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Custom The Role of Media in Economic Downturn Essay

In recent times, the relationship between financial markets and public disclosures has come under scrutiny as the media played a role in the financial downturn. According to Clark, Thrift and Tickel (2004), financial market dynamics are influenced by public disclosures, created by real time communication thus influencing investors in their decision making process.

Media organizations are complex social institutions that exert an influence on the messages they transmit. According to the broad survey of print, online and broadcast media by the Pew Research Center, the media generally ignored the coverage of the great recession and how it resulted in the financial crisis to bring about bank bail-outs and administration’s stimulus. Instead, it focused more on unemployment and housing issues. Pew Research Center found that job cuts, housing issues and foreclosures filled up 6% of the news hole, and bankers’ recession took up 5% of economic coverage while 4% went to bankruptcies and industrial recession. This made investors focus more on how to deal with unemployment and housing thereby deviating from crucial issues of financial downturn.      

According to Danny Schechter an investigative financial journalist, little or no examination into financial products later resulted into financial problems such as the Collateral Debt Obligations (CDOs). He asserted that the media failed in its responsibility due to common interest. There was no scrutiny of home advertising and sales thereby resulting in complications due to falling house prices and mortgage default. This contributed to the financial recession.

With the collapse of financial markets, Schechter remarked that it was a financial system failure, regulatory failure and a media failure by omission and commission. To reduce criticism of economic journalism, Huffington Post created a funds drive to support and facilitate investigative journalism including serious issues on the economic crisis to avoid the blame game.

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