Why journalists failed to predict the banking crisis October 14, 2008
Posted by Jonathan Hewett in : Journalism, News, reporting, science , 1 comment so farThe developments that led to the current banking crisis seem to have been incremental, took place over a number of years, and together affected the whole system. Is that why journalists failed to see its demise?
I wonder about the role of human psychology, as one of many possible factors that worked against the reporting on developments that contributed to the current crisis.
…the most important “defaults” of the human mind are to look for discrepancies in the world, to ignore what is going on constantly, and to respond quickly to sudden shifts, to emergencies, to scarcity, to the immediate and personal, to “news”.
So wrote psychologist Robert Ornstein and biologist Paul Ehrlich in New World, New Mind nearly 20 years ago. They argue that the human brain is poorly equipped to tackle many modern challenges: still primitive, it responds primarily to dramatic sensory changes (fight or flight and all that). In contrast, contemporary issues that tend to be evident mostly through gradual changes are seen as less significant or urgent.
For millions of years these “defaults” of the mind have worked well. They do not work well in a world where 2 billion people could be killed by a simple misjudgment, and our defaults do not even work so well in the day-to-day world of modern life…
Ornstein and Ehrlich focused on environmental change — but perhaps their theory applies validly to other areas, too. A psychology of news values in journalism? You read it here first. Probably.
There’s a tenuous link with some of the more familiar factors being put forward. Alex Brummer, the Daily Mail’s City editor, says few financial journalists understood the systemic problems that were piling up. He also highlighted the difficulties for journalists in dealing with powerful PR and threats of having access withdrawn:
Brummer says that too many financial journalists are bamboozled by the ‘manipulative’ PR operations of big companies, and some are too fearful that they will lose access if they are too critical. ‘The duty of a journalist is always to be sceptical. But they are up against very powerful institutions who lie and cheat.’
James Robertson, who wrote the piece, also quotes Dan Bögler, the FT’s managing editor, on why his paper didn’t do better:
Why didn’t we spot it? Unfortunately, financial journalists — and the FT has better-trained financial journalists than others — don’t really understand this stuff, and they join a long list of people that starts with bank regulators, central bank regulators and money managers.
No journalists appear on the list of ten people who “predicted the financial meltdown”, compiled by the Money Central blog at Times Online (tagline: Advice you can bank on). Perhaps no surprise there, although there are some honourable exceptions, such as those mentioned in the comments on that post.
The news about Robert Peston: meta-reporting? October 9, 2008
Posted by Jonathan Hewett in : Journalism, News, blogging, reporting , add a commentUpdate: Michael Howard has asked the FSA to investigate the alleged leaking to Peston/the BBC of sensitive information about the bank rescue package, reports Guido Fawkes.
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The BBC’s business editor is becoming the news, and not just as in the spoof article I bookmarked previously.
The House of Lords communications committee asks whether he’s setting the agenda:
“Well, I think there is an argument for that. One can’t deny that Robert Peston has been playing an instrumental role in the story and anyone in the news business has to pay close attention to what Robert Peston reports,” the Daily Mail political editor, Ben Brogan, told the committee.
“He is well informed, well connected and he has on a number of occasions broken the news it would be foolish in the extreme to ignore him. That, in some ways, gives him an enormous degree of power. But more power to his elbow, if he’s the journalist that is leading the charge on this, then good for him.”
More people want to find him online, says Robin Goad of Hitwise…
while he reports on falling markets, his own stock is looking like a good bet. As the chart below illustrates, UK Internet searches for ‘robert peston’ have shot up over the last month.
…which prompts a Media Guardian article on a similar theme, followed by a light piece about Peston’s potential rivals.
Journalists and media-watchers have also had the chance to read interview profiles of Peston in The Independent and The Guardian. Both allude to his contacts and brilliant scoops, of course — but don’t address directly how far he’s managing to steer the narrow course between reporter of scoops and cypher.
Footnote: Yesterday I read Peston’s blog post and not much later listened to his analysis piece on the 6pm Radio 4 news, and realised they were the same thing. So posting scripts is one way to do it, to answer Robin Goad’s query of how Peston was broadcasting frequently and
somehow also finding time update his blog daily with analysis of the latest episode in the ongoing saga of the financial crisis
I doubt I’m the first to realise this.