Panel Discusses Economy, Media

Professional journalists and Harvard academics debated the media’s ability and responsibility to predict economic trends during a discussion about financial reporting at the Institute of Politics yesterday.

In light of the recent subprime mortgage crisis and the dot-com bubble burst, the four panelists shared their perspectives on the role of journalism in shaping the financial behavior of the public.

The panel members argued over whether financial crises could be predicted and whether the general population could respond to such information in order to minimize the extent of a potential economic downturn.

In particular, they addressed the recent financial crisis, which was exacerbated by the subsequent collapse of funds that contained mortgage-backed bonds.

Jane B. Quinn, a contributing editor for Newsweek, and Floyd Norris, chief financial correspondent for The New York Times, were joined by Jeffrey A. Frankel, professor at the Kennedy School of Government, and economics professor Edward L. Glaeser.

Quinn said it was nearly impossible for journalists to have predicted with certainty the extent of the global credit crunch.

“You start getting into a slightly different area where even Wall Street didn’t know how to value [mortgage-backed bonds],” she said. “I don’t care how good of an investigative journalist you are, you can’t find out about this until it’s happening.”

However, Norris suggested that the media has regularly predicted fluctuations in the economy, but that the general public has typically ignored words of caution in the press because these predictions may not reflect the current situation.

“Eventually I got tired of writing how crazy the stock market was,” Norris said of the tech bubble at its peak.

Frankel said that the bubble was not covered extensively in the late 1990s because journalists are more interested in projects with a more immediate impact than those with longer time frames.

John D. Cella ’08 said he was encouraged by the willingness of Quinn and Norris to admit that there were mistakes made in the coverage of some financial issues, but added that he was less pleased about how they suggested that articles often cater to popular opinions.

“It sort of proved that stories are based on demand,” he said.