Financial journalists all at sea as crisis broke
October 29, 2009
By Nontyantyambo Petros
It's an old and honoured tradition to accuse the media when things go wrong in societies. But this has never bothered any journalist that I know. There is, however, one accusation that will be hard to ignore and it is that financial journalists missed the credit crunch which was to cripple the fundaments of capitalism - the biggest story in decades.
Financial journalists, along with economists, have been dealt a credibility blow that will take time and effort to overcome.
It is tempting to believe that journalists from the US have most to answer for as the crisis originated in their country. But we indicted ourselves by swallowing hook, line and sinker the argument from the government and some economists late last year that South Africa would not go into a recession. This, we were told at the time, was because state spending on infrastructure ahead of the 2010 World Cup would cushion the effects of the financial crisis and prevent the economy from contracting.
Of course we now know that the country has been in recession since the first quarter of this year, resulting in hundreds of thousands of workers losing their jobs.
In a session I attended recently on the state of financial journalism, a participant rubbed salt into the wound when he complained that this genre of journalism was "a sham... unable to predict business and economic failures". Another noted that company reporting was superficial and didn't seem capable of interrogating the financial wizardry that is sometimes buried in financial statements.
I say this at the risk of raising the ire of my colleagues, but many journalists only go through the financial statements of a company for the first time when they have to write a results story. A colleague recently admitted that, before he attended a financial literacy course, he used to get heart palpitations each time he was presented with a company's results.
Even though I did accounting up to matric, I didn't know what a closed period was and endured the ire of a news editor who was adamant that I ask a company executive certain questions even after he had explained that the company was in a closed period and he could therefore not give me the information I was requesting.
A big dilemma facing financial journalism is its specialised nature, which requires a level of maths literacy and basic accounting skills. As a country, we have a chronic shortage of students who do take up maths and accounting in their school and post-matric careers. For the most part, few students who graduate with these subjects will choose journalism as a career. That means the business media will have to contend with arts graduates.
In itself, this is not an insurmountable challenge. As we have seen in the recent example of Financial Times journalist Gillian Tett, an arts graduate can master the technical language and win awards as a financial journalist. Tett, who won this year's British Press Awards Journalist of the Year Award and last year's Business Journalist of the Year Award, completed a PhD in anthropology before joining the FT's graduate training programme in 1993.
For journalists to reach this level of excellence, media companies must put resources into training and retaining them.
But in the context of disinvestment and underinvestment characterising newsrooms globally, it will be quite a challenge to address superficial journalism. Many newsrooms are half the size they were a decade ago and many experienced journalists have left the industry, depleting media houses of the institutional memory and judgement that makes the difference between a good story and a regurgitated press release.
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