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The
Great Media Depression
News reports depict economy far worse now
than during the 1929 stock market crash
EXECUTIVE SUMMARY
A study from the Business & Media Institute
By Dan Gainor
with Julia A. Seymour and Genevieve Ebel
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Sidebars
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.”
Recommendations
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.
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