniter, instead of appointing extremists.)
#5 Posted by Harry Thorn, CJR on Thu 8 Mar 2012 at 10:15 PM