The media did not forecast the recession because of pressure from a “City PR machine”, journalists and politicians agreed last night.
The BBC’s Evan Davis, the Daily Mail’s Alex Brummer, the Financial Times‘s Gillian Tett, and the Liberal Democrat deputy leader Vince Cable were among the speakers at a debate, organised by Polis and The Media Society, titled: ‘Why Did Nobody See It Coming?”
Pressure from financial public relations officers was among the reasons put forward.
Brummer said: ‘The press has found itself up against an unnerving banking PR machine – whose job it is to dissemble, lie if you like, to put you off the track.”
Tett said that, after a slow start, the Financial Times soon realised the importance of stories on capital markets.
‘But then we came up against the financially powerful City PR lobby, with considerably more resources than my team,’she said.
Cable said he was lent on after first warning of impending doom in 2002 and 2003.
“I was invited in for friendly lunches to put me right,” he said. “They appealed to me as a patriot to rally behind the city. ‘The City is driving the economy, this is not good for the city’ [they said].
“It was the way of this industry to wrap itself in the Union Jack, which is very persuasive.”
‘Obsession with house prices’
Brummer denied that no recession warnings were made, and said: ‘Most of us had written, at some point, about elements of what was going on.”
But he admitted his paper’s “obsession” with the house price crash meant other aspects of the impending crisis were less prominent.
“Our readers seemed to be obsessed with the housing crash, and we played to that obsession,” he said.
“[Those stories] were at the front of the paper, where we have 10 million readers, as opposed to the City pages, where we have three readers.”
He added a lack of experience among financial journalists also prevented more accurate forecasts.
He said: ‘Many of them have never lived through a banking crisis before. I cut my teeth in the 1970sâ€¦experience does count in this area. A lot who grew up in the boom years have never experienced a collapse.”
Brummer admitted the Financial Times had a ‘wonderful pool of people”, but joked: ‘Not many people read the FT, so it’s a bit wasted on the general population.”
Tett, from the FT, agreed that warnings were made – but also agreed that, initially, the stories were ‘on page 323″.
‘Looking back, it’s clear the state of the financial industry was a glaring example of social silence,’she said.
‘I look back at what we wroteâ€¦I certainly wish we had said more, done more, spoken out more openly.”
‘It’s not the media’s job to bang a drum no-one else is’
Davis – who said it was ‘the job of journalists to withstand the pressures of the public relations industry’– gave five reasons why the media did not widely forecast the recession.
He said the financial world was ‘a complicated place”, with lots going on; that humans were ‘a flawed species, with all sorts of behavioural traits that mean we don’t see things in impartial ways”; and that the media ‘tend to operate in single dimensions – good news or bad news, it’s sunny or it’s raining”.
His fourth reason was ‘warnings are often made – lots of warnings are made that should not be listened to”, and his fifth was: ‘It’s not the job of the media necessarily to pioneer a view that no-one else is taking. If everyone else is taking a view, it’s not the media’s job to bang a drum that no-one else is.”
Davis added: ‘To say the press warned the world what was coming is ridiculous.
‘The press, in any way, didn’t see it comingâ€¦but I think that’s entirely forgivable. It’s such an ‘On the one hand, on the other hand’ answer. It’s very BBC-ish.”
Davis also praised Telegraph and Sky News journalist Jeff Randall – ‘Perhaps he’s entitled to say ‘I told you so’,’he said – and Cable, while admitting the media should give more coverage to nuances, and dissenting voices.
But Cable admitted, despite widespread praise, even he hadn’t fully forecast the crisis.
‘The honest view is that I, and many other people, never really understood the sheer magnitude, scale and speed with which the disaster has unfolded,’he said.
‘Media can’t be prophets’
Professor Willem Buiter, chair in European political economy at the London School of Economics, where the debate was held, said ‘no-one’saw the recession coming.
‘I don’t blame the media – they’re not supposed to see it coming,’he said. ‘Prophets, scientists – they’re supposed to see things coming.
‘Periodic booms and busts have never been predicted. The media – most of it is entertainment, a small part is news, a negligible part is analysis.
‘The written media at best can explain things as it happensâ€¦even then they don’t do complexity, because its readers don’t.”
When asked if the media were too gloomy, Buiter joked: ‘No, no. They are far too optimistic. You think things are bad – you just wait.”