'Financial journos need to regain trust'

Generic financialIt's not only the financial sector but the journalists who report it that needs to regain public trust. That's the view of former BBC economics correspondent Steve Schifferes, who made the comments in his first lecture as the new professor of Financial Journalism at City University.
Schifferes said news organisations needed to offer far better financial analysis and commentary on the sector they cover if they are to win back public trust. And he saw knocking down the divide between political and financial reporting as key to doing this.

He said the financial crisis has "shed a harsh light on financial journalism", raising questions about how effective it was. He does not blame journalists alone for failing to spot the crisis coming. After all, "neither regulators nor economists nor politicians" saw it coming.

Better explained

But, he said: "Journalists could have done a better job of examining the roots of the crisis and then explaining the serious consequences sooner. Why they didn't reveals quite a bit about the nature of the trade." And he went on to explain why.

In his view, many financial reporters are too specialised, and by concentrating so closely on their patches they fail to see the bigger picture. Much of what he said about being able to "join the dots" and recognise the significance of financial stories was aimed squarely at the trade.

But his comments about "a newly-awakened general public" being "interested in financial news" and about bridging the divide between political and financial reporting and analysis are worthy of wider consideration. In my opinion, that divide is rooted in the presentation of economics as a science.

Social science

I've argued before that economics is not an hard science but a social science. Therefore conclusions are based on assumptions and desired outcomes, rather than on incontrovertible facts. Too often, political ambition is presented as economic 'fact'.

That's particularly important at times when a set of economic policies are presented as the 'only' ones that can work. And when we are encouraged not to see the connection between economic policy at what it means to the everyday lives of ordinary people rather than just faceless corporations.

Joining the dots means being able to understand this, and also to understand one of the basics of the journalism trade. That is that it is easy for 'primary definers' to set the news agenda because they have access to the means of communicating their message, and journalists find it easier to take on board what they say.

Manufactured consensus

The ideas put forward by primary definers then, by default, become the consensus. The way to change this is by ensuring journalists have the time and resources, as well as the inclination, to look harder and deeper, to search out alternatives and to ask probing question.

The problem for news organisations is that news, on its own, has never made money. Now, with the traditional ways of subsidising news being squeezed, it's becoming harder to devote the resources to achieving the sort of journalism Steve Schifferes so rightly calls for.

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