Media, Business, and the Economy

Interest rates and federal monetary policy. The deficit and the national debt. Balances of trade and corporate performance. How do these factors and others affect Americans’ ability to succeed in the economy, both during their working years and after? How knowledgeable are Americans on these topics?

The American Academy of Arts and Sciences convened a group of economists, business leaders, and journalists to consider these very questions, and to ask a larger one: how well do the media inform the public about the economy, and how can that role be improved?

The group realized that any discussion of how the media cover economics cannot be separated from the economics of the media business. Shrinking advertising revenues are placing unprecedented pressures on daily newspapers, magazines, and television news, all of which have reduced the resources devoted to newsgathering and reporting. And traditional audiences increasingly are seeking information from Internet-based “new media.”

The Academy study on the Media, Business, and the Economy, which draws from an earlier Academy project on Corporate Responsibility in America, was launched during a period of relative prosperity and stability in the world’s financial markets. Today the global economy is far less settled, making the need for sound economic information even more crucial. This collection of papers illuminates three key factors in understanding the role of a changing media amid a changing economy.

Princeton economist Alan Blinder explores what Americans already know about economic policy, and how the media contribute to that understanding. His paper, Popular Opinion about Economic Policy: The Role of the Media, is based on work Blinder conducted with his colleague Alan Krueger at Princeton University. Since the Blinder/Krueger data were collected in 2003, there is evidence that the Internet has gained considerably on traditional media as a major source of news—economic and otherwise.

Veteran financial journalist Jeffrey Madrick describes the evolution of his craft over the past 30-plus years in a paper titled Credulity in Business Journalism: A History of the Business Press Since the 1970s. Primarily a print editor and reporter, Madrick desires healthier skepticism from his compatriots, lamenting that many in the financial press act more like cheerleaders than watchdogs, to the detriment of solid financial reporting and a well-informed public.

Lou Ureneck, a former daily newspaper editor who now chairs Boston University’s journalism program, surveys the formal training programs in this country that specialize in the preparation of newspeople for the finance and economy beat. These business journalists interpret the economy and inform us about how it affects our lives, and in The Teaching of Business Journalism in the United States Today Ureneck describes the university-based programs that are training the next generation of business journalists.

The Academy is grateful to the Fellows and other experts who participated in this study, and to the Annenberg Foundation Trust at Sunnylands and its director, Kathleen Hall Jamieson, for their support of the project.