The existence of a pro-business, pro-government bias led to ineffectual journalistic coverage of U.S. unemployment during the period leading up to the 2008-2009 recession. In what has come to be known as the Great Recession because of its comparability to the Great Depression, the U.S. unemployment rate reached historic highs. The magnitude of the recession was such that economists and policy-makers should have been better prepared to manage the looming crisis, but instead were caught unawares because they relied on self-serving forecasts that minimized unemployment forecasts. The news media was complicit in its minimalist coverage of the unrealistic projections that the Bush White House and administration served up.
In that context, and given the far-reaching effects on U.S. economy, the abbreviated reports of unemployment forecasts deserve closer scrutiny. This paper explores reasons the news media rarely challenged the consistently inaccurate unemployment forecasting, projections that should have informed policy decisions and warned the country that the U.S. was entering one of the worst employment crises in its history. In spite of the magnitude of the economic decline that would see tens of millions of Americans unemployed, there was little media coverage regarding forecast accuracy.
The few economists who actually forecast the timing, duration. And severity of the downturn as early as 2005 and 2006 were accorded scant attention. Instead, the news media reported more optimistic projections, offering markedly lower unemployment figures, which circumstance only changed well after the recession had taken hold. What factors created such gullibility on the part of the media? This essay explores possible explanations and examines the implications of those criticisms.
Description and Overview
The U.S. unemployment rate peaked in October 2009 at 10.1%, with more than 15 million people out of work ("U.S. Unemployment"). In reality, the number of unemployed was significantly higher if one included "marginally affected" and part-time workers, those who gave up looking for work or who wanted full-time jobs but could find only part-time work. The revised number totaled to an unemployment rate of 16.3% in July 2009. During the same period, the number of people who had given up on finding work rose to 796,000 (Bandyk). From December 2007 to June 2009, the period officially designated as the recession, the American economy shed more that 5% of its nonfarm payroll jobs (Rampell).
And yet, just 16 months earlier, the Federal Reserve was predicting that the unemployment rate in 2009 would be between 5.2% and 5.7%. Moreover, these figures were revised from an earlier projection that was even more inaccurate, 5% to 5.3%. According to Standard and Poor's chief economist David Wyss "They're not looking for a deep recession" (Isidore).
Furthermore, the Fed indicated that it was expecting the economy to grow in 2009. Nowhere in his analysis does the CNN journalist discuss the possibility of a different, more pessimistic forecast provided by other experts. Instead, he presented the forecast that Ben Bernanke and the Federal Reserve offered, never questioning their accuracy (Isidore).
Likewise, President Bush's Council of Economic Advisors offered similarly misguided counsel in February 2008. The administration's top advisors not only projected an annual unemployment rate of just below 5% through 2013, they also predicted that the economy would continue to grow and avoid a recession. During the White House ceremony that accompanied the report's release, Bush repeated his earlier contention that the economy was sound ("White House"). In fact, as it turned out, the nation had already entered into recession.
Even as the year progressed and more economic indicators pointed to a recession, economists and many in the media saw a rosier version of reality than was justified by the facts. In November 2008, CNN Money magazine quoted economists who predicted that the unemployment rate would max out at 7% or 8% by the end of 2009 (Rosato).
At the same time that the Federal Reserve and Bush administration economists' forecasting was so significantly inaccurate, other economists with different views received almost no media attention. Why was the media so willing to ignore economists like Nouriel Roubin, the New York University professor who predicted the upcoming recession in a September 2006 speech to the International Monetary Fund? Why did the media give no credence to Peter Schiff, president of Euro Pacific Capital, who predicted in August 2007, a "depressionary environment" for the year 2009? (The Motley Fool). From 2005 through 2007, various economists predicted the housing decline, the length and depth of the recession, the worsening financial markets, and the increase in unemployment. Yet journalists never asked the obvious question: why such a large discrepancy between predictions by the political elite and others?
Analysis and Interpretation
From the mid-2000s there were rumblings that signaled trouble ahead for the American economy; however the media was determined to under-report the severity of the crisis. The answers are to be found in analyzing the nature and function of media discourse in American society. For many news consumers, the conversation includes an ongoing debate about the place of journalism in modern culture. There is little consensus as to how the media should behave or whether it should be associated with or independent of political parties. Nor has it been determined if the media should provide information or expose wrongdoing, and how journalists may best go about serving the public good (Schudson, pp. 2-3.)
While everyone can and should be a media critic in a democracy, any analysis of the news media is more effective if it is based on the recognition that the product of the new media is, in fact, a form of culture, one which Schudson refers to as "public knowledge." And even though news may be described as belonging to the public, that does not mean that it is available without a cost. News, as the media provides it, is influenced by the profit motive, which is the price for what the media provides to society.
It is true, as Schudson observed, that the media is obligated not only to make a profit but to also maintain a certain level of credibility in the eyes of readers. Given this requirement, one can imagine that journalists would have questioned unemployment projections offered by government sources that differed so significantly from their peers in the private sector throughout the earlier phases of the economic downturn. Rather though, they were content to accept what the elites pushed their way. In Schudson's words, "the press more often follows than leads; it reinforces more than it challenges conventional wisdom. Views at the margins get little coverage, not because they lack validity or interest but because they lack official sponsorship" (p. 6). Because economists outside the administration lacked official sponsorship, their views were not given the same airing as those put forward by the Federal Reserve and the President's Council of Economic Advisors. Equally important, the profit motive also influenced news coverage, with the corporate structure of the media serving to marginalize news as well as its presentation.
Schudson discusses past surveys showing that national journalists tend to have liberal-leaning views. It is not certain that the same surveys taken today would yield the same results. However, with some noted exceptions, journalists still pride themselves on their professionalism and place that quality ahead of partisanship.
What influences journalists more even than their own political views though are their personal situations, which Schudson notes have grown more and more affluent over time (p.7). Journalists whose own jobs were secure and whose personal wealth insulated them from the effects of unemployment and recession might not be expected to cover such topics with the same thoroughness and dedication as less affluent journalists might. Such inability to connect with the implications of unemployment forecasts might indeed manifest itself in one-sided or incomplete news coverage and unquestioning acceptance of unrealistic economic projections. Journalists' own personal circumstances affected their ability to adequately cover stories on unemployment. As Schudson points out, the "consensus in the mainstream press arose not from journalistic routines or patterns of ownership but from…the taken-for-granted angle of vision of mainstream journalism" (p. 8).
Journalists tend to be no different than other human beings in that they are better able to recognize and discern issues and problems if they concern people like themselves as opposed to those beyond their social circles. In the context of this discussion then, it is appropriate to conclude that journalists who ran with the optimistic picture that administration economists painted were not so much politically as professionally biased.
Journalists are supposed to be objective. However, the quest for objectivity and professionalism introduces a level of bias. News coverage tends to stress disagreement, dissension and conflict. Negative news coverage, frequently cited in research and studies, is a manifestation of the pursuit of both sides of any story. This journalistic convention results in news coverage that emphasizes conflict even when there may be consensus. This tendency should have provided all the more reason for journalists to challenge the unemployment data they were given. The fact that this did not happens indicates that another, more…