The Great Media Depression: Executive Summary
The economy consumes the nightly newscasts. Broadcast networks report that America's finances are 'like a house of cards.' ABC, CBS and NBC even hyped similarities to the Great Depression more than 40 times in the first four months of 2008. But that parallel doesn't hold up, especially when analyzing the news of that era. In fact, daily coverage of the 1929 stock market crash strongly emphasized the positive side of events. The New York Times that year summed up a six-day Dow Jones loss of 30 percent as: 'the market quickly regained its poise and stability.' In 2008, coverage has taken the opposite tone, even though the Dow dropped just 1/100th of 1 percent in the days after the collapse of investment bank Bear Stearns. ABC found a dark cloud for every silver lining, saying: 'And everywhere you look, it's bad news.' On network news, that statement was accurate.
The Business & Media Institute performed a detailed analysis of two major weeks in America's stock market history - the week of the stock market crash in 1929 and the week of the Bear Stearns collapse in 2008. BMI examined daily news reports from Oct. 28 to Nov. 3, 1929, in The Wall Street Journal, New York Times and Washington Post. Those were compared to daily reports on ABC, CBS and NBC from March 13 to March 19, 2008. The difference between how the 1929 and 2008 media handled a crisis was profound - with modern journalists hyping every event and their predecessors expressing calm optimism. Among the key findings:
Modern Media Much More Negative: During the week of the 1929 stock market crash, daily news stories reported positive news more often than negative by a 4-to-1 ratio. The week that the Bear Stearns fall occurred, coverage was the complete opposite. Negative stories on ABC, CBS and NBC outnumbered positive 6-to-1. No Good News: Roughly 40 percent of the stories from 2008 contained no positive comments at all. On CBS, that percentage was even higher. Completely negative stories made up nearly 60 percent of its reports. It's Not A Depression: Today's journalists are making repeated connections to the largest economic crisis in modern times - often with the phrase 'not since the Great Depression.' Only a few of those comments explained the differences between today's economy and the nation's darkest economic years, or bothered to note that America is not in a depression. Old Presidents Never Die…: The claim that President George W. Bush would be the first president since Hoover to lose jobs in his first term proved false, yet journalists repeated it more often than Democratic operatives. Journalists have been comparing Republicans to Hoover for several years and have already begun doing so with Sen. John McCain, the presumptive GOP presidential nominee. CBS the Worst: CBS consistently appears among the worst media outlets on the economy. This study was no different. Business reporter Anthony Mason was even called 'the grim reaper' by his own anchor Katie Couric. In 2008 during the week of the Bear Stearns collapse, negative stories on CBS outnumbered positive by an 11-to-1 ratio. NBC the Best: NBC's attempts to deliver balanced economic coverage can be summed up in two words - Maria Bartiromo. The star of sister network CNBC was a cautious voice reminding viewers that negative news can have an impact. 'We could talk ourselves into a recession,' she told NBC's 'Today.'
BMI has three recommendations to keep the media from making the same mistakes in future economic coverage:
Avoid Shallow Sound-Bite Reporting on the Economy: The economy is too complex for shorthand descriptions. Typically, economists disagree about how good or bad the U.S. financial picture truly is. Modern-day journalists have no trouble including the negative, but need to make an effort to give audiences a more balanced view. Find a Middle Ground: One can argue that daily news media in 1929 were too boosterish. In the midst of a stock market collapse, journalists took an incredibly positive position. In 2008, journalists have gone too far in the other direction, emphasizing only the negative. Somewhere between lies appropriate news coverage. Journalists need to work toward finding that middle ground. Learn - and Report - History: Anyone who compares today's economy to the Great Depression knows nothing about either. Today's America isn't like the America of the Depression at all. Unemployment is vastly lower. The stock market has seen comparatively minor losses, and numerous government regulations have been created to prevent a repeat of Depression-era economic problems.