Journalistic Accountability and Financial Crash

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Introduction

Society works on the basis of many interactions, between individuals, groups, and systems alike. In order to properly manage social life, governments exist and mediate the needs of the many with their availability. People need company, so society has a concept of friends, lovers, and married couples, all of which pertain to their specific set of expectations and interactions. Similarly, a number of people united under a single task in order to make a profit can be called a business. Businesses exist in order to fill a niche, a need from the public that is possible to fulfill only through joined acts of labor. Companies interact with each other, the government, and consumers on the market. However, there is also one connection that businesses take especially seriously, one that has the ability to affect all others – the relationship with media. News media and journalism as its facet play a vital role in the lives of businesses. While journalism cannot be called an irreplaceable part of business operation, it is certainly a large factor in corporate success and failure. The specific relationship between journalists and business entities is complex. Different phases can be identified within the relationship between the two, each leading to a different perception of both entities by the public. Through investigation of multiple sources, it is possible to see a rough outline of the relationship between the subject from the 20^th century to the present.

In the 20^th century, independent journalism was largely used to promote corporate skepticism, shaping the reputations of many organizations in the eyes of the public. With the advancement in technology and an increase in business’s influence, however, many journalistic outlets began to more closely cooperate with companies, which in many cases skewed their reporting to the side of corporations. In more recent years, the tides began to shift once again, with journalism struggling to stay afloat in the age of digital information. The use of outrage culture and scandal, nowadays, gives investigative journalism the necessary attention, while once again portraying businesses in a bad or misinformed light. There are many other potential criticisms companies can weigh on the media industry, many of which have to do with their investigative techniques and reporting quality. Over the course of this paper, a more thorough investigation into the aforementioned historical trends will be performed. As a result, it will be possible to better understand the present realities of business-journalism relations. The present thesis is that the journalism media of today has deteriorated significantly compared to past decades, straying from its social and professional responsibilities. News media of the modern world lacks critical assessment tools, education, and financial backing to perform an in-depth analysis of business trends.

How Journalism Interacts with Society

Journalism, and news media, plays are an important part of society. Through effective journalism, people are able to learn about current events, form opinions about different facets of life and more thoroughly understand the world around them. More than just a tool to relay information, it is a lens through which the public perception is formed. Framing, narrative storytelling and focus of the news shape the understanding of the majority, including their stances on important events or potential changes. Investigative journalism, as a niche of the bigger whole, strives to provide deeper coverage of specific topics, ranging from government affairs and politics to local affairs. Working to unearth new information, this approach allows journalists to formulate new knowledge from existing sources. In addition, the news entity is capable of making people know more about a multitude of things, expanding the range of opportunities for a single individual. Information makes it easier to make choices, live a more connected and fulfilled life. Journalism fulfills society’s need for a group-wide increase of knowledge. Different types of journalism teach their clients to read and learn. In particular, however, a large portion of investigative journalism covers business-related news. Discussions of emergent companies, new deals, and policies, ethical considerations, and international relations between organizations – all of these topics and more get covered by the news.

History of Relations between Business and News Media Reporting

Journalism, at its core, is a system designed to deliver information. People gather, sort, and analyze various sources of data in order to present a clear narrative to others, one that can help them better understand the world. Freedom of the press has been among the central concepts in the US, encouraging news outlets to spread truthful and diverse information to the people. Through good reporting, it is possible for common individuals to feel more connected to the global sea of information, as well as make their own impact on the world. Investigative journalism, then, stands at the center of such concerns, delving deeply into its subjects in order to make them easier to digest.

Journalism, as a social concept, can be widely used to keep systems of power in check. Both government and large organizations work primarily for the people, and the people can exert influence on them through public channels. When information is widely available to the public regarding a social structure or business, they gain the ability to either support or change that structure. In the capitalist society of the US, journalism acts as a tool of skepticism, a way for individuals to understand complex business entities and subsequently control them. Therefore, news media is able to keep business in check, by mediating public opinion and subjecting businesses to scrutiny. In the 1970s and onwards, journalism largely served this goal, decreasing the degree of public confidence in business (Dreier, 1982). The priming of businesses’ potential consumers against them is what sparked the long-standing antagonism towards investigative journalism. News performed the role of watchdogs, speaking out against many activities performed by corporations (Miller, 2004). This often included investigations of shady business tactics, raising public awareness, and even providing the public with certain safeguards against fraud.

Accountability, Problems, and Eventual Decline

However, certain problems were present from the start of the rocky relationship between the two. In particular, a major criticism that can be made towards journalism both from the side of businesses and consumers is the lack of thorough investigation. In their role as watchdogs, journalists often did not properly understand the subjects they were covering, lacking the necessary depth and insight. This trend meant severe consequences for both businesses and regular people. In many cases, shallow reporting could lead to a mischaracterization of a company, while in others, it leads to major problems being unaddressed. A prime example of this trend was the 2008 financial crash (Starkman, 2014). It is presently known that many investigators stood at the center of an upcoming storm without realizing the scope of the problem, many of which then shifted the responsibility away from themselves (Usher, 2012). As a result, the banking firms and other companies that managed to profit off of the market crash remained afloat, while the public had to suffer the dire consequences of the event. Similarly, the passage of time deteriorated the mechanisms that kept companies in check, making many journalist sources simple accessories to existing corporations. A lack of insightful investigation and the much-needed passion for truth transformed news media from watchdogs to lapdogs. In many cases, poor reporting leads to lesser accountability, which, in turn, meant fewer changes for the better in the business sphere (Bednar, 2012). This problem escalated further, leading to the appearance of badly-researched news articles that relied on propagandistic sources and direct connections to businesses (St. John, 2010). The initial goal of news reporting was sullied, and presented narratives slowly started changing for the worse.

Formation of Outrage Culture

With the prominence of social media and other digital platforms, the situation did not change significantly. Attentive journalism of the past was largely replaced by more sloppy reporting, only exacerbated by the slow decline of news as a form of popular media (Carson, 2014). A lack of popularity or financing directly contributed to the deterioration of the medium. Journalism slowly began to focus less on informing people and enacting social change, and more on eliciting strong reactions from its viewers. In particular, a strong focus was made on making people dissatisfied, as anger often elicits the most engagement. The outrage culture, formed by strong competition and a need to grab readers’ attention in a global environment, soon took hold (Crockett, 2017). Born from the desire of journalist sources to stay relevant were articles designed to make people upset. Big companies, that grew even more powerful and prominent over time, then became one of the prime targets for news outlets. Stories that sell best are those that get big ratings, while the quality and truthfulness of the material come second (Nemeth, 2021). Much like the previous trend in journalism, this shift brought considerable problems to both consumers and companies. Without the incentive or time to thoroughly research specific topics investigative journalism as a whole mostly attempts to paint businesses, in a bad light, affecting public perception and stakeholder actions.

A Deeper Look at the Financial Crash

While the topic has already been covered in brief in other sections, a full overview of the journalism’s history with the financial crash is important to example. Using this event as a case study provides an opportunity to see how media’s involvement interacts with social events, and how journalism can be used in a real world scenario. The financial crash, in many ways, worked to showcase the biggest flaws of the news industry, as well as its continual degradation over the years. By investigating this event, it is possible to more thoroughly understand the implications journalistic malpractice has on society. Furthermore, the many problems showcased during this discussion can serve as a blueprint for future change in the journalistic sphere.

Foreseeing the Collapse

One of the defining factors in the devastation of the 2008 financial crash was its unexpected nature. The housing boom preceding the period gave many people opportunities and a false sense of security, while the banking industry used the contemporary economic climate for profit. According to most sources, there were certain signs of an upcoming economic collapse, which, however, were not widely understood. Some political and economic figures raised concerns, but most of them were not properly heard by the public. In particular, banks were often among the organizations that understood the implications of the emerging housing bubble, but did not actively seek to change the outcome. Journalists covered the housing bubble and the increase in cheap mortgages but also failed to fully example the connections between the two. While the fault cannot be solely put on journalists, it is important to hold them accountable for failing to alert the public. Many authors highlight journalism’s inability to perform its main role during the financial crash. As outlined by Starkman (2014), the capacity of the print media to act as a watchdog decreased over the years, culminating in a total professional lack of interest in the subject of the housing market problems. Gold (2018) highlights, however, that the issue was multi-faceted and included a failure of many organizations at the same time, not only journalism. Important consideration that this author also touches on is the lack of research. In most cases, journalists were not incentivized or required to “dig deeper” into a subject, leading to surface level reporting and a lack of critical investigation. In the 2008 financial crash, it was necessary to grasp the whole picture of the events to properly discuss them, something that many reporters simply did not have time to attempt. This tendency is further supported by writers like Sethi (1977), who highlights journalism’s frequent inability to represent economic complexity in full. An existing trait of news media reporting was directly responsible for the lack of coverage for the 2008 financial crash. Most existing research on the subject, however, does not pin the blame on specific journalists, or news outlets. Instead, this is seen as a systematic failure on the journalism sphere as a whole, and a consequence of the profession’s continual decline. With the reduction in funding, considerable staff layoffs, it was difficult for news outlets to fulfill their responsibilities to the public (Starkman, 2014). From the early 2000s, the financial decline of news media became endemic to its most egregious failures.

Journalism and Legislation

Following the financial collapse, the government found it necessary to change its policies in order to mitigate the effects of disaster and prevent any similar events in the future. One of the most widely covered issues, then, was the bank bailout proposed by the government. Seen as a necessary but unwanted solution, it has introduced much controvercy into the public discourse. The media at the time, including journalists, were trying to make sense of the financial crash, and the potential effectiveness of the bailout bill. Examining articles from that time period makes it clear that many reporters were unable to take a hard stance on the subject, or evaluate which of the potentially proposed measures would be beneficial to the economy (Norris, 2008). Similarly, many stories only included the surface-level telling of events, unable to delve deeper into the potential solutions. At the same time, the government was also considering other control measures to change the market for the better. This included stricter business regulation, and more government involvement in market affairs. But not every group favored this change, with both companies and entrepreneurs struggling to find a way of avoiding mistakes of the past. Having to work in a social climate ravaged by an economic disaster, investigative journalists actively covered most news on the subject, including potential policy changes. What is important to note, however, is that most journalist sources were extremely critical and resistant to legislation aimed at changing the economy. The opposition to regulatory reform could be seen in media framing, as well as the main focus of the post-crash news coverage. According to Adam Cox (2022), most news articles at the time focused on the monetary cost of changing regulations, instead of their potential value as a solution to the crisis. In their position towards the event, print media stood largely to uphold the status quo, pushing for a liberal market approach. In addition, the criticism levied at the news media after the economic crash has brought significant unrest into the sphere, with many publications dedicating their time to either taking or dodging responsibility. Discussions centered on journalism’s involvement into the financial collapse both worked to weaken the public’s trust in the medium, and took attention away from other considerations.

Opportunities for Change

In order to improve the currently existing relationship between journalism and business, and stabilize the role of the former in the social sphere, many changes are needed. Throughout the years, the field of news reporting and research has improved its methods significantly, however, it has also grown out of favor compared to other news sources. The combination of medium obsolescence and other problems leads to the degradation of journalism quality. Despite the changing attitudes around investigative journalism, it still remains an important facet of society, being in need of significant change. In addition, the business sphere also requires a more thorough analysis. The below paragraphs will detail some of the possible directions and opportunities for improvement, while also providing justifications for them.

A Global Environment

Globalization and the emergence of international trade as an important facet of business have affected the news industry. With the appearance of a large network of other news sources, competition increased and public access to information increased tenfold. The trend brought on by globalization can be seen as both a positive and a negative for journalism. The development of international relationship channels gave journalism a bigger potential audience, and a bigger public platform to work with. However, it also increased the number of competitors on the market. With the need to retain and gain news supporters, journalism was forced to focus on appealing news topics and eye-catching discussions. Government support and protection for local news sources may be a suitable way to help news organizations face the competition without compromising the quality of their reporting.

In regards to business, globalization also brought about significant change in the field. Competition, and a rising need for continual profit increase, combined with the desire for constant expansion, oftentimes drive the businesses of today. Stakeholders and investors put their money into businesses hoping to make large profits, while organizations work on their public relations in order to attract new audiences. In this highly capitalist environment, businesses lack the incentive to work in an ethically or environmentally conscious way. With the focus on continuous short-term gain, the relationship between corporations and journalism becomes more antagonistic. Bad reporting leads to changes in customer perception, which is a large contributing factor toward future profits. The investigative and scrutinizing nature of high-quality reporting, on the other hand, has the potential to show businesses in a bad light, driving down sales. As a result, both good and bad investigative journalism is largely seen negatively by global businesses.

Journalist Education

As mentioned previously, journalists working in the field are both poorly trained and ill-equipped to work with businesses. Understanding of finance, customer-company relations, or possible intricacies of corporate decision-making is insufficient, leading to surface-level evaluations and untruthful reporting. It is necessary to change investigative journalist education for the better, in order to better equip future professionals for their work. Through better education, it will be possible to improve the relationship between the two entities and also guarantee better reporting. In addition, it may be necessary to reinforce the role of investigative journalists as mediators between people and businesses, and structures of outside control. The role of written news media as a limiting mechanism and a tool of public scrutiny for business needs to be more prominent.

More Thorough Investigation

One of the vital problems uncovered through discussion is the inability of news media to properly give attention to the intricacies of business, or the emergent problems of the industry. The problem diminishes the capacity of journalism to act as a tool for the public, while also tarnishing the reputation of companies. In order to combat this problem, better education of journalists in the field of business discussion, and analytics is necessary. Furthermore, it may be required to change the financial incentive structure toward paying news resources more consistently. A number of quality-related problems stem from a lack of funding and attention, therefore better financing of news may be conducive to change.

Transparency of News Media and Business

Another possible avenue to change is the promotion of transparency. Many news companies in the modern age have additional incentives, stemming from political or business connections, affecting the way their writing reflects the world. Requiring more transparency about journalistic sources of income, or any potential vested interests can be conducive to encouraging better journalism. In particular, this action would give the public the necessary power to support independent or impactful journalism, distinguishing corporate propaganda from real news. In addition, such an action would incentivize change within news media itself, which would seek to adjust itself according to social expectations. Transparency can also make some of the other emergent problems clearer, and make it easier to enact the necessary change.

For businesses and corporate organizations, transparency is a necessary improvement as well. Presently, many companies do not perform their business operations clearly, with monetary flows being unclear and internal operations purposely obfuscated. This tendency makes it difficult to promote social accountability, detect fraud, enact corporate change, and conduct investigations. As a whole, the lack of transparency in business is detrimental to both organizations and the public, being in large part responsible for the harm done to society. It is necessary to use all possible tools to ensure better accountability and clarity for companies.

Financial Incentive Structure

As discussed previously, modern news media often find it difficult to stay afloat, support its staff, getting the necessary outreach and audience. Monetary compensation should be made better for journalists. A balance between good financing and news integrity is necessary, and there are different potential structures for change. Structural changes in financial support for the media, or better systems of information delivery are necessary to improve the quality of investigative journalism. There are a number of potential pathways towards improving news quality – reducing news outlet scope, using pay-to-access structures for audiences, gathering public donations, and other types of charity. Investigative journalism could focus more on local issues, with news media putting emphasis on reporting quality, good wages, and support for their employees. Alternatively, it is possible to create a system of social support for certain media outlets, providing them additional funding or opportunities for work. It is currently unclear which method of gathering funds is most conducive to the necessary change, and more research is needed on the subject.

Conclusion

In conclusion, it can be said that the relationship between business and journalism is especially complicated. Due to a long period of ideological clashes between the two entities, it is difficult for many companies to regard news media highly. In addition, the current news systems display a number of serious problems that require attention. Firstly, the journalists of today are ill-equipped towards keeping companies in check through honest reporting. A lack of financial support and lackluster investigative practices lead to surface-level discussion and systematic misunderstanding of the field. By failing to do proper research, journalists also do not fulfill their socially-assigned role. In addition, the work of news media sources contributes to the potential misrepresentation of companies within the public eye, affecting public relations and sales (Sethi, 1977). The lack of nuance in discussing business issues puts companies and investors under pressure when they are being covered by journalistic sources. Lastly, the present focus of journalism on causing outrage has been especially destructive towards relations between the two entities. The need for public attention forces investigators to cover topics that can create a strong reaction, or represent data in a way that is primed toward certain outcomes. As a result, the people do not get a more balanced view of the issues covered. A focus on negative reaction and engagement also leads to direct issues for company public relations.

References

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Cox, A. (2022). News media and the financial crisis: How elite journalism undermined the case for a paradigm shift. Routledge.

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