Technology tanked. Stocks spiraled. Bubbles burst. Confidence collapsed.
Business coverage chronicled all that before Sept. 11, 2001.
Those events seem relatively tame compared to the uncertain economic landscape journalists must cover today, and for the foreseeable future. What must business journalists do now? Focus on fundamentals and imagine the unimaginable.
The need to examine foundations that make our businesses run, our financial world hum, and our economy work become even more important in our coverage, according to journalists who cover those beats.
In an effort to find out how we should be looking at the economy today, we interviewed several journalists who have been Knight-Bagehot Fellows. The Knight-Bagehot program at the Graduate School of Journalism at Columbia University enables journalists to spend a year studying at the Columbia’s Graduate School of Business, where they take courses on business, finance, and economics.
Here’s what they had to say:
Floyd Norris, chief financial correspondent, The New York Times
For people who care about the companies, the balance sheet is more important than ever. We need to report on the financial health of companies. Many companies may have a harder time accessing capital markets.
For those companies, their own resources become even important than they were before. We may see companies survive because they had strong balance sheets.
Another thing to watch for: We’re going to see lot of companies taking a bath. See how much of the bath they blame on [what happened after the attack on the World Trade Centers].
Over time, we need to watch how investors and public attitudes change. Before this, people remained confident that the economy, the stock market, and their own financial situation would be fine over time. That long-term confidence supported heavy spending, and little savings, high stock prices.
To the extent confidence is shaken, we may see those trends hurt. Certainly in New York the shock has not worn off. So asking anyone now is useless. They don’t know. But over time we need to watch this.
Survey results show that confidence fell off substantially before Sept. 11. On Monday, we will have more figures [both before and after the attacks].
None of us knows what is going on. There have been things in the past that we thought would produce sea changes, such as the 1987 stock market crash. It showed price declines were buying opportunities, but not otherwise. The Russian economic crisis in the 1990s also showed investors that such problems didn’t have such an impact.
Jan Hopkins, anchor, CNN, covers financial markets and business
We need to look for ripple effects. We already have the airlines, which have affected rental car companies. Hotels and vacancy rates. Retailers at malls. Restaurants. Some restaurants are empty. Others packed.
Wall Street brokerage firms: Are they going to be able to keep people? What are they doing with regard to their people locally in other communities?
Advertising dollars: What’s happening with local television stations, newspapers? What are people doing in order to meet? Video-conferencing? Traveling to board meetings? More teleconferencing?
Reservists are being called up. What does holding their jobs do to a company? Remember the people part of the story.
What kind of disaster planning do companies have to keep their businesses running? Fire drills?
Stephen Dunphy, business columnist, The Seattle Times
Cockpit safety. Airport issues. I’m doing a story for Sunday that is a piece on guideposts we watch. For the next couple of months many of them won’t be worth a hill of beans. Where do we go now?
I’m suggesting we go to smaller retail surveys, unemployment claims. Do reporting the old-fashioned way: Talk to people. Talk to store clerks. Stand in line at stores.
Look at public companies you may be covering. Forget quarterly results; pay attention to cash flow. If a company is charging a dollar and getting a dollar, they’re doing OK. If not, they’re not.
Kathleen Pender, financial columnist, San Francisco Chronicle
Look at third-quarter reports. Look for kitchen sink items. Companies will want to throw in extra charges. Need to know which charges are really special and which aren’t.
Be careful of pro-forma accounting. Pro-forma accounting is a second set of accounting statements not filed with SEC, and not subject to general accounting practices. They’re published strictly for press releases. I see papers publishing them as if they were official. Difference could be as much as $50 billion.
Reporters have to be really, really careful about how they see the fundamental business. There was so much accounting chicanery before. So if you don’t understand how to read a financial statement, better learn how to do it. Take a basic accounting course.
The airline bailout is interesting to keep an eye on. See if money will have any impact, or just stave off bankruptcy.
Sarah Bachman, visiting scholar, Asia/Pacific Research Center, Stanford University
What needs to be covered: How businesses in the WTC are related to business & economics in the rest of the country. Some stories have been written — notably, those about Cantor Fitzgerald in The New York Times whose devastating losses have, ironically, vastly increased coverage and understanding of the nation’s bond-trading network.
What should business journalists be focusing on now? What I haven’t seen enough about — but am beginning to see — is a thorough examination of how deregulation of the airline industry put the industry in the impossible position of serving two masters: Wall Street and public safety. We know which one lost.
Deregulation did the same for the nuclear power industry, and is doing the same for the general electric power industry. With a second terrorist attack threatened, and maybe more on the horizon, one must ask: Do we have a clue as to what it would take to safeguard our power industry?
What should they be watching for in the future? By now, two weeks later, business coverage has bounced back and is becoming more thorough and better than ever. I would like to see more stories such as the David Ignatius story on people behind the scenes occupying vital niches in the economy: “Top aide steered Fed through terrible Tuesday.”
This crisis ha,s more than eve,r emphasized that business is about people, and there are plenty of important and interesting people stories to be told that could, simultaneously, inform the public greatly about the intricacies of our economy.
What is missing, and the coverage will catch up fairly soon: stories that deal with the question of how corporations in this climate should act as citizens of the American community and country. One problem we have with a lot of business reporting is that we tend to report what’s easy to report: the numbers.
We don’t ask often enough about the relationship of business in society. Front and center now is the role of the airline industry, which provides not just a service but a utility. Should the airline industry be responsible for security or should we, as the public, be responsible?
What role does business have in society? Newspapers have seen their role as delivering information. Journalism needs to ask what is our role in society.
Kim Norris, former assistant business editor, now health care reporter, Detroit Free Press
Watch for the economic fallout, which will be huge. This only exacerbates what’s been happening.
We’re focusing on airports, airlines, and consumer security. Northwest Airlines has its hub here and the airport employs a lot of people. We did a story earlier this year on airline deregulation and how it changed the landscape. People might be going back to this stuff. Competitive businesses aren’t supposed to get help from the government. At the same time, we need airlines.
The border issue is big for us. The Detroit/Canada border is one of the three busiest borders. Transportation issues. Trucks are sitting at the border for hours. Companies are having trouble getting parts, getting drivers, meeting production schedules.
I think the optimistic coverage of markets has been a disservice to the public. I don’t think I do the country any favors by building up debt. Telling me to buy a car to be a good patriot is not good. Consumers are already at historic debt levels.
Be watching the holiday season. It will be a big deal. It’s a huge economic indicator. People’s shopping habits will be put under microscope.
We need to see some of the downsides. What if it isn’t fine? We’re talking to a lot of people in the markets who have never been in a down cycle. We need more caution, more skeptical voices.
One of the problems as journalists is we have nothing to compare this to. Everything is very different.
(Aly Col¤n was a Knight-Bagehot Fellow in 1982-83.)
