If you haven’t read John Cassidy’s piece in The New Yorker asking “What Good Is Wall Street?”, get to it. It’s a pretty good read.
Meantime, he had some interesting things to say in a live chat with readers on The New Yorker’s website. This particularly is relevant to us (emphasis mine):
Reader question: What has changed the most since you started covering business?
John Cassidy: Great question. Two things, I think (and I started out in 1986):
1) Globalization—a cliche, but true.
2) Financialization—when I started, business sections had as many industrial reporters and labor reporters as finance reporters. Today, it’s all about finance. And that reflects the massive growth of the financial sector, the proliferation of hedge funds/private equity funds, etc.
— This one’s not so much specifically about the business press as it is the book industry.
The Financial Times’s Gillian Tett writes about her experience with her American publishers, which differed from her British experience:
A couple of years ago, I wrote a book about the financial crisis for the American and British markets. Before publication, I was told I would need to make tweaks to cater for differing transatlantic tastes. So for the UK edition I included long passages about Northern Rock (the failed British bank). And in the American edition I replaced that with passages on Countrywide (the US mortgage giant). So far, so unsurprising. But the real fun erupted when I wrote the preface. Initially I planned to start the book by admitting that I was not a true expert on high finance: instead I crashed into this world in 2005, after a background spent in journalism-cum-social anthropology - making me a well-intentioned amateur, but without complete knowledge.
My friends in the British publishing world loved that honesty; in the UK, self-deprecation sells, particularly for “well-meaning amateurs” such as the writer Bill Bryson. But my American friends hated it. In New York, I was sternly told, absolutely nobody wants to listen to self-doubt. If you are going to write a book - let alone stand on a political platform or run a company - you must act as if you are an expert, filled with complete conviction. For the US version, the preface was removed entirely.
— JW Mason of The Slack Wire has a thought on how the business press thinks.
I’ve observed before that to make sense of the financial press, you have to adopt the view that the world exists only as a source of payments on financial assets. Here’s a beautiful example, from an article at VoxEU. The writers are discussing CDS spreads on sovereign debt, specifically the “swap curve,” which is supposed to represent the market’s best guess of the probability of default:
“In normal times the slope of the swap curve is flat or slightly positive, reflecting more uncertainty about more distant future . In times of stress, however, the slope typically turns negative, mirroring fears that the country may not survive in the short term. But, if it does, it will not default later on.”
Yes, paying bondholders in full is synonymous with national survival.
Which makes sense, I guess, if you’re looking at the world only through the bond trader’s terminal, where Ireland, say, is not a group of people or a political or historical entity, but simply an asset class.
In a previous post, Mason wrote this:
You know the old joke of adding “in bed” to the end of fortune-cookie fortunes? I’ve increasingly felt the same kind of thing works for economic writing, especially financial journalism: Anytime you see a word implying a value judgment (good, bad, disaster, opportunity, frightening, promising), you just need to add “for bondholders” for it to make sense.
It’s sure hard to argue with that these days.
(h/t Mike Konczal)