Challenging Economic Journalism: Covering Business and Politics in an Age of Uncertainty 3031310292, 9783031310294

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Challenging Economic Journalism Covering Business and Politics in an Age of Uncertainty Henrik Müller

Challenging Economic Journalism

Henrik Müller

Challenging Economic Journalism Covering Business and Politics in an Age of Uncertainty

Henrik Müller Institute of Journalism and Mass Media TU Dortmund University Dortmund, Germany

ISBN 978-3-031-31029-4    ISBN 978-3-031-31030-0 (eBook) https://doi.org/10.1007/978-3-031-31030-0 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Cover illustration: Nikolay Pandev / Getty Images This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Contents

1 The Loss of Certainty: Journalism vs. the Economy  1 2 Peculiar Products: The Business of Economic News 11 3 Good,  Bad or Ugly: On the Quality of Economic Journalism 41 4 Making Sense: Narratives, Journalism and the Economy 73 5 Media  Coverage and Animal Spirits: The Interplay Between Economic Journalism and the Economy105 6 Here,  There and Everywhere: Economic Globalization and National Media143 7 The  Case of Europe: A Common Currency Without a Common Public Sphere179 8 From  Gate Keeping to Scouting: the Changing Role of Journalism211

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9 What to Cover: Topic Selection and Research225 10 What’s at Stake: An Outlook for Economic Journalism263 References275 Index295

About the Author

Henrik Müller  (*1965) is Professor of Economic Policy Journalism at TU Dortmund University’s Institute of Journalism and Mass Media, the largest facility for journalism studies in German-speaking countries, where he conducts specialized Bachelor- and Master-level programs at the intersection of economics, communication science, and journalism. He’s also a cofounder of the Dortmund Center data-based Media Analysis (DoCMA) and Narrative Economics Alliance Ruhr (NEAR), two interdisciplinary scholarly networks applying computational content analysis to economics and other social sciences. Müller studied economics at the University of Kiel, did his doctorate degree at the University of the Armed Forces in Hamburg, and graduated from German School of Journalism in Munich. He looks back at a two decades-spanning career as a journalist, working for newspapers and magazines, his last position being deputy editor-inchief of manager magazin, a business monthly. He’s the author of numerous books on economic issues, a frequent commentator in the media, and a contributor of a weekly column to Der Spiegel.

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List of Figures

Fig. 1.1

Freedom of the Press vs. Corruption Perception. Source: Freedom House, Transparency International (2017 data) Fig. 2.1 Varieties of economic journalism by user motivation and market size. Source: the author Fig. 4.1 A hierarchy of narratives. Source: the author Fig. 5.1 Humans in the loop—the role of qualitative assessment in topic modelling. Source: the author Fig. 5.2 Overall Uncertainty Perception Indicator for Germany and related events [Share of analysis corpus relative to entire corpus, Jan 2001–Jan 2023. Source: the author (after Müller et al., 2021)] Fig. 5.3 UPI—European and international topics and related events [Relative to entire corpus, three-month backward-looking moving averages, Jan 2001–Jan 2023. Source: the author (after Müller et al., 2021)] Fig. 5.4 UPI—Real-economy topics and related events [Relative to entire corpus, three-month backward-looking moving averages, Jan 2001–Jan 2023. Source: the author (after Müller et al., 2022)] Fig. 5.5 Overall Inflation Perception Indicator (IPI) and Harmonized Consumer Price Index for Germany, selected events [Analysis corpus share relative to entire corpus, percentage change y-o-y, three-month backward looking moving averages, Jan 2001–Jan 2023. Source: the author (after Müller et al., 2022)]

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List of Figures

Fig. 5.6

Fig. 6.1 Fig. 7.1 Fig. 7.2 Fig. 7.3 Fig. 7.4

Fig. 9.1 Fig. 9.2

Selected IPI topics related to the causes of inflation, selected events [Relative to entire corpus, three-month backwardlooking moving averages, Jan 2001–Jan 2023. Source: the author (after Müller et al., 2022)] Most read media brands by economic experts worldwide (shares) [677 respondents, up to three media brands could be named, Source: Boumans et al. (2023)] Europe-related Content as a Share of overall News Coverage. Source: Bergammi and Mourlon-Druol (2021). Note: E/T = European news as a share of total news ECB Coverage in European Newspapers, Shares Relative to Corpora. Three-month moving averages. Source: Müller et al. (2018, p. 10) Reform-related News Content, shares of entire coverage of Europe (Shares relative to European corpora, three-month moving averages). Source: Mourlon-Druol et al. (2022) Topics capturing EU-level Reforms [Share relative to reform-related corpus; topics 12 (LM), 17 (HB), 10 (Sole); three-month moving averages, and monthly values (dotted lines)] and related events. Source: Mourlon-Druol et al. (2022) Seven stages of research. Source: the author The issue attention cycle and its phases. 1: Pre-problem stage, 2: alarmed discovery and euphoric enthusiasm, 3: Realizing the cost of significant progress, 4: Gradual decline of intense public interest, 5: Post-problem stage; Source: after Downs (1972, p. 39–41)

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List of Tables

Table 2.1 Varieties of Economic Journalism Table 3.1 The ESSF Formula and Specifications

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CHAPTER 1

The Loss of Certainty: Journalism vs. the Economy

When I aspired to become an economic journalist, it was pretty clear what the job required: profound knowledge of economics, some journalistic craftsmanship, and a vivid sense of curiosity. So, I enrolled in an economics program, later proceeded to journalism school, and started working as a writer afterwards. Back then, in the late 80s and early 90s, we felt we were on a sure footing. Economics as a profession claimed it could explain basically everything; its proponents were styling themselves more or less like physicists, mathematically apt scholars of an exact science, rather than social scientists dealing with the vagueness and contradictions of real-­ world human actions. Markets, they said, were (mostly) inherently stable and efficient. Macroeconomic fluctuations could be smoothed effectively. Government intervention was suspected to have detrimental effects. Or so the zeitgeist informed us. Journalists, on the other hand, belonged to the privileged profession that guarded the gates to the public sphere. What was not reported by major newspapers or TV channels did not reach the public’s mind. Events that weren’t covered had no political impact. Politicians and scientists, entertainers and artists were not able to make it big unless they appeared in the relevant media. Ideas that were not voiced in the press or on TV didn’t reach an audience and thus effectively didn’t exist. Journalism had a unique role. The big publishing houses and broadcasting corporations enjoyed a commanding influence on public and political life, as well as fat and stable profits. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 H. Müller, Challenging Economic Journalism, https://doi.org/10.1007/978-3-031-31030-0_1

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If economic journalism meant the combination of some kind of superior knowledge, public influence, and a decently paid job, it struck me as an attractive occupation. I’m recounting my early professional aspirations not for nostalgia’s sake, but because quite a bit has changed since then, both economically and journalistically. Once-ironclad economic “laws” have been challenged by striking real-world events, like the Global Financial Crisis and the Euro crisis, or, more recently, a peculiar combination of negative nominal interest rates, weak investment, low productivity growth, low unemployment and deflationary pressures, followed by a bout of inflation in the wake of the corona pandemic and the Ukraine war that caught policy makers and many economists by surprise. The rise of populist politics in the west, and of authoritarian China and Russia in the east, has undermined economic policy doctrines, like free trade, balanced budgets, or independent central banking. Rising geopolitical tensions challenge the very idea of globalization. At the same time, public spheres have undergone profound changes, partly eroding journalism’s formerly dominant position in setting the agenda. Boundaries to public spheres have become porous, and discourses disorderly, with a multitude of players, voices and opinions being able to by-pass the formerly formidable gatekeepers. Journalism is still important when it comes to informing the public and forming public opinion. But it’s not the only game in town anymore. Many media outlets are in a sorry state financially. When old assumptions are overturned by reality, a new assessment is warranted. That’s the purpose of this book. We need to think about economic journalism—its foundations and functions, its shapes and routines, its relationship with the economy and economics. What do we need economic journalism for? Would societies function without it? And, quite fundamentally, what is economic journalism, or what could—or should— it become? This book seeks to answer these questions from different angles: for communication scholars, journalism students and practitioners it proposes a framework for economic journalism and the nature of the specific services it provides to society. Economists, who rely on economic journalism for information, inspiration, and increasingly for the augmentation of empirical analyses, may find insights into the patterns of shared narratives in modern hybrid media spheres, as well as some methodological considerations concerning the measurement of news content.

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1.1   On Truth, Reality and Bullshit Journalism that is worth its name rests upon a fundamental assumption: that there is an objective reality humans can grasp, and that this actual state of the world can be described factually. The facts are the facts; they are essential because when societies lose touch with the facts, they lose touch with reality. That may sound ridiculously self-evident, but in recent years the line between what’s true and what’s imagined has been blurred considerably. Advances in Artificial Intelligence that enable machines to manufacture convincing, yet possibly untrue stories in an unsupervised fashion are exacerbating this problem. Therefore, it needs to be stressed that there is no alternative reality governed by “alternative facts”, a term coined by Kellyanne Conway, councillor to former US president Donald Trump.1 “Post-truth politics” has become a catch phrase in an age of populism, and journalism has played an important part in spreading it, repeating populist claims and frames, whether mindlessly or opportunistically (e.g., Moffitt & Tormey, 2014; Müller, 2017). Harry S.  Frankfurt, a philosopher at Princeton university, wrote two influential essays, “On Bullshit” (2005) and “On Truth” (2006), that provide a useful point of reference. Bullshit, according to Frankfurt, can be defined as disrespect for the truth. Bullshitting is not identical to lying, since the liar acts deliberately and thereby still shows some respect for the truth, even though he refrains from making use of it. The bullshitter, in contrast, purports whatever she or he deems advantageous in a particular situation. To define what he means by truth, Frankfurt evades constructivist traps and in a practical manner defines truth as what really works, that is, what works in the real world. An engineer who constructs a bridge and bases her or his plans on falsities will very likely build a structure that collapses. The truth has practical utility. Bullshitters not only refuse to recognize reality, they obstruct it. Relating Frankfurt’s thoughts to economic journalism is straightforward. If journalists are to inform the public about the state of their communities, they need to be factual, dealing with real world problems and possible remedies. They need to be focused on reality, gather and hunt for evidence, present it comprehensively and digestibly to readers, users, watchers, or listeners. If, in contrast, journalism falls prey to bullshit, it risks losing its very purpose. While this may sound simple and natural, it is worth noting that the rise of (economic) populism has prompted important parts of the media to turn themselves into platforms where

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emotionally charged views are exchanged instead of serious, facts-based arguments. Over the past decade, economic populism, fake news and foreign propaganda have proliferated, as they are at a communicative advantage: simplistic, arousing stories are well suited to attract attention in modern media environments. Animating, emotional content is a lot easier and cheaper to produce than the factual variety. That’s why short-term media economic incentives clearly favour the “media complicity” with populist politicians that Mazzoleni (2008) identifies as a precondition for the latter’s success. Pushed by the emotional arousal that prevails on social media, journalism runs the risk of losing its level-headedness. Where anger and agitation prevail, rational discourse is distorted to the effect that civilized debates become virtually impossible, threatening the viability of democracy itself (Müller, 2020, pp. 183–212). When media populism meets economic populism, the results resemble Gresham’s Law, known from monetary theory: the good stuff is being driven out of the market by the bad stuff. While Gresham referred to competing monies—the more trustworthy cash disappears as a means of payment because people hoard it as a store of value—in the context of media markets heated populist interventions risk driving out sober comprehensive reporting.

1.2   Of Minds and Markets Interestingly, the rise of populism has put plenty of economic issues on the agenda, that were largely ignored by the wider public before. Debates about international trade or monetary policies used to be limited to the nerdy circles of experts, technocrats and policy wonks. Politicians as well as ordinary citizens hardly bothered to take notice. Now these issues have risen to the centre of attention—though in reduced (and often negatively charged) form. Whether it was the protectionist tariff policies of the Trump administration in the US or the alleged costs of EU membership in the Brexit campaign of 2016 in Britain, twenty-first century populism is not only about identity, but to a great deal about the economy. What we are witnessing are the results of two trends joining forces: economization and mediatization. Economic aspects of public life have become more important. This is partly due to the replacement of traditional forms of co-ordination within families and communities by markets and a still-expanding division of labour, but also to the multitude of

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economic crises that have shaken western societies. Mediatization, in turn, implies that public and political life is increasingly being performed in highly differentiated media spheres that augment, or even supersede, old-­ fashioned direct communication. As a consequence, economic rationality and public emotionality frequently collide. And economic journalism is positioned right at the intersection, where these clashes occur—which makes for a fascinating, yet demanding environment. Economic journalism is particularly vulnerable because what we consider the economy is the result of a set of constructions itself. For instance, Gross Domestic Product (GDP) is a twentieth century invention. We cannot observe GDP with our senses, watch it grow or shrink. We may be able to sense poverty, but whether the number of poor people in a country is rising or falling is a matter of statistics. Many people believe that the poor are getting poorer, that immigrants are depressing employment opportunities, and that international trade is crippling the livelihoods of average citizens. Whether these assertions are true can be answered by hard-facts evidence. That’s the difference between believing and knowing, and certainly journalism, as a “knowledge profession” (Donsbach, 2014), should be concerned with the latter. How a company is doing cannot be gauged by taking a look at its headquarters or at the way its top executives dress, but only by scrutinizing its accounts—and by getting one’s hands on some suspicious internal documents. Again, what we call a profit or a loss is defined by rules, laws, and customs. Economics, statistics, and accounting are based on definitions derived from theoretical considerations as well as conventions. Most of the time these assumptions are only implicitly present, to the effect that reporting on the economy may give the impression as if it were about constructing a belief system instead of pursuing reality. That’s why journalists need to treat abstract economic concepts with caution. Statistics, national aggregates, or company accounts are hints to reality, but not the real thing itself. Accordingly, researching and writing (or recording) stories about economic issues entails the investigation and presentation of all of these aspects: facts and figures, persons and personalities, reporters’ first-hand evidence and experience. Hence, journalists need to develop new routines and re-define their position in the new media landscapes. That’s no easy task. On the one hand, journalists cannot ignore the tides of public emotions, or else they risk losing their audience. On the other hand, they must not neglect their main job of informing the citizenry in a

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factual and timely manner. The final part of this book proposes some concepts on how to reconcile these two conflicting objectives.

1.3   Problems, Priorities and Uncertainty When covering the economic aspects of society in a sufficiently comprehensive manner serious journalism is confronted with a mostly “inattentive audience” (van Dalen et al., 2019). People shy away from hard-news. It is inevitable, then, that editorial choices need to strike a balance between sober elucidation and sweeping attention arousal. Sublime normative postulations concerning what journalism should or shouldn’t do are worth little, if the fundamental challenge of engaging the public is not taken into account. This trade-off has gotten a lot harder, due to digitalization and the exponential growth of distracting entertaining content; globalization and the increasing complexity of issues has rendered economic issues harder to fathom. To complicate things further, economic journalism should not only be about the past and the present, but also about potential future outcomes. More than other beats, it is expected to be forward-looking: journalists not only need to unveil what’s gone wrong in the past, but also point out what’s bound to fail in the future. Thus, there is often speculation involved: it should be informed and educated, but there is always a considerable degree of not-knowing. At any given point in time the two dominant questions are: What’s going on now? And where does it lead us? Gauging future implications of current developments has become more difficult, as once-reliable causal relationships between economic variables have broken down. An example is the absence of inflation in the 2010s, which is all the more astonishing given the extraordinary monetary stimuli central banks injected into the economy. If journalists had kept predicting with firm conviction an inflationary shock that did not materialize, they were making a mistake. But if, on the other hand, they called off any risk of future inflation, like many economists did at the time, they were not acting responsibly either. Scepticism is warranted, always and everywhere. Economic journalism’s primary task is making sense of the economy as it evolves, with all the uncertainty that comes with it. This demanding environment calls for concepts that provide economic journalism with a yardstick. Certainly, what to cover and what to ignore, how to weigh facts and arguments, and how to frame an issue is a complex undertaking. Economics may provide some guidance, though. Much of

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the discipline is underpinned by the notion of a theoretically achievable ideal world (although views on what this world should look like exactly differ widely). Operationalizing fundamental notions of welfare economics, this book proposes a four-dimensional coordinate plane: efficiency, stability, sustainability, and fairness—the ESSF formula. Chapter 3 develops this concept in detail. It is meant to help journalists gauging the relevance of current developments and guiding the angles and frames they choose in their reporting. Throughout the book the formula is applied to different aspects of economic journalism, the fundamental idea being that violations of the four goals need to be publicly addressed to correct them. In fact, if we lived in circumstances that resembled an economist’s nirvana, there would be little need for economic journalism at all. A major source of unfairness is the unequal distribution of information. Illuminating the shady world of insider information is one of economic journalism’s key tasks. By holding institutions and companies to account, it diminishes the scope for corruption (Stiglitz, 2002). Executives and public servants running the risk of being discovered and publicly exposed by relentless journalistic scrutiny are deterred to succumb to the temptations of bribery. This in turn induces changes in social norms. Where the media can do their job properly, corrupt behaviour is largely absent. Where, in contrast, government intervention in the media is wide-spread, so is corruption. In Fig. 1.1 the relationship between the freedom of the press and the prevalence of corruption is depicted. In the upper right-­ hand corner, the best-performers are located, i.e., the countries that combine freedom of the press and a low prevalence of corruption, a spot that is inhabited exclusively by Anglo-Saxon and northern European countries. At the other end of the scale, countries can be found where corruption is rife and freedom of the press non-existent, most prominently China and Russia. There are only a few outliers, mostly rich city states such as Singapore and the United Arab Emirates, whose institutions are relatively clean despite curbing the freedom of the press and of expression in general. Hence, independent journalism is a precondition for well-­functioning institutions, albeit not the only one. Press freedom explains about half of the observed variations in corruption.

H. MÜLLER 100 New Zeland

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Fig. 1.1  Freedom of the Press vs. Corruption Perception. Source: Freedom House, Transparency International (2017 data)

1.4   Overview of the Book This book is organized as follows: Chap. 2 focusses on the production of economic news. It stresses how news is different from information. Contrary to the latter the former is a product that is produced by companies and corporations, whether for-profit, non-profit or public-service, facing specific incentives and constrains. Starting from a media economic perspective, we analyse some peculiar properties of economic journalism, provide a typology of the different types of economic journalism (business, consumer, economic policy etc.), and show what different audiences expect from it according to surveys. The producers of economic news navigate a complex environment where vital economic interests as well as activists and experts of different colours seek to influence them and discuss a taxonomy of journalistic independence. The output of economic news and its quality are at the centre of Chap. 3. It starts with concepts familiar in journalism studies, such as news values, framing, and agenda setting, and relates them to the specifics of economic

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journalism. We develop a set of relevance criteria for economic and business news, based on the above-mentioned ESSF formula, holding that efficiency, stability, sustainability and fairness should prevail. Chapter 4 puts the focus on the concept of the narrative, that has become popular in economics, and relates it to economic journalism. Following this approach, a leaning against the wind strategy is being developed, adapted from central banking theory. Chapter 5 takes an economist’s perspective: journalistic content has become an input into economic analysis, particularly concerning business cycle developments and the measurement of uncertainty. We discuss to what extent media reception determines the perception of the economy and which transmission channels link media content and the behaviour of managers, investors and consumers. Globalization and, even more so, European integration have brought about a degree of interdependence that transcends national boundaries. Politics and the media, though, are still predominantly national. Chapter 6 deals with this asynchrony that leads to a host of problems, from the mismanagement of global commons to incomplete EU governance structures. Ill-informed publics largely ignore the international dimension of the political economy, paving the way for populists. In Chap. 7 the focus is on Europe, a common market with a common currency, but no common public sphere. We take a closer look at the perception of the Euro crisis in different member states’ media, the framing of the European Central Bank (ECB) in different countries, and ask whether there is empirical evidence for divergence or convergence in media coverage. Chapter 8 highlights the changing roles and functions of economic and business journalism. Despite radically altered media publics, there is a need for specialists who select what is important for society at present, who uncover what went wrong in the past, and who raise early warning flags in order to prevent undesirable developments for the future. Chapter 9 translates these considerations into practicable routines. It proposes a workable standard procedure for choosing topics and doing research and analysis in economic journalism. The final chapter provides an outlook on economic journalism’s future. Although the economy is a vital part of social life and well-being, economic journalism runs the risk of being pushed to the fringes of public awareness. Media economics suggest the emergence of a specialized four-­ tier market for business news. In this scenario the broader public risks

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being deprived of a continuous, comprehensive, balanced and independent coverage of economic and business developments.

Note 1. https://www.nbcnews.com/storyline/meet-­the-­press-­70-­years/wh-­spokesman-­ gave-­alternative-­facts-­inauguration-­crowd-­n710466

References Donsbach, W. (2014). Journalism as the new knowledge profession and consequences for journalism education. Journalism, 15(6), 661–677. Frankfurt, H. G. (2005). On bullshit. Princeton University Press. Frankfurt, H. G. (2006). On truth. Princeton University Press. Mazzoleni, G. (2008). Populism and the media. In D. Albertazzi & D. McDonnell (Eds.), Twenty-first century populism. The spectre of Western European democracy (pp. 49–67). Palgrave Macmillan. Moffitt, B., & Tormey, S. (2014). Rethinking populism: Politics, mediatisation and political style. Political Studies, 62, 381–397. Müller, H. (2017). Populism, de-globalisation, and media competition: The spiral of noise. Central European Journal of Communication, 9(1 (18)), 64–78. Müller, H. (2020). Kurzschlusspolitik. Wie ständige Erregung unsere Demokratie zerstört. Piper. Stiglitz, J. (2002). Transparency in government. In World Bank (Eds.), The right to tell. The role of mass media in economic development (pp. 27–44). van Dalen, A., Svensson, H., Kalogeropoulos, A., Albaek, E., & de Vreese, C. H. (2019). Economic news. Informing the inattentive audience. Routledge.

CHAPTER 2

Peculiar Products: The Business of Economic News

Information is a vital resource in a merchant society. When you trade with others, it helps to have an idea about the market situation—about supply and demand of a particular good, the factor prices your competitors are willing to pay, the production costs, and so forth. You may also form expectations about the future. If you were a sixteenth century grain merchant and you knew about a drought in some far-out producing region, you might consider holding back some of your stocks since you’d be anticipating meagre harvests, supply shortfalls and subsequently rising prices, from which you’d strive to profit. Information improves decisions. If you have earlier and more precise information than your competitors, that’s a profound commercial advantage; if everybody else is well-informed except you, you risk being driven out of the market. Prior to the merchant society, the value of information on a broader scale was limited because there wasn’t much of a market. In an agrarian subsistence economy where production and consumption were all but local, and villagers mostly adscripted peasants, there weren’t many decisions to be taken that would require timely and correct information. It is therefore hardly surprising that the first ventures in economic journalism were started as merchant societies began to flourish in sixteenth century Europe. Among these pioneer publications were the so-called Fuggerzeitungen (Fugger newspapers), produced by the highly influential merchant family Fugger, headquartered in the Bavarian city of Augsburg.

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These papers were archived early on, the oldest editions dating from 1568, and are well documented; today, they are kept at the Austrian National Library (Keller, 2012). The Fugger papers were authored by writers in a range of European cities, such as Antwerp, Cologne, Rome, or Venice. Actually, they hardly resembled modern-day newspapers at all, but were mostly hand-written, though some printed editions are conveyed as well. They were shared rather than published, directed at an insider-expert readership. After all, a reading mass audiences did not exist at the time due to low literacy rates—although printed pamphlets containing mostly sensationalist and religious stories, that were read out loud on public squares, were prevalent during the reformation and thereafter (Schlögl, 2008, p. 606). The Fugger newspapers can be interpreted as a precursor of the modern newspaper, as early twentieth century scholars emphasized (e.g., Kempter, 1936), that is, writings directed at members of a business network to share market-relevant information. They contained reports written by correspondents of the family’s pan-European business network and were distributed through this network. The purpose was to share information to the readers’ mutual advantage. In terms of content, they catered to business instincts as well as to general curiosity, comprising a wide array of issues that ranged from specifically business-related matters, such as the provision of grain, the European flow of trade from the Mediterranean to the Rhine, transcontinental linkages such as the trade in spices and precious metals, but also aspects of economic policy, for instance changes in tax laws, British piracy, the establishment of European colonies in Asia and the Americas, as well as financial market news like exchange rates or the emission of bonds (Keller, 2012, p. 189). The Fugger newspapers’ accuracy and reliability have been called into question; Matthews (1959) referred to them as a mix of “true reports and false rumors, trivial occurrences and important events”; Habermas (1962) saw them as an example of “news merchants” collaborating with state censors to control news flows. More recent research, though, has put the Fugger newspapers into a more favourable light. Bauer’s (2011) content analysis concludes that while business information was their original purpose, economic news only contributed 6 per cent to their overall content, 25 per cent dealt with politics and 51 per cent with matters concerning the military and violence. Furthermore, accuracy increased over the decades, as correspondents became more professional; among them were employees of the Fugger organization, friends and acquaintances of the family as well as professional news writers.

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2.1   An Executive Must-Have: The Evolution of News The early example of the Fugger newspapers indicates two important insights into economic news that are valid to this day: first, business motives can serve as a starting point to create a supply of news media that later branch out into the coverage of politics and other aspects of social life, as readers’ curiosity about what is happening in the wider world and awareness about their place therein is triggered. Second, in an economy that grows more and more complex, information is a resource that requires professional journalistic standards to ensure ongoing reliability; to be useful, reported reality needs to be a credible representation of the real thing.1 Newspapers in the Dutch Golden Age In the Netherlands, then Europe’s leading merchant nation and most advanced society, newspapers were published on a frequent basis as early as 1618 (van Groesen, 2016). The reformation and the rise of Reformist Calvinism in the Low Countries had induced improved literacy rates, while standards of living were rising markedly in the Dutch Golden Age. By the mid-1600s a lively and highly competitive “courantes” market had developed (der Weduwen, 2018). To this day, one of the papers founded in that era is still being published: the Oprechte Haelemse Courant, now called Haarlems Dagblad, first appeared in 1656 (Encyclopedia Britannica, 2023a). Golden Age publishers pioneered practices that would become core features of news markets in the centuries to come. They broadened the scope of their products’ content, so that they would appeal to larger audiences. They sold advertising space to anybody who would pay for it—to book publishers, a trade that grew in parallel to the news market, but also to postal services, political pamphleteers or private citizens who were looking for their missing pets (der Weduwen & Pettegree, 2020). They were among the first “attention merchants”, a term coined by Wu (2017), generating revenues not just by selling subscriptions and single issues, but also ad space, thereby creating the two-sided markets that still dominate today’s news business models. What is more, fierce competition led publishers to invest in quality. Dutch newsman Van der Macht, for example, ran a widespread network of correspondents and pursued an early form of investigative chequebook journalism, as der Weduwen (2018, p. 15) recounts: Van der Macht was a

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frequent visitor to the offices of state of the government in The Hague, “where he maintained financial relationships with clerks and secretaries to gain access to the latest letters, memoranda and resolutions passed around the government complex.” He also had a taste for unconfirmed rumours. Each issue “ended with a report from The Hague (…) composed by stringing together half a dozen sentences of hearsay, gossip and political chatter—with little regard for their truthfulness. Van der Macht did whatever he could to present the freshest news—but he was more concerned with providing a large quantity of news, rather than evaluating its accuracy.” Reporting sensational rumors or wild made-up stories had the potential to arouse public attention, but it hampered a publication’s reputation, and consequently hurt its revenues. As several newspapers began covering identical issues, their truthfulness could be compared. And early Dutch publishers were all too happy to point out their competitors’ mistakes and mishaps, in effect inventing media journalism. Over time, market forces led to improved quality: “in the second half of the seventeenth century commercial credibility and reputation came to play ever more important roles in the news market” (der Weduwen, 2018, p. 19). England and the Continent The Dutch enjoyed liberties that were unknown elsewhere in Europe at the time. England, the second economically advanced country, would follow the Dutch example several decades later. During the Glorious Revolution of 1688/89 partisan pamphlets had become wide-spread instruments of agitation. Afterwards, the new constitutional order led to a gradual removal of censorship. Instead, press laws were introduced that obliged publishers and writers to assume liability for their content. Based on these foundations, a free and diverse press began to flourish in eighteenth century England (Schlögl, 2008). By early nineteenth century, journalism had become entrenched in Britain to a degree, that its quality and significance in society could be taken for granted. The liberal philosopher Jeremy Bentham concluded, “moral aptitude” of those holding public office depended “upon the influence exercised by the Public Opinion Tribunal which in turn depended “upon the degree of liberty possessed by the press” (Bentham, 1823, p. 178). Politics had become a complex process involving masses of citizens, and journalists were their agents. The freer the press the better. Bentham’s confidence that unrestricted and diverse media would contribute to good governance and overall

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welfare—instead of leading to a tyranny of an ill-informed majority, as many of his contemporaries feared (Cutler, 1999, pp. 341–343)—attests to the degree of journalistic professionalization and quality that the British press had achieved by then. Yet, most of Continental Europe was late to the game. Until early nineteenth century politics was shaped mostly in personal communication inside and between the princes’ courts, detached from the public’s eye and hence from public discourse. Politics constituted a “predominately performative reality”, as Schlögl (2008, p. 606) notes. Since the public did not have a say in it, censorship largely banned domestic politics from publications. In France after the Revolution, newspapers were subject to strict surveillance under Napoleon’s reign. Public discourse and the exchange of partisan arguments were deemed to weaken the common will of the people and the unity of the nation. Only after the restauration of 1815, a political press began to take hold in France. Branching Out from Business Even where freedom of the press, and freedom of expression in general, was not granted, media catered to an ever-growing audience of literate people. As the early example of the Fuggerzeitungen illustrates, forerunners of modern journalism were often triggered by the informational needs of business. As soon as a steady supply of news was established, it spawned the coverage of other aspects of public life as well. Stories about foreign events captured readers’ attention in particular, the more exotic the better. An extreme example was a six-piece series published by the New York Sun in 1835; the tabloid, run by Benjamin Day, reported on telescopic observations of life on the surface of the moon, where, the story claimed, humanish moonlings lived, sporting wings, copper-colored fur, and a yellowish complexion.2 It took several decades longer to establish reporting standards, that even tabloid journalism could not undercut without harming its reputation. Historical experience suggests a pattern: what is started as specialized business journalism over time broadens in scope, as economies of scale kick in; falling unit-costs lead to higher profits as circulations increase. There are ample examples of this effect. Reuters started as a London-based news wire company in 1851 focusing on banks, brokerages and businesses; later, it branched out and turned itself into a general news agency serving print media as well and becoming a wholesale supplier of news. It was not

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just its financial news service that was of value to newspapers, but also the breadth and speed with which it was able to cover international events (Encyclopedia Britannica, 2023b) Reuters’ founder, German-born entrepreneur Paul Reuter, was among the first to exploit the opportunities arising from the hottest technology at the time, the telegraph. More than a century later, Michael Bloomberg was following a similar path, when the personal computer became the main instrument of data processing in the 1980s and 90s. His agency started as a financial data provider, later ventured into financial news and eventually emerged as a general news service, including television channels (Palmer, 2019, p.  180). The Financial Times, launched in 1888, targeted the financial community of the City of London at first. Over the years, it turned itself into the leading global newspaper covering politics and business around the world, but also science, arts, entertainment, and style. The Wall Street Journal is another case in point: launched a year after the FT on the other side of the Atlantic, it was an offspring of financial data provider Dow Jones that decided to assemble its smallish specialized newsletters (“flimsies”) to form a proper newspaper; today, it is among the US dailies with the largest circulation, not just known for world-class business and politics journalism, but also for distinctly conservative commentary. Business and finance first, other issues later—the broad pattern has repeated itself over and over again. Today highly specialized “verticals” (newsletters providing the business and lobbyism community with expert knowledge on politics, finance or technology) cross-finance newspapers and website directed at the mass market, a business-model pioneered by Washington-based Politico. Notwithstanding the general media crisis, that has been simmering due to digitalization and falling ad revenues since the late 2000s, many business news outlets are still in rather decent shape. The Economist, founded in 1843 in London, was initially aimed at fostering free trade in the UK; it fiercely opposed the protectionist Corn Laws in place at the time. Under its editor Walter Bagehot, who led the paper from 1861–77, it arguably became the most influential publication of Victorian Britain. The Economist has since morphed into one of the leading global media brands, covering a broad range of issues and virtually every country on the planet. In non-­ English language markets, too, business media retain a strong presence; NRC Handelsbladet in the Netherlands, Il Sole 24 Ore in Italy, Les Échos in France or Handelsblatt in Germany are among the most influential papers

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in their respective countries, with a readership not confined to the business community. Furthermore, the rise of the general newspaper since the late nineteenth century—a type of publication containing a broad range of issues and political leanings to fully exploit economies of scale and maximize profits—has turned business and economics into beats that are not just for specialists, but directed at the general public. This trend was in line with the more active economic and social policies and the larger shares of national income being redistributed through taxes and transfers, that have since become the norm in advanced economies. As governments have become more involved in everyday life, the need for scrutiny in the “Public Opinion Tribunal” (Bentham) has increased as well. The business-first-other-issues-later pattern in the advancement of journalism is embedded in a complex historical context. In many places the market economy developed before democracy in a modern sense. Hence, business journalism tended to precede political journalism. But even where political opinions were largely censored, (foreign) politics became an integral part of business content, as in the case of the Fuggerzeitungen. Since developments outside of the market system were prone to affect the market one way or another, these pieces of information were important to economic agents. Crucially, mere profit-seeking readers would eventually mature to become citoyens, people who care about what is happening in society and its institutions and want a say in politics. Seen from this perspective, the business press can be a means of liberation. To this day, even in authoritarian states that suppress free media and prefer to bathe citizens in political propaganda instead, business journalism is among the most trustworthy sources of information; messing with economically relevant information means messing with economic well-­ being, which, in turn, potentially poses a threat to the people in power. In China, the biweekly business magazine Caijing earned a reputation for investigative journalism, enjoying relatively loose government oversight. Generally, Chinese “newspapers focusing on economics and business appear to be allowed wider latitude in what they can safely report,” Shirk (2011, p.  12) concludes, albeit censorship has become markedly more intrusive since president Xi Jinping seized office in 2012. Likewise, in Russia the business press could report relatively freely, with Vedomosti, a joint venture of the Financial Times and the Wall Street Journal, being its standard bearer; it was the segment’s flagship publication, until in 2020 the government decided to rein it in (Economist, 2020).

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Economic journalism may contribute to opening up rigid political systems in the long-run. But this process is suffering considerable set-backs at the time of writing. After all, ruling parties and oligarchies show little interest in the Public Opinion Tribunal.

2.2  Why Bother? Properties of News as a Product As the brief historical overview has highlighted, news is different from information. While the latter may be likened to an ever-evolving ether floating through society, but mostly hidden in private, the former is an economic good available to the public, up for open discussion, interpretation, and the formation of public opinion. Information is a vast, unruly and in many aspects unknown social resource. News, in contrast, is supposed to be concise, limited, and focused, supplied by companies and corporations, whether for-profit, non-profit or public-service, that face distinct incentives and constrains. Outlets cater to an audience whose motivations have been a matter of research for decades (Fengler & Ruß-­ Mohl, 2005, pp. 86–96). The uses and gratifications approach (e.g., Lee, 2013, for an overview) isolates four inclinations for news consumption: (a) information-driven motivations (finding out about the state of the world, the performance of government or companies, but also about matters that may affect oneself directly), (b) entertainment-driven motivations (seeking excitement or fun, fighting boredom), (c) opinion-driven motivations (developing a point of view on issues, getting to know other people’s opinions or the views of likeminded commentators), (d) social-driven motivations (being able to converse with peers, gaining social status by knowing what is going on). Hard-news consumption is primarily dominated by (a), where intrapersonal factors, such as direct utility resulting from gaining knowledge or following one’s conscience to fulfil the civic duty of being an informed citizen, are at play. Interpersonal factors are involved, too; (d) points to the effects of social norms on news consumption: if staying informed and having well-founded opinions is rewarded by a social group, news consumption is mutually reinforced by its members. If, in contrast, one’s peers do not care much about current issues, the individual motivation to concern oneself with hard-news is bound to deteriorate, as the social gratification of news consumption declines. From a media economic perspective (e. g., Hamilton, 2004) hard-news journalism is a peculiar product. It is characterized by positive externalities,

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cognitive disadvantages, asymmetric information, and economies of scale. (For a conceptualization of the economics-rooted analysis of journalism see Fengler & Ruß-Mohl, 2005; Fengler, 2016.) Economic journalism is a slightly different story, to which we will turn a little farther below. Positive Externalities An informed citizenry is a precondition for democracy and the market economy to work. More precisely, people need to concern themselves with issues that are of relevance to society as a whole; if individuals were just pursuing their own short-term interests, popular government would be doomed. Without some knowledge and well-founded opinions on pressing current issues, democracy is hardly conceivable, as public debates would go astray, election outcomes may turn self-destructive, and the Public Opinion Tribunal would cease to function. As early as 1904 US justice Louis D.  Brandeis postulated that the people could only govern “by taking the trouble to inform themselves as to the facts necessary for a correct decision, and then by recording that decision through a public vote” (quoted after Goldstein, 2017). Citizens need to devote time, effort, and potentially some money, to stay informed. In doing so, they contribute to the well-being of society as a whole, thus creating what economists call positive externalities, i.e., individuals bear the costs of news absorption, but the associated benefits go far beyond the personal sphere. People obtain information from the news media. The media contribute to setting the public agenda, thereby channelling society’s collective attention. Seen this way, quality journalism is systemically relevant for modern-­ day mass democracies to function properly. Still, more than a century after Brandeis’ assertion, populism and political aggressiveness are on the rise, particularly in the US. Partisan media stir discontent and outrage. These developments point to the familiar result of economics that wherever positive externalities arise, demand and supply tend to remain below socially desirable levels. As a merit good—a good characterized by positive externalities—news may deserve extra support. Cognitive Disadvantages The problematic effects of positive externalities are aggravated by the cognitive disadvantages hard news suffer from. Occupying oneself with complex political and economic issues is cumbersome. As dual process theory (most prominently: Kahneman, 2011, economics Nobel laureate of 2002)

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holds, there are two modes of applying human intelligence: System 1 is fast, intuitive and emotional, System 2 is slow, sceptical and rational. Politics and public discourse should be governed by the latter (though the former adds some spice). The trouble is that System 2 thinking virtually hurts, to the effect that people tend to avoid it whenever they are given a choice. That’s why hard news is a tough sell in an environment where soft news and entertainment (from YouTube celebrities to gaming and streaming) are abundant. From a citizen’s perspective, perception is costly, and opportunity costs are rising with the expansion of more pleasurable alternatives. In the terms of the uses and gratifications approach, information-driven motivations of media consumption may prompt people to go through the hassle of System 2-thinking, but the other three motivations, entertainment-, opinion- and social-driven ones, tend to favour System 1 mode; if these motivations dominate news consumption, it hardly matters whether the content is correct or relevant, as long as it is fun, easy to grasp and accepted by one’s peer-group. As media users’ calculus is adjusted to lower levels of hard-news consumption, suppliers, too, are tempted to trim their products to make them easier to conceive and to stress emotional qualities. What’s more, digital content providers, such as social media platforms and search engines, deliberately target System 1 triggers, aiming at maximizing users’ engagement, that is, the time they spend online and the attention they devote to it (e.g., Williams, 2018). Publishing companies, dependent on distributing their content via digital platforms, are prone to follow this logic, adjusting their content to click-baiting. Asymmetric Information The paradox of news as a product is that users purchase or obtain it, and devote a portion of their time budgets to it, without being able to judge its quality ex ante. After all, the very meaning of news is that users are informed of stuff they didn’t know before. Asymmetric information (between reporters/editors and readers) is a crucial property of news, making it a credence good based on trustworthiness and consequently the ultimate experience good (Nelson, 1970;  Fengler & Ruß-Mohl, 2005, pp. 78–80): only when users have consumed the same product over and over again, they can judge its quality, albeit imperfectly, since the product is somewhat different each time they turn to it (a newspaper, for instance, contains different stories every day). Still, people have to rely on the media

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to emphasize the most pressing social issues and to report the relevant facts correctly. Asymmetries are aggravated by the fact that much of journalism is rooted in abstractions, that construct a societal collective beyond human cognitive capabilities. People cannot sense whether national unemployment is going up or down, crime rates are falling or rising, health standards improve or deteriorate, if distributional fairness increases or decreases, Gross Domestic Product (GDP) grows or shrinks, let alone if the “output gap”3 is positive or negative. All these abstractions matter, though, in the sense that they inform governments, civil society, companies, or investors whether or not to take certain actions (e.g., raise the minimum wage, prop up the police, invest in automation, or sell a particular asset class). In a market-democracy, citizens should be able to judge the appropriateness of measures taken. And the media should provide them with the relevant information (news), discussions concerning the underlying rationale (analysis) and opinions about the adequacy of policies (commentary). Hence, there are different levels of information asymmetries: neither do laymen media users know whether the reporters got the facts straight, nor can they assess whether the reported rationale is correct, nor can they evaluate the viability of the arguments presented in an opinion piece. The abstractions of modern societies are beyond people’s sensual grasp. “The world that we have to deal with politically is out of reach, out of sight, out of mind. It has to be explored, reported, and imagined,” as Lippmann (1922, p. 18) put it. Hence, it is all the more difficult to judge the quality of news. In economics, the effects of asymmetric information between buyers and sellers have been discussed under the headline of the “market for lemons” analogy (Akerlof, 1970), that can be applied to highlight some of the problems of news markets as well (Fengler & Ruß-Mohl, 2005; Fengler, 2016). Since buyers cannot judge the quality of the individual product, they have to rely on “(…) some market statistic to judge the quality of prospective purchases” (p. 488). In news markets, it may be the reputation of “the media” in general that informs potential buyers of the assumed quality of the individual product, and thus of the anticipated utility accruing to the buyer. If you live in a society where people trust the media in general, it is reasonable to assume that you will be inclined to purchase an individual media product, say, a particular newspaper. Note that consumers have to resort to “some market statistic” in this setting. This, in turn, implies that the individual producer is (partly) off the hook; his or her

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product quality is not judged individually ex ante, but consumers anticipate some kind of average quality. Therefore, from an individual producer’s perspective, there is an incentive to undercut competitors in terms of quality: you can profit from the overall reputation of news, but contribute little to it (and save the associated costs). Over time, average quality may deteriorate further: “(…) there tends to be a reduction in the average quality of goods and also in the size of the market.” (p. 488). Lower-than-­ necessary quality could be a chronic ailment of markets in general: “For it is quite possible to have the bad driving out the not-so-bad driving out the medium driving out the not-so-good driving out the good in such a sequence of events that no market exists at all” (pp. 499–500). Economies of Scale (and Scope) Much of media supply is driven by, in the terms of microeconomic production theory, increasing returns to scale. Roughly speaking, the bigger a publication becomes, the lower the unit costs of production and the higher the profits. Bigger news companies tend to be more profitable, are able to invest even more in content, production and distribution, potentially driving smaller competitors out of the market. Over the course of media history, economies of scale have increased dramatically—from early-­ day publishers who would apply moveable-letters printing and distribute their product, at first a single printed sheet, in small quantities locally, to today’s leading international media, such as The Economist or the Financial Times, that are produced on a global scale and distributed mostly electronically. Economies of scale in the media industry are the result of several mutually enforcing factors. The first factor is manufacturing the actual product. When printing became fast and cheap with the introduction of rotary printing in late nineteenth century, large-circulation newspapers enjoyed a competitive advantage, due to low unit printing costs; the more issues were printed, the cheaper the individual paper could be. The second factor was distribution: once a publisher had established a distribution network—a fleet of horse-drawn carriages, or trucks later on, to serve newsstands, hawkers in city streets, paperboys who hauled freshly printed issues to subscribers’ homes—, an increase in circulation led to decreasing delivery costs per newspaper. The third factor was content: since a publisher could enjoy low printing and distribution costs, if she or he was able to attract enough readers, it made sense to invest in scope (and quality) as well. Large staffs

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of reporters and editors were built up to cover a wide range of issues from different angles and perspectives. Fixed costs would rise with an increasing number of people on the payroll and more printing presses running, but once these outlays were covered, handsome profits could be made. The result was the already mentioned model of the general newspaper, the first truly mass media, catering to as many people as possible from different walks of life with a variety of political tastes. Editorial neutrality and impartiality, later aggrandized as journalistic ideals, became a business imperative. Strong ideological leanings, in contrast, stood in the way of the pursuit of profit. Better still, the attention of a large readership could be sold to advertisers, creating a second stream of income. The three mutually enforcing factors were at work in other parts of the media industry as well. The economies of scale facilitated by a new technology, the telegraph, helped the news wire industry in the second half the nineteenth century to grow from highly specialized financial data providers to general news agencies, with Reuters being its long-time frontrunner (see above). Radio and later television broadcasting were run either by national public-service (or government) corporations (mostly in Europe) or by a small number of national networks of commercial local stations that shared centrally-produced news and entertainment content (in the USA). Another technological innovation, the introduction of cable and satellite TV in the 1970s and 80s, shook up the television market again, opening inroads to new competitors such as 24/7 news channels, pioneered by CNN. Digitalization and Its Discontents Economies of scale are particularly pronounced in purely electronic news markets. Here, unit costs of (re)production and distribution tend to converge to zero as the number of users increases. These markets exhibit a peculiar twist: while an investigative news report, or an in-depth TV feature, may cost hundreds of thousands of Euros or Dollars to research, write, and film, the costs of reproducing and distributing it electronically are very low; selling an additional unit of the same piece costs essentially nothing. (The same is true for a software program or a movie, though in these cases the initial costs are a lot higher, Shapiro & Varian, 1999.) In economics jargon, marginal costs are zero. As textbook economics informs us, in a competitive market, prices tend to equal marginal production costs. But: if the price is zero, there will be no (commercial) supply. On

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the other hand, if a company is able to somehow charge for its product, it is poised for substantial profits. That’s why platform companies have grown to become money-making behemoths. The likes of Alphabet (Google, YouTube) and Meta (Facebook, Instagram) profit from yet another economies-of-scale effect: the more users they can attract, the more data they accumulate, the better their algorithms get at targeting users, whose attention they sell to advertisers. Unfortunately, news publishers are in a less favourable position. Ad revenues have largely migrated to the platforms. Compared with the digital giants even the biggest news providers are small companies, and many struggle to survive in the digital era. Problematically, many of them cannot help but rely on distributing their content via Google or Facebook, thereby being effectively forced to adapt to social media’s attention-grabbing logic and tailor their stories to it (von Nordheim, 2019). Moreover, the platforms are able to use their algorithms to produce individualized news streams tailored to the tastes of each user, akin to what communication scholar Nicolas Negroponte (1995) foresaw early on: the coming of the “daily me”—a personalized news supply, that is pretty much the opposite of the general news that thus far has laid the foundation of democratic discourse, where everybody is served the same news diet and has the chance to be confronted with stories that she or he hasn’t thought about before. Sunstein (2017) calls the latter property of traditional public spheres “serendipity”: encountering issues that one would not have bothered to look for, but that are important as they constitute the basis for compassionate compromise in society. Only if citizens concern themselves with what’s important to others as well, there’s a chance to reconcile opposing interests. Note that the root cause of the loss of serendipity is the shifting of economies of scale—from product to process. In the old days of the general newspaper, it was cost-efficient to print voluminous issues, in which different groups of people found articles of interest to them, and, maybe, browsed through the rest (thereby producing serendipity as a by-­product). Publishers did not have to know much about their customers tastes, interests and habits, as long as they bought the papers and advertisers paid for the space between articles. Now that the process of production and distribution involves algorithms and databases, the economies of scale lay in the information that media suppliers accumulate and employ to sell ads and other products. Hence, the more engagement the better—the more detailed information media companies can retrieve from their customers, the more money they can make of them. Personalizing news feeds and ads furthers this goal.

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Spelling out the properties of news as a product may look like painting a rather bleak picture. But pessimism is tempered by a host of practices journalists, publishers, and policymakers have adopted to make news a viable product; this approach worked fairly well in the past—to work in the future still, an update is needed. Moreover, economic journalism differs somewhat from the general variety. Let’s proceed with the latter and then turn to the former.

2.3   Business First, Politics Fast: On the Economics of Economic News Harking back to the uses and gratifications approach cited in the previous section, entertainment-driven motivations can largely be excluded where the consumption of economic journalism is concerned. Seriously grappling with the interplay of markets and politics is hardly fun (though well-­ told stories may make for a pleasant read, or watch, thereby easing the pain System 2 thinking evokes). Instead, economic news consumption is motivated by the desire to acquire knowledge about what is going on (information), to relate oneself to these wider developments (opinion), and to be able to converse with one’s peers (social). In a poll conducted among users of economic news, most participants indicated they were looking for “information about current economic, political and social developments” (82 per cent), followed by “gaining personal knowledge” (78 per cent); the social-driven motivation of being able to “converse with colleagues and friends” gained somewhat lower values (56 per cent). Among professional readers—“decision-makers” who are considered the core users of economic journalism—the results were even more pronounced (Mast, 2012, p. 152). Economic journalism is provided through highly differentiated markets. Content touching economic issues is not only found on the specialized pages of newspapers and websites, but also in the relevant segments of TV and (public) radio programs. Other sections, such as politics, culture or sports, too, choose economic angles frequently, for instance concerning budget issues of theatres and museums or the business models of major league football and its sponsors. As economic considerations are of particular importance in modern societies, economic perspectives have gained ground outside of the business sections.

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A Taxonomy of Economic Journalism Economic journalism in a narrow sense comes in a range of types. Table 2.1 proposes a taxonomy, from the most practical to the more abstract genres. To highlight the different approaches, consider how a sharp increase of oil Table 2.1  Varieties of Economic Journalism Genre

Target audience

Consumer The buying public Journalism

Private Investor Journalism

Issues, angles

Prices, quality, service, consumer rights and protection Private investors, savers Returns, risks, fees, taxes

Financial Financial Market Market professionals, Journalism regulators, general public

Business Companies’employees, Journalism competitors, shareholders, stakeholders

Economic General public, politics Policy (incl. lobbyists), Journalism business executives

Source: after Müller (2017)

Protagonists

Typical conflicts

Consumers, companies

“The Little Guy vs Big Business”

Investors, banks, investment funds, asset managers, insurance companies valuations, Quoted leverage, systemic companies, risk asset managers, hedge funds, private equity, analysts, regulators, central bankers Earnings Senior position, market executives, outlook, competitors, top-brass union leaders, executives, politicians mismanagement Regulation, Politicians and stabilisation, parties, redistribution government ministries, companies, citizens, NGOs, think tanks

“Greed vs caution”, “Big Finance vs private investors”

“Big Business vs shareholders”, “profitability vs stability”

“Company A vs Company B”

“Efficiency vs fairness”, “stability vs dynamism”, “Interest group A vs Interest Group B”

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prices might be covered respectively: Consumer Journalism might focus on the consequences of dearer oil for private households’ budgets and present options for the reduction of their oil bill. Private Investor Journalism could ask how different asset classes and individual stocks are affected, while Financial Market Journalism evaluates the consequences for financial stability and Business Journalism sheds light on the ensuing risks and opportunities to certain companies and sectors as well as company boards’ reactions to these altered circumstances. Economic Policy Journalism, in turn, may ask what the macroeconomic implications of an oil price shock could be: e.g., is there a recession in the making? Are central bankers about to raise interest rates? Will unions campaign for substantial wage hikes? (Müller, 2017). To put it more generally, Consumer Journalism is aimed at providing people with practical information concerning the purchase of certain goods. Likewise, Private Investor Journalism is targeted at private households’ decisions with regard to their retirement and wealth accumulation in general. Consumer and Investor Journalism have in common that they pledge to provide individuals with information enabling them to make better personal choices. Enhanced individual consumption or investment decisions also potentially lead to better working markets; concerning oneself with the quality of products may have the side effect of benefiting consumers or savers who do not bother to do so themselves, as companies alter their practices or regulators become more vigilante. Therefore, these types of journalism, too, may be characterized by positive externalities, though to a limited extend, as use is largely motivated by the quest for personal improvement. Financial Market and Business Journalism are targeted at users with a specific interest, who tend to have a high degree of issue-specific knowledge. Subscribers of the Financial Times or the Wall Street Journal, for instance, can be expected to be economics-savvy and to have some deep understanding of their respective professional field; an executive working for a large corporation, say, should be aware of proceedings inside the firm she is working for. Hence, information asymmetries are less pronounced compared to general journalism discussed in the previous section, as specialist readers have a framework at their disposal to decipher the meaning of new information. Furthermore, their interest is rooted in professional concerns: an analyst seeking information about recent developments; an executive trying to gauge the strengths and weaknesses of a rival company; a union leader observing the employment situation in a particular

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industry; and so forth. These professional readers’ motivations are not restricted to obtaining new information, or picking up some snippet-compatible insights for dinner party chatter, but they also seek to get a glimpse of public opinion in the making: what degree of importance or urgency do the media attach to certain events? What is the framing? Who is being portrayed as a villain, who as a hero? For all these reasons, financial and business news, like Consumer and Private Investor Journalism, is less affected by externalities, since the costs and benefits of consumption remain largely in the sphere of individual news recipients. Economic Policy Journalism is somewhat different in so far as it is aimed at the general public. Direct individual benefits of news consumption are limited, while the costs falling on recipients can be substantial: at the policy level, economic developments and policies tend to be both complex and abstract. If they are presented in a sufficiently differentiated way, grasping them can be a cumbersome undertaking. Keeping up with the latest proposals for pension reform or the rationale behind the reformulation of the central bank’s strategy requires a certain degree of civic-­ mindedness. While an attentive society is a prerequisite for the Public Opinion Tribunal to work properly on economic policy issues too, it cannot be taken for granted, as Economic Policy Journalism is characterized by positive externalities and information asymmetries. Due to the complexity of the issues at stake, it also suffers from cognitive disadvantages. To arouse awareness for economic policy issues, general news media can be tempted to resort to tactical dramatization, that is, inducing fear in users, and/or to populist narratives that combine simplicity with conflict and negative emotions. (We will get back to this theme in Chap. 6). However, Economic Policy Journalism, too, comes in highly specialized forms. There is a professional scene pursuing public policy, or trying to alter its results in their favour, that is comprised of people working for political parties, government, public administration, NGOs, think tanks, lobbying firms, big companies, business associations, unions, law firms, banks, academia, PR, media and so forth. These policy bubbles, clustered particularly in capital cities, prefer media providing inside information. In Washington and Brussels, Politico provides the respective bubbles’ occupants with deep and detailed knowledge about the workings of (economic) policy making. Other publishers have followed the example and have started publishing “verticals” (specialized news briefs) for different professional target audiences. The motivation for consuming this type of journalism, that I call Targeted Economic (Policy) Journalism, is largely

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professional, associated with a substantial willingness to pay. Positive externalities are virtually non-existent. Market Size and Readers’ Motivations Figure 2.1 illustrates a taxonomy of economic journalism. On the vertical axis, user motivation is shown in a personal-political continuum. Users’ willingness to pay for news should be high when personal benefits of media use are expected (low marks on vertical axis). It should be low when purely political motivations prevail, that is, benefits of media use are social rather than personal (positive externalities). On the horizontal axis, the potential size of the audiences is depicted. Since economies of scale are at play, the number of users is crucial. Fixed costs, particularly staffs’ salaries, need to be covered. A sizable paying

User motivation Personal

Declining willingness to pay

Political

„General“ Economic Policy Journalism

Business Journalism, Financial Market Journalism

„Targeted“ Economic (Policy) Journalism

Private Investor Journalism

Specialized

Consumer Journalism

Audience

General

Increasing size of potential audience

Fig. 2.1  Varieties of economic journalism by user motivation and market size. Source: the author

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(and/or marketable) audience is a necessary precondition of any media business model. Journalism for small audiences is thus only viable where the users’ willingness and ability to pay is very high, like in the case of Targeted Economic Journalism, located at the bottom-left in Fig.  2.1. (This market segment does not need to be limited to economic policy issues. For instance, investment expertise tailored to high net-worth individuals, aka the rich, also shares these properties.) On the other hand, consumers make for a large audience, while their motivation of gaining product-specific information is highly personal, as the position at the bottom-right indicates. General consumer media, such as Consumer Reports in the US or Test in Germany, both owned and supported by foundations, pursue highly sophisticated quality checks of everything from household appliances to life-insurances. Maintaining large paying audiences, they are able to employ large staffs, as they earn their revenues largely from selling digital content. In contrast, specialized publications that manage with limited staffs are less affected by economies of scale. As a consequence, the consumer market segment is highly differentiated. A wide range of special interest sub-genres cater to specific interests, such as collectors of vintage cars, electric guitars for heavy metal afficionados, or fans of fly-fishing gear. (However, professional journalism in these fields faces newish competition from user generated-content models where readers resort to the recommendations of fellow users, as well as a confusingly differentiated field of YouTubers and influencers.) Private Investor Journalism is positioned in a middle position at the bottom of Fig. 2.1, since its target audience is limited to people with spare funds to invest, that is, people with sizeable positive personal savings rates (roughly, the upper third of the income distribution in rich countries). In sum, Consumer and Personal Investor Journalism operate in a relatively benign environment, where overall audiences are large, personal motivation and willingness to pay are high (i.e., externalities are of limited importance), and economies of scale are less pronounced. Business and Financial Market Journalism are in a different position. As upmarket products, their overall audiences are smaller and more specialized. While these mostly high-income readers would be able to pay high product prices in principle, their willingness to pay largely depends on direct personal gains from news consumption. (Note that these personal benefits, according to the uses and gratifications approach, may also involve social-driven motivations, such as being able to converse with one’s sophisticated peers.) Since the motivation of Business and Financial

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Market Journalism usage is somewhat “political”, as denoted in Fig. 2.1, positive externalities are at play, though to a limited extend. At the same time, quality demands are high. Hence, sizeable staffs of decently paid specialized reporters and editors are needed, driving up fixed costs, to the effect that economies of scale are crucial. In sum, these factors lead to highly concentrated markets, rendering viable only a few publications per country—as a rule of thumb, the smaller the country, the harder they are to sustain, as tiny market-sizes are insufficient to support specialized high-­ quality media products. What is more, globalization has led to an internationalization of the target audience. With cross-border markets closely integrated, and English being the lingual common denominator of the business and finance community, global economic media have emerged. The Financial Times and the Economist have transcended national boundaries of their respective home market (Chap. 6). They have pushed economies of scale to new levels, potentially threatening the viability of national, non-English language business and finance media by out-competing them in terms of scope and quality. General Economic Policy Journalism is the most problematic variety. While the potential audience is very large, and staying informed about policy issues of all kinds is a precondition for democracy to work, as discussed above, disincentives of usage are considerable from an individual user’s perspective: direct personal benefits of news consumption are small. Keeping up with current economic and social issues may be necessary to being accepted in certain circles. But aside from such considerations, Economic Policy Journalism is largely consumed for intrinsic political motivations. As a consequence, positive externalities are pronounced, rendering users’ willingness to pay limited. From a suppliers’ perspective, sizeable qualified staffs are needed to cover all the areas of economic policy on a constant basis in sufficient depth. Therefore, high fixed costs contribute to considerable economies of scale. It is thus hardly surprising, that there are virtually no pure-play general economic policy publications. Economic Policy Journalism, therefore, has some resemblance to a public good: served in high quality, it is beneficial to society, but tends to be produced and consumed in less-than-optimal amounts and qualities. Public-good characteristics, according to standard textbook economics, include “non-rivalry” and “non-excludability”. In the digital era, non-rivalry clearly applies to news: a news piece does not deteriorate when it is consumed by someone; rather, it can be re-­ reproduced without loss of quality at zero marginal cost. Therefore, a

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welfare-economic argument can be made for giving the entire population free access to hard-news economic policy journalism. If this argument is accepted, however, the question arises who should cover the costs of production, as paywalls and subscription fees would need to be scrapped to establish non-excludability. (We’ll get back to these questions in the final chapter.) Bundling and Competition Laws As shown above, different types of economic news are characterized by different degrees of marketability as well as different cost structures. Some types of economic news, most notably Economic Policy Journalism, are associated with considerable externalities, but at the same time require large, specialized and expensive staffs. Also, Finance and Business Journalism are plagued by smallish audiences while depending on specialized and expensive staffs. One strategy to deal with these discrepancies is bundling. Like the general newspaper, general business media provide all the different types of economic journalism (Table  2.1) to some degree, thereby broadening their audience and exploiting economies of scale. While personal gains from Finance or Business Journalism consumption may be the reason why subscribers sign up to a certain media brand, excellent Economic Policy reporting may serve as a signal of high-quality standards. Pronounced economies of scale tend to create monopolistic media market structures. Public discourse, however, requires diversity and multi-­ perspectivity of news supplies to ensure all relevant issues, angles and frames to be voiced. As in other parts of society, monopolies tend to induce deteriorating quality. That’s why competition laws have been used to prevent the exploitation of news market power. Particularly at the local and regional level, where in many places only one news outlet exists anymore, mergers have been prohibited (e.g., in Germany) or secondary news media have been subsidized (e.g., in Scandinavia). Now competition authorities in many countries strive to tame the power of social media platforms. “Alternative” News Media Thus far, the discussion has been confined to traditional kinds of economic journalism. However, there is also an “alternative” variety (not

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shown in Fig. 2.1) that has grown considerably in scope. As the political fringes in western societies have grown, media catering to these more extreme parts of the public have increased in number. These publications, too, carry content concerning the economy; some of them sport economics or business and finance sections. This sub-segment of the news market encompasses a wide array of media, ranging from hard-right publications such as Breitbart (USA) or Compact (Germany) and Russian government-­ linked media Sputnik News and Russia Today, operating in a range of countries, to leftist outlets like Les Crises or Rebellyon in France (Institut Montaigne, 2019). Due to digitalization, barriers to market-entry have been lowered considerably; anybody can set up a website and a social media account. Furthermore, running an “alternative” outlet is a relatively low-cost business, as producing opinionated pieces about a narrow range of issues does not require large specialized staffs, limiting fixed costs. Therefore, small audiences suffice to generate revenues (from advertising, subscriptions, or merchandise products) that cover operating costs. This type of media can be sorted into two categories: “reactive” and “autonomous” (von Nordheim et al., 2019), the former reflecting largely on what mainstream, or “core”, media report, but framing it from distinctly ideological points of view; the latter striving to present an alternative version of reality covering aspects and issues that are neglected by mainstream media. User motivation in this sphere can be expected to be mainly driven by social objectives; inhabitants of “echo chambers” gain status among their peers if they are aware of the latest twists in stories popular in their respective social group (Sunstein, 2017), in contrast to staying informed about factual developments. In countries where political polarization remains limited, only niche audiences are inclined to use “alternative” media. However, increased polarization of the citizenry may prompt some traditional media to pivot to more extreme edges, following the audience and reinforcing their views, as has been the case with US cable program Fox News (Institut Montaigne, 2019, p. 35). While “alternative” media are not the focus of this book, they clearly pose a challenge to economic quality journalism: they vie for attention and have the potential to deform public discourse on economic issues. The next chapter deals with the question how to define and measure the quality of economic journalism. Here, the focus is on the economics of media supply.

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2.4  Solutions: Tackling Quality Uncertainty and the Erosion of Trust As the discussion has shown, quality journalism is an improbable product in many respects. Plagued by severe market deficiencies, it is a bit surprising that it does exist at all. Pronounced positive externalities imply that associated benefits are largely socialized, while cognitive disadvantages amount to considerable (opportunity) costs of consumption. Information asymmetries mean that users cannot judge the quality of an individual product ex ante. Under these conditions, competitive dynamics have the propensity to drive higher-quality products out of the market. Since buyers suffer from “quality uncertainty”, they gauge the value of a specific product according to some kind of market average. Thus, from the perspective of news producers, there is a recurring incentive to undercut average quality standards for short term gains, as Akerlof (1970, p. 499–500) points out. In effect, sequences of quality depletion may occur. Applying this scenario to news markets leads to the notion that quality can be expected to decrease as competition gets more intense. To be sure, this does not mean that monopoly structures suit news markets best; diversity of news media and facts-based controversy are indispensable preconditions for public discourse to succeed. Yet, some kind of balance needs to be struck: market conditions need to be set in a way that news suppliers compete for higher, not lower quality, while ensuring a sufficiently diverse supply of news. This balancing act has become more challenging, as digitalization has ushered in fiercer competition by lowering barriers to market entry: virtually everybody can set up a website that has the look and feel of the digital derivative of a traditional broadsheet newspaper, or create a YouTube channel that mimics a traditional TV format, but carries “news” that resort to opinionated gossip, prejudice, or thinly veiled propaganda. If the users take this kind of mimicry media for the real thing, the average value of news content is diminished and the sequence of quality depletion enters another round. Branding A key issue for dealing with asymmetric information is trust. If users believe that the media choose relevant issues and report on them accurately, timely, impartially, and intelligibly, it adds to the value of news as a product. The periodical nature of media means that they tend to be

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consumed in a recurrent mode. This is an advantage compared to, say, cars (Akerlof’s illustrative example), of which most people only buy a few over their lifetime. Media users may not be able to judge the quality of a particular article or TV news show, but coming back on a frequent basis enables them to judge its quality by experience. Branding, therefore, is a central strategy for news media. Since trust is vital to bridge information asymmetries, reputation matters. That’s why the digital revolution has not eliminated strong traditional media brands—such as the New York Times, Il Sole 24 Ore, or Der Spiegel—, but allowed them to transform themselves and adapt to the digital age (Reuters Institute, 2022;  Nielsen, 2016). Branding also applies to individual reporters, columnists or bloggers; news people who establish a reputation for having to say something relevant and interesting may convince users to come back frequently. However, trust in the media has declined in many countries in recent decades. Whether this is due to the deteriorating quality of the media, or to the emancipation of citizens in liberal democracies who may have adopted a sceptical attitude in general, is a matter of debate. Still, “it is clear that news media trust is at least fragile” (Strömbäck et  al., 2020). Business and financial media have been particularly hard hit by a “trust meltdown” (Schifferes, 2012) following the financial crisis that many media had failed to detect, until the bust of 2008 almost brought down the entire economic system. (We’ll get to this aspect in more detail in the next chapter.) Media Accountability Eurobarometer data show that levels of trust differ greatly even between European countries: in Northern Europe large majorities still trust the written press, TV and radio, while the corresponding values are low for southern and eastern (formerly socialist) European countries (European Parliament, 2022, p. 37). These observations are in line with international comparisons of media systems (Hallin & Mancini, 2004), that derive at the general conclusion that trust in the media is greatest where news organizations are independent, highly professionalized and well-managed practices of transparency-enhancing self-governance are pursued. The need to apply effective measures of media accountability directly follows from the notion of media independence and non-interference of government. Instruments are based both at the level of individual media outlets and at the sectoral level. Frequently used instruments include media councils run by publishers associations; publicly accessible codes of

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ethics or mission statements; publicly accessible information about ownership, political or business affiliations of a certain media organization; author’s profiles and e-mail addresses published online; disclosure statements in case the research for a story has been funded by third parties (e.g. in case a reporter has been invited to travel onboard a government or corporate aircraft); comprehensive correction policies; live streams of editorial meetings; background material disclosing information about the investigation process and sources of a specific story; newsroom or single journalist blogs; ombudspersons or public editors investigating professional misconduct and explaining editorial decisions; disclaimers about potential biases of the author of a news story (e.g. through personal connections to sources or events mentioned); debates about editorial decisions between editorial staff and audience (i.e. through a specific online forum or regular face-to-face meetings); provision of hyperlinks to original sources of a news story (Fengler & Speck, 2019, p. 123–124). Also, lawmakers have obliged publishers and writers to assume legal responsibility for the correctness of media content, a strategy pioneered in England after the Glorious Revolution as mentioned above. Thereby, quality uncertainty is diminished from a user’s perspective: as false reporting may lead to publicity-arousing court battles, hampering media brands’ reputation, news suppliers can be expected to ensure enduring quality. Put differently, legal provisions partly shift the risk of being negatively affected by false reporting from users to producers. Professionalization and Licensing Practices Another strategy to deal with the credence and experience good characteristics of news is the implementation of standardized educational requirements. If users are assured that suppliers are both knowledgeable and sincere, and that they adhere to professional journalistic standards, trust can be expected to improve. Quality uncertainty should decline. However, unlike physicians or lawyers—professions where entry is restricted by complex educational norms—journalism remains a rather open profession. As the media are closely linked to the fundamental freedom of expression, confining access to the journalistic profession to people who have passed some certified exam may violate basic civil liberties. In practice, however, educational standards have evolved over time, in many countries built around university-based journalism programs. Elite media typically employ people with an elite education, holding degrees from notable universities. This is particularly the case for economic journalism where some expert knowledge is needed to capture current developments reliably.

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2.5  Conclusion Historically, business journalism was the nucleus of the independent press—and in non-democratic emerging economies it still is to some degree to this day. Experience suggests a pattern: what started as specialized business journalism over time broadens in scope and scale. As merchants’ interests turn to more sophisticated business models, and markets and financial institutions develop, trustworthy information is required. News as a product is a necessity for the business class. From there on news outlet grow to become more general media, attracting more readers to be able to exploit the economies of scale that characterize news production. Over time this becomes part of the infrastructure of market-democracies. Still, journalism is a peculiar good, plagued with a range of market insufficiencies. Most notably, strong information asymmetries between readers and journalists require the trust of the former in the latter. But trust in the media—and other institutions—has been fading in many countries, while parts of journalism struggle to keep up quality. To be a product benefiting society, journalism, and economic journalism in particular, needs firm moorings in reality. Falsities, sloppiness, exaggerations, biases and outright lies have a corrosive effect on the democratic system in general, as the “Public Opinion Tribunal” (Jeremy Bentham) becomes dysfunctional. But for individual readers the personal consequences of systemic decay are rather indirect. In contrast, Business and Financial Journalism that lacks a firm foundation in truthfulness has direct negative effects on readers: those who base business decisions on false reporting are bound to lose money. Ensuring correctness, avoiding ideological bias and taming sensationalism are key qualities of journalism as a product and should thus be objectives in the professionalization of economic journalism. First and foremost, the news needs to be correct and comprehensive, that is, factual and impartial. It should not matter what writers and readers individually believe in, what their ideological bends or political tastes are—news should be true. That is, it should represent what is actually happening in the economy, and what is bound to affect it in the not-too distant future, and may therefore be relevant to business decisions. Other types of journalism may get away with opinionated semi-truths and still muster sizable audiences. Business and financial media need to be reliable. If they’re not, they cease to be viable products. The next chapter deals with quality considerations concerning economic journalism in more detail.

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Notes

1. See also Butterick (2015, Chap. 1) for a comprehensive historical overview of business journalism. 2. http://hoaxes.org/archive/permalink/the_great_moon_hoax. See also: Wu (2017), pp. 16–17. 3. The output gap is defined as the difference between “trend growth” (another abstraction gauging the expansion of the supply side of an economy) and the actual change in GDP. A “negative output gap” means that factors of production are underused (e.g. unemployment prevails, factories stand idle) because demand grows at a slower pace than the “production potential”. In such a constellation, the standard macroeconomic policy prescription stresses supporting demand: run loose monetary policy (lower interest rates, asset purchases by the central bank) and/or budget deficits.

References Akerlof, G.  A. (1970). The market for “lemons”: Quality uncertainty and the market mechanism. The Quarterly Journal of Economics, 84(3), 488–500. https://doi.org/10.1016/B978-­0-­12-­214850-­7.50022-­X Bauer, O. (2011). Zeitungen vor der Zeitung: Die Fuggerzeitungen (1568-1605) und das frühmoderne Nachrichtensystem. Oldenbourg Verlag. Bentham, J. (1823). The constitutional code. William Tate. https://books.googleusercontent.com/books/content?req=AKW5Qae0bjzzws71qBUJiPE-­VXXIf OZfJ517wlYT78ItOjMT_1Oj7aKqofZZGxNstcRzu9NIr2GMubYqeUb3rM RHEC14zIIdgN3Rfoa0E13Q9LkoAIgCY0e9G3MHYX1dXi3DzuYc0SPmjY SHVah4Scu-­ShBVsigbVtbaJ6lyQSAakYWSAELU5a_d8J2Vss0XMz5arkt7bpY9btVycDhL9Ac2rDTOwLHDKWq534goXreANlCBU4HcMKCDYfvv2o_ oO-­DNtwN9ZMZhFp_ezeXrXlrNHXwqs0oN6g Butterick, K.  J. (2015). Collusion and complacency: A critical introduction to business and financial journalism. Pluto Press. http://www.plutobooks. com/display.asp?K=9780745332031&st1=Keith%2BButterick&sf1=kw ord_index%2Cpublisher&sort=sort_pluto&m=1&dc=1 Cutler, F. (1999). Jeremy Bentham and the public opinion tribunal. The Public Opinion Quarterly, 63(3 (Autumn)), 321–346. der Weduwen, A. (2018). Competition, choice and diversity in the newspaper trade of the Dutch Golden Age. Early Modern Low Countries, 2(1), 7–23. der Weduwen, A. & Pettegree, A. (2020). The Dutch republic and the birth of modern advertising. Library of the Written Word, Vol. 77. Economist. (2020). Russia’s leading business paper is being gagged. Published May 7th 2020, https://www.economist.com/europe/2020/05/07/russias-­ leading-­business-­paper-­is-­being-­gagged

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Encyclopedia Britannica. (2023a). Entry “Netherlands”. Retrieved 31 May 2023 at https://www.britannica.com/place/Netherlands/Cultural-life Encyclopedia Britannica. (2023b). Entry “Thomson Reuters”. Retrieved 31 May 2023 at https://www.britannica.com/topic/Thomson-Reuters European Parliament. (2022). Media & News Survey. Flash Eurobarometer. https://europa.eu/eurobarometer/surveys/detail/2832 Fengler, S. (2016). Journalismus als rationales Handeln. In M. Löffelholz & L. Rothenberger (Eds.), Handbuch journalismustheorien (pp. 235–248). Springer. Fengler, S., & Ruß-Mohl, S. (2005). Der Journalist als „Homo oeconomicus“. UVK. Fengler, S., & Speck, D. (2019). Journalism and transparency: A mass communications perspective. In S. Berger & D. Owetschkin (Eds.), Contested transparencies, social movements and the public sphere: Multi-disciplinary perspectives (pp. 119–149). Springer. https://doi.org/10.1007/978-­3-­030-­23949-­7_6 Goldstein, J.  K. (2017). Justice brandeis and civic duty in a pluratistic society. Touro Law Review, 33(1), 105–130. Habermas, J. (1962). Strukturwandel der Öffentlichkeit. Luchterhand. Hallin, D.  C., & Mancini, P. (2004). Comparing media systems: Three models of media and politics. Cambridge University Press. https://doi.org/10.1017/ CBO9780511790867 Hamilton, J. T. (2004). All the news that’s fit to sell: How the market transforms information into news. Princeton University Press. Institut Montaigne. (2019). Media polarization “à la française”? Comparing the French and American ecosystems. Institut Montagne. https://www.institutmontaigne.org/ressources/pdfs/publications/media-­p olarization-­a -­l a-­ francaise-­report.pdf Kahneman, D. (2011). Thinking, fast and slow. Macmillan. Keller, K. (2012). Die Fuggerzeitungen: Ein Literaturbericht. Jahrbuch für Kommunikationsgeschichte, 186–204. Kempter, K. (1936). Die wirtschaftliche Berichterstattung in den sogenannten Fuggerzeitungen. Verlag der Zeitungswissenschaftlichen Vereinigung München. Lee, A. M. (2013). News audiences revisited: Theorizing the link between audience motivations and news consumption. Journal of Broadcasting and Electronic Media, 57(3), 300–317. https://doi.org/10.1080/08838151.2013.816712 Lippmann, W. (1922). Public opinion. Harcourt, Brace and Company. http:// archive.org/details/publicopinion00lippgoog Mast, C. (2012). Neuorientierung im Wirtschaftsjournalismus: Redaktionelle Strategien und Publikumserwartungen. Springer. Matthews, G.  T. (1959). News and rumor in renaissance Europe (the Fugger Newsletters). Edited, with an introduction, by G. T. Matthews. Capricorn Books. Müller, H. (2017). Funktion und Selbstverständnis des wirtschaftspolitischen Journalismus. In K. Otto & A.  Köhler (Eds.), Qualität im wirtschaftspolitischen Journalismus (pp.  27–48). Springer. https://doi.org/10.1007/ 978-­3-­658-­17467-­5_2

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Negroponte, N. (1995). Being digital. Vintage Books. Nelson, P. (1970). Information and consumer behavior. Journal of Political Economy, 78(2), 311–329. https://doi.org/10.1086/259630 Nielsen, R. K. (2016). The business of news. The Sage handbook of digital journalism, pp. 51–67. Palmer, M. B. (2019). International news agencies: A history. Springer International Publishing. https://doi.org/10.1007/978-­3-­030-­31178-­0 Reuters Institute. (2022). Digital News Report 2022. https://reutersinstitute. politics.ox.ac.uk/sites/default/files/2022-06/Digital_News-­R eport_ 2022.pdf Schifferes, S. (2012). Trust-meltdown for business journalism. British Journalism Review, 23(2), 55–59. https://doi.org/10.1177/0956474812450671 Schlögl, R. (2008). Politik beobachten: Öffentlichkeit und Medien in der Frühen Neuzeit. Zeitschrift für Historische Forschung, 35(4), 581–616. Shapiro, C., & Varian, H. R. (1999). Information rules. A strategic guide to the network economy. Harvard Business School Press. Shirk, S. L. (2011). Changing media, changing China. Oxford University Press. Strömbäck, J., Tsfati, Y., Boomgaarden, H., Damstra, A., Lindgren, E., Vliegenthart, R., & Lindholm, T. (2020). News media trust and its impact on media use: Toward a framework for future research. Annals of the International Communication Association, 44(2), 139–156. https://doi.org/10.108 0/23808985.2020.1755338 Sunstein, C. R. (2017). #Republic: Divided democracy in the age of social media. Princeton University Press. van Groesen, M. (2016). Reading newspapers in the Dutch golden age. Media History, 22(3–4), 334–352. https://doi.org/10.1080/13688804.2016. 1229121 von Nordheim, G. (2019). Journalism in the age of singularization. Inter-media perspectives through computational methods. (Diss.) Department of Cultural Studies, TU Dortmund University. https://katalog.ub.tu-­dortmund.de/id/ ir01388a:ubd.lobid:990229304990206441 von Nordheim, G., Müller, H., & Scheppe, M. (2019). Young, free and biased: A comparison of mainstream and right-wing media coverage of the 2015-16 refugee crisis in German newspapers. Journal of Alternative and Community Media, 4(1), 38–56. https://doi.org/10.1386/joacm_00042_1 Williams, J. (2018). Stand out of our Light. Freedom and resistance in the attention economy. Cambridge University Press. https://www.cambridge.org/core/ books/stand-­out-­of-­our-­light/3F8D7BA2C0FE3A7126A4D9B73A89415D Wu, T. (2017). The attention merchants: How our time and attention are gathered and sold. Atlantic Analysis Corp.

CHAPTER 3

Good, Bad or Ugly: On the Quality of Economic Journalism

Practitioners of journalism tend to dismiss the scientific study of journalistic quality. After all, producing quality content is what reporters and editors have been doing all their professional lives, guided by professional standards. A seasoned editor can tell, if a story is any good after reading a few lines and scanning through the paragraphs. What’s new? Did the reporter dig up genuinely new information, facts, figures, sources, perspectives? Has the story been checked and double checked? Have contrasting perspectives and opinions been taken into account? How relevant is the story? Where’s the beef? Of course, the question of media quality is more complicated, more important and more pressing. The rise of hybrid media landscapes, where journalism outlets compete for attention and engagement with a large number of non-journalistic actors, has challenged quality journalism. Deteriorating trust in the media, and in institutions in general, is undermining the credence of media that is an essential feature of news as a product (Chap. 2). We have seen, too, that the media is—or should be—a merit good. Quality defines which merits can be expected. Journalistic quality is both a positive and a normative concept, that has been widely discussed and addressed (e.g., Lacy & Rosenstiel, 2015). In this chapter, I will argue that economic journalism differs from general political journalism in several aspects. In particular, this is due to three factors: the properties of the subject itself, the demands of economic © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 H. Müller, Challenging Economic Journalism, https://doi.org/10.1007/978-3-031-31030-0_3

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journalism’s audience, and the nature of the influences it faces. Therefore, we need to re-calibrate familiar concepts of journalistic quality a bit. Positive concepts of quality in journalism focus on what users expect from the media, normative considerations rest upon the notion that the news media should work in, and for, the “public interest” (McQuail & Deuze, 2020). The media have a superb job to perform when it comes to holding the powerful to account, providing a platform for public discourse as well as a base of reliable facts as a precondition for deliberation. Habermas (2021) calls for the “illuminating quality” of journalism, without which “the citizens’ will” can neither be formed nor voiced. In his view, independent quality journalism is of systemic relevance to democracy. Therefore, the media should work in accordance with the values that govern society in general, particularly justice, fairness, democracy, social and cultural values; it shouldn’t cause “social problems or extreme offenses” (McQuail & Deuze, 2020, pp. 203–204). The public expects the media to supply a set of benign services, not unlike public utilities that cater to basic needs like water provision or garbage removal. Yet, media outlets in democracies are by no means monopolistic state-run agencies, but (private or public) corporations that operate in a competitive environment. And necessarily so: the process of deliberation relies on “competition as a discovery procedure”, to quote Friedrich von Hayek (2002) slightly out of context. In an open society, nothing is considered to be eternally true or an untouchable doctrine (aside from the fundamental liberal norms of freedom, fairness, justice and equal political participation). Conventional wisdoms are permanently challenged, the priorities on the public agenda are constantly rearranged, new facts come up and call for new interpretations, economic interests need to be reconciled. Deliberation requires the diversity of social discourse, which in turn calls for a competitive media sphere as an indispensable precondition. However, media competition by itself does not necessarily lead to journalistic quality. Increased competition for users’ attention can also lead to a deterioration of quality (Hamilton, 2004), if media users fall for trivial entertainment, strong partisan bias or conspiracy plots, and media outlets craving for revenues serve these instincts. As media landscapes have become more and more competitive over the past decades, from the introduction of cable TV to social media and streaming, thinking about how to ensure quality is all the more warranted, given journalism’s systemic importance.

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3.1   Basic Quality Requirements McQuail and Deuze (2020, p. 217) offer a pragmatic list of what constitutes journalistic quality: • “a comprehensive supply of relevant news and background information about events in the society and the world around”; • objectivity “in the sense of being factual in form, accurate, honest, sufficiently complete and true to reality, and reliable in the sense of being checkable and separating fact from opinion”; • “information should be balanced and fair (impartial), reporting alternative perspectives and interpretations in a non-sensational, unbiased way, as far as possible”. Communication scholars have come up with a host of lists like these. For instance, Ruß-Mohl (1992) proposes quality criteria along five dimensions: timeliness (novelty, relevance), objectivity (balanced reporting, multi-perspectivity, factuality), transparency/reflexivity (accountability, source criticism), originality (readability) and reduction of complexity (simplification, understandability). Arnold (2009) carves out three sets of quality criteria, that focus on the systemic functionality of news, normatively on its democracy orientation and on users’ utility. Each of these lists is debatable. But there clearly is a common thread, that can be summarized in one sentence: Quality journalism means reporting new facts correctly, that have been researched thoroughly with an attitude of sceptic open-mindedness towards different sources and their individual perspectives and interests, presented in a sober, yet comprehensible and, if possible, entertaining style.

Of course, that’s not easy—as the length of this sentence proves. Put squarely, good journalism is correct, timely, well-researched, and not too hard to grasp. Bad journalism is ridden by falsities, contradictions and opaque style. Ugly journalism is wilfully deceptive and partisan. To complicate things further, economic journalism faces additional challenges that call for amendments to general quality criteria.

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3.2  The Challenge of De-materialization: The Complex Nature of the Economy Economic reality as a subject is somewhat abstract in nature. Gross Domestic Product (GDP), the unemployment rate, government debt levels, corporate earnings, the yield curve or stock market quotations are conventions, with which statisticians, economists and accountants have come to grasp what we call “the economy”, “the company” or “the financial market”. These concepts do not lend themselves to sensual experience unlike, say, the weather, wars, car accidents, or whatever else makes the news. Iconic pictures of economic events that could carry economic developments to public attention are mostly lacking. For example, the Global Financial Crisis of 2008, even though a devastating event with long-­lasting depressing economic effects, did not produce many images, other than grave looking men in dark suits gathering for emergency consultations. Even the event that kicked-off the crisis, the investment bank Lehman Brothers going bust in September 2008, was all but invisible. The most emotional pictures being reported showed employees who had just been laid off, leaving the bank’s downtown Manhattan building, carrying their office belongings in cardboard boxes. Weak images are a challenge to economic journalism. Intangibles The abstract nature of the economy is aggravated by the process of de-­ materialization. Today, the production, trade and consumption of services and digital goods contribute a lot more to total value added than physical activities. The national capital stock is composed not just of visible assets such as bridges, factories, trucks or office buildings, but more and more of intangibles like software, patents, or branding. The valuations of the most expensive quoted companies, such as Apple or Tesla, can hardly be justified by the physical assets reported on their balance sheets, but by their command of highly valuable intangibles. The rise of “capitalism without capital” (Haskel & Westlake, 2017) implies that much of economic activity is literally fading out of sight. While Apple or Tesla still market physical products, their true company value is in branding, design, ecosystems of digital services and other intangible features they incorporate. Some big companies try to counter the invisibility effect by presenting top

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executives with some star qualities in an attempt to bridge the gap between the abstract and the concrete: by providing a public face they intend to make an otherwise unfathomable entity relatable. Still, to a large extent the economy is becoming faceless. Complex Trade-Offs Economic developments are not only getting all but invisible, they also tend to be plagued by complexity. Economic decisions typically involve some kind of trade-off, i.e., contradicting goals. A central bank, for example, may tighten monetary policy to fight inflation, but at the same time risks rising unemployment (the classic “Philips curve” effect). Additionally, micro versus macro level developments can have quite different implications, but tend to be confused in public discourse. Think of a company acquiring another one: at the micro level this is an investment that constitutes company growth; from a macro-level perspective it is not: shifting the ownership of a business does not involve capital formation, which is a growth-enhancing “flow variable”, in the lingo of national accounting, but a mere redistribution of the existing capital stock. This is an important distinction: what benefits an individual company (and its executives) may not benefit the economy as a whole. Therefore, the abstract and complex nature of economic issues renders the quality principle of reporting pure facts and background information, that McQuail and Deuze (2020) call for, difficult to apply. To be digestible, there needs to be some sort of framing, i.e., a concise carve-out from economic reality. Even short pieces of economic news need to add meaning to the facts they report; otherwise, their usability is very limited. To frame, according to Entman’s (1993) influential definition, means identifying an issue as a problem and providing some kind of moral judgement, among other aspects. Hence, framing implies that the distinction between pure information and opinion is somewhat blurred. The quality criterion of complexity reduction (Ruß-Mohl, 1992) oftentimes calls for rather strong judgements about what’s important and what can be neglected. These judgements are contentious. In any case, journalistic quality requires editors and reporters not to fall for their own presumptions. They need to be cautiously aware of all the left-out facts, aspects, and angles that cannot be touched upon in a single piece of news.

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News Values Abstraction, complexity and de-materialization make economic news a hard sell in general news markets, where competition for public attention is intense. Editorial decisions what to cover and what to ignore are informed by news values. These criteria can be interpreted both as positive descriptions of what media are actually doing and as a normative set of rules that editors should follow. Communication scientists have come up with a multitude of lists of factors that govern these choices (e.g., Harcup & O’Neill, 2017; Maier et al., 2010; Schulz, 1982; Staab, 1990; Galtung & Ruge, 1965). The essential news values can be summarized as follows: timeliness, negativity, conflict, proximity, prominence, and consonance. In plain English: What’s happening today is more important than what happened yesterday. It helps, if a problem is addressed, even better, if it results in a clash between persons, groups, or other entities. The closer to home all this takes place, or the more it affects the readers personally, the better. The involvement of well-known figures enhances a story’s news value. If it resonates with established frames or narratives, or if other media are intensely reporting on it, an issue’s priority tends to increase. A seventh news value should be added to this list: accessibility—issues that are easy to understand enjoy a communicative advantage (Müller & Hornig, 2020). Economic journalism, though, is mainly concerned with issues whose properties run counter to traditional news values: slowly evolving problems that cannot be pinned to a certain event; positive developments, and abstract ones happening in far-away places; new trends, or new interpretations of established ones; ordinary citizens living ordinary lives; complex issues (unless some populist short-cut logic is applied). Hence, over-­ leveraging and asset price bubbles rarely make the news—until things turn bad. What’s happening at important international bodies, such as the WTO, has largely faded from public awareness (Chap. 6). Complicated and abstract policy areas like monetary or tax policy, when addressed in general media, tend to be reduced to the strong framing of certain leading figures. Distant but important countries, such as India or Brazil, are barely covered in European or North-American media. Even big business is hardly sellable in general media these days. Consonance has become more important, driven in part by publishing on the internet where editors are able to observe competitors’ editorial choices in real-time. Issues that attract attention elsewhere can be easily adopted. Since speed is of the essence, replicating prevailing frames is an instant way to inform new facts with established meaning.1

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Attention Cycles Wide-spread consonance results in episodes of herd behaviour when virtually all the “mainstream” news media cover the same issue with a similar spin. Issue attention cycles (Downs, 1972; Dayan & Katz, 1992; Kepplinger, 2001; Waldherr, 2012) have become shorter and stronger (Lorenz-Spreen et al., 2019). In modern hybrid media systems these waves are not confined to classic media but involve entire information landscapes in “spasmodic” eruptions, a phenomenon Waisbord and Russell (2020) call “news flashpoints”, that is, “sudden and brief periods when interest in specific topics rises and falls rapidly across networked journalism. They are moments of content alignment when headlines and stories in mainstream and alternative media, trends and hashtags in social media, popular bloggers, and discussion forums address the same topics” (p. 377). In Downs’ original formulation an attention cycle consists of five phases. In a first “pre-problem stage” (Downs, 1972, p. 39–41) an issue lies dormant. It is part of the background noise of the news flow. The media, and hence the public, are largely ignoring “a highly undesirable social condition”, until a key event triggers public attention. In the second phase of “alarmed discovery and euphoric enthusiasm” the particular problem attracts plenty of media attention, while other issues are being pushed aside. Current events are extensively reported, the underlying problems are explored. Peak attention is reached in phase three with the public “realizing the cost of significant progress”. Difficult trade-offs are addressed. It becomes obvious that there are no quick and easy solutions. Media users, and possibly editors too, grow tired and frustrated of concerning themselves with the relevant details, to the effect that a “gradual decline of intense public interest” occurs in phase four, as new issues rise in visibility, even though the underlying problem, that triggered the news cycle in the first place, is not solved at all. After that, the issue lies dormant again during the “post-problem stage”. It becomes part of a society’s collective memory and can be reactivated when similar events occur (see also Fig. 16 in Chap. 9). Think of the nuclear accident at Fukushima in 2011 that triggered distant memories of the Chernobyl plant disaster in 1986 across Europe and prompted several governments to re-consider their energy policies (Meißner, 2019). The Fukushima event, though, differed from many economic issues, as it was accompanied by powerful images: there was video footage of the explosion of the reactor and of the catastrophic devastation of coastal towns caused by the tsunami that had also brought about the nuclear disaster.

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Agenda Setting Image-laden economic key events that carry an issue to the fore of public attention are rare. This poses a major challenge to economic journalism. Information quality considerations that focus on journalism’s “public interest” functions require the provision of a broad scope of issues, angles, and frames, which is essential for the workings of democracies and markets alike. In mediated societies where societal subsystems and institutions tend to align themselves with what’s going on in the public sphere, issues that are neglected by the media are rather unattractive to politicians, business executives, scientists or bureaucrats. Thus, if underlying economic problems are not pushed to the centre court of the public arena by the media, they most likely won’t rank high on the political agenda and will hardly be worked out, as Agenda Setting theory (McCombs & Shaw, 1972) holds.

3.3  The Challenge of Forward-Orientation: Economic Journalism’s Watchdog Role Media users’ interest in economic journalism is largely motivated by the desire for orientation. They want to catch a glimpse of the future, not just an accurate record of what’s going on at present. In a survey conducted by Mast (2012, p.  152), gaining “information about prospective developments in the economy, politics and society” was among the most often-­ cited items; two thirds of regular-reader participants and 87 per cent of decision-maker participants chose this item from a list of possible motivations. Hence, the quality criterion of timeliness (Ruß-Mohl, 1992) takes on a slightly different meaning than in other varieties of journalism: it’s not only about being among the first to report an event, say, some CEO’s press conference, but also about detecting problematic trends that are bound to lead to calamities, or opportunities, in the future. Admittedly, demanding that journalism should cover the future may sound somewhat odd. After all, the future is necessarily unknown, and quality journalism should be factual, not speculative. But many aspects of public discourse, and journalism in particular, are directed towards the future: sports writers try to gauge the chances of soccer teams, given their line-ups of players in the upcoming season; weather reports are meteorological short-term forecasts; covering climate change involves long-term scenarios spanning generations; with an election date nearing, domestic

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politics sections are ripe with stories about the likely performance of prospective governments. As far as economic issues are concerned, looking forward is even more pronounced: to a large extent economic activity is dealing with what’s ahead. A constant stream of business cycle forecasts and financial market predictions, political statements, financial analysts’ notes and companies’ earnings forecasts is flowing towards the public, attempting to foretell what’s coming and to influence expectations. Financial markets mirror prospective earnings in years to come. Company investments are based on business plans involving predictions about demand, costs, and revenues. Private households planning to finance real estate purchases need to make informed assumptions about the future path of interest rates. Labour unions bargaining for pay increases have to form appropriate expectations about inflation to prevent real wages from falling. Individuals who buy an insurance, intend to insulate themselves from the vagueness of an inherently risky future. Hence, a host of consequential decisions are taken with some conception of future developments. And indeed, a majority of business journalists recognize their audience’s desire for orientation and consider spreading knowledge about “where the economy, politics and society is headed” as one of their major responsibilities, according to Mast’s (2012, p. 156) survey. Risks and Side-Effects Many economic decisions entail side-effects that materialize over time. Companies may boost their profits by cutting investment, but by doing so put their future profitability at risk. When profits are channelled into share buy backs, resulting hikes of quotations are short-lived, if these measures call a company’s long-term viability into question. Fiscal policy boosting aggregate demand may produce buoyant growth in the near future, but is likely to result in inflation and untenable debt levels later on. Running prolonged current account deficits increases a country’s consumption possibilities at present, but may be a prelude to future capital flight. Cutting taxes may benefit voters, but leads to rising debt levels that need to be serviced later. Neglecting structural reforms today may secure political support, but shift the burden of adaption to the future. There are plenty of such intertemporal trade-offs, many of which are problematic because they amount to hidden costs, that can easily be exploited by interested

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parties. Contributing to transparency by highlighting undesired consequences should be one of quality economic journalism’s goals. To be sure, factoring in intertemporal effects in current media coverage is a demanding call. Off-setting trends can materialize that will prove all warnings wrong. Economic actors may behave in different-than-expected ways. Contrary to economists, who often perform their thought experiments by assuming that all conditions remain unchanged, except for the one thing their analysis focusses on (ceteris paribus), economic journalists are dealing with the real world, an environment that is constantly changing in complex and often unpredictable ways. Journalists therefore need to be cautious when highlighting detrimental future effects. They are no fortune tellers. Still, they shouldn’t turn a blind eye on detectable future side-effects. The Financial Crisis and the Euro Crisis In his account of the run-up to the financial crisis of 2008 Starkman (2014) fiercely criticizes the failure of US media to perform their role as watchdogs. Excessive risk taking by banks and other financial institutions was hardly framed as problematic. Instead, banks were put in the pillory if they failed to reach their own inflated earnings targets. That a “subprime” mortgage sector had emerged where private households with low solvency scores were tricked into mortgages; that banks who “originated” these loans were eager to get them off their books by bundling them into “mortgage-backed securities” (MBS) and selling them to other financial institutions on both sides of the Atlantic, thereby spreading associated default risks across the financial system; that rating agencies collaborated with this practice as they awarded MBS triple-A ratings—all this went largely unnoticed. As Manning (2013) put it, “most financial journalists and most international news agencies simply failed to report much of the emerging evidence of the growing possibility of collapse.” Instead, financial regulators such as the British Financial Conduct Authority (FCA) were praised for pursuing a “light touch” approach. The media only jumped on the issue of over-leveraging when things went wrong. As the real-estate market tumbled, MBS became all but worthless, and financial institutions’ balance sheets soured due to gigantic write-offs. In the end, the financial crisis would cost taxpayers on both sides of the Atlantic trillions of Dollars, Euros, and Pounds in bail-outs and deficit spending during a dragged-out phase of low growth. A heavy price that might have

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been lower, if the watchdog had barked loudly early on, to paraphrase the title of Starkman’s book.2 Could the media have seen the crisis of 2008 coming? It’s noteworthy that not only journalists, but also regulators, accountants, academic economists, central banks, and the International Monetary Fund (IMF) were caught by surprise. They all were entangled in some kind of collective stability illusion. Early-warning signs either didn’t show up, or if they did weren’t taken seriously. We will get back to this theme in subsequent chapters. Here, I’d like to stress that ignorance of slowly building problems is a recurring feature of the economy, that would be abated if economic journalists collectively did a better a job. The Euro crisis is another case in point. Here, too, the failure of early watchdog-like detection was remarkable. Banking statistics and earnings statements may have been opaque. And smoking gun-revealing evidence was hard to come by for journalists. But tensions in the Eurozone set-up could have already been detected in macro statistics and national accounts some years before anxiety infected financial markets. When the Euro crisis started in 2010 with the near-insolvency of Greece, Ireland and Portugal, it had been preceded by a decade-long divergence of competitiveness. Unit labour costs had been soaring particularly in southern Eurozone countries, while they were falling in Germany. At the same time, current account balances were diverging, with some countries running ever larger deficits and others accumulating substantial surpluses. In a currency union, though, the usual macroeconomic instruments for dealing with diverging competitiveness were missing: exchange rates between Euro member countries had been irrevocably fixed. By the mid-2000s, it was obvious that there were severe problems in the making. But without an easy fix at hand, the authorities chose to ignore it, hoping that market forces would iron out divergences somehow, as the zeitgeist suggested they would. And journalists by and large went along with the official stance of laid-back procrastination, when they should have been leaning against the wind (we’ll get to this concept in the next chapter). They should have dug deeper, doing research and analyses on the causes and consequences of the imbalances and raising early-warning flags. An at the time underdeveloped pan-European news coverage, with each member country focusing on its own issues and largely neglecting common European perspectives, may have had an impact, too (Chap. 7). However, the failure to spot simmering problems early on was not a matter of lacking data availability, but of acknowledging what the data meant.

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While the financial and the Euro crisis were endogenous economic disasters, social and geopolitical issues need to be taken into account as well. Arguably, outbreaks of international political tensions are even harder to foresee than economic ones, especially since there is always a wide range of potential risks simmering around the globe, most of which never materialize in an acute way. News media, though, tend to jump on international issues only when things turn catastrophic, in a classic attention cycle manner. Examples include the failure of media to spot the emerging refugee crisis of 2015/16 at an early stage (von Nordheim et al., 2019) and the Russian invasion of Ukraine in 2022. In both cases early-warning systems all but failed. The prelude to the refugee crisis was characterized by international donors cutting their financial support for camps outside of war-torn Syria and the deteriorating living conditions there; these facts were known and occasionally reported, but they didn’t receive attention sufficient to lift them to the top of the agenda in Europe. The Russian invasion of 2022 had an even more obvious prelude, with the annexation of Crimea and the beginning of a proxy war in eastern Ukraine in 2014. There had been dire warnings about the EU becoming too dependent on gas imports from an increasingly aggressively acting Russia, voiced loudly in the media. But these warnings didn’t have a lasting effect. Public attention soon shifted to other issues, leading to complacency. (We’ll get to international aspects of economic journalism in more detail in Chap. 6.) The public was relying on journalism’s forward guidance—and was caught by surprise when problems materialized. What you don’t see, you don’t get.

3.4  The Challenge of Voice: Why Not All Interests Are Equally Loud Clashes of economic interests are everywhere: union bosses may benefit from pushing through generous wage-settlements by boosting their popularity among members, but at the same time put some jobs at risk. Companies strive to weaken their competitors to push their profit margins, while the economy as a whole suffers from dampened competition. Raising minimum wages is popular, since it improves the livelihoods of low-income workers, but some people risk being priced out of the labour market, if wages are set too high. Introducing tariffs may help companies and workers in sectors facing fierce competition from abroad, but obstacles to trade raise prices for everybody else and stifle innovation. Social

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benefits are a relief for recipients, but somebody has to pay for these outlays via taxes or spending cuts in other areas. Loose financial regulation unleashes credit supply, but creates systemic risks over time. And so on. Various actors work hard to convince journalists of their particular cause, as they strive to win public support. This constitutes a significant difference vis-à-vis other varieties of journalism: economic journalism directly touches powerful interests that often involve quite concrete material gains or losses. Rent Seeking Companies, business associations, labour unions, lobbyists, and other pressure groups devote sizable resources to influence politics. These activities, known as rent seeking, have long been recognized by economists as a deviation from the ideal of “welfare-maximizing” markets and governments (e.g., Tullock, 1967; Krueger, 1974). The influence of business interests typically involves some kind of distortion, either by gaining access to taxpayers’ money through subsidies or by easing competition through domestic regulation or tariffs. The outcomes are seen as detrimental, as rent seeking tends to result in higher prices, less choice and slowed-down innovation as well as skewed tax-and-spending patterns. Lobbying for rent-grabbing is not confined to backroom talks between politicians and the emissaries of big business anymore, but in highly mediatized societies it has turned into a battle for public opinion. In the US the fight about climate change has been enduring and substantial, with interested industries involved in pushing their cause, negating the very existence of human-­ made climate change and thus the need to put policies in place to fight it (Perloff, 2018, p.  161). During the financial crisis of 2008/09, for instance, the German car industry was quite successful in convincing the public and the federal government to spend billions of Euros on a car-­ scrapping scheme, that did little to bolster aggregate demand but diverted plenty of public funds to the car industry. In effect, car manufacturers and dealers collaborated with potential car buyers to take a bigger bite of the budget in a time of crisis. The scheme was so popular that it was quickly copied by other western countries. (During the Corona crisis of 2020 the car manufacturers’ association tried to replicate this stunt, but wasn’t successful the second time around.)

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Collective Action Obviously, not all interest groups are equal. Political influence differs greatly among social groups, industries, and causes. In his classic study “The Logic of Collective Action” Mancur Olson (1965) showed how hard it is to gather a group of companies or private citizens to devote money, effort and time to rent seeking. Some kind of organizational structure is needed, experts need to be hired with ties to government and the media, expertise needs to be brought in. The bigger and the more diverse a group is, the harder it is to form a lobby group. The reason for the inability to organize is straightforward: when individual returns from lobbying are small and each potential contributor can count on others to pay their dues, everyone has an incentive to sit back and take a free-rider position—to the effect that there is no lobbying at all. Think of middle-class consumers whose interests are all but unorganizable, even though they represent vast majorities of citizens in western societies. On the other hand, if only a small number of players is involved and each one of them can expect substantial individual gains from investing in lobbying, the logic of collective action works in their favour. The afore mentioned German car industry, European farmers or US fracking companies are cases in point. Olson’s general thread is rather pessimistic as it implies that democracy is being deformed by its own mechanisms. The principle of equality before the law and of equal political representation in the parliamentary system is being violated by the de-facto inability to organize interests equally. The basic freedoms of speech and of association, i.e., the right to join a club or a labour union or an industry association, can be exercised by everybody, but to quite different effects. These findings leave economic journalism in a difficult spot. If generally accepted quality criteria are mindlessly applied, the media would aggravate the political system’s inherent deformations and the misrepresentation of interests in the public sphere. The principle that “information should be balanced and fair (impartial), reporting alternative perspectives”, as McQuail and Deuze (2020, p. 207) formulate, should not prompt journalists to cover all the voices raised in the public arena, thereby amplifying the distortions. For instance, if the available evidence leads a vast majority of established scientists to conclude that human-made climate change is real and its effects are severe, there is no point in giving climate change deniers an equal voice in the coverage, especially if such outlier positions are obviously motivated by lobby-financed commercial interests.

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Journalistic quality principles like impartiality and neutrality do not bind journalists to naiveté. Quite the contrary, if journalism is to enable deliberative discourse, as stated at the outset of this chapter, it needs to keep an eye on those interests that have difficulties gaining influence and therefore risk being overlooked in public debates. Economic journalism should make sure that all legitimate and reasonable positions can be heard. Legitimate implies fair interests that do not harm others and do not endanger social peace; reasonable means that arguments are considered to be valid if they are based on verifiable facts. Outrageous opinions about the alleged workings of the world that call for violent action—as, for example, disciples of the obscure QAnon cult have promoted—are neither legitimate nor reasonable and should be ignored, if possible. To ensure multi-perspectivity, and thus the quality of public discourse per se, journalists need to pro-actively search for reasonable positions that are missing in the debate and give them a voice. During the Corona pandemic, for instance, well-organized sectors such as retail and hospitality were hugely over-represented in the coverage of shutdowns and re-­ openings. At the same time, schoolkids, their parents and university students were underrepresented in the media; they neither had powerful organizational structures nor common political positions nor eloquent executives to appear in front of camera. Media’s own economic interests are of importance here, too. Since the audiences of traditional media such as newspapers and linear TV are relatively old on average, journalists tend to cater to these core customers’ interests, stressing issues such as protecting the elderly during the Corona pandemic or keeping public pension systems skewed towards the interests of older generations. Agenda Setting and Social Media The quality criteria of impartiality and objectivity commit economic journalists to being aware of the deficiencies of the political economy and to working towards countering them. This task is complicated by the profound changes that political and public spheres have undergone. Back in Olson’s days, political power and organized interests could be detected easily, though their backroom action remained opaque. Now the boundaries of public spheres have been perforated due to the emergence of the internet and social media. Where once well-­structured, costly organizations were needed to wield political influence, freedom of association can now be practiced in an ad-hoc fashion. Movements are formed in the

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digital sphere before spilling over into the physical world, via demonstrations and other public displays of discontent.3 “Agenda Setting in the twenty-first century” involves complex, multi-directional interactions between different actors via a host of channels (Boynton & Richardson, 2016). New mechanisms of political communication have altered “the logic of collective action” considerably. Activists of all sorts now stand a chance to gain the upper hand in the battles for public opinions. In this environment, business lobbyists cannot be expected to be the most powerful actors anymore. Arguably, the first truly consequential anti-business movement of this kind was the campaign against the Transatlantic Trade and Investment Partnership (TTIP), that started in 2013. The campaign came into being virtually out of the blue, gained considerable traction in the German-­speaking countries, then spread to other countries, and changed the course of international politics. In the end, it killed a project of strategic importance supported by both the US and EU administrations as well as by corporate interests. The TTIP campaign is an early example of social media-centred intermedia agenda setting. Activists drew up the arguments and established distinct images, such as the disgustingly pale and limp “chloride chicken”, on YouTube, Twitter and the likes. When traditional economic journalists finally took up the story half a year or so later, they largely adopted activists’ pre-framed arguments, as von Nordheim et al. (2018) show. Valid pro-TTIP points about establishing common environmental, social or technical standards among the two major western trading blocks, that would have pushed back China’s quest for supremacy to some degree, made it into the newspapers, but were only a side-show compared to the emotionally charged bid to scrap the entire project. The power of social media has been felt since by big business and economic policy makers. To be sure, a campaign like the anti-TTIP one is unlikely to be repeated, as government entities, lobby groups and journalistic media have all improved their social media savviness since then. They monitor the platforms closely now and get involved in debates early on. These practices, however, pose another challenge: if journalists mistake social media—particularly elitist Twitter, where many of them mingle with politicians, scientists, activists and lobbyists—for social reality, they run the risk of falling prey to the algorithms governing the platforms. The logic of collective attention, that has underpinned the age of mass media and focused democratic societies on a set of priorities, is endangered by the “singularization” of societies (Reckwitz, 2017). As social media aim at maximizing their

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users’ “engagement” on their platforms, they draw users into bubbles and echo chambers of like-minded individuals (Sunstein, 2017), thereby altering the self-perception of society and splintering it into polarized groups of “singularities”, individuals who view themselves as unique beings, not necessarily as parts of stable greater social groupings anymore. Journalism should counter these tendencies by “doing general” (von Nordheim, 2019), reflecting what a society—in its entirety—is and where it’s going. Catering to informational bubbles by fabricating news-style content based on social media posts may be quick, cheap and easy. But it can hardly count as quality journalism, in the sense that it provides “a comprehensive supply of relevant news and background information about events in the society and the world around”, as McQuail and Deuze (2020, p. 207) put it.

3.5  Who’s Got the Power? Independence Versus Influence The preceding sections have shown that ensuring quality in economic journalism is no easy task. We are dealing with particularly complex and abstract issues. The key-audience of professional users demands relevant issues to be covered not just in a factually correct, but also in a forward-­ looking manner. Economic journalism is confronted with a wide range of powerful interests that try to influence the media in their favour. Furthermore, economic journalism needs to frame issues aptly while not being opinionated. It needs to strive for impartiality, neutrality and objectivity, while paying attention particularly to those legitimate voices who face systemic difficulties in getting attention in public debates. Given the properties of news as a product, trust is an essential resource (Chap. 2). A trusting audience, in turn, is built on the recurring experience of quality, in the sense that a news brand provides a correct and timely representation of reality and does not let itself be used by one interest group or another. Independence In a liberal society, that have come to rely on journalism as a “fourth estate” responsible for managing the Public Opinion Tribunal, economic journalism should be neither a mouthpiece of business lobbyists or major corporations nor some propaganda arm of the government, the central bank, some political party or activist group. After all, independence is a prerequisite for trust, “without fear and without favour”, as the traditional

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claim of the Financial Times has it. Independence entails three dimensions (Müller, 2017, p. 43): Economic independence requires a viable stream of income that enables an editorial board to set its own priorities and to ward off any attempt to exert pressure. Editorial budgets need to be large enough to fund a team of specialized staff able to pursue in-depth investigations to dig up aspects of reality without support or guidance from outside forces. Therefore, commercial business models need to be profitable. Not-for profit ones need long-term commitments from—otherwise restrained—financiers. Public-service ones need to be designed as to keep political interferences at bay.4 Intellectual independence is crucial, if economic journalists are to meet their counterparts at eye level, whether in business, government or academia. They should be able to disentangle the meaning of the relevant facts and frames, dig up new information and develop new angles, challenge interpretations dominant in current discourse and formulate alternative interpretations on their own. A sound command of economics and accounting clearly is a desirable, if not a necessary condition. Ideological independence implies that economic journalists need to keep their personal convictions in check, as these may hinder them to acknowledge the economic and social reality they are supposed to observe and interpret. An open and sceptic professional mindset is needed to discern what’s going on in markets, politics, and society. To be sure, nobody is free of prejudices, personal preferences and value judgments. Social or spiritual backgrounds shape individual moral compasses. Journalistic independence, however, requires on-going self-critical reflection on one’s beliefs. Of course, the notion of independence is an unreachable ideal. Taken at face value, complete independence would require total autonomy of the journalist, a trait resembling the autonomous individual at the core of the basic model of rational choice theory taught in entry-level microeconomics classes. The idea that there could be autonomous journalists, though, is a contradiction in itself, since journalists are—and have to be—integral parts of the society in which they operate. Thus, of course they are influenced by the environment they work and live in. Hierarchies of Influences How the media and society interact is the domain of media sociology. A rich body of literature has been built dealing with this interplay. In a seminal approach Shoemaker and Reese (2014) conceptualize the perspective

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in their “hierarchies of influences” framework. It considers factors at five levels of analysis, involving “individual characteristics of specific newsworkers, their routines of work, organizational-level concerns, institutional issues, and larger social systems” (Reese & Shoemaker, 2016, p. 396). At the lowest level, the model deals with the personal and professional backgrounds of journalists, their attitudes, and the professional roles they were trained to perform. Empirical findings suggest that indeed journalists’ professional standards and ethics exert a greater influence on news content than “do their personal attitudes, values, and beliefs” (Shoemaker & Reese, 2014, p. 98). Education as well as the constrains governing particular news organizations trump personal inclinations, clearly relating the concept of intellectual independence cited above to the hierarchies of influence approach. Editorial routines also have an “important impact” on the production of news (p. 132). Routines structure the way content is selected, how much time, effort and money are devoted to the production of news stories, and in which formats they are presented. Organizational-level concerns, in turn, relate to the notion of economic independence, as factors driving news organization “have a critical impact on media content” (p.  164). As profit-oriented—or at the very least audience-­ oriented (in the case of public-service media)—corporations, they face economic pressures that are extended to editorial staffs in various ways, thus putting constrains on journalistic independence. Shoemaker and Reese (2014, p.  165) stress, that “The influence of ownership on content has been an important concern in the news media. Although news departments may be organizationally buffered from the larger firm, content is still controlled indirectly through hiring and promotion practices and through self-censorship.” Institutional issues concern the legal and regulatory environment in which news organizations operate. While in liberal democracies freedom of the media is guaranteed by the fundamental right of freedom of expression, media organizations are still regulated to some degree, and laws clearly set limits on content, ruling out, for instance, libel, hate speech, or incitement of the people. There are restrictions to advertising. And competition policies work against concentration in the media market— although the quasi-monopoly powers of platform companies such as Google and Facebook have ushered in a rethink. At the highest level the hierarchies of influences model considers extramedia influences that emanate from the social system (Reese & Shoemaker, 2016, p. 403). The category covers a wide range of actors that journalism

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deals with in informal, that is, non-institutionalized ways. Actors include sources such as experts or politicians, public relations people, lobbyists, activists, advertisers and others who are involved in shaping the selection and framing of news content, even triggering coverage by creating bogus “pseudoevents” (p. 210). “Radical” Critique It is often assumed that advertisers have an outsized influence on news content, particularly big corporations that run image ads in classy upmarket business publications. Other less traditional sources of publishers’ income, such as extensive event businesses directed primarily at corporate customers to make up for deteriorating advertising revenues, may well aggravate conflicts of interest. According to the “critical” view of the media in market democracies, media are thought to be means of a suppressive system that primarily serves powerful economic interests. Herman and Chomsky’s (1988) “propaganda model” purports that profit-driven media companies sell their users’ attention to other businesses. In terms of the hierarchies of influences approach, organizational-level concerns and extramedia settings would be of utmost importance in shaping what the media report and how they go about it. Thus, news content would be largely biased towards the interests of wealthy owners and their big business customers, to the effect that journalism reinforces “hegemonic neoliberal capitalistic discourses and power relations” (Shaw, 2015, p.  3). Business and financial journalism would be particularly affected because of their direct links to the interests at stake. In this view, the repeated failure to detect symptoms of economic crisis at an early stage is woven into the fabric of the capitalist system, of which the media system is an important building block. For instance, putting the brakes on excessive risk-taking in times of booms would simply run counter to media owners’ and their greedy capitalist peers’ interests. Systemic breakdowns would be inevitable. The notion of ideological independence—and thus quality in economic journalism more generally—would be a myth. The liberal stance, on which much of modern journalism is based, would amount to little more than a Marxian überbau, an intellectual superstructure thinly veiling the true selfish motivations of the exploiting class. Stripping away radical resonances in the wording, the critique cannot be entirely dismissed. Indeed, media ownership is important. If newspapers and TV stations belong to wealthy individuals or families, or

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outrightly to companies, with affiliations to governments and political parties, as is frequently the case in the “Mediterranean model” (Hallin & Mancini, 2004, p.  89) and even more so in developing and transition countries (Fengler, 2021), political polarization may well turn into hegemonic media monocultures. In such an environment, Habermas’ liberal ideal of free and “non-hierarchical discourse” would be unattainable. To be sure, media owners using journalism outlets to pursue their own political agenda are incompatible with the above-mentioned notion of quality. To keep oligarchic structures from deforming media systems, many western countries employ competition policy to restrict the scope of ownership. Laws bind media to minimum reporting standards in return for granting privileges, such as journalists’ right to protect the confidentiality of sources. However, fighting for independence is a never-ending battle as new challenges arise and new actors enter the scene. After all, two of the richest Americans own two of the most influential media: Amazon founder Jeff Bezos owns the Washington Post, while Elon Musk, of Tesla, SpaceX and other companies, took over Twitter, the network where opinion leaders from business, politics, science, culture, and the media hang out to shape public debates. In southern and eastern Europe rich individuals and companies own major media, raising the spectre of emerging oligarchic structures (Chap. 10). Transparency and Accountability As discussed in Chap. 2, business media cater to a well-informed core audience likely to bear personal costs, in case flawed reporting directs them to bad decisions—a factor that renders this type of media less likely to fall for the falsities of manipulation and propaganda. To be a viable product, journalism needs to refrain from being systematically biased. Therefore, ensuring editorial independence should be in the long-term self-interest of profit-oriented owners of media companies. Whether a publication’s political leanings are conservative, leftist or liberal should not obstruct their view of reality, that is, of relevant and observable facts shaping society. Keeping—and displaying—independence in the face of massive influences is vital for economic journalism to remain a trusted source of information. As shown in the previous chapter, media organizations have come to invest into media accountability to counter the loss of trust; practicing transparency concerning both products and processes is considered a

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means of media accountability. Transparency-enhancing measures are pointed at different levels of the hierarchies of influences model, but empirical findings show that particular weight is put on the personal and routine levels, as media organizations prefer low-cost measures that can be implemented easily (Fengler & Speck, 2019, p.  128–130). Most of all, though, independence is proven by factual everyday reporting. Independent Framing and Editorial Leaning The notion of journalistic independence, central to ensuring quality, implies that a publication needs some kind of consistent world outlook—an enduring coordinate plane that helps making sense of the world. Consistency is also called for by the experience-good characteristics of news, as discussed in the previous chapter. Recurrent users need to be reassured of a publication’s leanings, which are a key characteristic of news media products. Successful media brands are built on some philosophical underpinnings, that serve as a starting point from where the economy and society are being explored. Being consistent, however, does not prohibit editorial teams to change their stances on certain issues when the facts change—narrow-minded stubbornness does not count as a journalistic virtue. A publication’s leanings should be communicated transparently by the editorial team and the publisher. In this respect, too, a balanced approach is called for: a business newspaper that is confining itself to hailing star CEOs and entrepreneurs, routinely arguing for lower taxes, and parroting lobbyist positions demanding weak regulation, for example, is unlikely to be considered an independent watchdog of the corporate world. On the other hand, a hard-line anti-business stance will hardly appeal to the core audience of economic journalism, that is motivated by professional information needs. As stated earlier, framing is a central task of the practice of economic journalism, i.e., informing facts with meaning, since the issues it deals with are abstract and complex. Economic journalists need to make judgements about what’s important, what constitutes a problem, who is to blame, and what potential remedies could look like. If an intellectual coordinate plane is lacking, journalists are inevitably left with only one option: to borrow the framing from someone else—which is inconsistent with the requirement of independence. Turning to experts, i.e., people with some deeper knowledge of and with no direct personal interest in the issue at stake, is an important part

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of journalistic research (e.g., Albæk, 2011; Tiffen et al., 2014; Dimitrova & Strömbäck, 2009). But experts, too, have ideological inclinations, convictions, economic interests, prejudices and other personal biases. In fact, Manning (2013) attributes the failure to spot financial vulnerabilities in the run-up to the crisis of 2008 to all too cosy relationships between journalists and their sources at financial institutions. Where truly independent reporting would have been required, independence was hampered by a lack of scepticism: analysts employed by financial institutions were treated as experts, precisely because “financial journalists shared a ‘received wisdom’ (…), a set of assumptions about the nature of the political and economic world that were profoundly ideological” (Manning, 2013, p. 186). So, borrowing framing from experts doesn’t let journalists off the hook. At worst, journalists simply align themselves with one camp or another, be it the government, a political party or activist group, labour unions, or major corporate sectors such as banking or the car industry and their executives—a demeanour clearly violating the notion of journalistic independence. Can economics help?

3.6  The ESSF Formula: News Values for Economic Journalism Much of economic theory states welfare maximization as its ultimate objective. Economic journalism should adopt this goal, as welfare makes for a good starting point in our quest for a frame of reference. In economic theory, and in empirical cost-benefit analysis (e.g., Layard & Glaister, 1994), the term captures some kind of overall collective well-­ being, where each citizen’s interest, or utility, is taken into account. This may sound weirdly self-evident, but it’s not. Non-liberal systems do not put the individual at the centre of the social order; individual dignity, equal rights, and equality before the law count little where the prime objective demands service to an absolute monarch, a ruling class of oligarchs or clerics, a single-party nomenklatura, or an ethnic group. Contrastingly, the concept of welfare is firmly anchored in the values of liberal egalitarianism. Economics has drawn from a range of philosophical definitions of welfare, that can lead to quite different policy conclusions. (For an economics textbook overview see e.g., Varian, 2019, Chap. 34.) In any case, the overarching principle holds that each and every individual in a society counts and that some kind of compromise among the citizenry needs to be struck.

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Welfare is a somewhat open concept. It can be concretized by filling in purely materialistic objectives such as boosting current income or consumption, but also by considering long-term altruistic motives, such as slowing down climate change or securing prosperity for future generations. Translating the concept of welfare into journalistic categories, I propose that economic journalism should be guided by the ESSF formula— efficiency, stability, sustainability, and fairness. It’s meant to provide a set of news values for economic journalism. When the ESSF formula is violated, there is a case for a story. When it is badly violated, it should be a big one. The ESSF formula strives to capture how economic journalists (should) think about economic developments, which aspects should to be considered, which current and future trade-offs need to be borne in mind, and which potential remedies are at hand—that is, how a particular issue could be framed. The ESSF formula is spelled out in some detail in Table 3.1. It’s inspired by economic policy recommendation like the UN Global Compact, the work on Well-Being indicators at the OECD,5 the Stiglitz report on social progress commissioned by the president of France (Stiglitz et al., 2009) or the W3 formula proposed by a group of experts to the German parliament (e.g., Schmidt & aus dem Moore, 2014). All these conceptual efforts have stressed that the goals of achieving balanced economic growth and an efficient allocation of resources must be complemented with social and environmental considerations. The overarching theme is enhancing welfare—for the maximum number of people, over the long-term, so that they can lead a secure life of self-determination. Values and Conflicts The ESSF formula implies judgements: efficiency means there shall be no waste of economic resources, the more income and growth the better, all else being equal. Stability entails the absence of erratic movements of markets that obstruct their smooth functioning and may lead to economic and social disruptions. Sustainability purports that the destructive overuse of natural resources is undesirable, as it leads to future scarcities. Fairness rules out exploitation and overreach of any kind resulting from the asymmetric distribution of wealth, power, or information. The ESSF formula involves a host of conflicts. For example, aiming solely at efficiency would amount to narrow-mindedly advocating high rates of economic growth (leaving no resources idle and maximizing the accumulation of additional production capacities), while at the same time

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Table 3.1  The ESSF Formula and Specifications Efficiency

Stability

Sustainability

Fairness

General goals

Static: full utilization of factors of production Dynamic: high growth rate (per capita)

Absence of crises, smooth functioning of markets, harmonious society

Absence of deprivation, equal opportunities, voluntariness of exchange, ability to engage in public life

Examples of related socio-­ economic variables

Static: Un−/employment rate, labour market participation rate, productivity (output per hour worked), size and speed of digital networks; dynamic: investment (fixed, intangible), investment in venture capital, patents, forecasts for size of working age population

Inflation rates, Debt-to-income ratios (public and private), capitalization of financial institutions, stocks’ price-­ earnings ratios, sovereign and corporate bond spreads, exchange rates, current account balances, official reserves (foreign currencies, food and energy)

Long-term viability of current economic trajectory, preservation of natural resources, climate stabilization Carbon dioxide emission (per capita, relative to value added), extinction rate of species, projections of climate change impact, availability of water supplies, likelihood of extreme weather events, carbon leakage

Examples of related Economic Policy Areas

Labour markets, competition, trade, education, research & development

Monetary, fiscal, macroprudential regulation, energy market regulation

Energy, transportation, trade, agriculture

Poverty rate, distribution of income and wealth, deprivation rate, life expectancy, health status, perception of individual life satisfaction, progressivity of tax and transfer systems, corruption, insider trading, manipulation of public procurement or financial market prices Welfare, pensions, taxation, education, collective bargaining, minimum wages

Source: the author

the other three objectives would possibly be severely violated. If buoyant growth brings about unbalanced accounts (e.g., increasing debt levels), the overuse of natural resources, or vast gaps in the distribution of income and

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wealth, a taming of expansionary dynamics would be warranted. Economic journalism is about these kinds of trade-offs between conflicting objectives whose respective proponents pull their weight on each side of the scales. It is about power struggles: between and within companies, regulators, unions and employers, corporate executives and government officials, political parties, lobbyists and activists, customers and suppliers, investors and financial service companies, to name just a few. And it is about wrongdoings occurring in institutions, companies and markets, that is, the violation of the notion of fairness by exploiting asymmetric information. That the formula’s foundations lay in the liberal western tradition, make it hardly compatible with authoritarianism, communism or national-­ chauvinism. Otherwise, it is a rather open concept. Different media and individual journalists may stress different aspects, depending on their respective political bend: a left-leaning publication may put more weight on fairness and efficiency (high employment, growth), a conservative one will stress efficiency and stability, a greenish one sustainability and fairness. So, even if everybody accepts the ESSF formula, there is still plenty of room for disagreement. But it is hard to imagine any sensible economic journalist not embracing the formula in principle. It should be noted that the ESSF formula focusses on outcomes, not principles. It is open to very different ways of doing business and economic policy, whether private or public, financial market-driven or government-driven, corporatist or individualistic. What matters are the respective arrangement’s results. Together the four categories constitute a coordinate plane covering different aspects of welfare. When inefficiency is pushed back, when instability is avoided, when sustainability is provided for, and injustices are thwarted, conditions are laid for a society to prosper in a pacified manner over the long-term. Economic journalism should highlight slippages from these goals and provide sufficient transparency—so that they can be worked out.

3.7  Conclusion Journalistic quality is both a positive and a normative concept. Positive aspects involve the individual utility that arises from news consumption. Normative ones are due to the public-good properties of news media. What constitutes journalistic quality has been a matter of debate among communication scholars for decades. However, their lists of criteria only partly apply to economic journalism. Economic journalism differs from

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general political journalism in several aspects. In particular, this is due to three factors: the properties of the subject itself, the demands of economic journalism’s audience, and the power of the influences it faces. In particular, economic journalism should deal not just with what’s going on at present, but also with the future. After all, economic decisions are made with respect to likely or possible future states of the world. Therefore, we need to re-calibrate familiar concepts of journalistic quality a bit. This chapter proposes a set of criteria for economic journalism: the ESSF formular, stating that efficiency, stability, sustainability and fairness should prevail. The ESSF formular translates notions of welfare economics into news values and is meant to guide journalists to simmering problems before things turn really nasty.

Notes









1. In a rare study conducted by Boukes et al. (2020), news values are applied to economic issues; the authors find that popular and regional papers predominantly focus on attention-grabbing features such as personification, negativity and geographical proximity, whereas quality newspapers rely on a broader set of factors. 2. Kalogeropoulos et  al. (2014) come to a somewhat different conclusion. They find that business journalism indeed does perform its “watchdog” role quite well. However, their sole empirical focus is on the Danish case, a country with a highly developed media system of the “Nordic Model” variety (Hallin & Mancini, 2004) with high degrees of built-in independence. Even more important, they see the watchdogs as alert and critical counterparts of business, in the same vein as political journalism perform their role. The forward-looking nature, that is the issue we are highlighting here, is beyond their scope of their analysis. 3. Think of the French Gilet Jaunes (yellow vests), the Pegida anti-immigrant protests in parts of Germany or the Black Lives Matter movement in the US. They all started on WhatsApp, Facebook or Instagram in an informal way, but soon became big as protesters took to the streets and TV coverage projected their images across the nation and beyond. 4. The latter property is typically associated with the public service broadcasters operating under the “Democratic corporatist model” in Northern and Central Europe (Hallin & Mancini, 2004), where news corporations rely on special household levies and are supervised by independent boards composed of people from a broad set of backgrounds. 5. See https://www.oecd.org/statistics/measuring-­w ell-­b eing-­a nd-­ progress.htm

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CHAPTER 4

Making Sense: Narratives, Journalism and the Economy

When I dared my first attempts in practical journalism as a high school student, writing unassuming articles for a local newspaper, the head-­ reporter had a peculiar habit: he’d come back into the newsroom from some event, sit down at the computer keyboard, pull out a notebook from his baggy coat, and then loudly exclaim: “Let’s do poetry!” It was supposed to sound ironic and cynical—and hence unbelievably cool. As the years went by, and both my formal education and professional experience broadened, I arrived at deeply disapproving of the underlying notion: writing news shouldn’t even faintly be akin to composing a poem. Journalism is a serious business, and the economic variety in particular. It’s about facts, not fiction. Readers rely on it. It influences their perception of reality and the decisions they make. That said, while journalism isn’t—and shouldn’t be—poetry, it clearly involves storytelling. After having done extensive investigations, a reporter is expected not to annoy her audience with an unwieldy account of everything she has found out, but to present the essence of it in a condensed, accessible and convincing form. In the previous chapter, we saw that journalistic quality involves comprehensiveness, but also comprehensibility. Obviously, there is a trade-off. The long and winding recount of findings, involving all kinds of facts, figures, and perspective, may be staid, but it’s hardly accessible. What is needed is a cognitive bridge between the world as it exists and humans’ limited ability to perceive it. The concept of the narrative

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provides such a bridge. That’s what this chapter deals with. It’s not about how to tell a news story—what a reporter does when he sits down at the computer and pulls out his notebook—but why journalism is a narrative profession in the first place and how it interacts with society, the economy and its institutions. Journalism is still an important part in the process of forming economic narratives, but there are plenty of other actors as well. In recent years, narratives have been given a bad name in political discourse. In an age of rising populism and authoritarianism, the term reeks of deception and manipulation. Here, we are not concerned with deliberate misrepresentations, but understand narratives as representations of reality in reduced form, as they are a central element of human cognition. This is true not just at the level of the individual but also of the collective: groups of people, even entire societies, share narratives and are thereby able to make sense of the world, deal with uncertainty, cooperate, trade with one another, and indulge in the division of labour. That’s why economists have turned their attention to the concept. Akerlof and Snower (2016) identify seven functions of social narratives, namely: understanding the social environment, focusing collective attention, predicting events, motivating action, defining social relations, highlighting positions of power, and formulating and stabilizing social norms. The concept of the narrative is also present in communication science. Much more popular, though, is the related concept of the media frame, which owes its popularity to the fact that scientists have found it easier to operationalize. The temporal quality of the narrative, which connects current with past events as well as with the collective memory of a society, is repeatedly emphasized (Tenenboim-Weinblatt & Neiger, 2015). Following this idea, Tenenboim-Weinblatt et al. (2016) propose to operationalize narratives starting from the frame concept. They see two fundamental distinctions between the two concepts: a narrative can include a wider range of voices, events, and perspectives (p.  152) and it involves “temporal qualities” the frame concept lacks (p. 153). From this point of view, narratives are discursive representations of sequences of events, while the individual frame is only able to capture a limited period of time. Entman’s (1993) definition of a media frame involves references to time, too—the question who is responsible for a problem looks backward, proposing solutions looks forward—but the reference to a distinct period of time is still central. Similarly, McComas and Shanahan (1999, p. 37) name as the most important difference between frames and narratives that the latter “use a specific temporal order of events to construct meanings.”

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Tenenboim-Weinblatt et al. (2016, p. 153) therefore suggest defining narratives as “higher discursive constructs” that include frames. Thus, narratives connect individual frames in a sequence of events, assigning specific roles to actors.

4.1   Infectious Stories and Their Effects: Narrative Economics In November of 1987, Robert Shiller, an economics professor at Yale, published a paper about the stock market crash that had happened only weeks earlier. More or less out of the blue, the market had tanked by more than 22 per cent on October 19th, and Shiller wondered why that had happened. So, the very same day he sent out a questionnaire to investors, both individual and institutional ones. About 1000 persons replied. One of his findings was the relevance of news-related background noise, leading investors to react panicky when prices began to drop: “While no important news story appears to have broken right at the time of the stock market drop, we can identify news stories that preceded the drop by a number of days, and that were on investors’ minds. Institutional investors were most concerned about the recent rise in interest rates and about Treasury Secretary James A. Baker’s October 15 threat to push the dollar lower in response to increases in German interest rates.” These news stories chimed with a common belief that the market was overpriced anyway, that the national debt level was unsustainably high, and that taxes would need to be raised eventually (Shiller, 1987, p.  22): there seemed to be some kind of shared conviction prompting investors to react in a like-­ minded way once valuations started crumbling. Shiller didn’t use the term narrative back then, but he kept returning to the issue again and again. In “Irrational Exuberance”, a book on the “new economy” bubble published in March 2000, he cited the media as one “cultural factor” contributing to the widespread belief that stock market valuations, even though wildly detached from economic fundamentals at the time, could be justified somehow. The media, he argued in the book’s third edition, are not neutral observers of events, but “actively shape public attention and categories of thought, and they create the environment in which the speculative market events we see are played out” (Shiller, 2015, p. 121). In his collaborative work with George Akerlof about “Animal Spirits” (2009), a term borrowed from Keynes (1936), and “Phishing for Phools”

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(2015) the term “stories” is used to capture the social dimension of shared beliefs. I’m recounting his publication history, because Shiller, Nobel laureate of 2013, is a highly influential figure in the economics community. So, when in his American Economic Association presidential address, he called for developing “Narrative Economics” it had quite an impact on the profession: in the speech, later published as a paper (Shiller, 2017), he outlined a research agenda, suggesting that epidemiological models should be used to study “the spread and dynamics of popular narratives, the stories, particularly those of human interest and emotion, and how these change through time, to understand economic fluctuations” (p. 967). In a subsequent book of the same title, he widened the scope to economic policy considerations (Shiller, 2019). A little later he published a paper in which he pondered the influence of the narrative of the “longest expansion” on economic performance in the period of 2009 to 2019 (Shiller, 2020). However, Shiller in all his enthusiasm fails to provide a precise definition of what actually constitutes an economic narrative—as do many other economists and practitioners of economic policy. Indeed, the term “narrative” has become something of a buzz word. In economics literature, a clear distinction between news, pure information, or simply something that’s been reported in the media and a narrative is mostly missing. Shiller (2017, 2019, 2020) uses the term narrative synonymously with story, conviction or belief, all of which capture slightly different meanings. Furthermore, he sets out his empirical search for narratives in news media by sketching out narratives that he himself deems important and then tries to find representations in news content, which is problematic since this way empirical findings are necessarily researcher-­ dependent: you (may) find, what you’ve been looking for—but nothing else. Intersubjectivity and replicability can hardly be achieved. What’s needed is a more precise definition. Not least, it should help researchers avoid the pitfalls of subjective affectation; if narratives have the allusive properties ascribed to them, researchers need to handle them with extreme caution. In an attempt to overcome the fuzziness, Roos and Reccius (2021) draw from several disciplines, most notably from literature studies. They propose that “A collective economic narrative is a sense-­ making story about some economically relevant topic that is shared by members of a group, emerges and proliferates in social interaction, and suggests actions” (p. 13). They go on to define the central elements of this definition, from “story” to “suggests actions”. Importantly, they stress that narratives are about stating causal relationships. While empirical

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economics have a hard time distinguishing between correlation and causality, narratives are largely about eliminating ambiguity and stating clearcut relationships between causes and consequences. However, the news media are clearly crucial in the formation and consolidation of narratives. In liberal societies, narrative dispersion is not necessarily a top-down process, as it is in authoritarian systems, that use media to spread propaganda to quiet dissenting views, but it happens in an interplay between the public and the media. The media pick up narratives prevalent in society; journalists twist, question and augment them and thereby mirror the stories circulating in society. Furthermore, the media offer new narratives and observe whether they catch the public’s attention, or fade largely unnoticed. In an earlier attempt to develop a workable operationalization of the concept of the narrative, we proposed to follow Entman’s (1993, p. 52) definition (Müller et al., 2018). As cited above, a media frame comprises (a) a problem definition; (b) a diagnosis; (c) a moral judgment; and (d) possible problem-solving solutions. We add two more categories: (e) actors—persons, institutions, or social groups (nations, classes, etc.)— who are set in (often antagonistic) relationships; (f) events that are placed in temporal sequences and deemed to constitute causal relationships. A media narrative comprises frames and the elements (e) and (f). Put metaphorically, if a frame is like a still photo, a narrative is a motion picture. The former sports a higher resolution, while the latter allows contextualization over time.

4.2   Beliefs and Convictions: Types of Social Narratives In an open public sphere, narratives form, spread, mutate, and are challenged at different levels: private, social, and public. In the context of mass media and social discourse, narratives and narrators can be seen as being engaged in a never-ending contest for identifying the most important issues and for assuming the prerogative of interpretation—what’s really going on, who’s got the best explanation, and what could be done about it. The social dimension of sense-making is a never-ending competition between narratives (Eliaz & Spiegler, 2020; Bénabou et  al., 2018). Obviously, there’s some proximity to concepts such as agenda setting, framing and issue attention cycles, discussed in Chap. 3.

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Dominant vs. Hegemonic Narratives As a story becomes huge, it overshadows others and dominates public discourse for a while. But this dominance is not going to last. Other explanations, remedies, and new key events, push the formerly dominant narrative aside. However, in a competitive liberal public sphere, hegemonic narratives—all-encompassing sense-making stories that suggest actions— have no place. Communicative hegemony is a feature of authoritarianism. Strongmen-leaders resort to propaganda and censorship, overwhelm public spheres with official narratives, and suppress dissent. Think of Turkish leader Recep Tayyip Erdogan, whose eccentric views on macroeconomics were turned into the foundation of the country’s monetary policy. Erdogan opined that raising interest rates was a cause of inflation, not a cure for it, in stark contrast to established macroeconomics. When one central bank chief after another failed to deliver the wished-for combination of low inflation and low interest rates, they got fired. As price dynamics accelerated further, the head of the national statistics office lost his position, too. Science and the media had been brought under government control years before. So, critical debates were muted. Note that Erdogan’s macro views contain key elements of Roos and Reccius’ definition of an economic narrative: it is “collective”, in the sense that it is spread among the Turkish public, it clearly deals with an “economically relevant topic” (inflation) and “suggests actions” (lowering rates). It hasn’t emanated within a social group bottom-up, though, but it is forced on the people by economic policy propaganda. And there’s another problem: it’s not true. Lowering interest rates boosts credit supply and thereby aggregate demand for goods and services, typically resulting in rising prices. The domestic effect is exacerbated by a depreciating currency, raising import prices and pushing up inflation even further. It’s exactly what Turkey has been suffering from. Yet, without an honest debate about causes and consequences possible, the government’s monetary narrative can hardly be challenged. Even though it had no firm moorings in reality, severe policy mistakes could not be corrected. Meta-Narratives Erdogan’s interest rate aversion is based on his personal spiritual beliefs. As a conservative Muslim, he publicly explained, he was “doing what our religion tells us. This is the command”.1 Islam, taken literally, rules out

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demanding interest on loans, though Islamic finance, a discipline that has flourished in the twenty-first century, has come up with workarounds such as Sharia-compliant Islamic bonds (“Sukuks”). Related to the Christian ban on interest during the Middle Ages, the modern conservative Muslim view is that interest exploits the borrower. Plainly put, demanding interest equals usury. Referring to this principle, Erdogan harked back to an archaic rule and applied it to modern finance and monetary policy: a central bank that charges substantial interest rates from commercial banks compels these financial institutions to charge their clients even higher rates in return. Therefore, high official interest rates violate Islamic rules. Note that this view fails to make a distinction between nominal and real interest rates: when actual interest rates are lower than inflation rates—i.e., real interest rates are negative—financial wealth is depleted, which could count as usury (by the state) as well. What’s more, inflation surprises lower real wages and other nominally set sources of income. Notwithstanding these problematic implications, Erdogan convinced himself that monetary policy should be informed by an old religion, whether it fit the current state of affairs or not. That is, he evokes a meta-narrative and links it explicitly to a current economic policy narrative. The term meta-narrative, or grand narrative, was coined by Lyotard (1984). A meta-narrative is a belief system that encompasses historic experience, values, social norms and moral inclinations. It purports some deeper truths and thereby attaches legitimacy to power and meaning to other, lesser stories; it is particularly long-lived and usually not called into question. Thus, meta-narratives form the foundations of societies. They come in a range of shapes. Religions such as Hinduism, Judaism, Christianity, or Islam are based on metaphysical super-realities that overarch the real world inhabited by humans, including concepts of good and evil and conceptions of an after-world. Ideologies such as communism or nationalism are based on—real or imagined—pasts and common destinations. They introduce clear distinctions between social groups, classes or nations, that are portrayed as being involved in baneful struggles with each other, epic fights for survival, that are bound for some end-game. Consider how Vladimir Putin’s home-grown history of Russianness, laid out in a lengthy essay (Putin, 2021), was meant to legitimize the invasion of Ukraine in 2022 and his own tsar-like position; or how Erdogan strove to evoke images of Ottoman emperors, who were not just worldly, but also spiritual leaders (“caliphs”). To underline historic references both strongmen sought to produce images capturing the spirit of their stories:

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Erdogan seated on a throne-esque chair with a ridiculously high backrest; Putin hailed by a royal suit-like crowd at the Kremlin, the old palace where once tsars and orthodox bishops resided, when starting another term in office. Liberalism, too, can be interpreted as a meta-narrative: grounded in the belief that respecting the individual, adhering to reason and open discourse will lead to long-term human progress, it forms the basis of journalism, as it is understood in western societies (and in this book). Even Lyotard’s own scepticism—he claimed that meta-narratives’ rigorousness would not square with the ambiguities and cross-currents of the “postmodern condition”, as his influential 1984 book was titled—can be interpreted as a meta-narrative. Postmodernism holds that in differentiated modern societies no single master-story can serve as a brace, providing some sense of collective determination. That’s particularly the case in societies composed of people coming from diverse cultural backgrounds. However, the desire for some leitmotif persists: some emotional glue strong enough to hold societies together and to avert a “clash of civilizations” (Huntington, 1996) within countries, that is arguably more urgent today as societies have become more fragmented in an era of polarized media spheres. Economic Policy Narratives Overtones of meta-narratives can be detected in economic policy narratives. Observing facts can lead to quite different policy conclusions, depending on the ideological backdrop. Think of debates about tight housing markets in metropolitan areas, virulent in many countries in the 2010s. Seen through a socialist lens, there is a class struggle between house owners and tenants, with the former exploiting the latter. The obvious solution would be expropriation, or at least rent control. A liberal view, in contrast, would conclude that there is a mis-match between supply and demand. The obvious solution would be the relaxation of building rules to boost supply, which will dampen rents eventually. And then there are a bunch of other possible (social democratic) in-between solutions that combine some sort of rent control with some kind of subsidy scheme for investors and/or poorer households and/or cutting red-tape to encourage private building activity and/or state-owned companies raising public housing investment. There may also be more extreme views: nationalists claiming that immigrants are responsible for congesting housing markets,

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and hence calling for their expulsion; or Islamists purporting that western individualism and the decline of the large-family household were responsible for rising demand, which may prompt them to challenge disbelievers, and so forth. All of these views claim some causal relationship and “suggest actions”, two features constituting an economic narrative. Corporate Narratives Like markets and political institutions, corporations, large ones in particular, are the object of narratives. As dizzyingly complex social institutions, some of them employing hundreds of thousands of people, they are hard to grasp. This applies to all their stakeholders—customers, employees, investors, civil society—and possibly even to their senior management. Hence, reducing complexity by highlighting certain aspects and neglecting others is warranted to make a company comprehensible. Business media, stock market analysts, marketing and advertising experts and, most of all, a company’s own communication department compete in forming the corporate narrative. Companies that sell just a few popular tangible products, automobiles or smartphones, say, are easier to relate to than the abstract business models of modern finance or IT services whose products only exist in the shape of numbers and letters on computer screens. Company narratives contain attributes that are not that different from other economic narratives. As far as protagonists are concerned, a charismatic CEO helps, as does some mythical founder, think: Thomas Edison of General Electric. Attention grabbing hyperbole and galactic visions, like the ones impersonated by Elon Musk of Tesla, SpaceX and a number of other firms, can even make the most-of-the-time not particularly flashy business of running a company look exciting and grand. Narratives are momentous in forming expectations, not just in terms of the macroeconomy (see next section), but also of individual companies. Hence, corporate valuations and credit ratings not only depend on the bare-bones figures of by-gone performance, but also on an anticipated, imagined future. This is particularly true for start-ups, that initially do not have much more to show off than a vision and a story with which they woo investors and employees. Like other economic narratives corporate ones are about sense-making. What’s the meaning of a company? What’s its purpose? Arguably, making profits and generating paid jobs is not enough. To make a company relatable to society, financial markets, and its own employees, many firms aspire

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to greater goals. As strategy consultant John Hagel stresses, corporate narratives project trust in an era where societies are plagued by uncertainty and fear (Hagel, 2021). Also, the more prophane duty of stating the current condition of a company, and the risks it faces going forward, is not just a matter of numbers on the balance sheet and the earnings statement, but also of descriptions and qualifications in narrative form. Companies frame their performance. If they do so in a credible way, they can earn trust. If they exaggerate and lose touch with their own corporate reality, their credibility can be pulverized. Corporate narratives have become so important, that financial market and accounting scholars have started to systematically analyse the worded parts of companies’ communication. Concepts like “Narrative Disclosure Tone” measure the language managers use to present information to external users and relate it to companies’ future performance (e.g., Bassyouny & Abdelfattah, 2022). Since asymmetric information is a core feature of companies, it is the media’s job to narrow the gap between corporate insiders and outsiders by scrutinizing companies relentlessly, holding executives accountable to their own stated goals and common ethical standards. As far as a narrative crafted by the company itself is pure public relations, journalism is to find the flaws, particularly those aspects of the corporate story that do not fit the facts. How do they really treat their employees, customers and suppliers? How well are they positioned relative to their competitors? What can be made of the small print in the corporate risk report? This is particularly important in situations when a positive corporate narrative is becoming dominant. A company that everybody loves, always triggers some journalist’s investigative instincts, to the effect that any overly rosy picture will eventually turn somewhat shady—and thus move closer to, typically greyish, reality. Goldman et al. (2022) model the interaction between firms, journalists and financial markets, where there’s an equilibrium between exuberant manipulation by companies and the negativity of reporting. In essence, they find that the presence of critically scrutinizing journalists enhances the functioning of markets and the informative content of stock prices. Figure 4.1 illustrates a hierarchy of narratives. Meta-narratives inform different types of economic narratives with fundamental and long-­ enduring values, the latter coming in different forms: economic policy narratives primarily deal with the dimensions of economic activity that encompasses society as a whole, such as the business cycle, long-term

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Fig. 4.1  A hierarchy of narratives. Source: the author

growth, employment, equity, fairness, redistribution, public finances, and the provision of public goods in general. Corporate narratives aim at building a bridge between a company’s past and future, and are primarily concerned with managing stakeholders’ expectations. Financial market narratives translate both, the macro and the micro perspective, to market valuations and risk assessments. Note that different kinds of economic narratives are interconnected, as indicated by the double-arrows in Fig. 4.1. Think of a constellation where a range of prominent companies report poor results and give bleak outlooks, citing pessimistic assessments of broader economic and political developments, thereby further dampening the mood in financial markets. At times, the narrative representations of different levels of the economy may be mutually reinforcing. However, such interactions may also result in self-stabilization. If, for instance, companies start reporting improvements of performance and a more upbeat outlook due to the adaption of business models, economic policy as well as financial market narratives could be altered in positive ways.

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4.3   Gauging the Future: Narratives and Expectations Financial markets are particularly susceptible to narratives. This may sound somewhat astonishing, given that bourses are deemed to process information efficiently, as Eugene Fama, a Chicago economist and Nobel laureate, has relentlessly argued (e.g., Fama, 1970). However, market participants are not in the game of endlessly assessing information, but they ultimately need to act—buy, sell or hold assets. That is, they need a quick way to predict the likely effects of new information on fellow marketeers. If there is a dominant narrative, it helps predicting market reactions. As noted above, the market crash of 1987 was driven by a wide-spread nervousness about rising bond yields. Shiller (1987) observed that the underlying narrative circled around the possible unsustainability of the national debt pile and its implications for fiscal policy. So, a small drop in stock prices could trigger a vicious sell-off. In contrast, in the period of ultra-low inflation in the 2010s, markets were obsessed with central bank stimulus. Incoming macroeconomic information was assessed as to whether it would prompt central banks to extent their bond buying schemes or not. Thereby, bad news was turned into good news: rising unemployment numbers, or disappointing readings of purchasing manager indices, that by themselves should have had depressing effects, were interpreted as an argument for extended monetary stimulus, frequently boosting asset prices. Again, the attraction of the narrative is the causes-consequences nexus: if we observe x, the likely outcome will be y. If a narrative is dominant, we can anticipate that many other people will bet on the particular occurrence of y backed by the narrative. Hence, we can make a prediction about the immediate market effects of new information and act accordingly, even if we ourselves doubt the logic behind it. Taking the argument further, what governs (collective) market actions and what governs (individual) reasoning may diverge. Investors may be riding an asset price bubble, consciously aware of a widening disconnect between market valuations and fundamental conditions (e.g., historic averages of price-earnings ratios, a standard gauge for evaluating stock prices), precisely because some dominant narrative influences their expectations. The great economist John Maynard Keynes in his “General Theory” (1936) likened this financial market tendency to a beauty contest, a popular game in 1930s newspapers. These competitions asked readers which lady from a row of photographs would get the most votes and win the contest. That is, they weren’t asked whom

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they themselves liked best, but whom the largest number of fellow readers would consider the most beautiful. In effect, everybody had to anticipate which participating lady was considered the prettiest by the largest number of people—or, assuming that everybody else was engaged in the same calculation, which lady other readers thought that others thought would be the most beautiful one. Given the rules of the game, readers weren’t inclined to vote according to their own personal tastes, but according to some perceived ideal of beauty, presumably shared by many people. These ideals are also conveyed by media, although not necessarily journalistic ones, but advertising or the movies. Keynes’ beauty contest can be seen as an analogy to the influence of narratives on financial markets. What people anticipate as likely outcomes of social interactions, depends to some extent on temporary social conventions, that in turn are spread and strengthened by the media. Indeed, connecting causes and potential consequences is an essential part of expectations formation, that is the basis for decision making, most notably in the mode of “thinking fast” (Kahneman, 2011, see also Chap. 2). As dual-process theory expounds, spontaneous decision-making relies on the human emotional system (“System 1”) and makes use of narratives as short-cuts of reasoning. In contrast, “System 2” thinking is slow, rational, cumbersome—and not always suitable for keeping up with the pace of financial markets. “Radical Uncertainty” Tuckett and Nikolic (2017) have developed a Conviction Narrative Theory (CNT) that stresses narrative thinking as the cognitive mode in which humans make sense of an uncertain environment. According to their approach, economic actors are able to make decisions by telling themselves and others narratives about what is going on around them and which effects their actions are likely to have. “Narratives arise from the interplay between individual cognition and the social environment, with reasoners adopting a narrative to explain the available evidence; using that narrative to imagine plausible futures; and affectively evaluating those imagined futures to make a choice” (Johnson et al., 2020, p. 2). What is true of economic agents also applies to policy makers: taking note of circulating narratives could improve their understanding of the current trajectory of the economy. At the same time, by communicating narratives of their own, policy makers strive to influence narratives

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prevailing in the economy, thereby steering expectations and thus economic decisions of businesses and private households in desired directions. Indeed, Kay and King (2020) have forcefully called for the analysis of narratives in times of “radical uncertainty”. In this spirit, the Bank of England has implemented a multi-stage process by which its agents gather information through lengthy interviews with company executives. They explicitly ask the interviewees to formulate narratives about the state and likely future of the economy, about the current business climate they encounter and their own company’s plans for the future. In subsequent stages of the process, the core content of thousands of interviews is being condensed to a single narrative that fits on just one or two pages. This current account of the economy then becomes an input into the assessment of the Bank’s Monetary Policy Committee, alongside its traditional econometric analyses. As they face profound uncertainty about the current state and likely path of the economy, policy makers do what humans have done ever since: they turn to narrative accounts for sense-making and orientation. Moreover, the bank uses these written accounts of the economy to formulate its own narrative, by which it intends to alter—or reinforce—the narratives prevalent across the country (Tuckett et al., 2020). Andre et al. (2022) conducted comprehensive surveys among US citizens in the wake of the inflation surprise in the Fall of 2021, when the American consumer price index began rising a lot faster than expected. Participants were asked to give a brief written account of their reasoning about the drivers of inflation. These findings by and large confirm the empirical results of related macroeconomic studies, but in addition allow for a couple of additional interesting observations: first, ordinary citizens, as well as company executives, explained the rise of inflation by pointing to certain protagonists, putting the blame on someone; only the economists surveyed were inclined to give predominantly structural explanations, such as global supply-chain disruptions. Second, whom participants blamed for the surge of inflation, depended on their political leanings; Republicans predominantly blamed the Biden administration and the Fed, Democrats tended to blame corporate greed and big business. Third, people’s inflation convictions coincided with the editorial stances of the media they consumed, e.g., Republicans preferred Fox News, Democrats MSNCB and the New York Times. The results underline the importance of balanced, truthful reporting, but also news outlets’ temptation to cater to the emotionally charged views of a particular camp in a polarized society.

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“Rational Expectations” as Narrative-Based Social Conventions However strong the evidence may be that narratives influence economic behaviour, the more traditional “rational” view of expectations formation still holds sway in much of economics. I would argue, that rational expectations can be interpreted as a special case of an economic narrative. The rational expectations approach goes back to the American economist John Muth, who put it forward in a paper more than 60  years ago (Muth, 1961). The rational expectations hypothesis had pretty radical implications when first applied to macroeconomic theory (Lucas, 1972; Sargent & Wallace, 1975), since it asserted the ineffectiveness of large parts of the economic policy toolkit, particularly monetary policy. Still, to this day Muth’s core concept underpins much of macroeconomics and finance. Put plainly, it assumes that individuals and firms form expectations about the proximate future by making use of state-of-the-art econometric forecasts. If they ignored professional prognoses and fell prey to their own false convictions instead, they would “waste information”, which would be irrational. Muth conceded that individuals made erroneous predictions, but they’d be right in aggregate. In effect, expectations were “essentially the same as the predictions of the relevant economic theory” (Muth, 1961, p. 316). The rational expectations hypothesis has been disentangled by distinguishing between knowledge and information; the former concerns an analytical representation of the eco- nomic structure (the “true model”), while the latter involves the data going into it. New information is referred to established scientific knowledge and thereby transformed into the best prediction available at the time. One standard critique of the rational expectations approach has been that it leaves open the question how exactly people obtain the knowledge of professional forecasters (e.g., Friedman, 1979). That is, it lacks a microeconomic foundation. Carroll (2003) provided an answer to this question by formulating and testing a model where individuals read newspaper articles about economic forecasts, but “only occasionally pay attention to news reports” (p. 269). They are inattentive and consequently error-prone, a trait that generates “stickiness” in aggregate expectations. In Carroll’s version, the rational expectations hypothesis remains intact for professional forecasters, but it is somewhat relaxed for laypeople who only update their views from time to time. Note that economic journalism—newspaper consumption—performs a key role in this model.

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However, studies based on survey data show that the full-information rational expectations (FIRE) hypothesis is “increasingly at odds” with empirical findings (Coibion et al., 2018, p. 1447). Gathering and processing macro information is costly and time-consuming, to the effect that even individual firms’ inflation expectations are rather detached from reality (Coibion et  al., 2018). More fundamentally, the notion that there could be something like a “true model” is somewhat odd (Müller et al., 2022). After all, in science there can be no such thing as truth, in the sense that eternally correct interpretations of reality are set in stone, but only faulty approximations that are valid until a better explanation ensues, or, as is often the case in social sciences like economics, the phenomena to be explained change. One way of thinking about the “true model” is that it is a particular form of social convention. Using it to form expectations potentially alters behaviour: if economic agents and institutions make decisions according to the model’s predictions, they inadvertently reinforce its accuracy. As Muth put it, “the way expectations are formed depends specifically on the structure of the relevant system describing the economy” (p. 316). This “relevant system” is deemed to be the most accurate description of the underlying structure that economists have come up with yet, itself being the result of ongoing scientific competition. The “true model” needs to be altered or replaced when the structure of the economy changes and observable phenomena cannot be explained anymore; or when new methods, new data sources and enhanced computing power produce better results. Of course, there are different ways of “describing the economy”, to quote Muth again. Mathematical models and statistical methods are one way of doing so. By using these tools, economists cut out particular aspects of economic reality and sketch relationships between causes and consequences, which can then be quantified at sufficient significance levels. But when relevant relationships break down, or new forces come to the fore that are outside the scope of the model, more fundamental problems arise. Crises and their aftermaths are periods when economic agents and policy makers navigate in blind flight, hardly having statistically reliable gauges at their disposal. Indeed, the Covid-19 pandemic and the rapidly changing geopolitical landscape, epitomized by the Russian invasion of Ukraine in 2022, may well prove to be mega-events that induce a sweeping transformation of the underlying structure: from labour markets to the global division of labour, from mobility patterns to saving behaviour, from

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sped-­up digitization to excessive debt burdens, from notions of equity to the desired size of government, and much more. All of these developments potentially alter economic dynamics. Yet, at the time of writing, we do not know, if, how and to what degree these alterations actually come into effect. Without a “true model” at hand, rational expectations are impossible to form. One possible candidate to fill the gap is the concept of the narrative. In some aspects, economic narratives resemble the “true model” envisioned by the rational expectations hypothesis. Narratives, too, are a way of “describing the economy”. Like economic models and methods, narratives can be considered as social conventions incorporating beliefs about the workings of the economy. To be meaningful, they need to be anchored in facts, that is, in observable reality. Focusing on particular aspects and neglecting the rest, they reduce complexity and tend to state unambiguous causal relationships, hence informing expectations and economic decisions of individuals, groups and entire societies. Seen this way, narratives are a mode of sense-making in uncertain and overwhelmingly complex circumstances. Contrary to mathematically formulated economic models, they do not lend themselves to numerical precision. But narratives affect the human emotional system, which in turn may help on detecting turning points and fundamental shifts that formal models are prone to miss. Journalism is influential in forming economic narratives. The media convey what readers think other people think. Like in Keynes’ beauty contest, the media do not only inform individuals about facts, but also of social conventions on how to think about a certain issue. Even if users do not subscribe to a particular point of view, mass media represent important information concerning the beliefs of others, a property communication scientists call the third person effect (Davison, 1983; Peiser, 2009; Bonfadelli & Friemel, 2017). By analysing media coverage economists try to come to grips with it. (In the next chapter, an approach to measure media narratives is presented.)

4.4   Blind Spots and Fads: The Problems with Narratives For all their advantages, narratives come with some caveats, and journalists need to be aware of them. Let’s briefly consider the following four:

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Outdated Facts An economic narrative can be interpreted as a form of intangible social capital (Putnam, 1993), or a piece of “intangible infrastructure” (Haskel & Westlake, 2017, p.  144–157). Aligning thoughts, perceptions and expectations of individuals benefits societies by facilitating transactions and cooperation. But capital formation requires investment, which is a time-consuming and at times cumbersome process. Consequently, once a dominant narrative has been established, it tends to persist, even though the facts that used to support it may no longer be valid. There may be considerable lags between observable reality and the narratives that try to make sense of it. For example, the belief that China is still running huge current account surpluses and should hence be named a currency manipulator, that was voiced during the 2021 US presential campaign by both candidates, is based on facts from the 2000s, that have since changed profoundly. China may be condemned of other wrongdoings, violating human rights above all; unfair exchange rate manipulation is not the most pressing one anymore. To keep public discourse in touch with current reality, established narratives need to be confronted with up-to-date facts frequently. If the facts do not fit common narratives anymore, narratives need to be altered or replaced by new ones that are able to better capture observable reality. Narrow Vision While it is clearly advantageous that narratives provide markets and societies with thematic foci, they tend to systematically overlook what’s happening outside of the field of vision. Narratives create blind spots—largely unobserved corners of reality from where dangers can arise, like when you are riding your bike concentrating on the road ahead, missing the car from the cross-road bound to violate your right of way. To give an example, in 2020/21 the big economic issue was the Covid-19 pandemic: the effects of lock-downs, the effectiveness of vaccination campaigns, or ailing labour markets. What went missing were the potential effects on inflation, which, when it consequently kicked in, came as an unpleasant surprise to citizens and policymakers alike.

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False Causation The persuasive power of narratives prompts people to find them convincing. After all, humans are prone to believe a good story even if it’s only half-true, or dead wrong altogether. That is, it may be at odds with the facts. Think of right-wing populist candidate Marine Le Pen during the 2022 French presidential election campaign, where she claimed that the country’s social ills were mainly caused by mass immigration, even though France had not received sizeable numbers of immigrations from outside the EU for many years. In Germany, in the summer of 2022 it became common wisdom that record-high fuel prices were to be blamed on oil majors who, allegedly, exploited temporary tax-cuts on petrol to fill their coffers at the expense of motorists. For a while, the debate about the apparent misconduct took on a life of its own, prompting calls from the media and economic experts to scrap the measures immediately, even causing visible divisions within the federal coalition government. The effect was portrayed as proof of the bad influence of big business and the economic incompetence of the federal government—until an empirical study by ifo institute, a thinktank, suggested that the tax-cuts were indeed passed on to consumers almost entirely during the initial phase of the rebate.2 The facts were at odds with the narrative. But the story about greedy multinationals and dumb politicians was too good to be ignored, yet only half-true at best. Intriguing Persuasion Since narratives appeal to the human emotional system, people instinctively react to them, affirmatively or dismissively. This is particularly the case when some meta-narrative is evoked that sub-consciously purports basic values. Underlying religious or nationalist belief-systems may prompt humans to relate to certain economic policy narratives, while instinctively disapproving of others. If a national narrative paints a picture of recurring humiliation by outside forces, it is hard to agree to, say, an open trade policy regime based on liberal notions of mutual welfare.

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4.5   Getting Real: Narratives and Journalism What should journalists make of this? First of all, acknowledging the importance of narratives means that the significance of those professionals, who mirror, twist, doubt and reenforce prevailing narratives, should not be underestimated. By challenging narratives with up-to-date facts, journalists’ job is to question received wisdom. Are popular convictions (still) in touch with reality? Are there better explanations to make sense of the world? Since the facts evolve constantly, public discourse is plagued by recognition lags. In contributing to the shortening of time-lags between the dynamics of the economy and narrative formation, economic journalism clearly has a function to perform. False or misleading narratives should be ignored if possible; if they are too big to be dismissed already, they need to be confronted head-on and debunked. Illuminating blind spots and directing public attention to widely ignored problems is another key task. After all, journalism—and politics in general—should be concerned with real problems, their causes, and effective remedies (and disregard positions that pose offenses against social peace). In the previous chapter I proposed the ESSF formula. It’s meant as a guide for economic journalists to focus on outcomes, not principles. A lasting housing shortage, for instance, constitutes a violation of both the efficiency and the fairness objectives—the E and the F in the formula. Proposed solutions should be scrutinized focusing on the results they are likely to yield. (Expropriating private housing companies, for instance, is most probably not going to solve a housing shortage but aggravate inefficiencies. On the other hand, leaving the re-balancing of demand and supply solely to market forces is most likely going to violate the fairness principle.) The ESSF formula’s overriding goal is enhancing welfare, not worshipping some meta-narrative. What matters is real-world conditions, not someone’s self-proclaimed intentions. It makes little difference to the poor, whether their misery is caused by socialism or by unrestrained free-­ enterprise liberalism. Journalists may not serve as gatekeepers anymore, but they are needed as scouts to offer the public guidance in heavily jointed narrative landscapes. (On journalism’s changing role, see also Chap. 8.) The truth should prevail over lies, reality over fiction, relevance over triviality, even though this proposition is not that easily achievable anymore, if it ever was.

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Narrative Formation—Bottom-Up, Top-Down, or Mediated? The above-quoted analogy by Shiller (2017), who likens narratives to epidemics that arise spontaneously among social groups and spread exponentially by infecting individuals, who will become immune against it eventually, so that the number of cases starts falling again, envisions a bottom-up pattern that is at odds with the ways modern societies communicate. Among other things, it largely ignores journalism and mass media, even though Shiller mentions the media elsewhere in his writings. In its simplicity his approach resembles the perfect competition model of microeconomics, where no single market participant possesses the power to alter prices or the behaviour of others, a model that is mathematically convenient, but surely a rather extreme abstraction. That narratives are formed and spread in an anonymous process among groups of individuals with equal voice, contradicts the patterns of mass communication where power structures have always been an important aspect of the game. On the other hand, the traditional hierarchical model of political communication, with the mass media acting as gatekeepers situated between the spheres of the private and the social (e.g., Jarren & Donges, 2011), has ceased to exist as well. Today, economic narratives arise from an interplay between traditional journalistic media and social media where citizens, politicians, lobbyists, activists, scientists, and journalists receive and disseminate content, as well as direct communication within social groups, both online and offline. In liberal societies, the “mediated construction of reality” (Couldry & Hepp, 2016) has become a complex process: traditional roles of senders and recipients have become blurred; senders of narratives, politicians say, modulate their messages to fit the audience’s instincts, with the audience, in turn, being instantly measurable and itself able to publicly respond to messages, thereby altering narratives. In principle, social media platforms enable each and every participant to address a broader public; in practice, though, communicative power is quite unequally distributed. Big business, governments, political parties, or activist groups are able to spend vast resources on wooing—or scaring—the public. Fabricating narratives has become a multi-billion-dollar sector employing public relations and political communication specialists, that bears little resemblance with the idealistic assumption of all citizens having an equally loud voice. To push Shiller’s analogy further, contemporary public spheres look like epidemiological scenarios dominated by a few super-spreaders. They

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infect large numbers of other people, who in turn go on to disseminate mutated variants of a narrative; some of these new variants may supersede the original narrative. The epidemic parallel also raises important questions about who is responsible for testing and vaccinating societies against falsities. Journalism is an obvious candidate to fill the position. Journalists as Narrative Economists As noted above, narratives are a cognitive mode of sense-making in uncertain circumstances. This is exactly the situation that journalists deal with in their daily routines: finding out about the state of the world at the present juncture. Contrary to economists, social scientists or historians, journalists don’t enjoy the benefit of hindsight. Their job is to report on an ever-­ changing world as things happen, or soon afterwards. Hence, they are confronted with considerable uncertainty themselves. Collecting facts and digging up dirt is the business of hypothesis-driven investigation. But once this is done, journalists need to condense what they have found out. That is, they formulate a narrative: highlight the role of some actors and downplay others, stress certain events and link them to others, most of all, leave out many aspects and concentrate on just a few to make a story digestible. The narratives that they come up with should be convincing to their audience, but in the first place they need to convince themselves and their editors. Since human cognition is bent to sense-making by narratives, journalists are in danger of falling prey to their own narratives. That’s why editorial processes that challenge narratives and check the facts that claim to underpin them are of utmost importance. What’s more, journalists can easily get carried away by the narratives that surround them. Media cycles triggered by emotionally charged stories have the potential to arouse journalists, too. Professional training as well as editorial checks and balances need to ensure that level-headed soberness prevails. (We will get back to this theme in Chap. 8.) If performed properly, economic journalism has the potential to enrich economists’ knowledge of the economy. This is not just true because journalism conveys new information in a timely fashion, but also because it adds an additional method to economic analysis: narratives, that can be a valuable complement to the analytical approach, particularly in times of substantial structural change, as Kay and King (2020) have argued. By being less rigorous than mathematical models, narratives allow the

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inclusion of additional aspects into the equation. Squaring facts, figures and scientific studies with real-world experience of people who are either affected or responsible for particular developments, makes a story not just more relatable, it also informs the way how economists see the causes-­ consequences nexus. Take the recurring debates about raising minimum wages, for example. Econometricians may ponder the trade-off between improving incomes of the lowly paid and job-losses due to rising labour costs. However, actually talking to workers at the lower end of the income distribution and to their employers clarifies the incentives and restrains, that both groups face. By reading accounts of reporters’ first-hand experience, economists have the chance to enrich their knowledge. While analytical economics provides quantifiable predictions about labour market effects, these calculations are necessarily based on models calibrated with data derived from the past. At the current juncture, though, some aspects may have changed profoundly, rendering analytical models outdated. Going out and actually meeting people and observing their behaviour enhances our understanding of reality. Since academic economists rarely bother to do so, economic journalism performs an important complementary task.

4.6  Leaning Against the Wind: Journalism Versus Common Beliefs Economic systems, and societies more generally, have a tendency of getting into frenzies. Outbursts of over-confidence are followed by periods of pessimism, and vice versa. The macroeconomic consensus is that severe mood swings are detrimental, since unrestrained booms are typically associated with excessive risk-taking, overvalued asset prices and unsustainably low household savings rates, while depressions are characterized by low investment, household spending and high unemployment. Collective attitudes are not only associated with short-term business cycle developments, but also have the power to shape the long-term path of expansion, i.e., potential growth. Overshooting as well as undershooting of confidence is deemed to hamper efficiency, both in a static and in a dynamic sense. Therefore, much of macroeconomics and finance is concerned with keeping markets sober and healthy. Central banks, governments and regulators are supposed to slow down demand in times of overheating, and let loose

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policies stimulate the economy when demand is weak. Chronic stagnation should be countered by supply-side measures, or structural reforms, to enhance, say, the endowment with human capital or the efficiency of the public sectors. What sounds perfectly reasonable in theory, often runs counter to the dynamics of the political economy. In reality it is difficult to put the brakes on a boom, or agree on structural reforms in a chronically ailing economy. Once a certain view of the economy has become entrenched, it limits a nation’s ability to change track. That is, dominant economic narratives shape the self-perception of society and, consequently, the political process. This tendency can be linked to Conviction Narrative Theory mentioned above: decision making relies on stories for gauging the consequences of different choices, bridging the cognitive gap between the present and an uncertain future. However, the complexity-reducing nature of narratives can lead to ignorance—to the point that difficulties are building up unnoticed. Furthermore, dominant narratives are social conventions that are prone to persist up to the point where they are not in line with the facts anymore. Given the inequality of voice in public spheres, some protagonists have the power to exert outsized influence on economic narratives. This is particularly acute in constellations where aligned interests are at play. Take the case of the boom of the 2000s, that took hold in large parts of the world economy—until it was brought to a stand-still by the financial crisis of 2008. The macroeconomic narrative underpinning this period has been dubbed “the great moderation” (e.g., Bean, 2009). According to this view, global economic integration, digital technology and, above all, the hard-earned credibility of central banks had created an economy that was able to grow at elevated speed levels without risking price or financial stability. While consumer price inflation indeed remained low, imbalances— that over time became an obvious feature of the boom—were either overlooked or dismissed. In Anglo-Saxon economies in particular, household savings rates fell ever further, while current account deficits widened to unprecedented levels. Rapid credit expansion was accompanied by rising real estate values. In many developed countries financial sector growth outpaced the overall economy by far. That banks’ ballooning balance sheets, and additional financial vehicles they ran on the side, could present a growing systemic risk, was not a big issue at the time (for an overview, see BIS, 2010, pp. 74–88). In hindsight, it is hard to fathom, why early warning signs were widely overlooked or dismissed.

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Reining in Exuberance After the crash of 2008, a debate among central bankers and economists ensued about the proper policy response to booms and busts. It centred on the notion of lean vs. clean: should central banks and regulators lean against the wind and limit credit creation and soaring asset prices to prevent severe financial crises? Or should they rather stand back and clean up the mess once a bubble has burst? William White, then the chief economist of the Bank for International Settlements (BIS), was a major protagonist of the lean camp, holding that social costs of busts and the misallocation of capital during booms should be kept in check (White, 2009). The more vigorous the boom, the more devastating the following bust. Regulators were needed, the argument went, to counter the aligned interests of the main protagonists of the political economy who share a desire to keep the party going as long as possible: investors and corporate executives enjoy fat margins and salaries; labour unions profit from high employment and rising wages; politicians use surging tax revenues to fund additional public spending and hope to get re-elected by satisfied electorates. Since the horrendous clean-up costs of a bust have to be borne by regular taxpayers, who also stand to lose their jobs and their houses, an outside referee is needed, some institution facing different incentives. Hence, independent central banks, whose main interest is—or should be—to preserve their credibility of sober stewardship of the macro economy, should be trusted with the duty of keeping a lid on financial markets. The leaning-against-the-wind argument can also be applied to public discourse. Powerful protagonists not only lobby against restrictive regulations, they also employ vast resources to keep the boom narrative going: political spin-doctors, thinktanks, analysts, paid for by governments, political parties, banks, investment funds, companies or business associations, use their persuasive power to assure the public that things are going well and everything will be fine. It should be the task of economic journalism to challenge these views: confront the dominant narrative with facts that do not fit the story and focus on inconsistencies, highlight historic parallels to illustrate that things can indeed go severely wrong. Since the economic value of journalism as an experience good partly rests upon its long-term credibility, as shown in Chap. 2, editorial incentives should be set in a way that journalists are able to resist strong headwinds from vested interests. Intellectual independence is of the essence (Chap. 3). Of course, even the brightest and best-trained journalists do

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not know exactly how things will unfold in the future. Uncertainty is journalism’s permanent companion. After all, it’s possible that the dominant narrative will prove to be at least correct. But it can also be dead wrong. That’s why scepticism is warranted whenever some narrative dominates the public sphere. At the very least, journalists should refrain from being cheerleaders of the prevailing view. A boom narrative may be popular at the time, but once things turn sour an all too assertive attitude is bound to turn out reputation-degrading. Escaping Depression An equivalent argument can be made in the context of a chronically poorly performing economy. Excessive pessimism is a major hinderance to structural reforms and investment. As the above-mentioned Conviction Narrative Theory suggests, economic agents make choices by gauging the implications of different courses of action. To do so, they apply narratives. If a narrative is devastatingly bearish, they may only envision bad outcomes; i.e., there seems to be nothing to gain. In effect, no action is taken. Structural reforms are prone to be hampered by such self-defeating effects. Improving the supply side of the economy—e.g., the efficiency of labour markets or tax systems, the provision of public goods like education, research or clean energy, cutting harmful red tape—typically involves trade-offs over time: near-term costs need to be balanced by the prospect of long-term gains. If these anticipated gains appear small, unlikely or non-existent, reform efforts are not undertaken. If, as a consequence, the situation is getting worse, the pessimistic narrative is vindicated yet again, reinforcing the resistance to reforms. Indeed, vicious cycles of inaction can be observed in many countries. In the European Union, a block of largely prosperous, relatively well-governed countries, citizens have cultivated a belief that “things are going in the wrong direction”, as the Eurobarometer survey has repeatedly found. At the start of 2022, a time not yet tainted by the Russian aggression against Ukraine, there were only a few pockets of optimism in Europe, mostly located in the Nordics, Ireland, and, to a lesser degree, in Germany. Large swaths of the EU, in contrast, looked gloomily towards the future,3 an attitude that bodes badly for reform efforts. What’s more, in a stagnant environment, powerful interest groups and political parties feel that they have little to gain by pushing for long-term progress. Instead, playing short-term games, like exaggerating marginal

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matters or picking attention-arousing fights with political adversaries, turns out to be tactically advantageous from an individual politician’s perspective. If nobody believes that improvements are possible, why fight for them in the first place? That’s how the Italian government of Mario Draghi was brought down in the summer of 2022. The former president of the European Central Bank (ECB), who was appointed at the height of the Covid-19 pandemic to head a government of “national unity”, had a rare chance to implement structural reforms, that Italy had been unable to deliver for a long time. With virtually no improvements in GDP per capita for more than a decade and dangerously rising debt-levels, Italy was due to receive about 200 bln Euros from the crisis relief fund (“Next Level EU”), if it would implement a comprehensive reform and investment package approved by the European Commission. But Draghi was stopped half-way. Having accomplished only part of his agenda, the broad coalition backing his government broke apart: right-wing populists smelled the possibility to gain votes in snap elections, while left-wing populists feared fading into oblivion. The prospect of short-term political gains outweighed long-term economic ones. The underlying economic narrative of unstoppable decline remained intact. Cynicism prevailed, prompting parts of the electorate to fall for the populist temptation. Economic journalism is to provide a fair and forward-looking account of economic problems and their potential remedies in the public interest, as argued in the previous chapter. Leaning against the wind in times of excessive pessimism therefore implies not just stressing a society’s current pressing problems, but also highlighting what it could become. If it managed to break the circuit of recurring disappointments, which possibilities would open up? By drawing from examples of other countries as well as historic experience, dominant declinist narratives can—and should—be challenged. If, in contrast, journalism confines itself to reporting the absurdities of the daily political drama, it mindlessly reinforces the prevailing corrosive pessimism.

4.7  Conclusion Telling narratives is the mode in which humans make sense of an otherwise incomprehensibly complex world. Societies run on a set of narratives that serve as short-hand descriptions of the state of the nation. These stories shape expectations and drive economic and policy decision. Journalism is a key player in shaping economic narratives. Furthermore, it adds an

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additional approach to economists’ reasoning: narratives can be valuable complements to the statistics-focused approach pursued by economists, particularly in times of substantial structural change, when high levels of uncertainty prevail. Narratives are less rigorous than mathematical models and hence allow the inclusion of additional aspects, broadening the scope of analysis. Squaring facts, figures and scientific studies with real-­world experience makes a story more relatable, but it also informs experts and decision makers what’s happening on the ground and suggests possible causes-consequences nexuses. This way journalists act as narrative economists. However, narratives come with several caveats: They tend to lag behind actual developments; they can sound intriguingly convincing, even though they are factually baseless. Narratives trigger emotions that risk people— and journalists—to get carried away and lead societies to make dismal choices. At times, economic narratives are self-enforcing by driving economies into overly exuberant booms, and sometimes they help cementing severe depressions, thereby risking the wellbeing of entire societies. Journalism needs to counter these problematic aspects of narratives, by questioning dominant convictions, confronting them with new facts, and providing alternative interpretations. What’s more, the complexity-­ reducing properties of narratives leave blind spots, that can hinder societies to detect problems in the making early on. In this chapter the proposition is developed that journalists should lean against the wind: to counter dominant narratives, particularly in periods, when virtually all other relevant actors share aligned interests.

Notes 1. https://www.dw.com/en/turkish-­lira-­hits-­turbulence-­as-­erdogan-­cites-­islam-­ as-­reason-­for-­monetary-­policy/a-­60202309 2. https://www.ifo.de/node/70066 3. Standard Eurobarometer 96, Winter 2021/22, data annex p. T249, https://europa.eu/eurobarometer/surveys/detail/2553

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Journalismus- und Medienwirkungsforschung (pp.  143–159). VS Verlag für Sozialwissenschaften. Putin, V. (2021). On the historical unity of Russians and Ukrainians. http:// en.kremlin.ru/events/president/news/66181 Putnam, R. (1993). The prosperous community: Social capital and public life. The American Prospect, 13, 35–42. Roos, M. & Reccius, M. (2021). Narratives in economics. Ruhr Economic Papers No. 922. doi: https://doi.org/10.4419/96973068. Sargent, T. J., & Wallace, N. (1975). “Rational” expectations, the optimal monetary instrument, and the optimal money supply rule. Journal of Political Economy, 83(2), 241–254. https://doi.org/10.1086/260321 Shiller, R. J. (1987). Investor behavior in the October 1987 stock market crash: Survey evidence (Working Paper No. 2446). National Bureau of Economic Research. https://doi.org/10.3386/w2446. Shiller, R.  J. (2015). Irrational exuberance. Revised and Expanded 3rd Edn. Princeton University Press. https://doi.org/10.1515/9781400865536. Shiller, R.  J. (2017). Narrative economics. American Economic Review, 107(4), 967–1004. https://doi.org/10.1257/aer.107.4.967 Shiller, R.  J. (2019). Narrative economics: How stories go viral and drive major economic events. Princeton University Press. Shiller, R. J. (2020). Popular economic narratives advancing the longest U.S. expansion 2009–2019. Journal of Policy Modeling, 42(4), 791–798. https://doi. org/10.1016/j.jpolmod.2020.03.005 Tenenboim-Weinblatt, K., & Neiger, M. (2015). Print is future, online is past: Cross-media analysis of temporal orientations in the news. Communication Research, 42(8), 1047–1067. https://doi.org/10.1177/0093650214558260 Tenenboim-Weinblatt, K., Hanitzsch, T., & Nagar, R. (2016). Beyond peace journalism: Reclassifying conflict narratives in the Israeli news media. Journal of Peace Research, 53(2), 151–165. https://doi.org/10.1177/0022343 315609091 Tuckett, D., & Nikolic, M. (2017). The role of conviction and narrative in decision-­ making under radical uncertainty. Theory and Psychology, 27(4), 501–523. Tuckett, D., Holmes, D., Pearson, A., & Chaplin, G. (2020). Monetary policy and the management of uncertainty: A narrative approach. Bank of England Working Paper No. 870. https://doi.org/10.2139/ssrn.3627721. White, W.  R. (2009). Should monetary policy “Lean or clean”? Federal Reserve Bank of Dallas Globalization and Monetary Policy Institute Working Paper No. 34. doi: https://doi.org/10.24149/gwp34.

CHAPTER 5

Media Coverage and Animal Spirits: The Interplay Between Economic Journalism and the Economy

A couple of years ago, I chaired a panel discussion at an event at Deutsche Bundesbank’s headquarters in Frankfurt. It was an odd encounter. There was Otmar Issing, the smart if stubborn German central bank’s former chief economist who had performed the same role at the European Central Bank (ECB) in its early years, as well as a couple of journalists from renown publications. The audience, too, consisted of journalists and Bundesbankers. Strangely, they all seemed to be like-minded in a way that I found rather unhealthy. The broness culminated in Holger Steltzner, then the economics editor of Frankfurter Allgemeine Zeitung, a leading German daily, proclaiming that he considered himself to be the Bundesbank’s journalistic “transmission belt”. It struck me as a case of advanced-degree self-­ diminution. After all, economic journalism’s job is to critically monitor institutions and relentlessly scrutinize their conduct and performance from an independent position, as the previous chapters have stressed. Respecting the Bundesbank for its track record and its staff for their intellectualcapabilities does not equate to turning oneself into a disciple spreading the gospel. So, I ended up being the only one on the podium who voiced some critical questions regarding the central bank, occasionally prompting rumblings of discontent from the audience. Which was fine with me—pleasing the crowd isn’t part of a journalist’s job description. That the Bundesbank hosted a debate about the relationship between central banking and the media at all, highlights how the interplay between © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 H. Müller, Challenging Economic Journalism, https://doi.org/10.1007/978-3-031-31030-0_5

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the mass media and the economy has become more of an issue in recent years, both in policy making and in economic research. As journalism is a vital part in shaping public opinion, it influences citizens’ and firms’ economic decisions. That’s what this chapter is about. Particularly, it deals with empirical research in economics that incorporates data derived from media content, but often goes about it with little respect for the actual nature of this type of data. Furthermore, a procedure to operationalize the measurement of economic narratives is proposed. A couple of indicators we developed at Dortmund Center data-based Media Analysis (DoCMA) concerning the perception of inflation and of economic uncertainty are presented, whose underlying models can be interpreted as economic narratives. But let’s start out with a little detour to take the issue of the initial anecdote a little further.

5.1   Sphinx and Spectres: Central Bankers as Storytellers In the final section of Chap. 4, the proposition was put forward that journalists should lean against the wind by challenging popular economic narratives, much like central bankers should dampen the over- or undershooting of markets. The argument is rooted in the fact that journalism and central banking each face incentives that differ from market participants or politicians. Hence, both are able to act as independent referees and should indeed do so. But this notion does by no means imply that they should act in collusion. Quite the contrary, journalism needs to keep an equidistance—especially because monetary policy itself has turned itself into a narrative discipline in recent decades, trying to make intensive use of the media in addressing the public and the markets. Public communication has become a major instrument in the tool box that central bankers have at their disposal. (All the more they like journalists who resort to being mere “transmission belts”.) In contrast, old-­ school monetary policy makers would have plainly dismissed the notion that talking was a key part of their job. When Alan Greenspan, the Federal Reserve’s legendary chairman between 1987 and 2006, was required to appear in public, such as at congressional hearings, he cultivated a Sphinx-­ like appearance and crafted his remarks to be as imprecise and ambiguous as possible. The heads of the Bundesbank, in turn, were low-key public servants who seldom appeared in the media. Back then, central bankers

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communicated mainly through their actions (varying short-term interest rates or reserve requirements), not through words intended to influence, or even woo, the public. Speeches and interviews were rare and cautiously worded. It is for good reasons, though, that central banks the world over started communicating more actively: when, from the 1990s onwards, more and more monetary authorities became politically independent, difficult questions about their accountability and legitimacy arose. After all, in democratic systems it is the parliament’s responsibility to decide on the redistribution of taxpayers’ money. Since monetary policy inevitably involves some degree of redistribution of income and wealth, a democratic deficit emerged that central banks strove to mitigate by improving transparency. More intense public communication was meant to provide insights into their actions, motives and the trade-offs involved. This strategy also fit nicely into economic theory. Rational economic agents, the argument went, should not be misled by policy surprises, which were deemed to be a major cause of economic fluctuations. With maximum information about the authorities’ assessments, goals and plans available, they were expected to make decisions that would ultimately lead to a self-­ stabilization of markets. If market participants knew the central bank’s reaction function and the relevant data going into it, their expectations would align with the central bank’s views and objectives, ensuring a smoothly running low-inflation economy. According to this view, the better a central bank was at explaining its stance, and the more credible it was, the softer its measures could be. Talk supplemented action. Simply by insinuating potential monetary policy manoeuvres markets could be nudged to the desired direction. Communication became all the more important as interest rates hit the lower bound in the 2010s; at the zero-per-cent floor, classic instruments, such as short-term policy rates, ceased to work. Asset purchase programs (“quantitative easing”) were put in place to bring down long-term interest rates as well, confining large swaths of the bond market to very low or even negative yields. After central banks had engineered a downward shift in yields over the entire term structure, communication became even more important. “Forward guidance” was meant to alter expectations and soothe investors’ nerves by promising a continuously accommodating policy stance over the medium term. That is, communication was assigned a regular compartment in central banks’ tool boxes, as they had run out of other instruments to pursue the bolstering of the economy at the zero

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lower bound. Now, talk supplanted action. That’s when rate setters turned themselves into storytellers. In this respect, they have come to resemble journalists: both professions try to make sense of the world, and to influence others, by telling narratives based on facts. But talk and persuasion are tricky and do not necessarily yield the desired effects. After inflation rates took off in the autumn of 2021, Andre et al. (2022) found a broad range of “inflation narratives” among US citizens and business people. The monetary narrative landscape is far from being dominated by a single monolithic story told by central bankers. The primary channels central bankers use to reach the public and the markets are traditional media, particularly newspapers and news agencies (Berger et  al., 2011). While a lot of effort is put into communicating directly via websites and social media, central banks still firmly rely on the transmission of their assessments and orientations through journalistic media.1 But, as independent media in a competitive market tend to add their own flavour, monetary storytellers are sometimes frustrated with the prevailing media narratives. For example, in the autumn of 2021, Isabel Schnabel (2021), an executive board member of the European Central Bank (ECB), complained that German media were prone to stoking fear by conjuring “the spectre of inflation”, thereby misleading the public. From a journalism studies perspective her argument was ambiguous at best. Journalists are supposed to give a correct account of reality; i.e., if excessively dramatized reporting leads to a de-anchoring of inflation expectations, media coverage could detrimentally influence markets and prices and thus the conduct of monetary policy. That the media’s influence on inflation expectations can be substantial is well documented (e.g., Larsen et al., 2021; Lamla & Lein, 2014). However, in democracies, journalism’s role is not confined to the recounting of official bulletins and data in a timely and correct manner. Journalism, and economic policy journalism in particular, needs to be independent: as a watchdog that points out unsustainable developments early on and confronts official narratives with inconvenient facts and their potential consequences. As it turned out, highlighting the “spectre of inflation” was a more accurate description of reality than the messages central banks sent. A few weeks after Schnabel had voiced her critique, things started to look fundamentally different: from October 2021 on, price indices shot up, pushing annual average consumer price inflation rates well above central banks’ two-per cent targets. At the time of writing, it is far from certain how the situation will play out. In any case, inflation has by no means proved to be

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“transitory”, as central bankers maintained over the second half of 2021. Instead, after having remained in a state of denial for too long, their reputation was at stake. As monetary policy, and the world economy in general, entered a period of “radical uncertainty” (Kay & King, 2020), more than ever the professional scepticism of well-informed, independent economic journalists is required. Furthermore, economic policy makers and forecasters are asked to include additional variables into their calculations, with media content being a data source getting particular attention among economists.

5.2  Of Money, Words and the Media: Journalistic Content as a Source of Data The interest in media content as an input into economic analysis is driven by the more and more mediated nature of political and market processes. By capturing aspects that are beyond the scope of traditional data sources, researchers strive to incorporate aspects that are typically outside of their field of vision. We’ll look at a brief review of the literature first, then turn to the argument, that economists tend to treat text-based data with little regard to the content that’s actually behind it. A Brief Review of the Literature Media-based indicators have been used for forecasting inflation, investment, business cycles and financial market developments (e.g., Larsen et al., 2021; Larsen & Thorsrud, 2019; Lamla et al., 2020; Conrad et al., 2021; Ter Ellen et  al., 2021; Flynn & Sastry, 2022), as well as for the measurement of uncertainty (Baker et al., 2016). In general, this type of analysis pursues one or more of three objectives: (a) By including news, economists hope to close time-lags due to delays in data availability (nowcasting). Significant events should show up in the media as they happen and are only reflected in surveys or hard economic data later. (b) Surprising political, social, or technological developments affecting the economy are to be incorporated into quantitative analysis. Uncertainty in its different forms has drawn considerable research attention in recent years.

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(c) If public moods and convictions drive “animal spirits”, resulting in rectified behaviour of many individuals and consequently in market fluctuations (Keynes, 1936; Akerlof & Shiller, 2009), media content can be used to measure economic narratives that reflect prevailing convictions (Shiller, 2017). Dominant economic narratives have the power to shape the economic policy agenda as well. A conceptual bridge exists in particular to the macroeconomic theory of expectation formation (Chap. 4). News-based indicators have also gained significant momentum concerning financial markets. In an early example, Tetlock (2007) constructs a pessimism indicator based on a daily stock market column in the Wall Street Journal, which he relates to stock market activity. Ammann et al. (2014) use a set of search terms to examine the German Handelsblatt; the results are condensed by cluster analysis and used for forecasts of the DAX stock index. Alexopoulos and Cohen (2015) construct a media-based uncertainty indicator and use it to measure rising uncertainty that increases stock market volatility and diminishes  investment returns. More recent approaches use probabilistic topic models. For example, Larsen and Thorsrud (2017) cluster the entire corpus of the Norwegian business newspaper Dagens Næringsliv using Latent Dirichlet Allocation (LDA) and then search for predictive properties of individual topics for a set of business cycle and financial market variables. Using a similar approach, Thorsrud (2016a, b) calibrates a “newsy coincidence index” for the Norwegian business cycle. Calomiris and Mamaysky (2020) apply topic models to stock price forecasting in 51 countries. Blagov et al. (2021), using time series derived from topic models of media coverage, find significant improvements in nowcasting business investment. Possibly the most prominent use of media-based economic indicators is the measurement of policy uncertainty. For example, the semi-annual reports on the state of the economy published by the International Monetary Fund and the OECD regularly include references to the Economic Policy Uncertainty Index (EPU) by Baker et al. (2016). Based on this approach, which is a frequency analysis using complex keyword combinations, a whole set of indicators has emerged. The EPU is arguably the most widely used media-based indicator. For example, Antonakakis et al. (2019) use it to examine the uncertainty emanating from the Greek sovereign debt crisis on Europe as a whole. Chen et al. (2019) apply EPU data to show how oil price shocks are transmitted to China. Yu et  al.

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(2018) show that global economic policy uncertainty is reflected in increased volatility of some financial market indicators. In Müller et  al. (2021) an EPU-style Uncertainty Perception Indicator (UPI) for Germany is constructed and a modified LDA approach applied, that will be described in some detail farther below. The media not only inform individuals about matters important to them personally but also about what other people are preoccupied with, which in turn influences expectations and alters behaviour. The afore-­ mentioned third person effect (Chap. 4) is a powerful channel. An individual may deem certain issues unimportant or misinterpreted, but is nevertheless influenced in her or his behaviour due to the belief that other people find them important and act accordingly. Typically, people underestimate the influence of news on themselves and overestimate its influence on others (Perloff, 1999, p. 353). Even people with expert knowledge in some areas, like business executives, investors, or entrepreneurs, are influenced by economic news since the third person effect typically increases with social distance (Lischka, 2016, p.  63). People with high social status and little direct exposure to average citizens predominantly learn what is driving ordinary folks by reading or watching the news. By including news data in economic analyses, researchers try to take account of what moves the nation, a valuable exercise since the ups and downs of issue attention can yield real economic consequences. A host of research has focused on the particular influence of news reporting on perceptions of the economy. Van Dalen et al. (2019) isolate a set of effects of media coverage concerning the perception of the economy and its governance. Soroka (2006) emphasizes the negativity of news reports and, using time-series analyses of UK media and public opinion, finds evidence for a stronger public response to negative news reports than to positive ones. He concluded that individuals were hardwired to prioritize negative information over positive one (Soroka, 2014, p.  101). Appelgren et al. (2019) focus on the interplay of economic activity and media coverage of the economy. Damstra et al. (2021) combine an extensive analysis of news content with a panel survey and an experiment and are able to show that economic news directly affects national economic evaluations, but not personal ones. That news has an impact on consumer confidence, and therefore most likely on real economic activity, is a result put forward by Boukes et  al. (2019). Damstra (2019) finds significant evidence that reported economic uncertainty directly affects consumer confidence.  Chahrour et  al. (2021) show that editorial preferences for some sectors while neglecting others can influence investment and be a source of business cycle fluctuations.

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Economists’ Hubris As discussed in Chap. 2, news differs from information. News is a complicated product that needs to attract people’s attention to make a meaningful contribution to society, while information is a somewhat amorphous intangible resource, albeit essential to the workings of the economy. Economists tend to mistake the former for the latter. The nature of news, and hence of data derived from journalistic media, reminds one of the Beatles song “A Day in the Life” whose opening line— “I read the news today, oh boy!”—touches upon several characteristics of news (Müller & Hornig, 2020a): It’s timely (today), fast, often negative, sometimes sensational (oh boy), and perceived by users each of whom hosts an individual set of subjective biases (I read…). Still, economists are increasingly keen on using media content for their analyses. One reason is because they can. Advanced computational methods in combination with rapid increases in computing capacity have enabled the analysis of vast amounts of media content, an exercise that was virtually impossible to perform a decade or so ago. However, some caveats are warranted. Media content used in a naïve, empiristic way runs the risk of producing meaningless, even misleading results. At worst, time-series derived from quantitative content analysis may look like objective data, similar to the numbers drawn from national accounts, but actually measure next to nothing. Media content is not about hard facts (e.g., tons of produce, turnover in Euros) but about rather fuzzy concepts like public attention, framing, tone, narrative, or sentiment and should be treated as such. Therefore, it makes little sense to mechanically apply statistical methods without keeping humans in the loop to check the actual meaning of findings at various stages of the process. Still, economists tend to treat news as an exogenously provided source of data, often presupposing that there are certain real-world events and developments that the media report in a timely, correct and unbiased fashion. This is a heroic assumption that can prompt economists to pose rather far-fetched questions. For instance, Bloom (2014) muses about the absence of the fall of the Berlin wall or the advent of the internet in his news-based measure of economic uncertainty: “Why does good news so rarely cause an uncertainty shock?” (p. 162). The question is legitimate from an economist’s perspective, because, after all, uncertainty in a strict statistical sense is about not being able to calculate probabilities of occurrence—which may eventually result in negative as well as positive surprises.

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Given the mechanisms of the media, however, the missing peaks of positive news shocks are not astonishing at all. Two very basic media mechanisms apparently haven’t occurred to the author: that media outlets focus on problems and conflicts rather than entertain the audience with positive stories (the latter being the unique job of public relations); and that the semantics of the very word “uncertainty”, which is part of the Economic Policy Uncertainty Index’s query (Baker et al., 2016), has a negative slant itself. That’s why journalists, when writing about positive developments, which they occasionally do as well, tend to choose words other than “uncertain” and its derivatives. Since the EPU’s search-term filters for articles with a negative slam, what shows up in the indicator is predominantly negative, and deliberately so. Bloom got what he’d been looking for. Working with data derived from media content requires considering how this content actually came into being. News itself is a product that is manufactured under a set of constrains, as discussed in Chap. 2. What makes the news is not necessarily a matter of superior (objective) importance but rather the result of media organizations’ economic incentives, professional standards, and consumer (i.e., media user) behaviour, or simply the taste of some editor in charge. News producers face incentives and trade-offs, not just budgetary ones. The production of news is costly. Revenues need to be generated, whether from subscriptions or advertising or other sources. Reaching a paying (or marketable) audience of considerable size is a necessary condition for news’ very existence. Product differentiation is well developed; different news outlets cater to different political and ideological tastes. Hence, journalistic publications at times pick different events and developments to report on, or identical ones they portray from different angles, stressing different frames. There may be some objective reality out there, but its representation in the media can only be partial and biased one way or another, precisely because news has to sell, because resources are scarce and users’ attention is limited. That doesn’t make news necessarily false or “fake”, as fashionable insults have it. But it’s undeniable that highly competitive media markets are prone to deteriorating quality (Chap. 2); more attractive—i.e., sensational, attention-­ grabbing, easy-to-understand—stories and issues have the potential to crowd-out true, complicated, facts-laden ones. Oh Boy! Researchers working with media content, therefore, should not mistake the coverage of social reality for the real thing. Yet, what’s in the news informs societies who they are, what their most pressing problems are, and which ideas are being put forward to solve them. Thereby, media coverage

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influences the collective self-perception of society, and this in turn influences economic behaviour by policy makers, firms and individuals. Statistics may be governed by averages and medians. Economics is preoccupied with equilibrium, efficiency, and growth. Journalism is driven by outliers, the outrageous, and the outraged. While the first two disciplines are backward looking, trying to make sense of the (immediate) past using models and probability distributions derived from bygone observations, journalism is about the present, and sometimes about the future, which is particularly true for economic journalism (Chap. 3). What’s going on right now? And where does it lead us? This structural dissonance between journalism and economics and econometrics needs to be born in mind when dealing with news content as data, and it is of particular concern in the context of economic developments.

5.3  Humans in the Loop: Measuring the News One key question at the outset of any analysis is what the most adequate measuring points could be. Which media should be selected? After all, the choice has the potential to alter results considerably. A cautionary answer would be, that it all depends on the research questions. For instance, if economic developments in one single region were to be explained, regional media should be considered, not national or international ones. For the analysis of particular segments of financial markets, general newspapers or news websites will be of little use. If macroeconomic movements or changes in consumer or investor sentiment are in focus, general national media would be appropriate data sources. Leading and Following Media In modern media systems, elite media still exert widespread influence. Classic broadsheets, TV news programs, and their electronic derivatives continue to set many of the issues and frames that other media outlets mirror. In a hierarchically structured media market, trusted elite papers that cater to an educated high-income/high-impact audience still partly set the public agenda, even though this position has been somewhat diminished by the rise of partisan news networks such as Fox news or “alt-right” ones like Breitbart in the USA and by social media. Twitter, as well as some Facebook and YouTube channels, may also be considered elite media of a new media order. But applying data from these platforms to economic

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analysis has two major shortcomings: social media do not have the long publication history that is needed for econometric analysis of, say, more than two business cycles; and the opaque nature of the underlying algorithms makes it virtually impossible to gauge the representativeness of generated data sets, or to ensure their replicability. Furthermore, general broadsheets can be expected to report the most important issues that are happening on social media platforms as well. Due to these intermedia agenda setting effects we can expect traditional newspapers to cover major debates on social media as well, albeit with a time-lag. From a researcher’s point of view, broadsheets offer an additional advantage: they cover a variety of issues all the time, partly defying the tendency towards quasi-monothematic news cycles. They still offer their readers a multi-faceted, well-structured overview of current events on dozens of pages each day, far more detailed than other digital or televised news could, that researchers can use for their own purposes.2 Composing a Corpus Text mining methods enable analyses of vast amounts of media content. While computational power is not much of a limitational factor anymore, data availability still is. Applying media content to business cycle or financial market analysis requires long time series and therefore access to digital archives going back many years, preferably decades. These are rather rare (and expensive). That’s why researchers are tempted to choose data sources opportunistically, according to availability. But not all news media are equal. They may be prone to herd behaviour and therefore share some reporting patterns (Chap. 3), but their content is not identical, or even directly comparable. Different newspapers make somewhat different editorial choices: some topics may be stressed and covered extensively and others neglected; editorial spins differ according to a publication’s ideological stance. At times, these choices can even be purely arbitrary, driven by the tastes and sources of one single reporter. While such phenomena could be an interesting topic for communication studies, economists’ interest in journalistic content is different: after all, they want to get the drivers of overall public sentiment into the equation. By pursuing largescale content analysis, they expect to isolate prevailing frames and narratives that can be interpreted as manifestations of public opinion. What they are looking for, is some kind of mean coverage: what are media outlets talking about on average? Such averages should clearly be derived from

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several media, not just one, in order to offset individual publications’ biases. The above-mentioned third person effect calls for including not only expert media but also ones that are received by the general public. The Mainstream and the Edges The existence of a media mainstream is an advantage that researchers should exploit where possible. If a broad mainstream exists, only a limited number of relevant national media need to be taken into account. In this case, the choice of suitable measuring points is a natural one: elite mainstream newspapers and their digital derivates with  different ideological leanings, that are still in visible proximity to the political centre. This approach presumes, however, that only a limited degree of political and media polarization prevails, a notion that cannot be taken for granted anymore. In the US, for instance, the traditional median voter model (Downs, 1957), where the bulk of politics and media is grouped around the centre, has been transformed to a twin-peaks model, where polarization in politics coincides with polarization in the media (Pew, 2017, 2020). In these circumstances, the notion of mean coverage could become meaningless. Mean coverage, which may be interpreted as the common ground of society, will be hard to locate if there is no common ground but a multitude of tribal echo chambers. Therefore, researchers should be cautions when merging different media into one single corpus. To avoid the fallacy of false consensus in the presence of polarization, they need to make sure that the media included are homogenous to a degree that they are broadly comparable. For example, including hard-right and hard-left media into a single corpus is bound to blur the results to unrecognizability. Comparability is also warranted regarding the reception of content. Text mining techniques are often based on counts of articles that share certain characteristics. It is implicitly assumed that all the texts in a corpus have a roughly equal probability to be read or at least noticed. Broadsheet newspapers, that are browsed through from front to back page by their readers, come closest to this assumption. News websites, in contrast, have quite different perception patterns: user attention is devoted disproportionately to the stories at the top of the page, while the content farther below is largely ignored. Periodicity should also be comparable. Weekly magazines like The Economist or Der Spiegel pursue reporting patterns that differ from dailies; their cover stories impact the public agenda to a far

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greater extent than, say, a brief news piece somewhere inside of a broadsheet daily. Simply counting the long cover story and the news brief as similar manifestations of the same trend is hardly justifiable. Online news sites, too, follow publication patterns that differ from daily newspapers. To keep readers engaged, they refresh their content several times a day. But reader attention fluctuates considerably over the course of the day, peaking during breakfast and lunch hours and during commuting time (on public transport). Furthermore, it greatly matters where an article is launched: a leading story at the top of the home page is bound to be read, or recognized, by several times as many people as one that’s published farther below, far away from the limelight of centre stage. “Distant Reading” Topic modelling approaches such as Latent Dirichlet Allocation (Blei et  al., 2003) have become work-horse tools of text mining and have become more and more popular in econometric analyses (e.g., Kozlowski et  al., 2020; Larsen & Thorsrud, 2019). However, economists tend to treat news-based data like regular statistical time-series, with little regard to its specifics. One example is the preoccupation with measures such as “perplexity” and “coherence” (Mimno et  al., 2011). Perplexity is a likelihood-­based measure to determine the LDA parameter K (the number of text clusters, or “topics”, the algorithm is set to form), which has to be chosen by researchers in advance. However, resulting “optimal” parameter values often collide with interpretability; human coders may not be able to sufficiently make sense of models created by optimization in a mathematical sense (Chang et al., 2009). Topic coherence is another case in point. While the objective to create LDA models containing clearly distinguishable clusters of texts is certainly a valuable one, mathematical tools can be misleading, sometimes running contrary to human interpretation. While Natural Language Processing (NLP) seems to pave the way to enhanced automatization of large-scale content analysis, for the time being human interpretation is needed at different stages in the research loop. “Distant reading” (Moretti, 2016), in topic modelling the interpretation of a model’s content, needs to yield sensible results. If informed human coders cannot make sense of the results, a model should be considered faulty and arbitrary, and parameter settings should be altered.

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Figure 5.1 depicts a typical process of content-focused text mining. At each stage human coders are needed to assess the machine-generated results; to ensure intersubjectivity several coders need to come to similar conclusions. The straight arrows indicate the general direction of procedure, the bow-shaped ones illustrate reiterations at different stages. If the results have no clear connection with the research questions, if the filtered corpus contains not all the relevant articles or too many irrelevant ones (i.e., it performs badly in terms of “recall” and “precision”, according to Fig. 5.1  Humans in the loop—the role of qualitative assessment in topic modelling. Source: the author

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Stryker et al., 2006), if the model’s topics are hard to interpret or distinguish by the coders, a recalibration of the query and/or the parameter settings is warranted. To get meaningful results, humans in the loop play a critical part. Still, statisticians and econometricians tend to harbour an intellectually motivated aversion against qualitative assessments, rather relying on automatized, purely quantitative algorithms that run without human interference, for the sake of objectivity and procedural elegance. However, this course of action raises the question of research rationality. After all, we are dealing with dense texts about complex issues, written in human language, itself a multifaceted, often ambiguous symbolic system. Leaving the analytical potential of the human brain, and the cultural knowledge it has accumulated, unutilized is far from straightforward. Banking solely on computing capacity misses the opportunity to exploit the advances the interplay of men and machines can facilitate. In fact, the mixed-methods approach of quantitative and qualitative steps of analysis can at the same time add meaning to figures and keep cognitive biases in check. The next section provides two examples.

5.4  Riding the Trend: Are Narratives Quantifiable? As noted earlier, at our research centre DoCMA we have constructed a couple of thematic media indicators, whose development turned out to be more difficult than expected. This section recounts some failed attempts, explains the solutions we found, and presents some results.3 Limited Progress, Failed Attempts Inspired by the work of Baker et al. (2016), who measure economic policy uncertainty by applying a query of logically connected search words, we set out to do something similar, but a bit more advanced, making use of the topic modelling approach LDA (Blei et al., 2003). The idea was that it might be useful for econometric analyses, not only to measure the intensity of overall economic policy uncertainty over time, but also the sources where this uncertainty originates. In Müller et al. (2018), we built a first version of the Uncertainty Perception Indicator (UPI) for Germany, based

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on just one broadsheet newspaper, Süddeutsche Zeitung. After having calibrated the LDA model by “eyeballing” its topics to yield meaningful results concerning our research questions, we were indeed able to identify distinct drivers of economic uncertainty. Using data from a quarter-­ century of reporting, narratives could be detected that offered condensed versions of the evolving perceptions of economic policy uncertainty. Subsequently, we dug deeper into this approach. We broadened the underlying corpus of newspapers by including two more leading broadsheets. We proposed a taxonomy of economic uncertainty (Müller & Hornig, 2020b), highlighting the necessity for a more open query that doesn’t pre-define areas of economic policy (known unknowns), contrary to the approach of Baker et al. (2016), in order to allow for the detection of unknown unknowns, i.e., events like the Corona pandemic, that are neither caused by monetary, fiscal or trade policy, but shock the economic system from the outside. Our aim was to build time-series that could serve as suitable inputs into econometric models. However, trying to construct consistent time-series proved to be a complex and at times frustrating undertaking. Each quarter we ran the algorithm with exactly the same data and parameter settings, just adding the articles published in the most recent quarter. What we found were somewhat different topic structures, even though the vast majority of topics were (both statistically and intuitively) closely related. At times, though, the topics were not as coherent as the ones found earlier. That is, they could not be labelled quite as distinctly. Since we got different models at each point in time, it was impossible to fit them together to get consistent time series. We attributed these problems to changes in the enlarged corpus, and to the extreme uncertainty events due to the Corona pandemic in the first half of 2020. It seemed possible that the thematic distribution of topics in the corpus had changed. To heal these insufficiencies, we tried three different strategies: zooming, accumulating, and prototyping. In order to capture the supposed changes in the corpus structure, we reran the algorithm with higher values of K (14, 16, 18, 20), the number of topics to be formed, for three different corpora, ending in Q1, Q2, and Q3 respectively. The finer granulation was supposed to make the models more sensitive to changes in the underlying structure, zooming into the subtler details of the corpus. A preliminary eyeballing analysis singled out K = 18 as the most suitable parameter setting. Labelling the topics of each of the three models showed that this exercise didn’t yield the hoped-for results either:

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while some similarly labelled topics could be found in all of the three models, even these topics were not completely identical. A case in point was a topic that we’ve found in each and every uncertainty-related model we’ve run so far. It consists of articles about business cycle developments, forecasts, and early indicators, labelled “German Economy”; using the standardized language of national accounts, these topics tend to be pretty consistent over time. Still, even the “German Economy” topics in the different models were not identical. Zooming wasn’t the solution we’d hoped for. Could we overcome the problem of fuzziness, if we combined individual topics to broader categories? The rationale behind this accumulation exercise went as follows: the algorithm sorted certain events and themes into different categories in different models, these differences might be neutralized, if we combined these topics. The broader categories should be more stable over time. Nice idea, except that it didn’t work either. Maybe the problem was the LDA approach itself? To be sure, LDA yields somewhat different models with each run, due to the probabilistic nature of the algorithm. Even using an exactly similar corpus and identical parameter settings, results differ, at least slightly. To overcome this problem, our collaborators from the statistics department suggested a procedure they call prototyping (Rieger et  al., 2020), that chooses a sort of average LDA model after a large number of re-runs (typically around 100). Alas, applying this technique in subsequent quarters did not produce time-consistent models either. We concluded that one-shot LDAs may produce intriguingly plausible representations of average media coverage, but are doing so only with the benefit of hindsight. Gauging the cutting edge of media perception of the economy on a recurrent basis is a more demanding exercise. Referring to the film metaphor (Chap. 4) again, we weren’t able to produce a series of stills that could be assembled seamlessly to look like a movie. What we got, were pictures that looked somewhat familiar, but differed too much to lend themselves to stitching them together. The one-shot LDAs, even of the prototyped sort, were good enough for large scale content analysis, but random in too many aspects. This outcome was highly unsatisfactory considering the purposes we had in mind for our uncertainty indicator. Imagine that changes in, say, consumer price levels were based on different baskets of goods each month, or that GDP was calculated using different definitions each quarter, statisticians would be unable to measure inflation or growth. Therefore, another approach was needed to move closer to our goal of producing consistent text-based indicators.

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Modelling Collective Memory The original LDA is a rather static approach. The models’ structures do not change over time, nor do the characteristics of the particular topics (or clusters of articles). That’s why LDA works fine for limited periods of time, a few years, say, and thematically limited text corpora. In that case, topics can be interpreted as frames in the vein of Entman (1993), as DiMaggio et al. (2013) argue. Over longer periods of time, though, both LDA and the concept of the frame seem superficial, as they fall short of capturing the dynamics of economic narratives. After all, what we were interested in was detecting the evolution of thematic trends. LDA, in contrast, assumes the stasis of topics over time, which collides with the more fluid nature of narratives, that change and may even be altered in hindsight. That’s one reason why it is virtually impossible to fit together LDA models calculated at subsequent points in time: the vocabulary is shifting, the thematic focus is drifting. The problem is not only probabilistic instability, that could in theory be mitigated by prototyping and “seeding” (holding the model constant and just fitting new data to it), but also the constantly varying nature of public discourse that needs to be incorporated. After months of conversations Rieger et al. (2021) presented a solution: they came up with a new dynamic version of LDA that allows topic-structures to change over time by modelling fading collective memory, as newer versions of narratives overwrite older ones. New data are fitted to a topic model that is calculated based on a rolling window of past observations (that’s why it’s called RollingLDA). The past informs the human perception of the present, but older memories sink into oblivion. From a technical point of view, RollingLDA is flexible enough to adapt even to severe thematic breaks, like the ones that occurred in the past few years. It is a robust method that has proved suitable for our purposes. The Uncertainty Perception Indicator (UPI) The UPI is based on a corpus of three leading nation-wide German newspapers: Süddeutsche Zeitung (centre left), Die Welt (centre right) and Handelsblatt (business). These papers capture the broad middle ground of public opinion in the country well enough. After all, we are interested in average uncertainty, rather than what is going on in different niches of the political spectrum. The data was obtained from LexisNexis and from the

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publishing houses. Due to limited availability, the data base starts on January 1, 2001 and is currently updated on a monthly basis. At the time of writing the entire corpus has a size of roughly three million articles. In a first step, the corpus is cleaned. For example, all words are converted to lower case and umlauts are resolved. Afterwards, we delete an extended selection of stop words that do not contribute to the generation of topics or that might even involve noise. Following these preprocessing steps, an issue-specific analysis corpus is produced by applying a rather open query (Müller & Hornig, 2020b): “unsicherheit” OR “unsicher” OR “unsicherheiten” AND “wirtschaftlich” OR “wirtschaft”.4

The subsequent analysis corpus has a size of about 40,000 articles. The LDA model has been calibrated by a number of human researchers. We found K = 14 to be the most appropriate parameter setting given our theoretical considerations on the origins of economic uncertainty. The modelling of the initial sequence in the RollingLDA procedure is stabilized making use of the LDAPrototype approach to ensure the reliability of the method. The memory parameter of the RollingLDA is set to three quarters, a restriction that opens up the possibility for new topics to appear, or for existing ones to mutate. This parameter can be varied. However, three quarters are intuitive from the point of view that each window of modelling is based on articles from one year. A larger number of quarters, i.e., a longer memory, could lead to inflexible models, a reduction to fewer quarters to more flexible, but also to rapidly changing topics, undermining the goal of comparability over time. Since we allow topic structures to change, we need to make sure that topics remain stable over time to a degree that comparability is ensured, i.e., that they actually deal with similar content. Some actors may change, new terms may be coined, some words may fade from vocabulary while others become fashionable; nonetheless, a topic should contain articles about similar issues over the entire time horizon. (For a discussion of the construction of the UPI and a detailed description of its topics see Müller et al., 2021.)5 Figure 5.2 shows the overall count of relevant articles over the period ending in January 2023—before applying our dynamic topic modelling approach. Note that what we are measuring here is the share of newspaper content framed in terms of economic uncertainty, relative to the three newspapers’ entire content. So, we are looking at representations of

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Fig. 5.2  Overall Uncertainty Perception Indicator for Germany and related events [Share of analysis corpus relative to entire corpus, Jan 2001–Jan 2023. Source: the author (after Müller et al., 2021)]

exogenous developments in the press, that have the potential to shape readers’ perceptions of the state of the world and their expectations regarding the future. Looking at the overall UPI first makes sense, because when an uncertainty shock hits, one way of dealing with it, is estimating its size. At first, we may have little knowledge of the exact nature of the beast, but at least we can make educated guesses about its strength. Being able to gauge the size of a recent uncertainty event means we can compare it to past shocks and their impacts. When Covid-19 spread around the globe in the Spring of 2020, early on uncertainty indicators showed the enormity of the economic fall-out to be expected. It became obvious that a really big hit was in the making, as Covid-induced uncertainty dwarfed the related values in the wake of earlier shocks. Governments (and central banks) launched unprecedented stimulus programs, while company treasurers hoarded all the liquidity available and private households raised their savings rates dramatically. It is plausible that the immediate reactions of 2020 were informed by experiences made during the financial crisis; without the

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memories of 2008/09, and governments’ willingness to step in, the impact of the Covid-shock might have been even graver. Yet, not all shocks are created equal. Three types of uncertainty can be distinguished: market-based uncertainty originates in the economy itself and is the result of our, at times, insufficient understanding of market mechanisms; economic policy uncertainty leads to economic consequence of developments in the realms of politics; truly-exogenous uncertainty originates outside of both politics and the economy. Among the eight major peaks our time-series has produced at the time of writing, all three types of uncertainty are detectable. The first two local maxima are (geo)political in nature: 9/11 (coinciding with the fallout from the bursting of the dot. com bubble, a market-based event preceding the period covered by our data) and the Iraq war. The third is associated with the Financial Crisis, hence clearly market-based. The fourth peak is triggered by the financial stress surrounding the Euro area culminating in 2011, which can be considered market-based as well as economic policy-related, given Eurozone member states’ inability to swiftly enhance the Euro’s institutional framework. Clearly economic policy-related shocks occurred in the second half of 2016, with the Brexit vote and Donald Trump’s election, events that impacted the economy indirectly and structurally through their corrosive effects on international trade. The seventh peak is the Corona pandemic. The eighth one is triggered by the war following the Russian invasion of Ukraine on 24 February 2022. Before we get to the topic analysis three general observations from Fig. 5.2 are noteworthy: First, outbreaks of uncertainty seem to come in waves. A major event is typically being followed by subsequent (smaller) ones. The two geopolitical shocks of the early 2000s were related to each other, the US-led war in Iraq being a direct consequence of the terror attacks of 9/11. The financial crisis, in turn, triggered the Euro crisis; the peak of Euro-related uncertainty in July 2011 was followed by subsequent repercussions resulting in local maxima in November 2011 and July 2012. The political shocks of 2016 were related to each other in so far as they were the most prominent manifestations of the simmering populist turn in western democracies. Major uncertainty shocks seem to be culminations of underlying tensions in the political economy. Once laid bare, these tensions tend to unload in a series of additional eruptions. Second, after a series of uncertainty shocks a phase of relative calm sets in. Once the geopolitical shocks of 2001/03 were digested, several years of

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low perceived uncertainty followed, an era dubbed “the great moderation”. Also, after the years of financial market turmoil several years of stability ensued. Even after Trump took office and the Brexit talks between the UK and the EU stalled, a rather relaxed mood prevailed for a while. Why? Maybe it’s because the initial uncertainty shock disappears as societies learn more about the respective phenomenon and adapt to it. Or the decline of the indicator is due to the media toning down their coverage deliberately, since they feel that the public—and maybe journalists themselves—got tired of reporting in constant panic mode, following typical issue attention patterns (Chap. 3). Or the media did not detect simmering problems that would later erupt in the next shock, or they did not take them seriously enough. Whatever the case, we are interested in the perception of uncertainty, and that’s shaped both by the volume of reporting (as depicted in Fig. 5.2) and its framing (to which we will come in a minute). Third, uncertainty perception follows a rising trend. Since 2008 the overall volume of uncertainty-related reporting has increased. This rise has come in several steps, with each major peak leaving behind subsequently higher levels of background noise, as the rising trend in Fig. 5.2 shows. Again, there are two preliminary explanations for this phenomenon: (a) the world has indeed become more unstable, associated with the volatility of financial market-driven capitalism and the decline of US-led hegemonic stability, both epitomized in the US-centred financial crisis of 2008; (b) the media may have taken to framing all kinds of developments in terms of attention-grabbing uncertainty, in this case, the long- term rise would be the manifestation of a just another media fad. (We tend to embrace (a) and dismiss (b), since the traditional quality media in our corpus bank on a reputation of level- headedness.) Deconstructing the UPI using our topic modelling approach allows us to dig deeper into the data and the thematic patterns hidden within. Just a few aspects are highlighted here. Figure 5.3 shows the UPI topics related to geopolitics, central banking and conflicts within the EU. Consider the peaks of the topic “Geopolitics”. The outbreak of the Ukraine war caused the topic values to shoot to an all-time high initially. However, the election of Donald Trump produced a thematic shock of almost equal size, but the immediate economic impact of the latter was negligible. Only when the populist US president kicked off a trade-war, it had a noticeable effect on the economy. Something similar happened after the Brexit referendum which triggered considerable attention in 2016 but only had real economic impact when the UK actually left the Common

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Fig. 5.3  UPI—European and international topics and related events [Relative to entire corpus, three-month backward-looking moving averages, Jan 2001–Jan 2023. Source: the author (after Müller et al., 2021)]

Market in 2021. By then, however, it didn’t come as a surprise anymore, but was anticipated. Hence, purely political shocks do not need to have much of an immediate impact on the economy. During the pandemic, in contrast, the initial policy response was action by central banks, sending the related “Central Banks” topic upwards in crisis mode, signalling a direct impact of the shock on economic activity. In turn, the uptick in the “Central Banks” topic towards the end of the time horizon was due to the rise of inflation that took off even before the war started. Our model also contains topics that deal with the fall-out from uncertainty on companies, sectors (“Companies & Markets”) and the economy as a whole (“German Economy”) and show cyclical frequency patterns. Other topics are rather structural in nature, most notably “Energy & Climate Change Mitigation” and “Corporate Culture”, a topic dealing with workplace relations and the effects of digitalization. All four are depicted in Fig. 5.4.

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Fig. 5.4  UPI—Real-economy topics and related events [Relative to entire corpus, three-month backward-looking moving averages, Jan 2001–Jan 2023. Source: the author (after Müller et al., 2022)]

Before the Ukraine war, about half of German natural gas imports came from Russia by pipeline; a cut-off, or even a slowdown, would have severe effects. This is reflected by “Energy and Climate Change Mitigation” shooting up dramatically with the outbreak of the war. The topic laid dormant for many years. A minor temporary peak was caused by the nuclear disaster at Fukushima (Japan) in 2011, which led the federal government to phase out German reactors earlier than originally planned. Towards the end of the 2010s, the “Fridays for Future” protests triggered a heightened awareness of climate change, resulting in uncertainty concerning the social acceptability of traditional forms of power generation and prospective regulations. In 2022 the Russian aggression put the issue on top of the agenda.

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The impression that the uncertainty shock triggered by the Ukraine war would be economically just as severe as the Covid-19 shock, and potentially even more so, is underlined by the topic “German Economy” dealing with business cycle news and forecasts, that approached pandemic levels by mid-2022, though at the time it was driven not only by the war, but by monetary tightening and renewed lockdowns in China as well. A sharp rise in “Companies & Markets” reflects the bleak outlook many companies gave as a consequence of sharply deteriorating external conditions at the time, while towards the very end of the observation period these tensions had already subsided. The entire model’s aspects are too far-ranging to be discussed in the context of this book. However, getting back to the question whether an uncertainty narrative can be derived from our topic modelling exercise, it is noteworthy that one not-yet mentioned topic is of particular interest. “Society” deals with the self-images Germans harbour: how they think they are doing, what they believe in, what they worry about and how they consider to alleviate their collective problems. In terms of issues, the topic deals with globalization, diversity, equity, justice and freedom. It is not just about economic uncertainty, but about the collective insecurity that follows from it. Hence, “Society” contains information that is helpful for the deduction of a narrative, which is defined, as proposed in Chap. 4, as containing the following elements: ( a) a problem definition, (b) a problem diagnosis, (c) a moral judgement, (d) possible remedies, (e) protagonists, (f) a series of events. Events are associated with peaks in the frequency curves shown in the figures above. Protagonists can be derived from the lists of top words LDA produces. The first four elements (Entman’s features of a media frame) can be obtained from a qualitative analysis of the top words and top articles LDA produces for the topic “Society”. The “Society” topic’s (translated) top words are:

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humans, world, society, politics, today, being, Germany, freedom, Europe, social, globalization, democracy, state, future, asking, knowing

(Translated) headlines of top articles read: The utter entanglements of the Climate worriers Süddeutsche Zeitung, 4 Dec 2009 Long live liberalism! Süddeutsche Zeitung, 1 Nov 2018 The AfD will probably further gain support Süddeutsche Zeitung, 16 Mar 2018 Globalization as a scapegoat Handelsblatt, 16 Mar 2018 The End of the Middle Class Süddeutsche Zeitung, 2 Nov 2018 The unsatisfiable desire for Security Die Welt, 2 Aug 2003 Germany’s best years are yet to come Süddeutsche Zeitung, 26 Feb 2009

So, subsuming the results yields a qualitative assessment: Problem definition: Globalization poses challenges to Germany’s society and economy. It comes in different forms and shapes: terror, unstable international alliances, financial market turmoil, pandemics, energy insecurity, or war. Problem diagnosis: Germany is ill-prepared to face the challenges. Moral judgement: Ill-preparedness results in suffering and heightened uncertainty, nationally and globally. Possible remedies: Depending on the slant of individual publications a wide range is put forward, from enhancing competitiveness and stricter immigration enforcement to more international engagement.

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Protagonists: According to the top words of the topic “Society”, the narrative is not primarily concerned with individual or institutional actors but with abstractions, such as Germany, Europe, State, and Globalization. Events: Major uncertainty shocks, from the 9/11 attacks to the Ukraine war, mainly come from abroad. Summing up the quantitative-qualitative analysis, an uncertainty narrative could be formulated as follows: Globalization in its different manifestations poses a threat to German society and its economy. The problems are becoming more pressing as its effects move closer to home; war in Europe and pandemics are more immediate threats, and therefore more closely watched by the media, than international terrorism or armed conflicts elsewhere. Germany needs to prepare for this disorderly world, but there is no consensus (yet) how to tackle the challenges.

Note that the proposed narrative states a causes-consequences nexus between globalization and its various effects. Over time, protagonists come and go, locations vary, but the general thread of the plot remains the same. Hence, a narrative that covers more than two decades can be likened to a series of sequels, split in different portions by distinct events. To be sure, formulating a narrative based on the LDA model’s output comes with some degree of arbitrariness. The aim of our on-going research is to formalize the process further in order to enhance its objectivity, possibly by applying more advanced strands of text mining like Named Entity Recognition or Semantic Role Labelling, as Lange et  al. (2022) show based on a corpus of articles from the Financial Times concerning the issue of economic uncertainty. At the time of writing econometric tests have not yet been completed. Though first results look promising, it still remains to be seen whether individual uncertainty topics contain information that enhances forecasts, e.g., of GDP and its components. The Inflation Perception Indicator (IPI) As discussed in Chap. 4, the link between media coverage and inflation expectations has been widely recognized. “Media sources tend to play the biggest role in shaping the narrative of the public debate on inflation” (de Fiore et  al., 2022, p.  5). So, when in early 2022 it became clear that

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inflation was all but “transitory”, as central banks had insisted for some time, we decided to construct an indicator based on a similar formula as the UPI. The Inflation Perception Indicator (IPI) makes use of the same three-newspaper corpus and the RollingLDA approach as well. Particularly, we were interested in the volume of overall coverage, of the causes of inflation named in the coverage, as well as persons, institutions or other entities in this context. To select the relevant thematic analysis corpus, we strove to find a search term by including the word “inflation” and its “nearest neighbours” (measured by cosine similarity) in the articles. We then evaluated different combinations of these synonyms by applying them to a randomly chosen subset of articles from our corpus and let them be evaluated by three human coders. As it turned out, inflation* OR teuerung* OR geldentwertung* OR preissteigerung*

yielded the best results. The resulting analysis corpus comprises roughly 50,000 articles. To calibrate the algorithm according to our research questions, we tried different values of the parameter K. Three coders labelled the topics of each model independently, making use of the most characteristic words (“top words”) and articles (“top articles”) as well as each topic’s frequency distribution over time. A value of K = 10 was found to be the most appropriate in terms of our research interest (for details see Müller et al., 2022). Figure 5.5 shows that inflation coverage is roughly in line with actual consumer price dynamics. When inflation is on the rise, so is newspaper coverage, a co-movement that is most pronounced at the end of the time-­ horizon, when both time series shot to unprecedented levels. The LDA approach allows us to deconstruct the overall analysis corpus of the IPI and divide it into sub-issues (Fig. 5.6). A couple of developments are noteworthy: during the initial period of European Monetary Union inflation was not much of an issue at all. This changed with the boom preceding the Great Financial Crisis, when inflation rates reached four per cent for a while, before collapsing in the wake of the severe international recession that followed the crash. Even when inflation rates were very low, like in the second half of the 2010s, newspapers stayed vigilante, particularly regarding monetary and fiscal policies. Issues like Quantitative Easing (QE), i.e., bond buying programs of the ECB, as well as fiscal policies in the eurozone context were covered continuously. The most direct triggers of inflation—raw material prices and

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Fig. 5.5  Overall Inflation Perception Indicator (IPI) and Harmonized Consumer Price Index for Germany, selected events [Analysis corpus share relative to entire corpus, percentage change y-o-y, three-month backward looking moving averages, Jan 2001–Jan 2023. Source: the author (after Müller et al., 2022)]

wages (and big hikes in government benefits)—were no huge issues, though. Only when inflation hit in 2021 did these aspects gain prominence, with the ECB being the main culprit. Interestingly, in the early stages of the recent inflation episode, redistribution aspects were largely ignored by the press. Higher wages as well as government benefits to stabilize real incomes lagged behind other aspects, which can be interpreted as typical for second-round effects, but also as a potential cause of lagging demands. Turning to the consequences of inflation, again four topics can be subsumed under this rubrum. Financial markets and private investment aspects provide readers with tips how to safeguard their wealth in turbulent times. The “News” topic that earlier on contained mere reporting on statistical releases, is now ripe with other aspects, such as the plight of poorer households, consequences for renters and real estate markets in general, or the financial squeeze that university students face. Interestingly,

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Fig. 5.6  Selected IPI topics related to the causes of inflation, selected events [Relative to entire corpus, three-month backward-looking moving averages, Jan 2001–Jan 2023. Source: the author (after Müller et al., 2022)]

after having raised very little attention for two decades, the topic “Companies” is as prominent as “Raw Materials” towards the end of the observation period. “Companies” focusses on the detrimental effects of higher input prices on firms, that are unable to pass them on to customers. Moving closer to the concept of the narrative, we resort to Entman’s (1993) definition of a media frame, augmented by Müller et  al. (2018, 2021). To extract the associated information, we dig deeper into the content for qualitative analysis. For this, we consider the relevant topics’ top articles, i.e., the ones with the best statistical fit. In June 2022, for example, headlines of the top 10 articles of the topic “Central Banks” read: Economist advises ECB to rase rates firmly Again, an inflation record ECB bound to raise policy rate Experts predict forceful ECB rate hike

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ECB substantiates help for Southern Europe Monetary policy changes track The return of the Euro Crisis The ECB’s dilemma Interest rate turnaround in the Euro area BIS chief economist Mario Borio: “A situation without precedent”2

All of the articles stressed the importance of acting quickly and decisively to rein in inflation, while some also focused on the ECB’s difficulty to balance price stability and fiscal stability in highly-indebted southern European countries, leaving the Frankfurt-based central bank in a difficult spot. For the purpose of comparison, it is interesting to consult the top articles of January 2022. Back then the stories dealt with warnings of Isabel Schnabel, member of the ECB’s executive board, concerning energy prices driving inflation, the Fed’s first moves to tighten monetary policy, and the first interviews of Deutsche Bundesbank’s new president, Joachim Nagel. The tone was rather neutral and matter-of-factly, lacking the sense of urgency that would prevail half a year later. In turn, the “Eurozone” topic’s top articles contain stories about the fiscal stance, in Germany and beyond, as well as initiatives to ease social tensions, and the associated controversies in the federal government. Particular attention is devoted to the German chancellor’s “Masterplan” to fight inflation, i.e., round table talks with employers and unions dubbed “concerted action”. In January  2022, the top 10 articles were not as focused on how to fight inflation. Rising costs of living was more of a side aspect back then. Stories ranged from adjusting the progressive German income tax system to rising price levels, French demands for Europe to become more energy-independent, and the project of Germany’s economy minister to augment the government’s concept of welfare by sustainability aspects. Again, the sense of urgency that was detectable later on was largely missing at the beginning of 2022. With respect to redistribution policies (“German Politics”), the top article in January that year covered the surprisingly modest economic policy proposals of the new leader of the conservative Christian democrats (CDU), published by Süddeutsche Zeitung on January 24. In contrast, there’s one dominating issue among the topic’s top articles in June 2022: strikes for higher wages to offset the detrimental effects of inflation on workers’ real incomes. Subsuming the news content through the lens of the economic narrative, we summarize our findings as follows:

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Germany is cursed with run-away inflation, that is hurting everybody, but particularly the poorer parts of society, and even some corporations. This is destabilizing, unjust and unfair. It could be alleviated by tightening monetary policy (though that may cause financial stress in highly indebted countries), handing out government benefits to the poor and substantial wage increases (though this may kick off a price-wage spiral, rendering inflation even more enduring). The problem would have been easier to handle, had the ECB acted early on and if asset purchases in the 2010s had not happened.

This account of media content, as structured by the IPI model, points to a longer bout of inflation. Since media narratives are thought to be important drivers of people’s expectations, inflation narratives—and the associated reporting—are bound to be self-stabilizing. Further increases of longer-term inflation expectations seem likely, reinforcing price dynamics (Müller et al., 2022). Concerning the methodology and its short-comings the same caveats are warranted as in the UPI case.

5.5  Conclusion A rapidly growing body of literature provides evidence that media content influences economic expectations and consequently decisions. At the same time, the quest for more rapidly available real-time data has intensified, particularly driven by the Covid-19 pandemic. As the media can be expected to report new developments in a timely fashion, media content is used for high-frequency forecasts (nowcasting). Furthermore, the media can not only be expected to report endogenous developments but also exogenous ones. By incorporating media content into economic analyses influences beyond the explanatory scope of economic models can in principle be factored in. For all these reasons the use of media content in econometric models is in vogue, facilitated by rapidly evolving modern text mining techniques. This chapter argues that researchers need to take account of the specifics of this type of data, particularly how and with which motivation it came into being. Furthermore, text mining tools need to be tailored according to particular research interests; thematic patterns need to be interpreted by researchers. Without the double-checking and re-checking by humans in the loop, text mining exercises run the risk of yielding fundamentally meaningless, uninterpretable results. The chapter also proposes an approach to measure economic narratives.

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Notes



1. See Müller and Schmidt (2022) for an overview of the situation in Europe. 2. News agencies such as Reuters, Bloomberg or Deutsche Presseagentur (DPA), the wholesale suppliers of news, could serve the same purpose, though any analysis would have to take into account the proportions of content that has actually been published by newspapers to arrive at a proper representation of mediated reality. 3. We also produced an R package, tosca, that incorporates useful tools for statical content analysis, Koppers et  al. (2021), accessible at https:// github.com/Docma-­TU/tosca 4. “Uncertain”, “Uncertainty”, “Uncertain*”, “Economic”, “Economy” 5. All described steps of pre-processing, modelling and evaluation can be found as R codes in the GitHub repository https://github.com/ JonasRieger/upi

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CHAPTER 6

Here, There and Everywhere: Economic Globalization and National Media

In the 2000s, I travelled to the US from time to time. The business magazine I worked for had a correspondent based in New York City, but he was focused on large companies and their executives. The bigger macro picture, in turn, was my assignment. So, occasionally, I got to travel across the country, meet entrepreneurs, corporate executives, governors, economists, financiers, and plenty of ordinary people. What’s more, I went to places, that foreign correspondents seemed to shun: decline-stricken industrial areas in the Midwest, in Michigan or Indiana. I even visited a couple of gold mines in Montana during the raw materials boom of 2007/08, talked to upbeat prospectors, as well as environmentalist who were not particularly happy about the side-effects. These trips were a blast: quite intensive experiences, full of interesting insights. After I got back, I wrote sceptical stories about the troubles of Mainstreet America. These articles differed considerably from the ones that dominated European business media at the time. Back then, the US was usually portrayed as a superhero economy, an example of innovation and efficiency, that the rest of the world, and Europe in particular, would have to follow, if it wanted to keep up. In its complexity-reducing ways, business news from the US was dominated by Silicon Valley and Wall Street, not Mainstreet. Politics under president George W. Bush were a different matter. At the time, there was plenty of transatlantic disagreement on style and

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substance, particularly concerning the invasion of Iraq. But in economic terms, America was seen as the home to an epoch-shaping tech sector and a world-beating financial services industry. The former was certainly true; the latter would soon get the rich world badly into trouble, when an overextended financial sector slipped into a serious meltdown—which should not have come as a surprise: that rapid rises of house prices in the 2000s would have to come to an end was inevitable. At the time, though, it was unclear how this scenario would play out, when and where it would start, and how severe it could eventually become. But there was lots of alarming evidence, if one was willing to take notice. In 2006, one year before the financial crisis started and two years before it culminated in the break-down of Lehman Brothers, an investment bank, I decided to let statistics and studies guide my travel plans (as well as the availability of interviewees, admittedly). After having consulted the relevant data, I reckoned that Michigan was the weakest spot in the US housing market. State-wide price rises had already ground to a halt, while markets were still buoyant elsewhere in the US. Michigan fundamentals were weak, as manufacturing output was sputtering and the population was in decline. On the ground in Lancing, the state capital, I met builders, local politicians and municipal executives, and left with the impression that this might become ground zero of a coming real estate crash. I drove on to Canton, Ohio, a once moderately well-off municipality, that a study by the Brookings Institution had found to be the metropolitan area that had suffered the biggest losses of manufacturing jobs since 2000. I met the mayor (who, to my surprise, was a fierce free-market Republican bemoaning the mood of decline and despair in her town) and talked to an executive at Timken, an industrial conglomerate headquartered in Canton (who was proud of having outsourced hundreds of white-collar jobs to India, while at the same time the company had secured tariff protection from the federal government). As life goes, the situation was ambivalent—many shades of grey, no simple black-and-white. What would the scenario of a nation-wide real estate crash entail for the financial sector? I had no clue. During a visit to Washington, DC, I met Kenneth Rogoff for an interview. The Harvard scholar and former chief economist of the International Monetary Fund was not really worried about the breakdown of some individual banks, which would be inevitable and manageable, but he feared rising systemic dangers. Banks had sold off the default risks of mortgages, nicely wrapped into structured securities, and spread them throughout financial markets (a practice I hadn’t heard of before, that would later be considered one of the original sins that led

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to the crisis of 2008). It’s astounding how much you can actually find out early on, if you just do your job as a journalist: ask the right people and listen to what they have to say. Of course, in 2006 nobody knew exactly what was coming. But you could sense that the popular narrative about the American super-economy was misleading. It was already obvious that economic decline in some regions furthered political polarization and anti-globalization sentiment. Congressmen from the Midwest were campaigning for tariff protection (against China) and against immigration (from Mexico). It was in the Rust Belt that “America is at risk of losing its center”, I wrote in 2006. Donald Trump was elected ten years later largely by winning Midwestern states, where he successfully wooed the region’s deprived (white) voters. It certainly was politically shocking, but hardly surprising.1 He just picked up the prevailing mood and added a generous helping of poison. I’m recounting these experiences as a reporter, because the US is the most intensively covered country in the world, in a “key position as the centerpiece of a global system” (Segev & Blondheim, 2013). Given its economic, political, cultural, and military sway, America is of utmost importance to many countries, most notably to European ones with whom the US is economically closely interconnected and politically allied. What’s more, foreign reporters face negligible obstacles; correspondents are free to travel anywhere and interview who they deem interesting. Language barriers are low. Domestic information from statistics offices, science, political discourse and the media is plentiful, diverse and credible. In many aspects, America is a foreign reporter’s paradise. Still, news coverage is astonishingly uniform and narrow-sighted. It is even more so with respect to other countries. International news coverage is patchy, biases, and stereotypical. The world may be more interconnected than it ever was, but human attention is limited. It’s hard to keep up with all the relevant developments around the globe. Domestic audiences are already overwhelmed with all kinds of news, gossip and other media content. Offering them more of the hard-news diet from far-away places needs a solid justification. Editors harbour their own prejudices, as do readers. Strong and clear-cut framing is a way to reduce complexity. Hence, familiar themes and aspects beat surprising ones. Foreign correspondents are often frustrated with what they perceive as ignorance, as the stories, frames, and angles they propose differ from those editors at home deem relevant. The next crisis may be in the making somewhere, but aren’t

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readers still grappling with the last one? Can’t you just write something different? This chapter focusses on the coverage of foreign economic developments. Journalism is still predominantly national in scope while economic issues are increasingly transcending borders. This asynchrony leads to a host of problems, from the failure to spot major developments early on, to the mismanagement of global commons like the planet’s atmosphere. Ill-­ informed publics largely ignore the international dimension of the political economy, paving the way for populists. The tensions between national instincts and global requirements can be observed for a host of issues, including the coverage of China, climate change, migration, and international institutions.

6.1   Of Flows, Stereotypes, and Domestication: A Brief Review of the Literature News Flows What drives the coverage of international issues has been a matter of research in communication science for decades. Early examples include studies by the International Press Institute (1953) and UNESCO (1954). In a seminal paper, Galtung and Ruge (1965) strove to capture the news values that drove reporting about foreign events, a study that later was applied to news selection per se. They came up with a list of factors that’s among the most often cited items in communication science—and that bodes ill for economic journalism, as noted in Chap. 3. The twelve factors they propose 2 result in a news selection process that centers on unexpected, negative events, preferably involving (famous) persons, that the respective audience can easily understand, since the event’s causes and consequences come with little ambiguity and take place in nations that readers (and editors) can easily relate to. Only the last feature—referring to Galtung and Ruge’s news factors “elite nations” and “meaningfulness”—supports the choice of economically relevant foreign issues: large countries with high degrees of cultural proximity to the respective recipient country tend to exert more influence in terms of economic and financial developments or economic policy. Large countries are also important trading nations and home to deep financial markets; their clout in international policy making is considerable. The more closely linked two

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countries are culturally (and geographically), the more likely they are to be major trading and investment partners. This is first and foremost the case for the US, specifically mentioned by Galtung and Ruge, but today also for other G7 countries, as well as for China, Russia, or India. In Chap. 3, we saw that economic developments are often gradual, latent, and abstract, and that economic journalism should be forward-looking, which inevitably involves uncertainty and ambiguity—running counter to Galtung and Ruge’s news factors. To be sure, the authors did not seek to prescribe their twelve factors as a menu for editors how to select foreign news. Quite the contrary, they strove to make sense of what drives coverage in a positive manner, while, by pointing out the consequences of mindless newsroom routines and editorial biases, they tried to convince journalists to “counteract” these news factors. After all, their specific research interest was the representation of three international crises of their time (Congo, Cuba, and Cyprus) in Norwegian newspapers. Writing during the period of decolonization, they were concerned that western media might not represent the newly independent states in adequate complexity and continuity, but would cement the old colonial order in public perception and only paid attention when severe crises occurred, or when some celebrity elite figures appeared on the scene. To counter these tendencies, they prescribed a set of recommendations (Galtung & Ruge, 1965, pp.  84–85). These clear-sighted suggestions also partly apply to the coverage of economic and business issues, particularly where foreign issues are concerned. Specifically, they argue that “more emphasis” should be put “on build-up and background material in the total media output. Journalists should be better trained to capture and report on long-term developments, and concentrate less on ‘events’ (…); on complex and ambiguous events; (…) on that which does not fit stereotypes; (…), on the predictable and frequent (…); more awareness of the continuity factor (…); more coverage of non-elite nations (…) and non-elite people; (…) more reference to non-personal causes of events”. In essence, Galtung and Ruge call for a balanced, multi-­ perspective, continuous coverage with a profound understanding of structural drivers, an assessment still valid today. Empirical research took off in the 1970s, including Robinson and Sparkes’ (1976) study, that stressed the overwhelming role international news agencies, such as Associated Press, Reuters, or Agence France Press, played as wholesale providers disseminating content from “elite nations” across a wide range of countries. Harcup and O’Neill (2001) revisited

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Galtung and Ruge’s list of news factors in a content analysis of British newspapers, though they did not limit their study to the coverage of foreign developments. They more or less confirmed the list, but also found many articles containing newsy entertainment, involving sex, animals, humour, showbiz celebrities, and/or appealing pictures. This kind of trivialization of news makes it even harder for serious economic and business journalism to get to the attention of the mass market. The age of social media since the 2010s has only contributed to this trend. While the literature on news values focusses on editorial decision makers—and their biases—the theory of news flows looks at structural factors that promote, or hinder, media spill-overs between countries. Einar Östgaard (1965), a peace researcher from Norway, and at the time a colleague of Galtung and Ruge, opined that the media in his day put too much emphasis on great power leaders and the conflicts they cultivated. By priming the public for violence, more peaceful ways of conflict resolution were hard to achieve. Östgaard harked back to Robert Desmond (1937) who had emphasised censorship and propaganda as “obstacles to the flow of news” (cited after Östgaard, 1965, p. 40). At the time of writing, government interference by some important countries, most notably China and Russia, is becoming more important yet again. More recent studies on news flows focus on the prominence of different countries in international coverage. While some make the news due to specific on-going or recurring events, e.g., wars, civil unrest, or natural disasters, others are covered on a frequent basis in more breadth. As mentioned above, Segev and Blondheim (2013) found that the US had a news share of 18.6 per cent of global coverage of international affairs, a value almost exactly replicating the results of Wu (2000) more than a decade earlier. In the authors’ global ranking, China (5.5 per cent) was second, followed by Palestine (4.6), the UK (4.3), France (3.9), Iran (3.9), Israel (3.9), Russia (3.3), Germany (3.3), Afghanistan (2.8), the EU (2.6), Iraq (2.5), Japan (2.5), the UN (2.3), and North Korea (2.2). Their findings confirm the importance of economic factors. Conflicts, too, let some countries rise in prominence, but as international and internal tensions arise and subside—or just fade from media attention—so does the coverage of crisis-prone countries over time.3 Economic and cultural factors make for longer-lasting salience in the news. The outsized importance of the US is stunning nonetheless, particularly with respect to individual European countries. In the UK (then still an EU member) and Germany, for instance, the coverage of the US was more than twice as voluminous as

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the combined share of the EU and its individual member countries; a result that is somewhat disturbing given the high degrees of economic and institutional integration that EU countries have reached (we’ll get to this issue in the next chapter). Segev (2016) strives to integrate a host of factors that contribute to a country’s visibility into a “group-sphere model of international news flow”. Summing up the literature, he finds three groups of variables that are deemed to influence a country’s salience in the media: “national traits”; “relatedness”; and “events”. “National traits” refers to the size of a country and its economic and political power, with the size of the economy being of particular importance, but also military capacities, and the size of the population. “Relatedness” captures economic, political, social and cultural ties between a reporting and a reported country. Again, economic factors such as bilateral trade have been found to be particular good predictors of a country’s news prominence. Immigration and the population share with migration backgrounds are also part of this category. “Events” include international and internal conflicts (war, military tensions, civil unrest), but also natural disasters (e.g., earthquakes, floods, famines). Segev’s empirical approach operationalizes these categories with data for 17 variables and the international news coverage by media outlets from eleven countries. His results underline the impact of economic factors, with the size of national GDP showing the strongest correlation with global media coverage, followed by external debt, and trade flows.4 Hence, reporting intensity is mostly driven by economic size, external vulnerabilities, and connectiveness. However, this does not necessarily mean that these issues are addressed directly in the news, or that economic and business issues are covered more closely, but that political, social, cultural, or environmental developments are more likely to raise awareness, if they occur in economically important countries. Domestication The study of news flows contributes important insights into which countries are covered, but says little about what is reported and how it is framed. An approach that provides a framework for the study of these types of questions is domestication. It was introduced by Gurevitch and Levy (1990). Comparing TV news from a number of western countries that covered identical events of international relevance, they found that the respective stories differed considerably. The authors hypothesized that

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news production and reception needed to be understood in a cultural context, in the sense that “different societies tell themselves—on television and elsewhere—different stories, coherent narratives that serve particular purposes”. (Note the reference to the concept of the narrative that has developed quite a bit since Gurevitch and Levy’s time of writing, as shown in Chap. 4). To present foreign events—or news in general—in meaningful ways, they need to be told to the effect that they resonate with the recipient society. Foreign news stories are tailored “to render them more familiar, more comprehensible and more compatible for consumption” by domestic users. Thus, the process of domestication entails the use of cultural hooks to connect otherwise disparate public spheres. News producers look for familiarities in a foreign news story that resonate with established domestic experiences and imaginary systems, i.e., with “narratives that are already stored (…) in the collective memories of different societies and cultures” (Gurevitch & Levy, 1990, p.  30). This concept resembles the meta-narratives and economic policy narratives described in Chap. 4. For example, a story about inflation in Turkey published in the UK may, explicitly or implicitly, evoke collective memories of the era of the Great Inflation of the 1970s, or the more recent one of 2022, while a German story may focus on the mistakes of the Turkish central bank and its presidential mastermind, linking the current Turkish fate to the familiar German monetary narrative about recklessly ultraloose policy in the 2010s (that has also left its mark on your author), as seen in Chap. 5. Stressing religious influences on interest rate policies, in turn, may resonate with anti-Islamic sentiments. While the reasons for running the story at all can be explained by the news flow approach—Turkey is a medium-sized economy, member of the G20, situated at a strategically sensitive location, with which both the UK and Germany have fairly close trading and investment relationships, while sizable populations of Turkish origin reside in both countries—the framing may differ considerably due to idiosyncratic collective memories. In the same vein, Clausen (2004, p. 32) argues, “that for an event to be judged ‘newsworthy’, it must be anchored in narrative frameworks that are already familiar to and recognizable by (…) audiences situated in particular cultures”. However, not all stories are necessarily culture-specific. There may also be universal themes, such as the brutal exploitation of the weak by the strong. Still, being confronted with developments abroad may be seen as challenging to a nation’s identity, a notion that used to be an issue in Japan, according to Clausen. Under these conditions,

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domestication may also be seen as to serve the purpose of shielding the domestic public from disturbing alien influences. However, Clausen’s interviewees in Japanese TV newsrooms brushed aside such concerns. They were mainly keen on telling stories in popular, relatable ways—in order to maximize their audience. As often, media economic goals trumped other objectives. The domestication approach is clearly related to the concept of the media frame, as Hufnagel et  al. (2022) carve out. If the media’s job is making sense—by evoking, disseminating, and altering frames and narratives—then international news coverage is to make sense of the wider world and to define one’s position in it. Foreign news stories are frequently picked up by politicians and thereby linked to national political debates (Alasuutari et al., 2013). The coverage of foreign events also touches upon the agenda-setting function of the media. The above-mentioned prominence of the US in global news involves vastly diverging narratives and frames. In China and Russia, where according to Segev and Blondheim’s (2013) ranking, America has been the number-­one country covered, state-led media portray the US as a rival or an enemy, that is inherently weak and decadent. The openly self-critical and polarized western media spheres provide them with of plenty of material. News flows from and to these countries are again distorted by intense propaganda and censorship, as Östgaard, and Desmond before him, stressed. In economic terms, the US with its liberalized labour and capital markets, its traditional free-trade stance and small-government approach, used to be painted as a model for other countries, particularly during 1990s and the 2000s, as described in the intro to this chapter. It was thought be the epicentre of a “new economy”-inspired productivity boom, until the financial crisis of 2008 exposed the self-serving nature of the vast financial industry. Later, the Trump presidency shed light on the dire state of Americans living in the industrial heartland, who in their despair were willing to go for the populist temptation. Studies about the international flows and frames in business and economic journalism are rare, however. Stereotyping One aspect of the domestication of news is stereotyping: evoking images of other nations in the context of established narratives. Stereotypes are clearly helpful in reducing complexity, but can also be grossly

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misleading—and hence become an actual hinderance to making sense of the real world. Stereotypes can be disgusting, admiring, charming, or ridiculous. They can also be economically relevant. To engage in long-­ term economic relationships, conceptions of cultural distance, or proximity, between two countries need to be taken into account. Before companies build transnational supply chains, or consider direct investments abroad, managers weigh notions of cultural fit. Without factual knowledge they turn to stereotypes that are mainly spread by the media. National stereotypes “can stimulate or de-stimulate business” (Jaklič & Svetličič 2016, p. 1098). The effects of biased, overly simplistic (media-transmitted) stereotypes can be so strong that they become a hinderance for gaining actual knowledge, which can be particularly problematic in direct and lasting types of business cooperation like foreign direct investment (FDI).5 National stereotypes also influence economic policies. One example is the Euro debt crisis that prompted media in northern European countries to evoke demeaning stereotypes about the Greek, an allegedly lazy, free-­ spending Oriental people inhabiting the Hellenic lands. The German press, in particular, replicated a distorted image of Greece over and over again, as Tzogopoulos (2019) argues. While the Greek economy and the state sector undeniably had deep-rooted problems, the story about unproductive, fiscally irresponsible southerners convinced a northern public not to treat the debt crisis as a common EU problem that needed common solutions, but to impose harsh austerity programs to teach irresponsible nations a lesson. This reasoning was mainly inspired by stereotypes about the Greek, but it also spilled over to similar programs for other countries, notwithstanding significant differences in conditions. Stereotypes can be politically poisonous and self-replicating. In an interview, Jeroen Dijsselbloem, at the time the Dutch finance minister and head of the Eurogroup, made a slur in the direction of indebted southern countries, calling for enduring fiscal prudence. (“When I spend all my money on booze and women, I can’t ask for support afterwards.”) The statement soon triggered a vicious spat, leading the Portuguese prime minister to call for the Eurogroup chief’s resignation. Later, Dijsselbloem conceded that using the metaphor had been a mistake, but that its insulting character hadn’t come to his mind at the time (Dijsselbloem, 2018, Chap. 8)—proving the deep-seated quality of stereotypes. In their fiscally strict approach, northern publics and politicians were closely aligned. Stressing perceived cultural differences between northern and southern Europe can be seen as an example of “othering”, as sociologists call this

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effect: members of one social group establish (mental) borders towards others, thereby strengthening cohesion within the group, but complicating cooperation with non-insiders. This effect of stereotyping can indeed have troubling implications for international, or in this case European, cooperation (see also next chapter). In liberal societies, stereotyping is not the product of vicious domestic propaganda, although malicious populist political communication clearly has distorted public discourses (see below), but the result of journalists mindlessly reproducing wide-spread beliefs and images. Van Doorslaer (2021) calls this conduct “stereotyping by default”. It’s not about pursuing a deliberate strategy to some ideological or political end, but about attracting a sizable audience. If the media constantly reproduce certain national stereotypes, it is because it’s an easy, cheap and popular way to attach some kind of meaning to bits of information. In the face of the “fast production and rapid distribution features of online and social media, the repetition is even multiplied”, which in turn “leads to effects that can be considered similar to canonicity” (van Doorslaer, 2021, p. 215)—stereotypes that become basic assumptions about the nature of other nations, that are rarely put into question. The effects of stereotypes can be harmless, funny, and hilarious. But they can also have grave consequences, if deep-seated prejudices limit the scope for politicians to engage in cooperative international policies. Distorted stereotypes shape political fundamentals and reduce a government’s set of possible actions. In repeating stereotypes over and over again, they become a “part of national political culture”, Grix and Lacroix (2006) point out, constraining politics. These frames of nations need not be confrontational. Quite the contrary, in some cases they are driven by admiration. What’s more, stereotypes may change over time, due to altered perceptions and self-perceptions. Consider the case of the UK and Germany. In the mid-2000s, Grix and Lacroix, two researchers from Birmingham, set out to analyse how the British press was covering Germany and the Germans. In the course of their content analysis of newspaper articles they found 13 German-specific stereotypes, eight of which were of particular importance, namely (p. 378–379): Stereotype 1: War prone, defined in this research as a tendency for armed conflict, the use of violence or hostility (this also includes stereotypical references to Nazis or Nazism).

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Stereotype 2: Engine or leader of the EU, i.e., Germany portrayed as the prime force behind European integration, the one member state that controls power and decision-making within the EU. Stereotype 3: German–British football rivalry, i.e., Germany and Britain have a particularly bitter, historical and perennial football rivalry. Stereotype 4: Highly intellectual, educated or creative, i.e. the portrayal of Germans as having a tendency to (sometimes over) use their intellect to study, reflect or speculate. Germans are knowledgeable, perceptive, and reflective and they have a good or better educational system than the UK. Stereotype 5: German cars or engineering, i.e., Germany and Germans are seen as exceptionally skilful in the application of knowledge, mathematics and experience to the design of useful objects (particularly cars) or processes. Stereotype 6: German companies hindering or taking over British ones, in other words, preventing the expansion and development of British industry, or plainly taking it over (often through unfair means or competition). Stereotype 7: Controlled, restricted or highly legislated economy or society, i.e., Germany and Germans are generally restrained or over-managed. Stereotype 8: Organized, punctual or boring, i.e., lacking in interest; always on time, but also dull; no sense of humour.

(As a German, yours truly must admit these stereotypes are all true—to some extent.) In their content analysis of newspaper articles, Grix and Lacroix found that the “war-prone” stereotype was by far the most widespread, contributing more than a third to the coverage. The “EU leader” motif came in second with about 17 per cent of the sample. The shares of the other patterns were negligible. 60 years after World War II had ended and 15 years after reunification, the public image of Germany was still one of a latently aggressive, highly efficient and unappealing adversary. However, over the course of the following decade the public image seems to have shifted, due to two developments: Since the mid-2000s the German economy has outperformed many of its peers, most notably Britain’s, that fell into a prolonged slump after the Financial Crisis. And: Relative economic and social stability has helped Germans to take to a more relaxed demeanour, epitomized by the football world championships of 2006, when German hosts were able to charm a global audience. Hence, in the years after Grix and Lacroix undertook their analysis, a fundamental shift in the relative positions of the two countries happened: Britain grappled with its position in the world and in Europe, voted for

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Brexit and was at times stuck with dysfunctional politics, while Germany motored on, calmly and boringly. In 2020, John Kampfner, a British journalist, published his best-selling book “Why the Germans do it better: Notes from a grown-up country”, that earned praise from critics from many relevant UK newspapers. The book’s general thread was, that virtually everything in Germany was somehow superior—bar humour—and that Britain could learn quite a bit from its once-ridiculed neighbour. Kampfner’s book reads, as if Grix and Lacroix’ (2006) stereotypes 4 and 5 had gained the upper-hand in public perception. In turn, the war-prone stereotype 1 faded, not least because the author, himself of Jewish decent, whose family had suffered greatly during the Holocaust, acknowledged the sincerity with which Germans had tried to come to terms with their nation’s horrible past. Certainly, these appealing stereotypes won’t last either, but will be displaced by less favourable images in the future. Domestication of foreign developments at times implies that another country may serve as a mirror-image to rouse domestic audiences. German business media used to look to the US for inspiration in terms of liberalization and fostering high tech. Kampfner’s book was supposed to present ways to his fellow-Brits how to improve their own country. Framing another country as superior to induce changes at home is an age-old technique. It may also cause unintended feedback-loops when readers in the revered foreign country become aware of the rosy image they convey. Think of Cicero (106—43 B.C.) and his book “Germania”. He intended to warn his fellow Romans against complacency, as modern-day historians argue. To this end, he described the barbaric northern Germanic tribes as courageous, modest and true. They might have been underdeveloped and simple-minded, but they were strong and enduring and a challenge to Rome (whose citizens were drawn to opulence and thus ran the risk to grow weak, or so popular laments went). Tacitus had never been to areas Germanic tribes inhabited. He had no first-hand knowledge, neither had his readers. So, he resorted to producing stereotypes about the alien peoples up north and put them in contrast to clichés about his own society. He created a mirror-image, an imaginary anti-Rome. The real power of Tacitus’ narrative only unfolded one and half millennia later: readers in search of a national identity took the stereotypes conveyed in Germania at face value, accepting them as a playbook for what it means to be German(ic). Later, nineteenth century German nationalists cultivated them to create a grotesquely heroic self-image. Undoubtedly, domestication cum stereotyping can yield powerful, yet annoying effects.

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6.2   Globalization in Retreat: Two Case Studies The previous section has shown that the perception of developments abroad is largely driven by national interests. But too-narrow a view of international developments runs the risk of overlooking what may become important for the domestic economy and business eventually. Here, we take a closer look at two examples: the coverage of China and of the World Trade Organization (WTO). Covering China Following a comprehensive mixed-method approach, we analysed the China-related coverage of four leading German newspapers over a period spanning from 2000 to 2019 (Hufnagel et al., 2022). These two decades were characterized by China’s ascent to become one of the world’s leading economies. In 2001 the country entered the World Trade Organization (WTO) and was quickly integrated into international markets. China’s opening-up altered the workings of the global economy in many aspects: labour supply rose massively; demand for raw materials and machinery exploded; systematic foreign exchange interventions turned China into the world’s largest creditor, particularly vis-à-vis the US; global emissions of climate gases rose rapidly; global institutions like the UN, the IMF, and the WTO were transformed by China’s involvement in governing the institutional arrangements of the international economy. From a German perspective, China became a favourite destination for trade and investment, given the country’s openness and export dependency. Hence, all the determinants of news flows were there and should have prompted German newspapers to cover China more and more intensively over time, and, possibly, in more breadth as well. But Hufnagel et  al.’s study revealed somewhat different patterns. Overall coverage rose in the 2000s, spiking during the Beijing Olympics in 2008, and softened afterwards (p. 8). Only towards the end of the observation period, when trade frictions rose markedly, the number of China-related articles was again on the rise. The reporting intensity patterns indicate that China was the next big thing during the 2000s up to the financial crisis, but was regarded as a known, less exciting entity afterwards—until problems became obvious. An automated topic modelling analysis (conducted along the lines described in Chap. 5) revealed that the coverage of China was largely driven by economic issues, contributing more than 40 per cent to the

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entire China-related corpus of some 56,000 articles; stories dealing with politics or Chinese society account for 17 per cent each, with arts, sports and disasters contributing much of the rest. In a second step, a qualitative-­ quantitative frame analysis was conducted, guided by the LDA algorithm that computes the most characteristic articles of each topic. The analysis yielded several China frames that had not been considered in the literature before (“a posteriori” frames). The most common frame portrayed China as a “valuable partner”, present in about ten per cent of the articles in the sample, solely from the business sections, followed by “rising power” (eight per cent). The associated stories deal with China’s attractiveness as a place to do business (cost advantages, market size, etc.). The country is painted as an engine of the world economy, ever closer trade and business links are viewed as positive developments. The opposite frame depicts China as an “economic threat” (six per cent), challenging the German manufacturing sector, not least by employing unfair business practices, such as (social, environmental, financial) dumping and copying (or stealing) intellectual property. Contrary to the US-focused literature, that typically finds a “geopolitical threat” frame, this theme was barely detectable in our analysis. It seems to be inspired by a uniquely American great power world view, while the German one is predominantly mercantile. German newspapers stressed other aspects, such as Chinas “needs of resources” and being “a polluter of the environment”. The country’s oddity, from a western perspective (“China as the other”), was an issue, as well as its internal economic and social tensions (“Economic decline”, “internal strife”). There are other— opposing—frames as well: while “violator of human rights” underlines the authoritarian nature of the political system, the “opening up” frame conveys hopes that political suppression could gradually give way to social and political liberalization; “China as a diplomat” provides optimism for an increasingly constructive role in international relations. The overall framing was positive to neutral over large swaths of the period considered. The term “partner” appeared frequently in the corpus, particularly in a topic dealing with the car industry, but faded towards zero towards the end of the observation period. Instead, the word “competitor” appeared more and more often, following an upward trend in the 2010s. But only rarely did the texts we analysed depict China in critical terms until 2016/17. By that time, the country’s image in German media had changed profoundly, due to several events that emphasized that China-related risks were rising, most notably the take-over of German

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robotics company Kuka and a more aggressive international acquisitions spree pushed by the Beijing leadership. To triangulate the results of the quantitative-qualitative content analysis, several interviews with China correspondents were conducted. The interviewees were not surprised at all by the results of the content analysis. A majority of them lamented that German China coverage had followed economic and political interests and had, thus, neglected other aspects. They argued that human rights violations, in Tibet, Xinjiang, and elsewhere, had been the object of rumours for long, but hard evidence had lacked, which was an obstacle to reporting. This has only changed in recent years. Over much of the observation period news coverage was largely based on the assumption that China was a purely economic actor, offering potential benefits, as one interviewee put it. Towards the end of the 2010s, media coverage turned increasingly critical. One correspondent described the Kuka take-over as the key-event in this change, marking the beginning of a “phase of awakening and the end of naiveté”. In 2019, a report by the federal association of manufacturers (Bundesverband der Deutschen Industrie, BDI) named China as a “systemic competitor”. Late, alas, business as well as political actors realized that the decades-old notion of “change through trade” would not happen, as several interviewees put it. The BDI’s report had “deliver(ed) the language for our adjusted relationship and our newly framed view of China”, according to one correspondent. More fundamentally, it was influential in forming the altered media perception of China (Hufnagel et al., 2022, p. 18). Three brief generalizations from the study are as striking as they are troubling: 1. The coverage of a culturally distant, but economically closely linked country such as China is highly focused on economic and business aspects and largely leaves aside political, social, or cultural issues. But these areas provide the setting in which companies and governments operate. Neglecting these deeper issues can lead to being blindsided. Risks that build up outside of the narrow scope of the money-making sphere come as surprises once they materialize. 2. When non-economic issues were reported, they, too, were apparently affected by the positive overall framing of an up-and-coming country. That is, what was happening in China was domesticated by hooking it to the business priorities-inspired frames of an outwardlooking economy (Germany’s in this case). Hence, the leverage of

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business and ­lobbyists in shaping public perceptions—and economic policies—can be substantial, as the hierarchies of influences model (Chap. 3) predicts. However, such a bias is not necessarily in the business sector’s own long-term interest: an uncritical stance on China over a long period of time tempted large parts of the German manufacturing sector, especially the auto industry, to become dependent to the extent that they got trapped. Lately, doing too much business in China has become a serious problem for many companies, now that the geopolitical landscape has shifted towards the formation of an authoritarian geopolitical block with Beijing at its centre. A more sceptical, cautious approach could have helped to prevent the build-up of cluster risks. 3. The notion that intellectual and ideological independence is vital for journalism to provide a clear-sighted, multifaceted, forward-looking view of the economy, stressed in Chap. 3, is all the more important where international economic issues are concerned. Covering the World Trade Organization (WTO) In 2019, when the WTO was about to turn 25, we were asked by Bertelsmann Foundation, a thinktank, to do a study on the media coverage of the multilateral trade body since its inception (Müller & Boczek, 2020). The issue may sound somewhat far-fetched today. But when the WTO was founded on January 1, 1995, it was accompanied by great expectations. The Geneva-based institution was deemed to be the enabler of globalization. As the successor to the General Agreement on Tariffs and Trade (GATT), which in the decades after World War II had facilitated the gradual liberalization of trade between western economies, the WTO was supposed to lift the international division of labour to new levels, based on common rules, serving smaller countries in particular, not just big trading nations or blocs (such as the EU). After the Cold War had ended in 1989/90, the aim of this new international institution was to expand the rules-based multilateral trading system to include practically every country in the world and to establish legally binding mechanisms for resolving trade conflicts. Since international organizations do not operate in a political vacuum, but need public support to pursue their objectives, how they are covered by the media is an important if rarely-studied question. Global economic governance largely depends on international institutions, that in

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turn need public support in individual countries, not least the bigger ones, to pursue their objectives. We decided to compare the coverage of the WTO in a couple of leading US and German newspapers, the New York Times and the Washington Post, as well as Süddeutsche Zeitung and Handelsblatt from January 1994 to June 2019. All in all, about five million articles were published among the four newspapers in the relevant period. We created a single corpus of WTO-related articles for each country, containing as little as some 10,000 articles each—already an indication of the low visibility of the WTO in overall media coverage. We conducted a number LDA analyses with different parameter settings (following the calibration procedure sketched in Chap. 5). In the US media, the overall reporting regarding the WTO occurred mainly in two phases: The first peak can be detected around the turn of the millennium, when the US government agreed with the Chinese leadership on the conditions for WTO accession in the autumn of 1999, and only weeks later when the protests against a WTO summit in Seattle triggered the first major anti-globalization movement. The second peak in reporting was triggered when the unilateral policy of trade wars began during the presidency of Donald Trump in the late 2010s. These two peaks stand out, but in between reporting intensity was very low most of the time. Even in the still optimistic early 2000s the launch of the Doha Round, meant to be a major multilateral free trade initiative in 2001, coinciding with China‘s actual accession to the WTO, only triggered minor peaks in media interest. When two ministerial conferences intentioned to rescue the Doha round in Cancún 2003 and Hong Kong 2005 failed to make progress, the WTO largely disappeared from reporting. Only from the second half of 2016, due to the anti-trade rhetoric by the then-presidential candidate Donald Trump, reporting intensity recovered a bit. With the start of the actual escalation of tariff conflicts initiated by president Trump from the beginning of 2018, the intensity of reporting reached new highs. The topic modelling exercise yields two types of topics: actors driven and systemic ones. Among the latter, a critical globalization debate can be detected, containing articles on globalization protests, as well as a topic dealing with conflicts among WTO member states in particular. The debate was present throughout the history of the WTO, weighing the effects of globalization on the social fabric and on the political system in general. The decisive event of the topic labelled “globalization” is the Brexit referendum in the summer of 2016, followed by the final phase of

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the US election campaign with Trump as the Republican Party’s presidential candidate. Both events combined form a somber scenario. Characteristic headlines read: “The World’s losers are revolting, and Brexit is only the beginning”; “The End of the Anglo-American Order”; or “Trade in the Trump Era: the ‘Politics of Resentment’” (Müller & Boczek, 2020, p. 28). Interestingly, the US newspapers put great emphasis on China, the perceived contender for geopolitical leadership in the twenty-first century. Unlike the EU and other important western US trading partners such as Canada, Mexico and Japan, opening up the People’s republic was of outstanding importance from an American perspective. In fact, China is so central to US reporting that two out of ten topics in our model deal with it. While the basic thread of a related German China topic is clearly optimistic, US reporting remains sober to sceptical. Around the millennium, German media saw China primarily as an investment opportunity and a promising export market, in line with the analysis presented above; in contrast, their US counterparts emphasized China’s cooperative role in managing an unstable global economy. This slightly favourable interpretation of China reached its maximum in the late 1990s and early 2000s, the time when China, with help from the US, negotiated the terms of it becoming a WTO member. All along, there is also a prevailing pessimistic view on China, captured in another topic. Here, China is presented primarily as a challenger in a geopolitical context. While the former (optimistic) China topic prevailed in the first part of our observation period, the latter (pessimistic) one dominated after 2010. In contrast, the media coverage of the WTO in Germany was more favourable. And it was more constant, at least up to the failure of the Hongkong ministerial conference in 2005. The reporting can be summarized in three phases: During the optimistic mid-1990s to early 2000s, the WTO would finally end the protectionism of the post-war decades and promote further liberalization, or so the narrative went. Negotiations within the framework of the WTO were followed closely. What’s more, the intensification of international trade is seen as a means of integrating emerging, developing and transition countries that were opening up into the liberal international order. This applies in particular to China. In the mid- to late 2000s attention petered out. The launch of the Doha Round in late 2001 was still covered closely, it soon became clear that rapid progress could not be achieved. The failure of the ministerial conferences in Cancún 2003 and Hong Kong of 2005 made headlines again. After that, the WTO—and the multilateral approach to global

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trade—gradually faded from public awareness. Trade policy issues moved to other arenas, as the USA and the EU intensified their strategy of “competitive liberalization”. Both major western trading powers were aiming at concluding bilateral trade and investment deals outside of the multilateral system. This change in course is reflected in the reporting: The negotiations within the WTO framework largely disappear from view. The public is gradually losing interest in multilateralism and its most important institution. From the 2000s to 2017 public attention in the German newspapers fell ever further. Even partial successes like the Bali Agreement on Agriculture went largely unnoticed. As the multilateral order has gradually decayed, international trade is now primarily perceived as a strategic struggle. The results of our topic modelling analysis show, that public perception is increasingly shaped by the struggle between great powers and important sectors. At the same time, there is an increasingly critical public debate about globalization in general and the role of the WTO, triggered by the financial crisis of 2008. This fundamental debate about globalization reaches a climax in Germany during the dispute over TTIP, the Transatlantic Trade and Investment Agreement, in the mid-2010s. Planned as a bilateral treaty between the EU and the US, the negotiations took place outside of the multilateral framework, though the resentments that surfaced during the, at times, fierce protests also had some repercussions in the WTO context. While at the beginning of the analysis period there was hope for further economic and social opening within the framework of the multilateral trade system, later on the WTO as an institution became increasingly marginalized. In this third phase, the public image of the USA also changes: Germany has traditionally viewed the USA as an open economy that is pushing the rest of the world to take further steps toward liberalization. This picture changes abruptly with the election of Donald Trump. 2017 marks the beginning of a new era for the WTO, characterized by trade conflicts between the large economic areas, most of which are being fought outside the WTO. The decline of media interest in the WTO is also visible in the awareness of its leaders. Since the news factor of prominence is of great importance, journalistic media have difficulties reporting on institutions that do not have a recognizable face at the helm. Pascal Lamy, who shaped trade policy reporting for a decade and a half, first as EU trade commissioner and then as WTO director general, was much better known and more present than later leaders. Only the first WTO director general, former

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GATT chairman Peter Sutherland, had a media presence comparable to Lamy’s. In 2021, WTO member states appointed Ngozi Okonjo-Iweala as the new head of the institution, a Nigerian economist with a distinguished career in international institutions and finance. Her public appearance visibly stands out given the colorful traditional attire she prefers. After an initial phase of increased media attention, the WTO seems to have slipped below the radar again, though her term was beyond the scope of our analysis. Our results are sobering: 25 years after its establishment, the WTO was no longer seen as an influential forum. In the public eye, it had become one of many marginalized international institutions. The lack of public attention in the United States and in Germany, which is likely to be similar in other countries, represents a structural problem—for the WTO as an institution and for the multilateral order as a whole. In democratic societies, those actors who are able to put issues and solutions on the agenda have an advantage. If they cease to succeed, they lose their ability to set the agenda. As the multilateral approach has largely faded from economic policy debates, it is no longer part of the relevant set of policy choices anymore. Conflict-laden unilateral trade strategies enjoy advantages in highly competitive media systems, while the far more complex multilateral conflict resolution mechanisms, epitomized by the WTO, are at risk of losing popular support.

6.3  Populists vs. “Globalists”: A Tale of Two Media Spheres In a perfect world, there would be a hierarchy of overlapping media spheres, ranging from the local to the global level. At each level, the relevant public would engage in debates about the adequate supply of public goods, the management of public institutions and corporations, prevailing social and economic conditions and so forth. Locally, debates might center on public child care facilities, schools or nursing homes; nationally, healthcare or public pension systems would be addressed; internationally, dealing with climate change, the proliferation of nuclear arms, or currency misalignments would be addressed. In this ideal world, there would be media at each level to facilitate these discourses, supplying them with a basis of reliable facts, holding institutions to account, and structuring the policy agenda, along the lines of Habermas’ concept of deliberation

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discussed at the outset of Chap. 3. Since the different levels do not operate independently of each other, there would be some kind of overlap. Think of local newspapers covering the most important national and international events as well, while national and international media take notice of significant developments at the local level around the world. There’d be news flows in every direction. Reality, alas, is messier: first of all, liberal media systems are far from being the global norm, with government influence growing in many places. Private local media, in turn, have been struggling throughout western countries, leaving “news deserts”, towns with just one monopoly media brand, or none at all.6 At the national level, media competition has become increasingly fierce and polarized, while international media are just a niche of the news market, though a growing one. As a consequence, the public spheres at the national and at the international level have been growing apart. This sections sheds light on the dynamics behind this trend. Globalization as a Populist Issue Globalization is an unlikely populist issue. Former cohorts of populists, such as former Italian prime minister Silvio Berlusconi, shied away from bothering voters with complicated economic issues and tried to stick to entertaining messages instead. Proponents of the most recent vintage, however, stress controversial economic problems such as immigration and international competition, promising quick-fixes by implementing protectionist measures. Donald Trump got elected by promising to “Build the Wall” at the Mexican border and to wage a tariff war against China in 2016. The same year, the Brexit campaign targeted immigration and the alleged burden of contributing to the EU budget. The term “globalist” has been turned into an insult. Media dynamics have contributed to spreading political populism, particularly because populists cater to economic incentives in highly competitive media markets, as I have argued elsewhere (Müller, 2017). To be sure, globalization is an abstract and complex phenomenon, involving the flow of goods, services, capital, people, ideas, information, and pollutants, as well as the interplay between states, markets, corporations, and international institutions. The effects of an increase, or a decrease, in globalization intensity can hardly be adequately appreciated by individual citizens, let alone sensually experienced. Lippman’s (1922) famous quote about the world that needs “to be explored, reported, and

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imagined” to be graspable (Chap. 2) applies even more to today’s multidimensionally connected international system. Populists thrive on radically simplifying the issues at stake to make them media-compatible and easy to understand in the eyes of inattentive citizens. While simplification and complexity-reduction are certainly necessary to enable democratic discourse, populist strategies do not stop there. Political scientists have dubbed populism a “thin ideology” (Stanley, 2008), lacking a coherent belief system, even though populists are keen to link their messages to established meta-narratives (Chap. 4). Populism can be leftist, conservative, or fascist, internationalist or nationalist. From a communication perspective two aspects stand out: first, populism is built on simplistic narratives offering clear-cut answers to complex problems. Costs and side-effects are frequently neglected (Dornbusch & Edwards, 1991); difficult trade-offs that need to be taken into account in economic policy and business decisions are negated. Second, populist messages typically involve negativity and dramatization. The world is framed as being dangerous and decaying. Antagonists are singled out that are portrayed as enemies of the common people, keeping them from leading better lives (Mudde, 2004). Experts and “elites”, who stress the difficulties to navigate a complex world, are denounced. Support for populism does not seem to stem mainly from dissatisfaction with the economic situation or with one’s personal situation. It is rather the result of a negative view of the general track a society is on (e.g., Elchardus & Spruyt, 2016). In terms of style, populists vary greatly. They may come across as clowns, bullies or braggers, or all of that at different times. What they have in common, is a knack for raising public attention by breaking conventions and taboos. By doing so they lure journalists into following their preposterous world views. Modern populism can be understood as a political technique to maximize media attention. Populist content follows the logic of news values and social media mechanisms. Whatever populists say or do, it must not be boring by any means. And the media jump on the baits they are offered, because messages and images are tailored exactly to their own (short-term) economic self-interests. Personalization, celebrity status, negativity, conflict, surprises, evoking established frames (and stereotypes)—populism is about news values. It is not so much about solving real-world problems, but about inducing some kind of “media complicity” (Mazzoleni, 2008). Because it is the outrageous that makes the headlines, populists behave accordingly, relying “on hyperbole, misstatements, and demagoguery. They exhibit narcissistic traits and disdain for other

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people”, as Picard (2016) put it. “Populism exploits the vulnerabilities of journalism”, whose fundamental practices and values “are used against itself and democratic society”. By paying attention, “by treating them fairly, and by accurately reporting their statements and activities, journalists open themselves to exploitation in ways that distort and conceal truth” (Picard, 2016, p. 2). When populists turn to globalization-related economic issues, as they have done in recent years, they apply domestication and stereotyping in extreme forms: they make distant issues relatable by breaking them down to the simplest possible level. These distorted accounts of (at times imagined) reality are charged emotionally by evoking negative clichés about other nations, ethnic or social groups. For example, if workers in the US Midwest lose manufacturing jobs, the reason may be low productivity and thus fading competitiveness. Following this assessment, a cure would be either to accept sectoral transformation and help affected workers find other adequate occupations, or to prop up the regional industrial base by enhancing qualifications, fostering innovation, or cutting red tape; if dumping (selling below production costs) by foreign competitors is a suspected cause of regional decline, the way to settle the dispute would be through the WTO.  To be sure, all of these economic policy measures involve grinding work over the long haul—boring stuff from a media perspective. The attention-maximizing approach would be quite different: blame sinister Chinese competitors and lowly paid Mexican workers; accuse “elites” in Washington for waging war against the middle class; impose punitive tariffs with massive bravado; “build the wall”, or at least assert that you do so. That the populist approach is most likely not helping affected workers and regions is of little relevance, if the overriding objective is dominating the news. The resulting absence of viable policies is certainly cynical. But it is individually rational, and not just from the perspective of populist politicians, but from different groups of actors as well: media corporations that cover populist-evoked news flashpoints profit financially from increased user intensity; politicians, activists, and policy wonks who go on air opposing the populist positions can all hope to divert some of the media attention into their own direction. Whenever there is an attention-­ grabbing populist pseudo-event, the entire public sphere can be expected to jump on it, making it bigger than it substantially is and pushing aside other issues. Note that individual rationality in a highly competitive media sphere leads to a collectively detrimental dynamic: the spiral of noise

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(Müller, 2017). A public sphere can thus be seen as a public good that deteriorates because of an undersupply of serious arguments. There are similarities to the tragedy of the commons, an economics textbook analogy describing how commonly shared pasture land suffers from overgrazing caused by the uncoordinated rational decisions of individual cattle owners (Hardin, 1968). What’s more, for populists to stay on top of the media agenda, they need to send strong signals frequently. Breaking racist or sexist taboos; picking fights with persons and institutions, the more eminent and powerful the better; furthering demeaning prejudices; spreading obvious lies— all these can be tactics of choice, if the major objective is maximizing media attention. As the media jump on populist utterances, discuss and counter them, the spiral of noise is being pushed ever further. Meanwhile, the quality of public discourse is decaying.7 An Emerging Global Business Media Sphere While most people perceive the manifestations of globalization through the lens of national media, there is a small group of users who turn to global media. Executives of international corporations, financial and government institutions, experts working in academics, at thinktanks or international NGOs form the core of an internationally-minded audience. A survey conducted with researchers from ifo Institute for Economic Research reveals the media-related preferences and attitudes of this group (Boumans et al., 2023). As part of the World Economic Survey (WES), a poll of economic experts working mostly at government and financial institution around the world, we asked which media brands respondents frequently used; we also included questions concerning media quality and reliability. The survey was conducted in March and April of 2020; 813 economic experts from 108 countries participated; 677 answered the question concerning specific media brands. The results are telling: Anglo-­ Saxon media are the major ingredients in the media diet of this elite group. The most widely-read media brands by far are The Economist and the Financial Times, both published in London, with shares of 48 and 41 per cent respectively. The list continues with US media brands (New York Times, Bloomberg, Wall Street Journal), although their shares are markedly smaller (Fig. 6.1). Only one non-Anglo-Saxon newspaper made the top 10, Frankfurter Allgemeine Zeitung, mirroring the centrality of the German economy for Europe as a whole.

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0

0.1

0.2

0.3

0.4

0.5

0.6

The Economist Financial Times New York Times Bloomberg Wall Street Journal BBC The Guardian CNN Reuters Frankfurter Allgemeine Zeitung

Fig. 6.1  Most read media brands by economic experts worldwide (shares) [677 respondents, up to three media brands could be named, Source: Boumans et al. (2023)]

What’s more, the media used by this expert group have in common a distinctly (classical) liberal stance; the only possible exception is the Wall Street Journal, which sports a distinctly conversative editorial section. It is no undue simplification to state that among these media there is a broad consensus that openness to trade, capital flows and migration is beneficial, multinationalism is essential for global governance, and international institutions should generally have more competences rather than less. Reporting is facts-based, often focused on international spill-overs of economic and political developments, thereby facilitating transnational news flows. Opinion pieces are nuanced, but typically bent towards a “globalist” international worldview. These media brands target an international audience, trying to avoid domestication and stereotyping. The results of our survey suggest that media consumption indeed influences the respondents’ expectations of future developments. Asked for a self-assessment, majorities answered that media content affected their anticipations. In sum our findings confirm the notion that media consumption matters to one’s economic outlook (Boumans et  al., 2023, p. 19–20). Accordingly, professional economists view news content as a

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valuable source of information. More than 80 per cent of respondents broadly agreed with this statement. A majority use media content as an input into their own economic assessments. These findings are particularly striking as the respondents have access to a host of other sources, ranging from official statistics and financial market data to personal encounters with business and asset managers. In line with our discussions in Chaps. 2 and 3, trust is of the essence. In authoritarian systems and formerly socialist transformation countries respondents were more critical regarding the media in general. While in western democracies and emerging democratic countries more than 60 per cent agree strongly or slightly with the statement that news media are the best source of information on current developments, in ex-­ transformation countries and authoritarian states the share is only around 40 per cent. The same pattern is visible  when respondents were asked about the reliability of media content. Trust in the media is significantly stronger where media systems are free and independent. Yet, even in authoritarian countries where the media are deemed neither independent nor particularly reliable, the media influences experts’ expectations, a result that may be attributed to the afore-mentioned “third person effect”. Reading or watching the news provides information on what a society thinks as a whole. Even if economic experts themselves may be sceptical concerning media content, they assume that other people are not. We found statistically significant evidence for this effect in all groups of countries. The overwhelming influence of Anglo-Saxon media is certainly facilitated by the widespread use of English as a global (second) language and their availability due to digitalization. It can also be attributed to the trust these established media brands enjoy. Given the influence of media on the perception of the current state of the world, our results suggest that Anglo-Saxon elite media’s sway is considerable. It is not far-fetched to assume that this effect contributes to an alignment of the belief systems among the “globalist” elite. However, their views contrast sharply with the populist-nationalist tendencies that have become more widespread in national politics. To the extent that these two media spheres diverge, tensions between the requirements of international interdependencies and the willingness to act at the national level look set to increase.

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6.4  The Perils of Ignorance: Some Normative Considerations The literature on international news flows emphasizes the underrepresentation of the Global South in western media, as well as the lack of south-­ south flows due to the dominance of Western news agencies that furthers the persistence of north-south news flows. At the heart of these considerations lie notions of equity: systematically ignoring poor and less powerful countries means depriving them of their fair share of global attention and political influence. Economic journalism, however, should look at these phenomena from a different angle. GDP and Beyond As argued in Chap. 3, economic journalism’s role is that of a forward-­ looking watchdog. Economic problems tend to build up over time, invisibly and unnoticed. They need to be dragged to public attention early on, so that market participants and institutions can adjust their expectations and decisions in a gradual way, in order to avoid havoc in the future. But public attention is limited. Hence, the most important, and potentially most devastating, developments need to be covered on an ongoing basis. Segev’s (2016) findings, that the size of a country’s economy explains much of its share of voice in international news, can thus be considered sensible. After all, big open economies cause large spill-over effects elsewhere. When the US central bank raises interest rates, it shakes global financial markets. When China’s leadership decides to implement strict lockdowns to fight a contagious disease, the resulting production shortfalls can be felt the world over. When the EU designs new rules for internet platform companies or Articial Intelligence, it sets standards relevant to the rest of the world. Therefore, the focus of international economic news should be predominantly on these big economies. However, international spill-overs do not only come in the form of trade and investment flows—the stuff directly related to GDP—but also as migration, harmful pollutants or the depletion of global commons such as the atmosphere, the oceans, or the internet. From this perspective, we not just need to talk about the US, China and the EU, but also about the Democratic Republic of Congo (more than 100 million inhabitants, endowed with climate-influencing rainforests) and Nigeria (more than 200 million people, large oil producer), and even more so about Brazil

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and Indonesia (biggish economies, huge rainforests). We also need to talk about economic and corporate governance models, values, the rule of law and much more. The international dimension of business news is vast. Yet, media need to prioritize, depending on their respective home country, readership and editorial stance. The perils of national ignorance have been plentiful. In the past, early warning systems failed in many instances. Accordingly, major crisis factors remained undetected until things went severely downhill. The list of recent failures is long, from the US private debt crisis of 2008 mentioned at the outset of this chapter, the refugee crisis of 2015, that hit Europe unprepared because there was very little coverage of what was going on in the underfunded camps around Syria. The developing adversary relationship with China, and the regime’s deteriorating internal standards with respect to the human rights, the rule of law, and property rights were no central news theme for a long time, as discussed above. As relations have turned more confrontational, many corporations are so exposed to the People’s republic that they appear trapped. The same holds for Russia, that many in Europe, particularly  in Germany, failed to recognize as a major source of instability one should rather not be dependent on in terms of energy imports. True, media raised warnings, particularly after the annexation of Crimea in 2014, but didn’t follow-up on the problem consistently from an economic and business perspective. The ESSF Formula Revisited Turning back to McQuail and Deuze’s (2020) definition of journalistic quality cited in Chap. 3, remember that they call for “a comprehensive supply of relevant news and background information about events in the society and the world around” (italics my own). The news should be factual, accurate, honest, sufficiently complete and true to reality, impartial, multi-perspective, non-sensational and unbiased. Very well. But what should actually be reported, and what neglected? What are the news values that international economic journalism should follow? The ESSF formula, proposed in Chap. 3, also applies to developments abroad. Translating the formula’s four objectives—efficiency, stability, sustainability, fairness—to the coverage of the economy and business at the international sphere, creates a coordinate plane that enables journalists to judge, or frame, economic developments beyond their respective domestic setting. For example, if low interest rates create an economic

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environment, in which wasteful investments or lavish government consumption are financed with cheap money, efficiency is at risk. Such a stance is also likely to sow the seeds of future instability, when accumulated debt cannot be serviced at higher interest rates at some point. If a major trading partner is turning more and more authoritarian, i.e., violating the principle of fairness, the viability of value chains and foreign investments in the country, and hence the stability of its economic model, needs to be questioned. If graft and cronyism take hold at international institutions, furthering unfair decision making and inefficient outcomes, wrongdoings need to highlighted. If international companies’ activities abroad involve violations of the goals of sustainability and fairness, they should be exposed to public scrutiny. Domestication with respect to international economic news means addressing domestic repercussions of ESSF violations. For example, the build-up of foreign liabilities at domestic banks may pose risks to their solvency, and should thus be investigated early on. Business models of foreign companies, sectors and economic policies, that have a competitive edge and are thus bound to challenge the market position of domestic producers, need to be addressed, so that there is a chance to facilitate adaptions. Favourable foreign practices in business and economic policy— that are not violating but enhancing efficiency, stability, sustainability and fairness—can serve as benchmarks for domestic practices, contributing to the process of learning from innovative approaches. Ignoring the Right Stuff Trade, and international economic relationships in general, are two-sided affairs: they are about both partnership and competition. While EU countries, for instance, are clearly partners in setting and administering common market policies, they compete with each other in product, capital and labour markets. Much the same is true for other countries in the WTO setting or under bilateral trade deals. Conflicts between partners are common; i.e., one side thinks the ESSF formula is violated one way or another. Sometimes certain particularities of trade deals may be interpreted differently, sometimes industrial or technological conditions may have shifted to the extent that the outcomes are not deemed fair anymore. But in principle it should be beyond question that the overall economic and political relationship is mutually advantageous. Think of the US and

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Canada, or France and Germany. Acknowledging dissent in certain areas while embracing the overall relationship is complicated stuff, seen from a journalistic point of view: the duality of partnership and competition creates a dissonance that is not easily captured in catchy headlines. Still, by fostering the acceptability of give-and-take with international partners, journalism is important in facilitating productive and enduring international economic relations. Admittedly, this approach is the opposite of exciting. It is the media’s instinct to exaggerate conflicts. That’s fine. But they need to go about it in a restrained way. If every single conflict prompts the media to call the entire relationship with foreign partners into question, the result over time may not be conflict resolution, but axing the partnership altogether by depriving it of its domestic acceptability, which would clearly be detrimental to welfare and hence the ESSF formula. Even worse, perceived international economic conflicts may not have any substance at all. They may just be fabricated for short-term political gains. Think of US president Donald Trump’s threat to put a punitive tariff on car imports from the EU, for the made-up reason that a US deficit in vehicle trade would undermine national security. This argument is bollocks in so many respects, one hardly knows where to start. Consider these three points: (a) setting the goal that sector-specific trade accounts need to be balanced runs counter to the very idea of the international division of labour; (b) since the US produces plenty of cars itself, the national-­ security case is baseless; (c) as a matter of fact, the US is also a substantial exporter of cars to Europe, that would have been hit by retaliatory tariffs in return, potentially triggering a trade war (a counter-threat that Jean-­ Claude Juncker, then the EU commission president, referred to as “we can do stupid, too”.) As described in the previous section, populism is a political practice designed to maximize media attention. It’s not primarily concerned with solving real-world problems and enhancing welfare at home and abroad. It’s about short-term effects, triggered by human affects, disregarding long-term consequences. Viewed through the distorting lens of attention-­ arousing populism, international economic affairs are all about conflicts, rip-offs, foes, and bad deals—real or imagined, never mind. Stereotyping helps populists to bring their points home to their voter base. As they hook arguments to established prejudices, they make them more powerful and poisonous, even though they may be completely baseless, a strategy

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amounting to a perfidious variety of domestication. Presenting international relations this way is corrosive: trust among nations is undermined; civilized conflict resolution is being hampered; international cooperation is being impeded. Journalism needs the wisdom to ignore the populist temptation as far and as long as possible. When it cannot be shrugged off anymore, for instance once the populist-in-chief has been elected president or prime minister, journalists should refrain from repeating false claims, even when they set out to debunk them. Journalism should focus on the relevant facts and try to dampen the arousal populists try to ignite. After all, journalistic independence involves economic, intellectual and ideological dimensions (Chap. 3). From that follows the freedom to ignore the irrelevant—and to discard the poisonous.

6.5  Conclusion International news struggle to present a clear and comprehensive picture of developments abroad. International news flows are uneven. To present foreign events in a relatable way, media resort to hooking them to national frames and stereotypes, thereby distorting their meaning considerably. As a consequence, international coverage is biased, patchy and event-driven. These characteristics do not bode well for international economic and business news. In such an environment, tensions arise between media spheres that are largely national in scope and an economic sphere that transcends borders. In a highly interconnected world the need to cooperate, to resolve conflicts, to manage international institutions and global commons is paramount. Problematic developments should be highlighted early on so that economic actors can adapt their expectations and their behaviour. At the same time, a global business media sphere is developing, but it is elitist and dominated by media brands with a distinctly Anglo-­ Saxon liberal bent, while national media are at risk of falling for the populist temptation. This divergence is likely to increase tensions between national and international requirements. National media could avoid this trap by focusing on the ESSF formula, i.e., whatever may hamper efficiency, stability, sustainability or fairness (with respect to the respective media’s audience) should be covered, preferably on an on-going basis.

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Notes







1. During the presidential campaign of 2020, I retold my experiences in “America’s forgotten parts”, alas in German: https://www.spiegel.de/ wirtschaft/soziales/us-­w ahlkampf-­d ie-­v ergessenen-­t eile-­a merikas-­ a-­3b68e35d-­dd2b-­414b-­9f81-­051905e616ce 2. Galtung and Ruge (1965, pp. 65–68) name the following factors contributing to an issue’s newsworthiness: 1. Frequency, 2. Threshold, 3. Unambiguity, 4. Meaningfulness, 5. Consonance, 6. Unexpectedness, 7. Continuity, 8. Composition, 9. Reference to Elite Nations, 10. Reference to Elite Persons, 11. Reference to Persons, 12. Negativity. For a brief description of these factors see also Harcup and O’Neill (2001, p. 263). 3. Wu (2000), for instance, found that the former Yugoslavian republic of Bosnia, trapped in civil war and ethnic tensions, was among the most-­ covered countries in the late 1990s when he conducted his study. 4. The Composite Index of National Capabilities (CINC), a combined measure of economic, demographic and military power, was also found to be highly correlated. However, the concept, dating back to the early 1970s, is somewhat outdated. The time series was discontinued in 2007. For details see http://correlatesofwar.org 5. Jaklič and Svetličič (2016) analysed mutual national stereotypes in ex-­ Yugoslavian countries and found that positive stereotypes indeed seemed to enhance a country’s attractiveness to inward-bound FDI. 6. See for example the work done at the Hussman School of Journalism and Media concerning the US https://www.cislm.org/research/ 7. While “alternative” segments of media markets have grown, they are still niche products in many countries (Chap. 2). The US, where the strongly partisan Fox network has become a major source of newsy content, still is an outlier among high-income Western countries in this respect (Newman et al., 2022, p. 41). In many European countries the media mainstream remains rather broad, as we have highlighted in a quantitative-qualitative content analysis of the coverage of the refugee crisis of 2015/16 (von Nordheim et  al. 2019). In the study, we compare three German mainstream newspapers (Süddeutsche Zeitung, Die Welt, Handelsblatt) and the hard-right weekly Junge Freiheit. The results are somewhat encouraging: the three traditional newspapers presented a balanced range of frames over the entire series of events. In particular, we did not find evidence for the popular critique that liberal journalists had painted an all-too-rosy picture of uncontrolled mass-­immigration. Junge Freiheit, in contrast, contained a limited number of frames. Interestingly, the right-wingers largely neglected the more complicated implications of the influx of more than a million

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foreigners in a short period of time, such as fiscal costs and the travails of EU coordination of migration policies. Instead of dramatizing these aspects, Junge Freiheit chose to largely ignore them and focused on identity issues instead. European media systems are certainly not immune to the populist temptation, but appear to be somewhat resilient  – for the time being.

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and 2019. International Communication Gazette, 17480485221118504. doi:https://doi.org/10.1177/17480485221118503. Jaklič, A., & Svetličič, M. (2016). Do stereotypes hinder or promote foreign direct investment? The case of Western Balkan Countries. Teorija in Praksa, 53(5), 1095–1108. Lippmann, W. (1922). Public opinion. Harcourt, Brace and Company. http:// archive.org/details/publicopinion00lippgoog Mazzoleni, G. (2008). Populism and the media. In D. Albertazzi & D. McDonnell (Eds.), Twenty-first century populism. The spectre of Western European democracy (pp. 49–67). Palgrave Macmillan. McQuail, D., & Deuze, M. (2020). McQuail’s media & mass communication theory (7th ed.). Sage. Mudde, C. (2004). The populist zeitgeist. Government and Opposition, 39(4), 541–563. https://doi.org/10.1111/j.1477-­7053.2004.00135.x Müller, H. (2017). Populism, de-globalisation, and media competition: The spiral of noise. Central European Journal of Communication, 9(1 (18)), 64–78. Müller, H., & Boczek, K. (2020). A Fading Institution. 25 years of the World Trade Organization: The WTO through the media looking glass. Bertelsmann Stiftung. https://www.bertelsmann-­stiftung.de/fileadmin/files/BSt/Publikationen/ GrauePublikationen/MT_GED_A_fading_Institution_2020_ENG.pdf Newman, N., Fletcher, R., Robertson, C. T., Eddy, K., & Nielsen, R. K. (2022). Reuters Institute Digital News Report 2022. Reuters Institute for the Study of Journalism. Östgaard, E. (1965). Factors influencing the flow of news. Journal of Peace Research, 2(1), 39–63. Picard, R. G. (2016). Journalism, populism and the future of democracy. Keynote speech to the 40th Anniversary Symposium of the Institut für Journalistik, Technische Universität Dortmund, October 28, 2016. http://www.robertpicard.net/yahoo_site_admin/assets/docs/Journpopulismdemocracy. 29964414.pdf Robinson, G. J., & Sparkes, V. M. (1976). International news in the Canadian and American Press: A comparative news flow study. Gazette (Leiden, Netherlands), 22(4), 203–218. https://doi.org/10.1177/001654927602200401 Segev, E. (2016). The group-sphere model of international news flow: A cross-­ national comparison of news sites. International Communication Gazette, 78(3), 200–222. Segev, E., & Blondheim, M. (2013). America’s global standing according to popular news sites from around the world. Political Communication, 30(1), 139–161. https://doi.org/10.1080/10584609.2012.737418 Stanley, B. (2008). The thin ideology of populism. Journal of Political Ideologies, 13(1), 95–110. https://doi.org/10.1080/13569310701822289

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Tzogopoulos, G. N. (2019). Assessing the image of Germany in the Greek media during the crisis (2010–2015). In Public discourses and attitudes in during the crisis (pp. 87–101). Routledge. UNESCO. (1954). Freedom of information: 20th century casualty? (VII, 3; The UNESCO Courier, S. 1–36). van Doorslaer, L. (2021). Stereotyping by default in media transfer. In National stereotyping, identity politics, European crises (pp. 205–220). Brill. von Nordheim, G., Müller, H., & Scheppe, M. (2019). Young, free and biased: A comparison of mainstream and right-wing media coverage of the 2015-16 refugee crisis in German newspapers. Journal of Alternative and Community Media, 4(1), 38–56. https://doi.org/10.1386/joacm_00042_1 Wu, H. (2000). Systemic determinants of international news coverage: A comparison of 38 countries. Journal of Communication, 50(2), 110–130. https://doi. org/10.1111/j.1460-­2466.2000.tb02844.x

CHAPTER 7

The Case of Europe: A Common Currency Without a Common Public Sphere

For me, Tuesday mornings are an exciting time of the week. At 7 a.m. I receive an email that informs me how many readers my weekly column for news magazine Der Spiegel has attracted, how many of them have read it completely, and how much time they spent doing so. The numbers are the reading results of articles usually published online on Sunday afternoons. These pieces deal with economic and economic policy issues, often involve a European or international perspective, and provide an outlook on what to expect in terms of economic and business events in the upcoming week. Mostly, the texts are pondering rather abstract economic developments, dulled by considerable amounts of figures and references to statistics and surveys (I also try to provide some clear-cut propositions, though). Given that Der Spiegel is one of Germany’s leading journalism outlets (Newman et al., 2022, p. 80–81) catering to a broad audience, it’s not a given that the stuff I’m offering is of interest to a sizable number of people. Accordingly, the columns’ success varies: the most-read piece in the 52 weeks to October 17, 2022 got seven times the attention of the least-­ read one. Thankfully, the editorial team has never pressured me on reader numbers or other performance indicators; the choice of issue and angle is solely my own. My personal ambition, though, is to attract a weekly readership in the low six-figure numbers. Besides, the columns are a repeated real-world experiment in communication science.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 H. Müller, Challenging Economic Journalism, https://doi.org/10.1007/978-3-031-31030-0_7

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Writing these columns, I pursue four goals: highlight aspects and issues that I feel are being neglected in public debates; illuminate the context based on verifiable facts, especially at the intersection of politics and the economy; provide fodder for a hopefully controversial debate, stimulating readers to make up their own minds; arouse attention, a text must be able to assert itself against the general media background noise. Seen this way, the memos are a mixture of journalism and popular economics. The four goals are not without contradictions. Goals 1 and 2 tend to run counter to goal 4: a balanced text on a topic that hardly anyone is interested in on the day of publication is bound to be overlooked and thus also to miss goal 3. A highly pointed piece on a hotly debated topic, written in the tone of alarmism, may fulfil goals 1, 3 and 4, but not necessarily goal 2— the illuminating properties remain underdeveloped. So, there are trade-­ offs involved. Meeting all four goals at the same time hardly ever works. As far as attention is concerned, a text’s performance is unpredictable. There is just one rule: whenever I write about the European Union the results are likely to be disappointing, in particular when a text is about fixing flaws in the set-up of the EU and the Euro area. Generally, readers tend to shun constructive approaches and prefer negative or even alarmist ones. During the 52 weeks to October 17, 2022 truly historic events rattled Europe. Russia invaded Ukraine and waged war on European soil, a catastrophe that had been considered impossible in the twenty-first century. The consequences included millions of Ukrainian refugees fleeing their home and a continent-wide energy crisis. Excessive rises in natural gas and electricity prices amplified a bout of inflation not seen in more than four decades. Supported by the ensuing cost-of-living crisis, hard-right nationalist candidate Marine Le Pen got within reach of becoming president of state in French elections in the spring of 2022, a victory that would have had the potential to undermine the entire project of European integration. Meanwhile, the Covid-19 pandemic was still raging, with successive waves of infections caused by new variants of the virus running through the continent. The pieces I wrote during that period mirrored these developments. Among the 20 most-read columns, seven dealt with different aspects of the Russian aggression and the (insufficient) western response; nine were about inflation, central banks’ mistakes, and the fallout from rising interest rates. Other columns that focused on the implications of a populist surge in France and Italy, the second and third-largest EU country respectively, failed to attract sizable audiences. The same was true for a

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couple of texts that discussed reform options to make the EU more resilient economically and more capable militarily. We have to face it: European issues are no easy sell. Even at a time when Europe was in acute danger from the Russian aggression, and from the ensuing economic and political repercussions, European angles were by no means winners in the competition for public attention. Accordingly, the media largely ignore the issue. (Consider my modest attempts to point to European reform necessities quixotic stubbornness.) There were no cover stories or series of articles on how to build a more secure, tighter-knit European Union in major media. Reforms at the European level haven’t been pushed forward in earnest since French and Dutch voters rejected the EU constitution in referendums in 2005. Outside the circles of thinktanks and policy wonks any advancements that would entail changes to the EU treaties were considered non-starters. And the media are no exception. On the face of it, the reluctance to further integrate Europe politically is hard to grasp. However, this hesitancy is directly related to the underdevelopment of a pan-European media sphere, constituting a missing link of European integration, as this chapter will argue. After seven decades of perpetual coalescence, Europe is still divided into national media spheres. This is somewhat odd, given the sweeping advances the continent made economically, socially, and technologically during that period. Europe may be bound together by economic interdependencies and shared institutions, but public discourses play out mostly within the limits of individual nations. This dichotomy constitutes a problem: it is a major hinderance on the way to deeper political integration and the closer alignment of national politics. In the absence of pan-European mass media, journalism at the national level, and economic journalism in particular, is an important factor.

7.1   The State of the European Union: Some Basics Questions of Identity Non-Europeans may consider it self-evident that more EU unity is needed if Europe is to play a more active role in a geopolitical landscape dominated by mega-states (the US, China, India, Russia). Europe could be in that league, too, all the more as it already has some state-like features: a parliament, a currency, a budget, a supreme court, fortified external borders, to name just a few. But from within, the EU looks disunited, vast,

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and dizzyingly heterogenous. After all, it’s a region of 450 million citizens, living in 27 member states, speaking 24 official tongues, and many more minority languages and dialects. But at the same time, they share a common market and an array of associated policies, including trade, competition, climate and, for a subset of member states, monetary matters. Christian heritage makes for a common cultural matrix, while English has become the continent’s de facto (second) language. Lifestyles have converged considerably, too, with large consumer brands available in cities from the Black Sea to the Atlantic Ocean and low-fare airlines, long-­ distance busses and high-speed railway networks ensuring fast and safe transborder transportation. Three quarters of its inhabitants consider themselves EU citizens, according to a Eurobarometer survey.1 More than 60 per cent say they feel “very” or “fairly” attached to the EU, around 70 per cent to Europe. 90 per cent feel that way regarding their respective home country.2 The results highlight that modern national and European identities are not mutually exclusive but can coexist peacefully, even within one person. The survey also underlines that “Europe”, rather a cultural than a political or geographic designation, is more popular than the EU. In many respects, Europe looks more homogenous today than, say, India. But it doesn’t feel that way. As the historian Paul Kennedy (1987) has pointed out, ever since the end of the Middle Ages the political landscape has been shaped by the competition of small and medium-sized countries. Contrary to regions elsewhere on the globe, no grand monocentric empire did rise to unify the continent by force, like Han-dominated China for instance. Instead, Europe was about the duality of intense exchange and inter-state conflicts: facilitated by a geography of endless coastlines and navigable rivers, commerce and cultural intercommunion could easily flourish. On the other hand, kingdoms and fiefdoms were involved in an enduring struggle for supremacy, or self-assertion. Eventually many of these proto-states and statelets would morph into nations, that is, mass societies with a shared narrative and a heightened sense of common destiny and solidarity (Müller, 2006). But nationalism is not only about strengthening the ties within societies, it is also about setting up lines of demarcation against others. Hence, early twentieth century international relations became increasingly poisoned by the notion that nations were involved in a fight for survival, the absurd implication being that either a nation would prevail or it would face extinction. As a result, conflicts became increasingly bitter and all-encompassing,

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culminating in the two devastating Europe-centered World Wars of the twentieth century. The process of European integration is a direct consequence of the bloodshed of these clashes. As early as 1950, five years after World War II had ended, reconciliation started between France and the Benelux countries and their formerly fascist aggressors Germany and Italy. The institutions envisioned by Robert Schuman, then the French foreign minister, are in place to this day, plus a host of additional ones that have been set up since. Yet, Europe is no super-state, even if English Brexiteers were eager to denounce EU overreach. It does not even have a proper federal level comparable with existing federal systems like the US, Switzerland or Canada. In search for a synonym, English-language media like to call the EU a “block”, though the label is misleading, as the term suggests a coherence that the EU is often lacking. To this day, Europe is a collection of contradictions. It’s about common rules, embracing neighbouring cultures, and anxiously looking after one’s own national identity and narrowly defined interests. It also confines culture to national terms, which implies that meaningful common media policies are all but missing. Money and Democracy Monetary unions the world over involve redistributive policies. Income is reallocated to poorer regions, as in the long run economic centres tend to gain from a playing field levelled monetarily, while the periphery loses in relative terms (Müller & Richter, 2017). To counter these centrifugal effects centralized funds are needed. A similar rationale follows from asymmetric shocks, that affect some parts of a currency area while others remain unscathed (Bayoumi & Eichengreen, 1992). Think of the Ukraine war that adversely hit neighbouring Eastern Europe and the Baltics far harder than western parts of the Union. Countries that have their own currencies are, in theory, able to let their exchange rates depreciate and lower interest rates to cushion the brunt by improving competitiveness and domestic demand. Within a monetary union this course of action is impossible. What is more, in times of market turmoil a lender of last resort is needed to stabilize financial markets and state finances. In the setting of a multi-­ nation monetary union, this function needs to be centralized. In short, there are many reasons why forming a monetary union increases the need for redistribution of income and liabilities within the currency area.

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But European Monetary Union in its original form, as envisioned by the Treaty of Maastricht, did not include any of these features. Instead, budget rules were put in place (“Stability and Growth Pact”), that were designed to limit the ability of governments to run deficits and pile up debt. That the belief in the self-correcting mechanisms of markets, the Maastricht narrative if you will, was in conflict with reality, became apparent during the Euro crisis starting in 2010. To keep the entire European project from exploding, a common facility for emergency financing, the European Stabilization Mechanism (ESM), was introduced by Euro member states. Later, the ECB was allowed to buy government bonds (“quantitative easing”), though this was legally tricky since the acquisition of government debt inevitably entails some kind of risk transfer—if a government goes bankrupt, all EMU taxpayers suffer from write-downs of assets. The ECB found a work-around by letting national central banks keep their respective governments’ liabilities on their books. Still, the EU is not fit for redistributing sizable amounts of money, because it lacks the legitimacy to do so. And this is a direct consequence of the missing of a European public sphere. (We’ll get back to this theme a little farther below.) The regular EU budget amounts to about 1 per cent of the EU’s combined GDP per year. The seven-year financial framework starting in the period from 2021 was a bit bigger, at 1.7 per cent, because EU member states set up a Corona crisis relief fund (“Next Generation EU”), designed to kick-start the economies that were particularly hard-hit by the pandemic, with the biggest slices ear-marked for Italy and Spain. In nominal terms the sums involved sound gigantic: 1.7 tr euros, 750 bn for the Corona relief facility alone, but this is over a seven-­ year period. Annually, it’s only 240 bn euros for 27 member states. By comparison: in the Federal Republic of Germany, the central budget (including social insurance) is more than 30 percent of national GDP; in the US the federal budget is about a quarter of GDP. It is by no means certain that the EU budget will not shrink again in the future, as the Next Generation fund is only meant to be a one-off instrument of solidarity, not a permanent facility.3 The usual mini-budget, however, is not enough to counteract the centrifugal forces that are driving apart the economic core (e.g., southern and western Germany, the Netherlands, Flanders, Ile-de-France) and the rest of Europe. Parts of the EU have been falling behind economically for years. It is hardly possible to mitigate such polarization effects with national budgets alone. Plus, demands that the EU should do more have

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grown constantly: regarding internal and external security, climate protection and energy security, refugee policy, the creation of a digital single market, to name just a few policy areas. But if the EU level is to take on more and more responsibilities, it needs more money—and more democratic legitimacy. In an ideal world, the EU would look like this: each level of government would be assigned distinct responsibilities in a federal structure. Member states would have certain tasks as would Brussels. At each level, parliaments would decide on expenditure and revenues. In such a setting, the EU budget would be negotiated at and approved by the European Parliament. To balance the books, MEPs would be able to draw from their own sources of revenue: taxes levied across the EU—instead of, as has been the case ever since, allocations from the member states based on national income. In reality, though, the struggle over the EU budget plays out as a zero-sum game, as a group of experts led by former EU Commissioner Mario Monti has criticized (Monti et al., 2016). Since each member state government calculates for itself how much it pays into community coffers and how much it gets out, i.e., to what extent it is a net contributor or net recipient, added value created for the EU as a whole would not be part of the political calculus, leaving the common budget cash-starved. In their report, the Monti Group offered suggestions as to how Europe could be put on a more stable footing financially. In particular, they advised that the EU level should receive a larger share of value-­ added tax, as well as a share of a harmonized corporation tax. The EU should also get the right to levy taxes on financial transactions, CO2 emissions and energy consumption as well as the proceeds from climate tariffs on emissions-intensive imports. The overall tax burden was not supposed to increase, but revenues should be distributed more intelligently between the national and the European level. Equipped with such sources of income, the EU could get away from the petty logic of national net-­ contributor/recipient positions. Spending programs could be designed according to what is necessary for the Union as a whole, that is, where the European “added value” is greatest—and not according to what can be clearly assigned to individual countries. The Monti Group concluded that citizens had great expectations, but that Europe would hardly ever deliver, unless financial relations would be overhauled.

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No Redistribution Without Representation At the heart of democracy lies the principle that representatives of the people, i.e., members of parliament, ultimately get to decide on taxation and spending. The slogan “No taxation without representation” ignited the American Revolution in 1776. The trigger was the introduction of taxes, that the North American colonies were supposed to transfer to London without being allowed to have a say in it. The American uprising would eventually pave the way to modern-day western-style democracy. Today, this representation principle limits the scope for fiscal federalism in the EU, and in the Eurozone in particular, for three reasons: First, the Eurozone, a subset of 20 member states at the time of writing, does not have a parliament of its own. Formally, there is no need for one, since the Treaty still operates under the assumption that the Euro will become the EU currency—bar the Danish Krona, as Denmark secured the right to opt out of the single currency. All other member states are formally obliged to adopt the Euro eventually, even though countries such as Sweden, Poland or the Czech Republic have so far shown no inclination to join. Since there is no Eurozone parliament, the bail-out fund ESM had to be set up as a non-EU institution; ESM funds are allocated by national parliaments of Eurozone member states to ensure the representation principle. Second, the European Parliament does not represent a single European people but the inhabitants of 27 member states. Given the very different sizes of member states, this leads to a grossly unequal representation of the inhabitants of the EU, depending on their nationality. In European elections the votes of a small country are weighted far more heavily than the votes of a large one. MEPs from small member states such as Malta or Luxembourg represent around 80,000 citizens; their counterparts from large countries like Germany represent more than ten times as many inhabitants. Third, for democracy to work, parliaments, governments, courts, and other state institutions cannot operate in a vacuum, but need to be embedded in free and open public discourse—the Public Opinion Tribunal, hailed by Jeremy Bentham (Chap. 2). For public opinion to accrue, mediating instances are needed, such as parties, associations, the press and broadcasting, as the German Constitutional Court has spelled out in a number of rulings, starting with the decision concerning the Treaty of Maastricht (BVerfG, 1993, p. 98). These rulings have been highly controversial, but they effectively limit the scope for European integration:

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according to this view, delegating more and more competences to the EU level would undermine the very principle of democracy and hence violate the most fundamental provisions of the (German) constitution. As a result, the EU Council, consisting of the heads of member-state governments, gets to decide unanimously on the EU budget. Revenues are allocated through national contributions, that flow from national budgets, approved by national parliaments. Seen from this perspective, a European Public Sphere (EPS) is a necessary precondition for democracy to work at the EU level, and thus for further integration to be both feasible and constitutional. To be sure, the court conceded that conditions might evolve over time. Whether they have done so sufficiently has been a matter of academic debate for decades.

7.2  Missing Links: The Debate About a European Public Sphere Political theorists have long argued that “without a functioning political public sphere democracy, that is worth its name, is impossible”. Some kind of common media is an “indispensable precondition for the quality of democratic processes and the forming of the political identity of citizens” (Meyer, 2009, p. 245). Indeed, in nineteenth century Europe the development of a democratic identity at the national level was closely associated with the spread of national media.4 While traditional nation states rely on the formation of public opinion through national mass media, there is still no equivalent at the European level. Cross-border mass media such as pan-European newspapers, news websites or common public-service broadcasters, that could facilitate the emergence of an EPS, are small in size and impact. If the historical analogy regarding the emergence of national identity is accepted, Europe would need to actively build comparable institutions. These would complement national institutions. Common mass media would be part of the solution. In this vein, the creation of a public-service European Broadcasting Corporation, modelled after the BBC in the UK or the ZDF in Germany, has been proposed (Thomaß, 2006). Such an approach might have been straightforward in the 1990s, when the former European Community started to call itself a “Union” and went on to create a common currency after the ratification of the Maastricht Treaty. At the time, the lack of a European Public Sphere was becoming more and more pressing. However, an EBC never came about.

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Dimensions of Europeanization Research in communication science has since centred on the question whether and how European issues are presented in national media. Even in the absence of cross-border media, national debates could converge over time to the effect that a quasi-Europeanization of media coverage would emerge (Latzer & Saurwein, 2006, p.  16) as well as specialized public spheres through transborder networks (Eder, 2000), synchronizing public discourses and setting common political priorities, thereby creating pan-European public opinion by stealth. A host of studies (e.g., Koopmans & Erbe, 2004; Trenz, 2004; Brüggemann, 2005; Pfetsch & Koopmans, 2006; Brüggemann & Kleinen von Königslöw, 2007) have found different degrees of Europeanisation of media coverage, even though national media systems differ considerably (Hallin & Mancini, 2004; Nielsen et al., 2013). Importantly, before decisions are taken at the Union level, they should be discussed across borders, based on commonly accepted facts and evidence, revealing dispersed knowledge and conflicting interests, ultimately leading to widely accepted compromises. In the absence of transnational mass media, it is crucial for national media to cover common issues to trigger citizens’ awareness of the European dimension by taking into account perspectives, interests and arguments prevalent in other member states and at the EU level (Koopmans & Erbe, 2004; Pfetsch et al., 2008). A narrow national perspective, in contrast, is detrimental to finding some kind of transnational consensus. A convergence of media coverage at the national level can thus be seen as a precondition for the democratization of European integration. Koopmans and Pfetsch (2006) refer to this process as the “transnationalization of public debate”. In the literature, three dimensions of EPS are frequently referred to (Koopmans & Erbe 2004, p. 101): vertical, horizontal, and intersectional. Vertical Europeanization implies that national media report on EU institutions and the EU level in general, for instance, on legislative procedures involving the European Parliament, the Council and the Commission; policy decisions taken by the ECB or the Commissioners for competition and trade; Euro area-wide business cycle developments; or the scrutiny of EU institutions and policies. Horizontal Europeanization entails national media covering developments in other member states, such as elections or government reshuffles; economic and social developments like the health crisis caused by the pandemic; political movements (like the gilets jaunes,

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or yellow vests, in France); or policies that are deemed exemplary and worth copying. Intersectional Europeanization means that national media in different member states report on the same issues at the same time within comparable frames of reference, hence, without strong national bias; think of the Russian invasion of Ukraine. The result would be a partial synchronization of reporting patterns throughout the EU. I would add two more categories: Triangular Europeanization captures episodes where developments in one member state, or EU institution, are covered through the lens of another member state. This is particularly the case in constellations of asymmetric influence, when the approval of one particular member state is crucial. As an example, consider France during the Brexit negotiations, that at times were jeopardized by squabbles between the two countries over fishery policy and therefore closely watched by media elsewhere in the EU. A fifth variant might be called Silent Europeanization, where comparable frames of references are applied to similar developments in different member states. Think of pension reforms at member state level. If political debates involve comparable arguments and acknowledge the same restrictions (demographics, labour markets, sustainability of public finances, requirements of EU budget rules …), this can be considered a manifestation of an EPS as well, even though neither EU institutions, other member states nor common policies might be explicitly mentioned. (Measuring Silent EPS with sufficient intercoder reliability is bound to prove tricky, though.) The EPS literature typically focusses on the national vs. the European level: either media are self-centered or outward-looking. Following this line of thought, one would expect to find positive correlations between manifestations of horizontal and vertical EPS. However, in a large-scale content analysis von Nordheim et al. (2021) do not find evidence for this, but show that both kinds of Europeanization do not correlate in reliable ways and conclude that they should be interpreted as two different states of a media sphere: high degrees of horizontal reporting may be manifestations of a Europeanized public. In contrast, high degrees of vertical reporting may simply be the result of Brussels bashing in a polarized media environment. Where anti-EU propaganda prevails in only partly free media systems (as in the case of Hungary), a positive attitude towards the EU and its member states can hardly be attested. Von Nordheim et  al. (2021) speak of “dark Europeanization”. In an empirical analysis of the

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coverage of the 2019 European elections in a broad range of member states, they find “confrontational” and “convergent” countries, as well as some where the media do not care much about what’s going on elsewhere in the EU. There seems to be some relation to the degree of press freedom; Hungary and Poland (low degrees of press freedom) are clearly in camp confrontational, whereas countries with high degrees of press freedom (Portugal, Germany) are on the convergent side. To generalize a bit, empirical studies conclude that there is a Europeanization of media coverage, but that transnational news dissemination is rather issue-specific and not necessarily broad-based. Still, media attention has clearly increased over the decades. While European news only made up a tiny share of overall newspaper content from the 1950s to the 1980s, this has changed profoundly since the 1990s (Fig.  7.1). In another comparative topic modelling analysis of leading business newspapers, we reached a similar result, namely that the financial crisis of 2008 and the Euro Crisis in the 2010s have clearly contributed to the enduring salience of Europe-related issues (Mourlon-Druol et al., 2022).

Fig. 7.1  Europe-related Content as a Share of overall News Coverage. Source: Bergammi and Mourlon-Druol (2021). Note: E/T = European news as a share of total news

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The Euro Crisis in the Press Before the Russian assault on Ukraine in 2022, the defining period of European integration in the twenty-first century was the Euro crisis. It caused several countries to drift to the brink of sovereign bankruptcy. It spawned institutional innovations, such as the ESM, a broader definition of the ECB’s mandate, and an enhanced surveillance mechanism. It also brought about bitter arguments between allegedly free-spending southerners, who were forced to follow a path of austerity and deteriorating incomes for an extended period, and northerners purportedly showing a lack of solidarity with their hard-hit peers. In a study with scholars from the Brussels-based thinktank Bruegel we analysed the crisis-related content of major liberal newspapers from France (Le Monde), Germany (Süddeutsche Zeitung), Italy (La Stampa), and Spain (El País) during an observation period spanning from 2007 to 2016. Our general question was who was blaming whom in the context of the Euro crisis. The LDA-­ guided topic analysis (Müller et al., 2018) showed some interesting patterns: all four newspapers reported intensively on the Euro crisis, and did so broadly in sync, driven by distinct events, emergency EU council meetings for instance. Developments in particular member states as well as at EU institutions were covered; in some instances, national and EU designations were overlapping, with then-German chancellor Angela Merkel or Luxembourg’s prime minister Jean-Claude Juncker being heads of governments and decisive figures at EU institutions (the Council and the Eurogroup respectively) at the same time, for example. Hence, the coverage involved aspects of horizontal as well as vertical Europeanization. However, the topic analysis revealed that the framing diverged substantially. The four newspapers were reporting closely related European issues and events, but went about it looking through markedly different lenses. More specifically, we found two types of topics in the LDA models, institutional and systemic ones. Institutional topics are dealing with the ECB, the Commission, national governments (such as Greece’s or Germany’s). Systemic topics provide some evidence regarding the dominant overall framing of the crisis in the respective publication; these clusters of articles typically include opinion pieces such as commentaries, op-eds, interviews or book reviews. They are at the core of the debate about the broader meaning and consequences of the economic and financial crisis, as it spilled over into society and politics more broadly. There are several common elements in the corpora we analysed. In each newspaper,

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there is a clear indication that the economic crisis led to political crisis as well as a crisis of values, provoking specific feelings and leading to the naming of scapegoats. Close reading of typical articles within the respective systemic topics revealed a sense of gloom in all four newspapers, though there are notable differences. The Italian, Spanish and, to some extent, French newspapers convey a generalized loss of hope resulting from a downgraded long-term outlook, a fear of the end of European integration and even the death of democracy. In contrast, the German discourse as represented by Süddeutsche Zeitung was toned rather technocratic. As a rough summary of our results, we formulated (Müller et al., 2018, p. 11): Süddeutsche Zeitung blames everyone else but Germany, the chief suspects being Greece and the ECB; it stresses the need to get back to a perceived status quo ante of stability and fairness. Le Monde blames everyone including the French political class, but largely refrains from criticism of European institutions such as the European Commission and the ECB. La Stampa sees Italy as the victim of unfortunate circumstances, including the EU austerity measures promoted by Germany, and Italy’s own politicians. El País primarily blames Spain for misconduct during the boom years preceding the crisis.

The common European phenomenon of acute financial stress starting in 2010 was simultaneously recognized, but assessed applying distinctly national frames. Picard (2015), who investigated the media coverage of the debt crisis in ten countries, came to a similar conclusion. There may be clear signs of horizontal and vertical as well as triangular (e.g., Italian media reporting on the German stance towards Greece) Europeanization. But intersectional aspects could hardly be found, as the framing of the debt crisis differed considerably from country to country. Of course, the global financial crisis and the subsequent recession had quite different effects in different Eurozone countries. Therefore, it comes as little surprise that we found different reporting patterns in the four newspapers. National problems and solutions took centre-stage in national discourses, leaving systemic Euro area-issues, like the absence of a proper form of fiscal federalism, largely unmentioned. Where these issues were raised, they were dealt with from a distinctly national point of view. A transnational consensus view on the causes and consequences of the Euro crisis—a common economic narrative—is missing. This impedes the emergence of pan-European public opinion as the basis for a debate around the reform agenda for the Euro area as a whole.

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Framing Draghi The absence of a pan-European economic policy consensus is arguably most acute with regard to the European Central Bank (ECB), an institution whose policies have direct consequences for the well-being of citizens. The ECB is communicating not just with one public sphere and its leading media, but with a multitude of national discourses. In the above-­ mentioned study on the coverage of the Euro crisis (Müller et al., 2018) we took a closer look at the ECB. Our LDA analysis yielded clear-cut ECB topics for the four newspapers considered. But the reporting patterns differed considerably (Fig. 7.2). The frequency analysis of the ECB topics shows a divergence of media attention over time. In the first phase of the financial crisis, in 2007 and 2008, the ECB was intensively covered in the newspapers from France, Italy, and Spain, but not in Süddeutsche Zeitung from Germany, a country where the central bank had seldomly been questioned as a tradition. After a brief period of relatively low levels of coverage in 2009, the ECB came into the spotlight with the outbreak of the sovereign debt crisis in early 2010. The increased focus on the ECB was most pronounced in Süddeutsche Zeitung. During that period, the ECB adopted an increasingly accommodative stance, including bond purchases in 2010 and 2011 (Sovereign Markets Program, SMP), the start of large-scale liquidity injections (Long-term Repurchasing Operations, LTRO), the assurance that 0.09 0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01

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the bank would do “whatever it takes” to combat speculation against individual member states (Outright Monetary Transactions, OMT) by then-­ ECB president Mario Draghi in the summer of 2012, and the introduction of Quantitative Easing (Asset Purchase Program, APP) in 2015. Süddeutsche Zeitung covered these developments more intensively than its three peers, taking a far more critical view, a tendency also found in the context of the Inflation Perception Indicator presented in Chap. 5. Close-reading of articles confirmed these differences. While during the first phase of the crisis Le Monde, La Stampa and El País called for rapid accommodative action by the ECB, Süddeutsche Zeitung warned against following the “panicky” actions of the US Federal Reserve (5 February 2008). Later Süddeutsche stressed the “expropriation of savers” because of zero interest rates (6 August 2013) and claimed the ECB was “stretching” its mandate when conducting extensive asset purchases (22 October 2015). El País, referring to the initial reluctance of the ECB to act, emphasized that “the words of Jean Claude Trichet will be felt in the pockets of those who have to renew their mortgage next month” (24 April 2008), but later warned that “cheap money creates addiction” (5 May 2013). Le Monde demanded that the ECB should play “the role of lender of last resort” for the most indebted euro-area countries (11 November 2011) and called for “large-scale monetary easing” to foster fiscal consolidation and structural reforms (8 January 2015). La Stampa cited criticism of the ECB’s willingness to raise interest rates in 2011, saying “many analysts consider that its reactions to inflation risks are exaggerated” (4 April 2011). Hence, from the beginning of the crisis, the ECB was operating under conflicting pressures from different member countries, as our results suggest. The central bank’s stance was at the same time considered to be too accommodative and too restrictive; it was warned to follow and not to follow the Fed’s example; it was criticized and praised for its asset purchase programs. These opposing media frames make for an extremely challenging context within which to conduct a uniform monetary policy across different countries. Another study conducted by a member of our research team compared specifically the coverage of ECB president Mario Draghi in French and German newspapers over the entirety of his term from 2011 to 2019 (Schmidt, 2022). Draghi was a divisive figure during his time in office, hailed as a savior of the Euro zone by some, but blamed for masterminding an overly lose monetary policy stance by others. The study is based on two three-newspaper corpora, containing articles from Süddeutsche

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Zeitung, Die Welt and Handelsblatt as well as from their French counterparts Le Monde, Le Figaro and Les Échos. An LDA analysis reveals stark differences in the framing of Draghi’s reign at the central bank. Strikingly, in Germany a “savers” topic could be isolated, capturing the already mentioned narrative of the ECB hurting the prudent. In the France corpus, there is a “Germany” topic that focuses on German criticism of ECB policy, an example of Triangular Europeanization, while in the German corpus there is no equivalent topic dealing with other Eurozone countries. In terms of the overall framing of monetary policy, traces of markedly different economic ideologies become visible, with ECB coverage showing monetarist leanings in the German and Keynesian leanings in the French case. Aside from these differences, there are also similarities: several of the eight topics per corpus that could be identified are closely related. Both countries’ newspapers pay attention to the stock market, the external value of the Euro, speeches and interviews of ECB executives, interest rate policy and the travails of Greece, resulting in a substantial overlap of the two corpora’s topics (p. 136). So, some degree of synchronizations could be detected, while at the same time there remain differences in economic ideologies and traditions. As the media are important in shaping citizens’ expectations, and hence the transmission of monetary policy, systematic divergences in the media representation of central bank actions are likely to have real economic effects. Reforming Europe That the EU needs to be reformed, is a familiar topos. That’s why in a more recent collaboration with Bruegel scholars, we set out to measure the related debates in business newspapers in France (Les Échos), Italy (Il Sole 24 Ore), and Germany (Handelsblatt). These specialist publications can be expected to be among the most Europeanized national news media, since the common market is at the core of European integration and its most advanced part. In another topic modelling exercise, we created three analysis corpora related to reforms in Europe, providing that both the coverage of reforms at the national and at the European level are addressed. Figure 7.3 shows the frequency of the coverage of reforms relative to the entire Europe-related news coverage (Mourlon-Druol et al., 2022). The data underline the familiar tendency of the media to focus on distinct events. When a crisis hits, coverage is intense, but it peters out soon afterwards, as the Issue Attention Cycle approach would predict (Chap.

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3). The media stress immediate challenges, and shift their focus to the next big issue once the negative surprise has subsided. The financial and the Euro crisis as well as the refugee crisis and the Trump-induced trade war in the 2010s caused high-intensity debates about the consequences the EU should draw. But they ebbed away quickly when the initial shock was digested, leaving little legacy in terms of on-going reform debates. What is more, neither the failed attempt to ratify a European Constitution in 2005, the Brexit referendum of 2016 nor the Covid-19 crisis of 2020 triggered noticeable coverage of extra reform efforts across the three biggest EU countries. However, the frequency curves shown in Fig. 7.3 suggest some degree of synchronization of the reform debates in the three countries: the events highlighted show up in all the three papers, but synchronization is more advanced between Italy and Germany, where major common peaks are associated with the refugee crisis in the 2010s and the 0.3

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trade war in particular, while Les Échos seems to follow a somewhat different agenda. The observed Italo-German parallelism need not mean that the two countries share a common reform agenda; it may simply be a representation of the fact that the underlying shocks—unchecked mass immigration and new obstacles to merchandise trade—hit the two countries harder than France. Looking deeper into the respective topic models, we found broadly comparable reporting patterns in the three newspapers. While certainly different national perspectives are prominent in reporting, there is some degree of attention synchronization with respect to developments of pan-­ European significance. The most pronounced parallel movements can be observed concerning the Greek debt crisis, with Italian and German coverage moving closely in synch, while French reporting patterns are somewhat, but not completely, different. The intensity of coverage culminates around four distinct peaks: in 2010 when Greece reported a massive hitherto hidden budget deficit, the event that triggered the Euro crisis in the first place; the showdown between the “troika” institutions and the Greek government led by Alexis Tsipras in 2015, that was followed by a Greek referendum on domestic reforms and a failed attempt to kick Greece out of the Eurozone in 2015, and then again the fear of a return of the debt crisis at the outset of the Covid pandemic. Specifically, in each of the corpora, one topic can be identified that deals with reforms at the EU level. Contrary to the other topics, these three clusters of articles are not primarily concerned with specific policy areas such as competition or monetary policy, but more fundamentally with the entire set-up of the EU. Figure 7.4 provides an overview of the topics’ salience over time. Clearly, the big debates about Europe took place in the early 2000s. It was a time when the European project was forcefully pushed forward: after monetary union had been achieved, Eastern enlargement was looming, and the EU needed to get ready for the accession of ten more member states. A convention was set up to work on a European constitution, with the media taking notice. However, after the constitution was rejected by referendums in France and the Netherlands in the Spring of 2005, public attention rapidly declined. Les Échos and Il Sole all but stopped their reporting. Handelsblatt, in contrast, continued covering the negotiations that followed concerning the Treaty of Lisbon, that was supposed to salvage the Constitution’s central provisions, so that the functioning of the enlarged EU could be preserved. To be sure, the interest was not solely driven by European

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motivations, but also by the travails of the Berlin government, that held the rotating EU presidency during a critical phase of the negations in the first half of 2007. When the Treaty of Lisbon was signed in December of 2007, the ratification process started, culminating in a rejection by an Irish referendum. The troubles were only resolved when Ireland held a second referendum in the Fall of 2009 (causing a last peak in Handelsblatt’s coverage) that finally paved the way to the Treaty coming into effect. The drama was largely missing in Il Sole and in Les Échos. After that, the debate about the future of Europe died down in all the three newspapers (Fig. 7.4). Only after the Brexit referendum in 2016, Les Échos picked up on the issue again, highlighting the need to reinvigorate the European project. A

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year later, Il Sole highlighted a reform agenda put forward by Donald Tusk, then the president of the European Council. Both events triggered minor peaks in the two papers’ frequency curves. Towards the end of the observation period, the French and the Italian publications reported on the issue of EU reforms with significantly greater relative intensity and constancy than their German peer. In particular, the adoption of the Corona crisis relief fund (“NextGenerationEU”) in the summer of 2020 prompted considerable coverage. While the trends in the frequency curves diverge somewhat, the curve progressions reveal a substantial degree of synchronization, particularly after 2010 when the succession of peaks and troughs is largely congruent. Reporting is driven by the same events, although not with identical intensity. This pattern could be attributed to intersectional Europeanization. Grosso modo we summarized our findings as follows (Mourlon-Druol et al., 2022, pp. 32–33): European aspects play a more and more important role in the content of national newspapers. The financial crisis and the Euro crisis mark events that led to a lasting upward shift in the Europeanization of (business) news. The need for reforms in general is a central theme during times of crisis, but peters out quickly afterwards. In recent years, media attention for reforms has declined steadily (…). Some events of common interest trigger synchronized media attention cycles, resulting in a temporarily shared focus of the media considered. (…) The issue of reforming the EU setup (…) has all but faded from media awareness. After the failed attempt to establish a European Constitution and the implementation of the successive Treaty of Lisbon in the 2000s, the issue only has a minuscule part in overall reporting. However, from time to time some event may give the issue a little boost. It can be argued, though, that the three newspapers considered, share a common narrative with regard to EU-level reforms, deeming them necessary, but unattainable.

7.3  Anything But ESSF? Missing Public Scrutiny of EU Transfers Journalism’s role in a democracy is not confined to the formulation of political priorities and establishing a commonly accepted facts-base. It is also vital in holding institutions to account: how policies are actually implemented on the ground needs to be scrutinized to bring misconduct and divergences from the stated goals of policies to public attention. This

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is a particularly cumbersome task, as it involves the inglorious investigative work of reporters at the national and local level concerning often small-­ scale projects, that may not be the most popular stories among media users, but that are crucially important nonetheless. After all, it is at the local level where EU policies materialize and affect citizens’ lives directly. Though small in comparison to national budgets, the EU financial framework involves considerable sums that are redistributed across member states. The biggest chunk of the common budget is attributed to “cohesion” funds. These financial resources are meant to counter the centrifugal forces mentioned in Sect. 7.1 and keep the EU from drifting apart economically, socially, and politically.5 They are specifically targeted at facilitating investment in poorer regions. In practice, cohesion funds are mostly handed out as subsidies to public institutions and small and medium firms, often involving co-financing by member states, thereby boosting the sums available. In poorer EU countries, particularly in Central-Eastern Europe, cohesion funds finance a substantial part of overall investment. However, the evidence of the real-world effects of this type of EU spending is mixed at best. Economic journalism could help to improve the effectiveness and efficiency of these programs. Economics: Findings on Cohesion Policy Economic analyses have amassed a host of evidence questioning the effectiveness and efficiency of EU cohesion policies. Many projects do not meet the aspired goals, or even have detrimental effects. In a longitudinal comparative analysis covering four program periods. Bachtler et al. (2017) conclude that spending of cohesionpolicy funds has suffered from a lack of conceptual thinking, vaguely defined objectives and mismanagement, while the authors concede that there is evidence of improvement over time. In a study conducted on request of the European Parliament, Darvas et al. (2019) reckon that, while cohesion policy was clearly motivated by the treaty-based objective to reduce disparities between the levels of development of various regions and the backwardness of the poorest ones, it was suffering from a range of, at times contradictory, goals. Social, political, economic and ecological considerations tend to be hard to disentangle, to the effect that the literature on the impact of cohesion policy is largely inconclusive. Hence, Darvas et al. (2019) recommend concentrating research on unequivocally successful cases, in order to induce a process of learning from best practices.

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Focusing solely on the economic objective of fostering growth, Di Caro and Fratesi (2022) define different types of impact. They distinguish between “effective” (high funding intensity, positive impact), “triggering” (low intensity, positive impact), “ineffective” (high intensity, no impact) and “marginal” (low intensity, no impact). Their results show that “ineffectiveness” is a wide-spread problem, in the sense that regions receive intense cohesion funding without a measurable growth-enhancing impact; this is the case for Portugal, Hungary, Ireland, the Baltics, large parts of Greece, Spain and southern Italy (p. 316). Fiaschi et al. (2018), using a spatial growth model, find nonsignificant effects for cohesion funds, but highly significant positive effects for other instruments of regional policy. Fazekas and Tóth (2017) investigate the prevalence of corruption in the context of cohesion funds and find empirical evidence that “EU-­ funded public procurement contracts carry a greater risk of corruption than domestically funded ones” (p. 199). Given the EU’s extensive monitoring and auditing framework, which exceeds the measures applied in many countries at the national level, these results are rather surprising. The authors note that officials handling EU funds on the ground enjoy large degrees of discretion and that “EU Funds, like any external funding, weaken the link between domestic civil society, taxation and policy performance” (p. 188). Media Coverage of Cohesion Policies Since the economic effects of cohesion policies are mixed, and outcomes vary greatly between successes and failures, journalism has the potential to improve the results. By scrutinizing concrete projects, holding officials and companies to account, and promoting public engagement—ideally throughout the entire process of planning and realization—project performance could be enhanced. As Stiglitz (2002) notes, independent media mitigate information asymmetries and thus help to diminish the principal-­ agent problem that typically plagues economic assistance programs. However, studies of media coverage of EU cohesion policies find that reporting in regional media is mostly positive, while national and international media tend to be more critical (Mendez et  al., 2020). On social media, too, the tone regarding cohesion projects is neutral to positive as well, with EU and local government institutions largely setting the agenda (Carrascosa et al., 2018). While these findings may be framed positively, as a contribution “to the legitimization of the EU” (Mendez et al., 2020,

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p. 1050), they also point to deficits in reporting practices at regional news media: if reporters are not pursing their watchdog role, they can hardly uncover rent seeking, cronyism, mismanagement, and other complications. The few available studies on the communicative aspects of cohesion policies suggest that journalists have a hard time formulating criteria by which to evaluate the appropriateness of specific programs. Instead, interested parties such as local and EU institutions as well as companies involved seem to be the major players in framing and setting the agenda, which is clearly problematic. As stressed in Chap. 3, journalistic independence entails economic, intellectual, and ideological autonomy. That is, reporters and editors must be able to select issues, investigate, analyse and publish them without interference from government, business or other outside influences. To achieve intellectual and ideological independence, journalists require a frame of reference. Traditional news values, though, do not capture what’s necessary to cover economic policy, business and finance. Hence, complementary criteria are needed to get closer to the ideal of journalistic independence. Borrowing from concepts of welfare economics, the ESSF formula provides such a framework, focusing on efficiency, stability, sustainability, and fairness. When ESSF objectives are violated, there is a case for a story. The formula also suggests how a story could be framed and what its specific angle might be. A few examples regarding cohesion policies: Is a specific project likely to trigger additional investment, or is it just a windfall gain for the entities involved? (Spending public money without effect equals wasting public funds, violating efficiency; unduly profiting individual businesses and other entities runs against the notion of fairness.) Is the administrative burden manageable, or does it increase unproductive activities markedly, leading to efficiency-degrading dead-weight losses? Is a project likely to have lasting effects on regional growth, environmental quality, standards of living, or it just have a one-off boost with limited scope, adding little to the dynamic aspects of efficiency? Are there detrimental environmental and climate change aspects, and if so, do they constitute a substantial breach of the sustainability goal? Are there follow-up costs to be expected, and if so, are the local authorities fit and able to cover them, or may the ensuing commitments harm the financial stability of a municipality?

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How are regional prices going to react; is the project possibly crowding-­ out other activities by pushing up real-estate values or local wages? Are labour shortages in other sectors to be expected? Is there sufficient personal distance between local authorities and the entrepreneurs involved, or does it reek of corruption, hampering fairness? Are the targeted EU goals actually in line with local requirements, or are there discrepancies suggesting that a certain project should not be applied for in the first place, as it runs against a balanced ESSF assessment?

In many cases journalists will not arrive at clear-cut answers to these questions. Still, raising them publicly and giving a measured account of what research has yielded has the potential to iron out problematic developments. After all, reporting mishaps and missteps in a critical and timely manner does not necessarily involve damning European integration in principle, but improve the way it is working in practice.

7.4   Splitting Up Is Too Hard to Do: Some Normative Considerations Covering European issues must not be confused with propaganda for or against the EU. Just as reporting on severe cases of mismanagement at corporations and on the, at times, dirty squabbles of domestic politics does not equate to rejecting capitalism, private enterprise and democracy all together, European integration is a reality that needs to be explored, investigated and scrutinized—from the critical perspective of independent journalism. Highlighting its aberrations is the best chance to improve its workings. The tendency of populist journalism to dismiss European integration in general, instead of reporting on the specifics where improvements are clearly necessary, has corrosive effects, as the aggressive anti-EU attitude of UK tabloids has shown, that contributed to the self-defeating Brexit referendum. Neither democracy nor capitalism are ideal systems, and the EU isn’t either. Compared with the grand liberal principles of justice, equality, freedom, self-determination, and solidarity, it is ripe with hypocrisy. Violations of the ESSF formula are common. But the great advantage of the fallible western system is its ability for self-correction. As problems are publicly addressed and debated, they can be worked out. Journalism has a supreme part in this on-going process. But it can only deliver on its tasks, if it resists the populist temptations, that were already discussed in the context of international issues in Chap. 6. These

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mechanisms also apply to the coverage of the EU. True, the EU’s set-up is complicated, its balkanized institutions are hard to fathom, and even harder to report on in a way that is attractive enough to draw sizable audiences, as highlighted at the outset of this chapter. Simplifying, dramatizing, and demonizing “Brussels”, the ECB, or some partner countries may sound like a more thrilling take on European issues than soberly reporting facts-­centered stories. From a narrow-sighted media economic perspective, voicing strong opinions without having to investigate the concrete facts can also be considered advantageous, as it is both attention-arousing and cheap-to-produce. However, this type of competitive behaviour leads down a dangerous path: ever stronger stimuli are needed to keep the audience focused. The outrages and the outraged need to be given more and more space. The spiral of noise is accelerated time and again—until it is spinning out of control. From an intra-European perspective, what is needed is a broadening of the frame of reference. The rest of Europe is not some alien foreign land, but it is also not part of the home country either. It’s something in between. In national media, it is usually the respective member state and its society that, explicitly or implicitly, serve as a backdrop for the framing of developments and events. Often, this is not appropriate anymore. Developments in other countries need to be recognized, their interests, preferences, and preoccupations taken into account. Similar developments in different EU countries need to be highlighted, as there are likely to be structural forces behind them that need to be acknowledged and addressed. Repercussions of national policies elsewhere need to be taken into account and factored in. After all, economic journalism caters to a business-­oriented audience that often operates in different locations across the EU. For this type of media, Europeanizing the frame of reference is a media economic imperative. As a by-product, the basis is laid for trans-border deliberation and reconciliation, which in turn may eventually facilitate further steps of political integration, thus far hindered by the non-existence of a European Public Sphere. Empirical analyses suggest that this process of Europeanization of news coverage is under way. But progress is slow, and serious throwbacks do happen, not least in some central eastern European countries, such as Hungary and Poland, where media freedom is severely under pressure and government-linked media are recruited to spread nationalist propaganda. Media outside of Europe covering the EU are also prone to give in to the populist temptation. Its workings are complex and full of publicly

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displayed arguments that make it easy to portray it as a failure. That Europe doesn’t get it and is bound to fail, as is its common currency, has been a recurrent theme in Anglo-Saxon media for decades. All the doomsaying notwithstanding, the EU is still existing. In some aspects it is in better shape than around 2010. The Euro, too, is still here as a global currency, second only to the US Dollar. All the predictions about an imminent break-down of Europe have proven wrong—not a great forecasting performance, to put it mildly. A familiar fallacy concerning the coverage of Europe is ignoring the uniqueness of the endeavour of European political integration and the degree of economic and financial integration already accomplished. Exiting the EU has been very hard for the UK, and Britain was neither part of the Euro nor the Schengen area of open borders. For other countries that occasionally entertain the idea of going it alone, leaving would be even more painful. If going back to the status quo ante is no valid option, the only reasonable direction is forward. Progress is certainly too slow, but it is not non-­ existent. It should be sped up, and media should keep pointing at its deficiencies, while highlighting the EU’s internal rifts. After all, Europe is one of the three major economic powers on the globe, as big as the USA and China. It carries tremendous weight in economic policies and related areas such as climate change mitigation. It is far less well-developed in political or military terms. But that may change, too—if the media keep pointing to European deficiencies and reform necessities, even though at times that may look like an exercise in quixotic stubbornness.

7.5  Conclusion The European Union is a hybrid entity, with powerful common institutions, but also strong and enduring national identities and media spheres. For the EU to integrate further politically, a transnationalization of public debates is a prerequisite, or else fundamental democratic standards are undermined. A common media sphere is the missing link of EU integration. In the absence of common European mass media, the best hope is for national media to increasingly employ a European perspective. Empirical studies conclude that there is a Europeanization of coverage, but that transnational news dissemination is rather issue-specific and not necessarily broad-based. Still, media attention has clearly increased over the decades. It is partly synchronized, as news outlets in different countries react to the same events and, sometimes, portray them in comparable

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ways. Economic journalism is particularly called upon to Europeanize, as its business-focused audience is operating across borders in the common market. This does not imply becoming cheerleaders of European institutions, but rather to expand the respective frame of reference from the national to the European level, thereby acknowledging existing interdependencies and influences. European integration is a reality that needs to be explored and scrutinized, with all due criticism.

Notes 1. https://europa.eu/eurobarometer/surveys/detail/2693, table QD2.1 2. https://europa.eu/eurobarometer/surveys/detail/2693, tables QD1a.2– QD1a.4 3. The Next Generation EU fund is solely financed by common debt which needs to be repaid by future financial EU resources. That’s why repeating this fiscal stunt will be all but impossible under current budgeting rules. 4. Other nation-building factors were compulsory national educational systems and military service (Meyer 2009, p. 245; Müller 2017, p. 152–155). 5. For an overview of cohesion policies of the 2021-2027 period see https:// ec.europa.eu/regional_policy/en/2021_2027/

References Bachtler, J., Begg, I., Charles, D., & Polverari, L. (2017). The long-term effectiveness of EU Cohesion Policy: Assessing the achievements of the ERDF, 1989–2012. In J. Bachtler, P. Berkowitz, S. Hardy, & T. Muravska (Eds.), EU Cohesion Policy. Reassessing performance and direction (pp. 11–20). Routledge. Bayoumi, T., & Eichengreen, B. (1992). Shocking aspects of European monetary unification. NBER Working Paper No. 3949. https://doi.org/10.3386/w3949. Brüggemann, M. (2005). How the Eu constructs the European public sphere seven strategies of information policy. Javnost  - The Public, 12(2), 57–73. https://doi.org/10.1080/13183222.2005.11008888 Brüggemann, M., & Kleinen von Königslöw, K. (2007). “Let’s talk about Europe”. Explaining vertical and horizontal Europeanization in the quality press. TranState Working Papers No. 60. https://www.econstor.eu/handle/ 10419/24972 Bunndesverfassungsgericht (Federal Constitutional Court, BVerfG 1993). Decision concerning the Treaty of Maastricht, 12 October 1993 - 2 BvR 2134/92, 2 BvR 2159/92

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Carrascosa, J. M., Mendez, C., & Triga, V. (2018). EU cohesion policy in the media: A computational text analysis of online news, user comments and social media [Report]. COHESIFY. https://strathprints.strath.ac.uk/70279/ Darvas, Z., Mazza, J., & Midoes, C. (2019). How to improve European Union cohesion policy for the next decade. Bruegel Policy Contribution 2019/8. https://www.econstor.eu/handle/10419/208039 Di Caro, P., & Fratesi, U. (2022). One policy, different effects: Estimating the region-specific impacts of EU cohesion policy. Journal of Regional Science, 62(1), 307–330. https://doi.org/10.1111/jors.12566 Eder, K. (2000). Zur Transformation nationalstaatlicher Öffentlichkeit in Europa. Berliner Journal für Soziologie, 10(2), 167–184. https://doi.org/10.1007/ BF03204349 Fiaschi, D., Lavezzi, A. M., & Parenti, A. (2018). Does EU cohesion policy work? Theory and evidence. Journal of Regional Science, 58(2), 386–423. https:// doi.org/10.1111/jors.12364 Fazekas, M., & Tóth, I. J. (2017). Corruption in EU funds? Europe-wide evi­ dence of the corruption effect of EU-funded public contracting. In J. Bachtler, P. Berkowitz, S. Hardy & T. Muravska (Eds.), EU cohesion policy. Reassessing performance and direction (pp. 186–205). London and New York: Routledge. Hallin, D.  C., & Mancini, P. (2004). Comparing media systems: Three models of media and politics. Cambridge University Press. https://doi.org/10.1017/ CBO9780511790867 Kennedy, P. (1987). The rise and fall of great powers. Random House. Koopmans, R., & Erbe, J. (2004). Towards a European public sphere? Innovation: The European Journal of Social Science Research, 17(2), 97–118. https://doi. org/10.1080/1351161042000238643 Koopmans, R., & Pfetsch, B. (2006). Obstacles or motors of Europeanization? German media and the transnationalization of public debate. Communications, 31(2), 115–138. https://doi.org/10.1515/COMMUN.2006.009 Latzer, M., & Saurwein, F. (2006). Europäisierung durch Medien: Ansätze und Erkenntnisse der Öffentlichkeitsforschung. In W.  R. Langenbucher & M. Latzer (Eds.), Europäische Öffentlichkeit und medialer Wandel: Eine transdisziplinäre Perspektive (pp.  10–44). VS Verlag für Sozialwissenschaften. https://doi.org/10.1007/978-­3-­531-­90272-­2_1 Mendez, C., Mendez, F., Triga, V., & Carrascosa, J.  M. (2020). EU cohesion policy under the media spotlight: Exploring territorial and temporal patterns in news coverage and tone. Journal of Common Market Studies, 58(4), 1034–1055. https://doi.org/10.1111/jcms.13016 Meyer, T. (2009). Demokratietheorie. In T. Meyer (Ed.), Soziale Demokratie: Eine Einführung (pp. 235–258). VS Verlag für Sozialwissenschaften. https://doi. org/10.1007/978-­3-­531-­91618-­7_6

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Monti, M., Dăianu, D., Fuest, C., Georgieva, K., Kalfin, I., Lamassoure, A., Moscovici, P., Šimonytė, I., Timmermans, F., & Verhofstadt, G. (2016). Future financing of the EU: Final report and recommendations of the High-Level Group on Own Resources. European Commission, Directorate-General for Budget. https://data.europa.eu/doi/10.2761/36070. Mourlon-Druol, E., Müller, H., Porcaro, G. & Schmidt, T. (2022). You’ll never talk alone. What media narratives of European reforms reveal about a polity in the making. Bruegel Working Paper 19/2022, 6 Dec. 2022. https://www. bruegel.org/working-­paper/youll-­never-­talk-­alone-­what-­media-­narratives-­ european-­reforms-­reveal-­about-­polity Müller, H. (2006). Wirtschaftsfaktor Patriotismus: Vaterlandsliebe in Zeiten der Globalisierung. Eichborn. Müller, H. (2017). Nationaltheater. Campus. Müller, H., & Richter, W. F. (2017). Europa am Scheideweg – ein Vorschlag zur politischen Weiterentwicklung. Wirtschaftsdienst, 2017(7), 484–489. Müller, H., Porcaro, G., & von Nordheim, G. (2018). Tales from a crisis: Diverging narratives of the euro area. Bruegel Policy Contribution 2018/03. https:// www.econstor.eu/handle/10419/208010 Newman, N., Fletcher, R., Robertson, C. T., Eddy, K., & Nielsen, R. K. (2022). Reuters Institute Digital News Report 2022. Reuters Institute for the Study of Journalism. Nielsen, R.  K., Esser, F., & Levy, D. (2013). Comparative perspectives on the changing business of journalism and its implications for democracy. The International Journal of Press/Politics, 18(4), 383–391. https://doi.org/ 10.1177/1940161213497130 Pfetsch, B., & Koopmans, R. (2006). Unter falschem Verdacht—Massenmedien und die Europäisierung der politischen Öffentlichkeit in Deutschland. In W. R. Langenbucher & M. Latzer (Eds.), Europäische Öffentlichkeit und medialer Wandel: Eine transdisziplinäre Perspektive (pp.  179–191). VS Verlag für Sozialwissenschaften. https://doi.org/10.1007/978-­3-­531-­90272-­2_8 Pfetsch, B., Adam, S., & Eschner, B. (2008). The contribution of the press to Europeanization of public debates: A comparative study of issue salience and conflict lines of European integration. Journalism, 9(4), 465–492. https:// doi.org/10.1177/1464884908091295 Picard, R.  G. (2015). Conclusions. In R.  G. Picard (Ed.), The euro crisis in the media (pp. 237–243). IB Tauris & Co. Ltd. https://doi.org/10.5040/97807 55694990.ch-­00 Schmidt, T. (2022). Covering Draghi: Analysing the media coverage of the former ECB president. A German-French comparison. In H.  Müller & T.  Schmidt (Eds.), European central bank communication: Concepts, crises, and critique (pp. 127–151). https://doi.org/10.17877/DE290R-­22645

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CHAPTER 8

From Gate Keeping to Scouting: the Changing Role of Journalism

During my final year as a senior editor a colleague asked me whether we should to do a story on “these trade negotiations” between the US and the EU that were taking shape at the time. I thought it was indeed an interesting case, economically, and ever since having studied at an institute devoted to analysing the world economy, I’d been paying attention to trade issues. But journalistically? The EU had done many bilateral deals with countries around the world. Certainly, this one, the Transatlantic Trade and Investment Partnership (TTIP), would be more important, given the size of the two economies involved and the treaty’s envisaged scope. So, in my view there wasn’t anything wrong with such a deal between the two biggest western economies in principle. And the specifics were, well, specific to a degree that they could hardly be interesting, even to the audience of a business magazine. After all, the negotiations were about harmonizing thousands and thousands of product standards, or reconciling conflicting views about them, so that they wouldn’t amount to obstacles to trade anymore. There were some cases where tariffs were levied by the US on imports from Europe, on light trucks and vans for example, that companies like Volkswagen or Mercedes were keen to get rid of. But overall tariffs weren’t much of an issue anymore, as they had already been lowered substantially in earlier multilateral trade rounds. The TTIP negotiations were the usual grinding work of specialized diplomats and lawyers. Boring stuff. There wasn’t much of a story. Or so I thought. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 H. Müller, Challenging Economic Journalism, https://doi.org/10.1007/978-3-031-31030-0_8

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After I had quit my job and started out as a university professor, I would ask my students occasionally which issues in their opinion were being overlooked in current debates and should be covered more intensively. In a seminar in the spring of 2014, one of them answered: “I think we should really do a story on TTIP.” I was surprised that he even knew that there were trade negotiations going on. Up to that point they had been a low-key affair. He replied that it was really disturbing that these talks were confidential and took place behind closed doors. He had read about them on the internet; it was an issue discussed in social media. My explanation that confidentiality was essential in complex trade talks, and that it had always been that way, failed to convince him. Wasn’t it suspicious that the talks were hidden from the public eye? Wasn’t this a case of big business trying to push through their interests without anybody being able to intervene? A few months later, the story had made it to mainstream media. TTIP became a highly controversial issue, first in Germany and Austria, then in other EU countries as well, as mentioned in Chap. 3. Demonstrations were being staged. In 2015 and 2016 hundreds of thousands of people took to the streets to fiercely oppose the transatlantic trade deal. I attended a rally and was deeply disturbed by the aggression on display there. The treaty was ultimately brought down by German protesters, even before Donald Trump entered the White House with a protectionist agenda. So, after all, there was a story in TTIP. And it was a big one. My assessment had been wrong. Like many other business journalists, I had failed to grasp the issues at stake early on. The episode highlights the profound structural changes that western democracies and media landscapes have undergone. Back in the old days, journalists, like myself, would have largely neglected the trade talks. If public debates about them ever surfaced, it was because some lobby organization, a farmers’ association, say, decided that it needed to stoke some publicly displayed resistance to get its way. Trade talks were about interests, not about principles. This way, the negotiations about the European common market and the North American Free Trade Area (Nafta) had been finalized, as was the Uruguay round, the last big multilateral trade-­ liberalizing endeavour to date. The uproar against TTIP, however, and the devastating effects it had on the envisaged treaty, confirmed that these days are over. And it’s not just about trade. Immigration, abortion, EU membership—any issue can be charged with emotions to a degree that a

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political project becomes unattainable. And the political right is at least as susceptible to this trend as the left. Political “hooligans” were taking democracies hostage, deforming politics by letting anger and aggression reign, the philosopher Jason Brennan (2017) has argued. Interestingly, though, he has little to say about the media. Instead, he argues for limiting suffrage and turning democracy into epistocracy—the rule of the knowledgeable. Not everybody should be allowed to vote, but only those citizens who have proven that they are sufficiently informed and educated. “Against democracy”, as Brennan’s book is titled, is a pretty radical text. He assumes that there are three types of people: “hooligans” (an angry partisan mob), “hobbits” (just interested in their own private lives), and “Vulcans” (rationalists modelled after the “Star Trek” character Spock, able and willing to engage in the cumbersome process of deliberation). Only the latter were suited for democracy, while “hobbits” would abstain from voting anyway. But Brennan refrains from concerning himself with manifest questions: how do people actually gain knowledge and information, or build an opinion? And what’s the role of the media? Journalism has clearly lost its gate keeping abilities to the vast internet platform companies. Public attention is now managed by algorithms programmed to maximize user engagement, which works best when emotions are being stoked. Anger, envy, and greed are powerful drivers of user attention and are exploited accordingly (Williams, 2018). Many media have followed along. But serious journalism is clearly in the business of reason. Can it actually stay in that spot without being marginalized? How should journalism define its job going forward? This chapter deals with the changing role of journalism in modern-day media spheres. The next one draws some conclusions regarding practical aspects such as choosing topics and researching them.

8.1   Uncharted Landscapes: Media and Politics After the Digital Revolution Traditional democratic public spheres were structured hierarchically. At the top, there was an elite of politicians, technocrats, lobbyists, and scientists, at the bottom there was the general audience—mass media were located in between (Jarren & Donges, 2011, pp.  104–105; Pfetsch & Esser, 2012). In mediatized democracies, politics was largely negotiated in

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this published sphere. The task of journalism was to ensure the exchange of information between the top and the bottom of the media sphere, and vice versa. It was in the media where the political agenda of the elite collided with the everyday reality of the citizenry—to the effect that those who governed would get to know what the governed thought. The theoretical ideal supposed that there was a never-ending collective search for the best path forward. The media themselves were hierarchically structured, too. People with a high level of education and social status read elite newspapers. On the lower rungs of the social ladder, simpler media were consumed, that in turn adopted the agenda and the framing of elite media (Perloff, 2018, Chap. 1). Ideally, discourses would unfold in this setting, based on a commonly accepted factual foundation, mediated by responsible media, with journalism itself holding an enormous position of power because access to the public was only granted to those who were featured in the mass media. Both politics and the media were characterized by oligopolistic structures. High barriers to entry prevented intense competition from newcomers. Establishing new political parties, for example, was quite rare. To maximize electoral success, parties positioned themselves close to the middle of the political spectrum (Downs, 1957). Oligopolistic structures also prevailed in the media, that were protected from competitors by the economies of scale associated with the production and distribution of news and the experience good characteristics of media brands, discussed in Chap. 2. All these factors hindered the emergence of new competitors. As a result, competition in traditional media markets was limited. Together, politics and the media formed a mutually stabilizing dual system, pervaded by power structures that were dominated by a limited number of established institutions and elite figures. The internet since the 1990s, and even more so the advent of social media in the 2010s, have fundamentally changed these structures. Markets have become contestable, both in politics and in the media. In principle, everyone can address a broader public. Issue-specific movements (such as the anti-TTIP activists in Germany or the “Leave” campaign in the UK) have the power to influence the public agenda. Political movements (like Donald Trump‘s Twitter-based election campaign in 2016, or Emmanuel Macron’s centrist “En Marche!” in France a year later) can quickly garner large followings via social media, thereby radically transforming established political parties, or marginalizing them altogether. Politicians and activists broadcast directly via YouTube, Twitter or Telegram without

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having to face unpleasant questions from journalists. Large commercial enterprises operate their own generously financed media. What was initially hailed as a welcome democratization of public spheres (e.g., Johnson & Kaye, 2003; Drew & Weaver, 2006), even supposed to transcend national borders and create a global civil society (Castells, 2008), has in many aspects been a sobering experience. Societies that were previously overarched by a common media sphere are showing signs of fragmentation. The common facts base, a fundamental prerequisite of enlightened discourse, is being eroded, rendering societies vulnerable to manipulation and deception. If journalism is just playing along, minding to keep its audience engaged, it risks aggravating the corrosive effects that have been plaguing western societies for years. Structural change in public spheres quite fundamentally calls into question whether journalism is needed at all, as many citizens can no longer distinguish between facts and fakes, between independent analysis and manipulation (e.g., Edelman, 2018). Journalism may not be marginalized quite yet, but parts of the public now think that they manage without it.

8.2  Is Journalism Dispensable? The Unique Role of Independent Reporting The environment in which journalists operate has changed profoundly, and so have working conditions (e.g., Nielsen & Selva, 2019; Newman et al., 2020). Digitalization, and the rise of social media in particular, have cracked open public spheres, even calling into question whether journalism is still needed at all. Other sources of information are available now at no or low cost; in the realm of politics, NGOs and movements, organized around the structures of social media, have become more plentiful and powerful. In the realm of the economy and business, current issues are covered by analysts who provide digestible information, while short-sellers rigorously scrutinize individual listed companies. A lot of material is available on the web, from a wide range of opinions to highly professional data-driven analyses. Competition for public attention is fierce. Since the gates to the public sphere are wide open, journalists do no longer perform their traditional role as gate keepers. Other authors have argued that journalism “must become more aware of its normative capacity” as an “independent social institution” (Esser & Neuberger, 2019). From this perspective, journalistic media’s job is the creation of “master forums

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within which many forms of civic monitoring take place” and pursuing this general monitoring exercise with a “moral and civic orientation” (Kreiss, 2016). Bruns (2003) has proposed that journalists should be “gate watchers”, helping citizen journalists to collaborate, a concept that has also been applied to journalists’ blogging activities in mainland China (Yu, 2011), a country that does not value free speech or independent media. But self-degradation will not pave the way to the future of journalism, but will render it superfluous. Instead, journalists should play a more active role: as scouts in diverse and often confusing media spheres (Müller, 2020). Journalism is indispensable as a system in its own right—as the corrective arm of the media sphere. Without critical self-observation, societies lose their collective anchoring in reality and the integrity of their institutions. It’s true that self-observation also happens through statistics and science as well as through political actors (politicians, political parties, NGOs, think tanks etc.), albeit sometimes with a considerable time lag and guided by specific self-interest. Independent quality journalism’s job is to reflect what’s going on in society and business on a reliable factual basis in real time. Its characteristics may be changing a bit, but its central tasks remain unaffected. Despite radically altered media publics, there is a need for specialists who select what is important for society at present, who uncover what went wrong in the past, and who raise early warning flags in order to prevent undesirable developments for the future. A key distinction between journalists and other actors in the public sphere is the aspiration for neutrality and independence, discussed in Chap. 3, with welfare-enhancement serving as an underlying point of reference for economic journalism. From this referee-like perspective, they point to what is important at present, uncover what went wrong in the past, and analyse what’s bound to go wrong in the future. This way journalists fulfil an important task: they contribute to a socially shared base of facts and knowledge as well as the formulation of the public agenda—a common ground that is essential for society to come together and act collectively. In this way, journalism is systemically relevant for democracy to function insofar as a “popular will” can hardly develop in societies with deeply fragmented world perceptions.

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8.3  Attention Deficits: Altered Working Conditions The break-down of oligopolistic structures as a result of the digitalization of media markets has had immediate consequences for private-sector business models. Where previously stable returns were generated, margins have fallen. Many traditional newspapers have been discontinued or merged. The pressure to save costs remains virulent. As a result, media staffs have been thinned, while the number of distribution channels continues to increase. Working intensity and time pressure have increased. The ways in which journalistic competition is being played out has changed as well. In the old media economy, credibility was key for establishing and holding on to oligopolistic market positions, associated with juicy profit margins (Chap. 2). To keep competitors at bay, leading media companies used to invest in large editorial budgets and extensive research projects. Parts of this old world still exist, but it is endangered. Media competition now revolves around the attention of the audience: as the supply of media content (most of it non-journalistic) increases evermore, competition for users’ limited time budgets is stiff. Attracting attention thus becomes imperative. In this environment, the outrageous, the disgusting, the scandalous, the frivolous have a competitive edge over the profound and the serious. One may be tempted to dismiss this kind of trivia as harmless. It’s not. In a media sphere that constantly appeals to emotions, individuals and society as a whole risk being conditioned in ways that are detrimental to rational debate, turning ordinary people into Jason Brennan’s “hooligans”. Affect-centred journalism produces a rapid succession of waves of public arousal. Such cycles have existed in the past. But more recently they have become fiercer and shorter. Media that jump on an emotionally charged issue, whose news cycle is just on the upswing, can count on associated advertising revenues. At the same time, production costs are low: stories about a currently trending issue can be adopted from news agencies or competitors, repackaged, and replenished with some hastily copy-and-­ pasted social media snippets. This type of news recycling is of little use to deliberative discourse. But gauged by a short-term calculus it’s advantageous, because it’s cheap and predictable. In contrast, to dig up a new story and investigate it thoroughly is expensive, while it is ex ante uncertain whether it will reach a sizable audience. Established quality media brands invest in this kind of journalism nonetheless, to enhance their

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credibility and to signal their independent intrepidness. But where herd instincts reign, as characterized by Waisbord and Russell’s (2020) news flashpoints (Chap. 3), a remarkable uniformity of reporting is on display. Media staffs use topics and frames from Twitter or Facebook as a starting point for their own articles (von Nordheim, 2019). However, journalism, thus conducted, is little more than an amplifier, screaming out messages at full blast that have been pre-fabricated on social media. Donald Trump made the constant stimulation of excitement his communication style, and it is still working at the time of writing. Technical working conditions have changed profoundly, too. The single-­ channel media company is no longer a viable business model. In order to survive in the attention economy, the providers of journalistic content cannot help but use as many channels as possible. Print, online, digital for a wide array of devices, Facebook, Twitter, WhatsApp, digital radio, Instagram, Snapchat, podcasts, clips, classic television, virtual reality—in a technical environment that is growing rapidly and subject to short-lived fads, journalists need to be able to work in various digital formats. Reporters and editors need to master the technical possibilities and be able to develop content formats that correspond with user habits on the respective channel. What’s more, advances in Artificial Intelligence (AI) enable technology to produce content autonomously. AI-powered applications like ChatGPT challenge the very way journalists gather information and make sense of it. At the same time, they are powerful tools to execute routine tasks, potentially supercharging journalists’ productivity. New ways of man-machine collaboration need to be worked out and established. With regard to content, the topics journalism deals with have become more and more intricate. Finance, education, migration, climate change, the distribution of income and wealth, gender or sexual orientation— many issues now have international perspectives, or European ones, that need to be taken into account (Chaps. 6 and 7). Nations compare themselves with their peers. Geopolitical tensions have given rise to security concerns that need to be addressed. International interdependencies have greatly increased; the perception of major issues such as migration, climate policy or financial market developments has been internationalized in terms of causes, consequences and possible solutions to an extent that was hardly imaginable three decades ago. Societies themselves have also become more complex. Large social groupings such as “the working class”, “the farmers”, “the pensioners” or “the Catholics”—groups each equipped with relatively homogeneous sets of material living conditions, values and

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interests—have split-up into small-scale milieus. What drives the nation as a whole, is no longer easily recognizable. The consequences can hardly be overestimated, as journalism needs to maintain a delicate balance: on the one hand, it needs to be successful in the attention game, on the other hand, it needs to be trustworthy, working in the public interest. Hence, journalists should be able to: • understand the complexity of the respective issue in depth, while reducing complexity to an extent that a story becomes consumable; • reflect on their own work and their role in day-to-day business in a way that prevents them from getting carried away themselves by affect-centred debates; • use the issues that currently arouse the audience in a calculated way and broaden the scope of the debate by contributing angles and frames that are enigmatic, surprising and counter-intuitive; • craft their own exclusive stories, by finding new topics, or new aspects of established ones, and by engaging in original investigation and analysis.

8.4  Credibility on the Line: Journalism as a Profession The previous discussion has shown that the demands journalism and journalists are confronted with have increased enormously. The complexity of issues, the impact of digital technologies, the intensity of competition combined with time pressure make for a challenging environment, that requires high degrees of professionalization. At the same time, however, repeated rounds of cost-cutting at media companies have led to a deterioration in employment conditions. This affects both pay and job security. While other sectors are complaining about a lack of skilled workers who are wooed by high salaries and attractive career paths, motivating capable young people to become journalists is likely to become more difficult. Journalism needs to offer economically viable job prospects. In the past, only a few journalists got rich, but the earning potential was about equal to jobs in other fields that demanded comparable levels of education. If this were no longer guaranteed, the best minds could be expected to migrate to other professions. Credibility and independence require sufficiently satisfying conditions of income. Journalists who have to

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supplement their livelihoods in PR or advertising can hardly be independent inquirers. The situation in economic journalism is particularly challenging, as people with an education in economics and business administration are offered plenty of promising alternative positions. However, journalism as a profession encompasses more than the prospect of a decent standard of living through full-time work. “Journalists share a sense of common professional identity, they share common professional values, and there is consensus about the definition of professional roles (…). In professional working environments, a common language is spoken that is only partially accessible to laypeople, the professional group controls the professional activity of its members, it is clearly separated from its social environment and it controls the selection and professional socialization of the job candidates” (Kepplinger, 2011, p. 231, translation my own). Put differently, if journalists were laypeople who simply liked to write or publish a few clips on the internet, the standards formulated above could not be met. Journalism requires being able the capability to capture and reduce complexity, maintain neutrality and constantly reflect on one’s own actions and prejudices. An individual journalist can hardly achieve this. Feedback from colleagues and superiors is needed. Violations of professional standards must be sanctioned. Since the press is to be free and independent, effective self-regulation is required. It begins with training and continues in everyday work within newsrooms and outside through professional institutions such as press councils.

8.5  Knowhow vs. Knowledge: Some Thoughts on Journalism Education Journalists need three core-competences: research, analysis, and marketing—gather and hunt for information from all conceivable sources, also from ones that are not publicly accessible; confront the information with established knowledge and interpret it, find the connecting points; assemble it in a sensible and sense-making way, and tell stories in ways that actually reach sizeable audiences. As generating attention on different media channels is essential in modern media spheres, journalists need to be able to market content in a variety of formats, from social media posts to live events. The more demanding journalism as a profession becomes, the better journalists need to be prepared, and trained, for the job.

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If they are to act as scouts, guiding their audiences through the cliffy terrain of public spheres, economic journalists need to understand the landscape they are operating in. And they need to command the tools at their disposal. To stick to the metaphor, scouts must be able to react quickly and confidently to unexpected events; and they must not lose sight of their objectives. That is, they need knowledge and knowhow. The intensity of the working environment and relentless time pressure require journalists to be savvy craftspeople. It goes without saying that this includes basic skills such as being able to write readable, well-organized texts. In contrast to earlier generations of journalists, the use of technology is no longer an annoying side issue, but it requires a mastery that often decides on professional success or failure at the outset of a career. For many young journalists, technological knowhow is a decisive competitive advantage over older colleagues. Innovations and fads change in quick succession. There are always new platforms, programs, devices, formats, that have to be played. In 2014, Periscope, a live streaming service, was in vogue, but it’s now a thing of the past again. Some publications rely on marketing their content via Whatsapp, others via Snapchat. Twitter and Facebook are part of the standard repertoire. The authentic-looking live report via iPhone, even with a shaky picture, is welcomed by many editors, even at classic TV stations. However, technical knowhow is only a means, not an end in itself. Technologies change rapidly. Accordingly, the half-life of this type of knowledge knowhow is limited. What’s more, the ability to collaborate in teams is essential. The singular journalist who investigates and writes a story all by herself is no longer the rule, if it ever was. Teams work together in the process of researching and investigating, producing and distributing a story. Teamwork requires traits such as openness, reliability, and punctuality. Given the enormous increase in thematic complexity, journalists need a broad general education. Anyone who sits at a news desk should be familiar with the basic framework of European immigration policy, the character of the “Electoral College” in the US, the importance of the People’s Congress in China, the existence of the Higgs boson, the problem of loan securitizations, the effects and causes of climate change, or current labour market conditions. Events from every direction can occur and make headlines. They need to be assessed quickly in terms of relevance, broken down into essential questions and contextualized for users. Being aware of one’s knowledge gaps and being able to close them quickly and in a targeted manner is a prerequisite for avoiding mistakes.

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In order to be able to do justice to the complexity of publicised reality, specialization has become more important, particularly in economic and business journalism. A bachelor degree in economics or a related discipline is now considered a minimum requirement at many news outlets. Reporters who cover corporations need some accounting expertise. Those who write about business cycle developments need to know the relevant theories and have some grasp of the history of the most important time series. It helps, if central bank watchers have taken some classes in monetary theory and policy in college. After all, intellectual independence as a precondition for journalistic quality (Chap. 3) requires profound knowledge of the respective field. If journalists are to act as scouts, they need a deeper understanding of the workings of the public sphere as well. Communication science should therefore be an essential part of journalism education. Why do some issues make it to the top of the agenda while others don’t? Who has an interest in spinning an issue this way or another? Which economic and legal restrictions govern the work of publishers and other content providers? How do citizens absorb information and knowledge? What is the division of labour between different media genres? How and why do different actors publicly position themselves in a certain way? What are the ethic boundaries that journalists must not cross? Media economics and law, theories of media systems and political communication, media ethics—all of these fields should feature in a journalism curriculum so that journalists can perform their tasks in an effective and considerate manner.

8.6  Conclusion Journalists used to have a pivotal position in public spheres. This has changed profoundly. In this chapter the question is discussed, whether there still is a role for journalism in an age when public discourse spheres are largely governed by algorithms. As the gates to public spheres are wide open, gate keeping is no longer feasible. However, resorting to passivity with journalists becoming mere “gate watchers”, or providers of arenas for discourse, as some communication scientists have suggested, doesn’t provide a satisfying answer. Modern societies risk to go astray in confused debates. They need scouts to warn of risks and guide them so safe paths. Hence, the job is becoming a lot more complex and demanding, with far-­ reaching implications for journalism education.

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References Brennan, J. (2017). Against democracy. Princeton University Press. Bruns, A. (2003). Gatewatching, not gatekeeping: Collaborative online news. Media International Australia Incorporating Culture and Policy, 107, 109–122. Castells, M. (2008). The new public sphere: Global civil society, communication networks, and global governance. The Annals of the American Academy of Political and Social Science, 616(1), 78–93. Downs, A. (1957). An economic theory of political action in a democracy. Journal of Political Economy, 65(2), 135–150. Drew, D., & Weaver, D. (2006). Voter learning in the 2004 presidential election: Did the media matter? Journalism and Mass Communication Quarterly, 83, 25–42. Edelman. (2018). Edelman Trust Barometer 2018: Global Report (https://cms. edelman.com/sites/default/files/2018–01/2018%20Edelman%20Trust% 20Barometer%20Global%20Report.pdf). Esser, F., & Neuberger, C. (2019). Realizing the democratic functions of journalism in the digital age: New alliances and a return to old values. Journalism, 20(1), 194–197. https://doi.org/10.1177/1464884918807067 Jarren, O., & Donges, P. (2011). Politische Kommunikation in der Mediengesellschaft. VS Verlag für Sozialwissenschaften. https://doi.org/10.1007/978-­3-­ 531-­93446-­4 Johnson, T. J., & Kaye, B. K. (2003). A boost or bust for democracy? How the web influenced political attitudes and behaviors in the 1996 and 2000 presidential elections. Harvard International Journal of Press/Politics, 8, 9–34. Kepplinger, H. M. (2011). Journalismus als Beruf. VS Verlag. Kreiss, D. (2016). Beyond administrative journalism: Civic skepticism and the crisis in journalism. In J. C. Alexander, E. B. Breese, & M. Luengo (Eds.), The crisis of journalism reconsidered (pp. 59–76). Cambridge University Press. Müller, H. (2020). Journalisten als Scouts in unübersichtlichen öffentlichen Räumen. Ein Zwischenruf zur journalistischen Bildung. In A.  Blome, T.  Eberwein, & S.  Averbeck-Lietz (Eds.), Medienvertrauen. Historische und aktuelle Perspektiven (pp. 179–199). de Gruyter. Newman, N., Fletcher, R., Schulz, A., Andi, S., & Kleis Nielsen, R. (2020). Reuters Institute Digital News Report 2020. Reuters Institute for the Study of Journalism. Nielsen, R.  K. & Selva, M. (2019). More important but less robust? Five things everybody needs to know about the future of journalism. Reuters News Report 2019. https://reutersinstitute.politics.ox.ac.uk/sites/default/files/2019-­01/ Nielsen_and_Selva_FINAL_0.pdf Perloff, R. M. (2018). The dynamics of political communication: Media and politics in a digital age. Routledge.

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Pfetsch, B., & Esser, F. (2012). Comparing political communication. In F. Esser & T.  Hanitzsch (Eds.), Handbook of comparative communication research (pp. 25–47). Routledge. von Nordheim, G. (2019). Journalism in the Age of Singularization. Inter-media Perspectives through Computational Methods. (Diss.) Department of Cultural Studies, TU Dortmund University. https://katalog.ub.tu-dortmund.de/id/ ir01388a:ubd.lobid:990229304990206441 Waisbord, S., & Russell, A. (2020). News flashpoints: Networked journalism and waves of coverage of social problems. Journalism and Mass Communication Quarterly, 97(2), 376–392. https://doi.org/10.1177/1077699020917116 Williams, J. (2018). Stand out of our Light. Freedom and resistance in the attention economy. Cambridge University Press. https://www.cambridge.org/core/ books/stand-­out-­of-­our-­light/3F8D7BA2C0FE3A7126A4D9B73A89415D Yu, H. (2011). Beyond gatekeeping: J-blogging in China. Journalism, 12(4), 379–393. https://doi.org/10.1177/1464884910388229

CHAPTER 9

What to Cover: Topic Selection and Research

“Help! My job is killing me”, read the tabloid headline, that my boss was laying on my desk. It was a sloppily torn-out article, and I must have assumed that it was a joke, for I hardly managed to suppress a giggle. He wasn’t joking, though. “Write something of that kind”, he assigned me, straight-faced. Among my colleagues he was known as “the oyster”— quiet, low-profile on the outside, but hard and tough as well; it was good advice not to argue with him needlessly. It was the autumn of 1999, the “new economy” was in full swing. At the time, there was plenty of optimism, but also anxiety. The tabloid story catered to the latter theme. And me, a freshly minted doctor of economics, had just been hired by stern magazine, at the time one of the biggest and most influential weeklies in the German-speaking countries. My beat as a business reporter was supposed to be the car industry and the internet economy—serious issues, not the stuff for over-the-top drama. And now the business editor of stern, aka “the oyster”, was telling me to do a re-make of a rather lousy tabloid piece? An article that was complaining about new technologies, such as email, and the allegedly ever-increasing speed of work life and how some folks had trouble keeping up? Seriously? Seriously! Being the new kid on the team, I was in no position to decline. “The oyster” had spoken. It was my job to mould his crude idea into a compelling story, that was both true and new.

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Topic selection is a crucial part of journalism. It entails what’s covered, but also, just as important, what’s neglected. Alas, it is too often inspired by what other media have been covering. Consonance, the news value capturing the ease with which stories that contain predefined frames are perceived (discussed in Chap. 3), as opposed to entirely new themes, also applies to the editorial process. If the people in the upper echelons of the hierarchy are not leaving their offices anymore to do research of their own and experience reality first hand, they inevitably turn to what other outlets are reporting. This is problematic, as the media run the risk of becoming a self-serving system, not just a “self-referential” one (Luhmann, 2017, pp.  19–24). Taking for granted what other media have been reporting may have little correspondence with reality. In effect, the media as a “system” may unduly stress certain aspects collectively, but neglect others. Thereby, they run the risk of constructing a mediated reality that is somewhat detached from the real thing. This is particularly true for economic journalism that tends to deal with abstract and hard-to-observe societal phenomena that are not lending themselves to sensual experience. The media may be reporting that people cannot cope with working conditions anymore, while in truth they may be more satisfied than ever before, as computers and robots contribute to a cleaner and less exhausting environment at the workplace. Plus, editors may just be inclined to demand a story that generalizes their own prejudices, preferences, or personal problems; maybe “the oyster” himself, being in his fifties at the time, felt overwhelmed by the increasing speed of the digitized newsroom, which is why the tabloid story resonated with him (as I suspected, but didn’t dare to ask). Furthermore, there are certainly some workers who are dissatisfied, maybe even sick from stress. So, it’s not that hard to find five persons or so who support the hypothesis that working conditions are getting worse and worse. As a reporter you could just listen to them and then blend it all together in a heart-wrenching story about the travails of ordinary laborers. Actually, you could fabricate such a story anytime. It’s important to keep in mind, though, that it would leave readers with the impression that there is some greater truth about the state of society behind the pars pro toto cases presented. After all, economic and business journalism, more than other types of media content, need to be intersubjectively verifiable to be a reliable source of information. Are there problematic general trends behind the personal experiences of the story’s protagonists? Are there new facts, new angles, new analyses supporting the

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hypothesis? At the outset, a reporter usually doesn’t know exactly. So, she needs to find out, thoroughly and open-mindedly. That’s what this chapter is about: selecting topics and researching stories. It strives to break down the theoretical considerations of earlier chapters to the more practical aspects of journalism. It proposes a standard procedure for research. It also suggests some long-term trends to watch that may serve as inspirations for specific stories.

9.1   Pressing Questions: Editorial Routines and Information Seeking Every story starts with an idea. But let’s leave aside where ideas actually come from for now and treat them as exogenous. Once the general topic has been selected, the question arises what the concrete article could look like. This is part of an editorial routine that reporters go through on an daily basis. Routines: From the Idea to the Printing Press Attfield and Dowell (2003) interviewed journalists at The Times, the London-based broadsheet, to get a glimpse of the step-by-step nature of information seeking behaviour of newspaper journalists. A reporter’s assignment starts with establishing an angle. In contrast to the concepts of the media frame and the narrative (Chap. 4), where the emphasis is on attaching meaning to facts, the term angle captures the perspective through which the reporter looks at an issue. In the my-job-is-killing-me example cited above, the angle is clear-cut: the fate of the individual worker. It’s her or his perspective that governs the story. There could be plenty of alternative angles: the employers’ perspective (stressing competitiveness), the economists’ perspective (stressing productivity), the policy makers’ perspective (stressing regulatory reforms), the health insurances’ perspective (stressing medical costs arising from an overworked workforce), the doctors’ perspective (focusing on physical and mental health disorders), to mention just a few. They all circle around the same narrative, namely that digitalization creates a stressful working environment that’s detrimental to workers’ well-being. The specific angle is tailored to a news outlet’s audience and its own publication history; the on-going coverage of a topic typically involves a sequence of stories, each of which looks at it

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from a different angle. Angles are typically assigned by senior editorial staff to less experienced reporters, as in my exchange with the “oyster”. More seasoned professionals are expected to come up with ideas of their own. Being creative and imaginative is certainly expected from junior staff as well, even though they do not necessarily get to realize each and every idea they put forward. It needs to be stressed that the professional collective matters: it’s a media outlet’s team that makes the difference, not just its individual members. By bringing together different views, backgrounds, experiences and fields of expertise multi-perspectivity can be advanced, and story ideas can be torn, twisted and reassembled. For the team to go beyond individual cognitive limits, a certain professional demeanour is required: open-mindedness, tolerance, clarity, plus, not feeling offended easily while not being unduly offensive oneself. Collective creativity should be regarded as a fun part of the job, not as a dreadful toil. The angle establishes the general thread of the envisioned story and governs the search for information. In subsequent steps, reporters check for several constrains. Attfield and Dowell (2003, p. 192–198) name the following: The “originality constraint”—is the planned story new, or has it been covered in a similar way by other media recently? Hence, the first step is a quick search in a database or an electronic news cuttings service. If it’s already been reported, could the angle be altered to contribute something original? The “truth constraint”—is the hypothesized angle correct in the way that it can be proven with intersubjectively reproduceable facts? The “newsworthiness constraint”—is the angle deemed to engage the publication’s readership? If not, how could it be altered to do so?

In further steps, the reporters interviewed by Attfield and Dowell (2003) said that they strove to gain personal understanding of the issues concerned and gather potential content for an article. They also emphasized the uncertainty involved in the process, which is not only due to reality proving to be somewhat different from what the reporter thought it was initially. Uncertainty also stems from volatility in the editorial process: editors may change their minds regarding the angle best suitable for the audience mid-way through the process of information gathering. Also, the importance they’d like to attribute to a story may change. Hence, in practice, angles are altered; the length of an article may be changed, as current events unfold and other stories come in that are deemed more or

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less important. Researching and writing a news story or a feature is a reiterative undertaking. It seldomly follows a straight line from idea to publication, but involves several loops and recalibrations, and occasionally failures. In recent years, journalism has been modified quite a bit by the advent of online and social media, as stressed in Chap. 8. This has added to the speed of the process: time constraints have changed in nature. In the old print world, assignments at daily newspapers were typically given in the morning conference of the editorial staff. Stories had to be turned in by afternoon for editing, fact checking and fitting them on the pages. The start of the printing press was a natural end point. Magazines, like the ones I used to work for, functioned somewhat differently: the calibration of story ideas and angles was given more consideration; planning cycles were substantially longer, as was the actual time-span reporters were given to work on a story. With digitalization media brands have become multi-­ channel outlets, putting out websites, print versions and their digital derivatives, podcasts, video, live formats, books, and a lot more. News production has become more of a continuous process, not necessarily governed by the printing press, or the programmed start of a TV show, anymore. News outlets now strive to present a refreshed page several times a day, ideally during usage peaks in the morning, around noon, and late-­ afternoon rush hours, and plan their original content accordingly. Traditional newspaper brands have shifted their focus to deep background stories to differentiate themselves from the quick-and-dirty content of free-for-all media outlets. In doing so, newspapers now compete with what remains of magazine brands, that, in turn, have also established current news websites, thereby competing with newspaper brands. Space constrains have become more relaxed, since in digital publishing there is not necessarily a distinct limit of words or characters anymore. As a consequence, content production needs to be more efficient than in the old days. And that requires expertise and specialization. Today, high quality news outlets typically employ reporters who specialize in workplace relations, labour markets and career issues, for example, who would have been able to dive straight into the my-job-is-killing-me venture, well-­ prepared and knowledgeable—unlike myself. Back then, it took me several days to research the background: talk to psychotherapists and Human Resources executives, consultants, officials from unions and employer associations, health insurance executives, read studies and statistics. And I needed several weeks to get to a printable version, as most of the people I

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interviewed as case studies declined to appear in the story with their real names and their photographs—ultimately, I was stressed by the story myself. It felt like a never-ending task. (By coincidence, it was printed not until I had left stern magazine for another job.) Finishing the story took me so long, because I was working outside of my beat. I was a macroeconomics guy, who had been hired as a car industry and internet economy reporter. I didn’t have much of a chance to focus on this beat, but worked on all kinds of topics, from the my-job-is-killing-me report to CEO profiles to corporate take-over stories to consumer-focused pieces on how to reduce your electricity bill and much more. I didn’t mind it. It was interesting and a great experience, but it was hardly efficient. I couldn’t really build a personal network of sources. Verifying whether a story idea was true, let alone pursuing deep-digging research, took me quite a while and, in some cases, ended in failure, in the sense that eventually my editors would pull me away from a story and give me another assignment. Research as a Precondition for Journalistic Independence Economic and business journalism, like the entities it covers, is fundamentally driven by numbers. Other types of journalism may get away with opinionated semi-truths and still muster sizable audiences. Business and financial media need to be reliable. If not, they cease to be viable products. Doing a CEO profile for a business publication, for example, requires an in-depth look at the company accounts first. Is the firm making money in its core business operations? Are sales growing or shrinking? What exactly is its business model? Is it investing at sustainable levels? Do aging products, strong competitors, or high debt levels render the company vulnerable to shocks? Can it attract the employees it needs, or are there vacancies in crucial areas? Are there legal, political or reputational risks in sight? And so forth. Before concerning oneself with the CEO, the person that the actual story is supposed to be about, the hard and dry facts need to be pondered. A people magazine may make do with a home story, composed of glossy pictures and gossipy snippets about private life. Informed readers of business publications want to know how the CEO is performing on her or his job. Is he up to the task—or bound to fail? However, going through the numbers rarely informs a reporter what the story might be, but it straightens out what’s not the story; portraying the CEO of a struggling company as some super hero executive would be ridiculous.

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To mention another example, covering UN climate talks requires a solid grasp of the figures and the relevant scientific studies. How have greenhouse gas emissions developed over time? Is there a decoupling of emissions from economic activity in different countries? What are the likely consequences of the realization of different emission scenarios? Which countries are needed to achieve a meaningful compromise that leads to a sizable reduction of emissions? Which policy instruments can be expected to be effective in lowering emissions, at minimal cost, based on burden sharing among countries and societal groups (the ESSF formula once again)? Reporters who have not done their homework risk falling for the framing of politicians, activists, or lobbyists eager to further their respective interests. As a consequence, journalists may be overwhelmed by the contradictory framings they are confronted with, unable to evaluate what different positions and outcomes of climate negotiations actually imply, or whether a certain position is reasonable at all, that is, based on verifiable facts, as discussed in Chap. 3. Without sufficient knowledge, a reporter has three options: lean towards one side or another, either unduly dramatizing or playing down the risks of global warming; or resort to the kind of he-said-she-said journalism that we are confronted with too often. Simply replicating different positions in a debate is not enough, as it inevitably leads to false balance, where reasonable and untenable position are presented side by side leaving readers confused at best. This is a hugely important point: To get to an independent perspective, journalists need in-depth knowledge of the issues at stake. This is vital for the notion of intellectual independence stressed in Chap. 3. Otherwise, they risk being exploited by whoever gets the upper hand in public discourse. The quality requirement of journalistic neutrality does by no means call for ignorance, quite the contrary. Following the framing of authorities, lobbyists, activists, or experts blindly is bound to produce an image of reality distorted by external—or “extramedia”, in Shoemaker and Reese’s (2014) terminology—influences. To counter these forces, systematic research is of critical importance. Seven Stages of Research Having taught basic journalistic research classes to freshman students for years, I have come across four fallacies newcomers to the profession typically fall for:

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Refining the hypothesis

1.

2.

3.

4.

5.

6.

7.

Consulting the Archives

Screening the Data

Deducing Interrelations

Hypothesizing the story

Interviewing Experts

Interviewing Victims

Interviewing Agents

Checking evidence and claims

Fig. 9.1  Seven stages of research. Source: the author

First, they tend to confront potential actors (“agents” in Fig. 9.1) far too early. Instead of gathering evidence and talking to witnesses and “victims” (people who are affected by agents’ actions), they are inclined to ask the people who may be responsible for some undesirable situation right away. They have a hypothesis about what’s going on and the first thing they think of is: call the press secretary. Which will typically be the end of the story. Second, they tend to trust their sources to a degree that borders on naïveté. Which is to ignore that everybody pursues some personal interest when talking to a reporter. Third, they tend to view social media as a representation of social reality. Which is to overlook the mechanisms of conversations on platforms and the discourse-deforming propensities of the algorithms that boost some content and rank down other voices. Fourth, those students who acknowledge that they need to build a deeper understanding of the issues involved, sometimes assume that they must do basic research themselves, for instance, surveying large numbers of people. Which is not only costly, but also time-consuming and thus uneconomic.

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To counter these tendencies, I propose a seven-step routine. Following Haller’s (2016) notion that reporters should systematically circle in on a research object, it is meant to guide journalists to a gradual approximation to the underlying reality they try to illuminate (Fig. 9.1). 1. It all starts with consulting the archives. Press databases, search engines, and the library need to be browsed to find out whether the envisioned story is original. Central question: What’s new? 2. Step two focuses on hard facts: official data, company and national accounts, surveys, scientific studies, analysts’ reports, but also possibly confidential documents or exclusively scraped data from the internet inform the reporter regarding the second central question: What’s true? 3. Trying to deduce interrelations between different facts and data helps to illuminate what is behind the data. The reporter employs her knowledge and experience to get to a preliminary understanding of potential causes-consequences nexuses and responsibilities of persons or institutions, all of which are features of a narrative (Chap. 4) and thus of a comprehensive news story. Central question: What’s going on? 4. Hypothesizing the story means imagining how the article may eventually play out. Protagonists are contemplated, experts are identified, angles and frames are played with, judgements are considered. Central question: What can I contribute? 5. The following steps are meant to get closer to the research target, to verify or falsify the hypotheses formulated earlier. Interviewing experts is a way of finding out whether a hypothesis is correct, or at least plausible. Citing eminent figures also adds credibility to a story. Central question: Am I on the right track? 6. Meeting and interviewing people who are affected by a particular situation (involuntarily), “victims” in the terminology of Fig. 9.1, is essential for being able to tell a relatable story. What’s more, these protagonists add a real-life perspective to the picture, that may differ from the one derived from the more abstract preceding steps. Central question: How does it feel on the ground? 7. At last, those who bear responsibility for the particular situation are approached and confronted. Interviewing agents is a matter of fairness (and also required by press laws). Central question: Who is responsible?

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The procedure sketched in Fig.  9.1 may appear highly stylized and rather rigid, which is certainly true. Many stories do not fit into this scheme exactly. Analytical news reports in business newspapers often stop at step four. For example, new figures are published—GDP growth, corporate earnings, inflation, stock market quotations, employment, consumer sentiment etc.—that are being deciphered with respect to what they mean going forward, with the help of experts. The story stays at the analytical level, without touching ground by giving voice to people who are actually affected by the developments or by questioning decision makers in business or politics (called “agents” in Fig. 9.1). That’s inevitable. Not every tiny piece of news calls for a big story. News outlets need to be able to distinguish between what’s neglectable and what is, or may become, important. The former should not be reported at all, the latter may make headlines. Different journalistic formats require deviations from the standard procedure. An investigative story may rely on confidential sources guiding reporters through the research process. A column, like the weekly one I write, may stop at step three, trying to make sense of the situation on the author’s own account. Op-eds are typically written by reporters who go through the entire routine frequently and feel that they should add some pointed remarks to the debate. The seven-steps procedure is meant to structure a reporter’s full-scale research plan. Before getting to the phone and actually talking to people, it clarifies the objectives of interviews and the envisioned contribution of each interviewee. Importantly, the step-by-step approach is not meant to be unidirectional. Rather, it’s reiterative. That’s what the arrows in Fig. 9.1 symbolize. At each point of the research process new information may come up that cast earlier findings in a different light. In this case, the reporter needs to go back, refine her hypothesis, check and double-check claims and evidence, before proceeding. As the number and length of the arrows indicate, research can be a tiresome process, that involves plenty of loops. The less specialized and experienced a reporter is, and the newer she is on her beat, the more backward loops tend to be necessary, when she realizes that she’s on the wrong track. Loops are inevitable. As a matter of fact, hardly any story is realized as originally thought up. Hypotheses are being refined, or even repented, angles refocused, responsibilities of protagonists reassigned. Getting to a clear and fair view of reality is a cumbersome undertaking. The aim, or research objective, needs to be clear. Reporters need to set themselves goals that provide them with a direction

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concerning what they want to achieve. Otherwise, they tend to get lost in the breadth of facts, voices and opinions they are confronted with. But research objectives also need to be altered, as the project proceeds and original goals turn out to be unachievable under given constrains (time, budget, manpower). Sources Doing journalistic research calls for a general attitude of scepticism. It helps to assume that nobody is telling the truth. That is not to say that everybody is lying. But perception and cognition are selective. Two people attending the same board meeting, say, will have slightly different recollections of who said what to whom, let alone the emotions involved. Therefore, relying on just one source is risky. Conformation from other persons is essential. What’s more, whoever talks to a reporter does so out of a certain interest. Sources may wish to be mentioned in the media, because they think it helps them professionally or the institution they represent, or simply for the sake of vanity; maybe they want to influence the framing of a news story, deflect blame from themselves, harm the reputation of rivals, or establish a friendly long-term relationship with a journalist, hoping it may help them in case they get caught up in some kind of scandalous controversy in the future. Doing research entails utilizing different motivations of sources and finding their weak spots. That may sound like deception, a behaviour reporters should certainly avoid. Journalists need to treat their sources fairly: protect anonymity if required, be clear about their own objectives, and stick to the deal they agreed to. Experts play an important part in the research process (Tiffen et  al., 2014; Dimitrova & Strömbäck, 2009), as they are vital for the framing of a story. Having stressed that journalistic independence requires the ability of journalists to assess the meaning of a story and the viability of an argument by themselves, they still need sparring partners. In a setting characterized by uncertainty, journalists depend on people they can discuss issues with. A reporter may have a general understanding of accounting rules, but necessarily lacks the expertise of a certified public accountant, or the profound understanding of business models and market structures that a specialized analyst is able to contribute. Who may serve as an expert in the context of a specific research project, and who shouldn’t, requires a measured assessment. An expert is a person with deeper scientific or professional understanding, but without direct personal interests concerning the

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issue at hand. A lot depends on the specific context. An economic forecaster at a public research institute, say, certainly qualifies as an independent expert as far as the business-cycle outlook is concerned, but he’s hardly without personal interests when his own institute is being scrutinized for its performance or financial conduct; in the latter case he may be an “agent” or a “victim”, depending of his rank and responsibilities. Sometimes lobbyists and activists are mistaken for being experts. Even though they typically have accumulated plenty of issue-specific knowledge, they are by no means neutral, but strive to further their respective organization’s interests, be it the Business Roundtable, the US-based circle of CEOs, Greenpeace, or Amnesty International. Like political parties, these organizations are political players and should be treated as such. What’s more, even respectable, independent experts harbour their own biases. Therefore, relying on a small group of experts that are contacted over and over again is problematic, as individual biases, even if not driven by some selfish motive, risk seeping into news coverage. To ensure journalistic independence and multi-perspectivity, a variety of experts should be consulted. Reality is bleaker, though. Often those experts are asked who are the easiest to deal with—who respond quickly and say what a reporter wishes to hear. Many journalists rely on a handful of contacts that make up their core network. Meanwhile, selling experts has turned into a business model for communication departments and PR agencies. In media markets characterized by high speed and slim margins they are pretty successful. In an international comparative study, Tiffen et al. (2014) show that news websites of the quick-and-dirty type are the ones most likely to publish stories based on just one expert. In fact, these news websites are the journalistic outlets that “display the greatest use of independent experts as sources”, a finding the authors attribute “to the attractiveness of using media releases and interviews with independent experts as an easy way of gathering material where there are small numbers of employed journalists”. More respectable media tend to use fewer experts (p. 385). But even in Süddeutsche Zeitung, Germany’s biggest broadsheet newspaper with a national circulation, frequently sources are falsely called “experts”, a study by Boczek (2019) finds. Her results show that so-called experts are often not scientists or independent professionals, but politicians or business lobbyists. They are often quoted opining on some issue rather than presenting plain facts or putting them into context. The

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business section is the one with the most mentions of experts by far, followed by politics and general news sections (p. 68). In a meta-study covering 90 studies on the information seeking behaviour of journalists, Hertzum (2022) found that the selection of sources runs somewhat counter to quality criteria. His verdict, that “the importance journalists assign to balance stands in contrast to the frequent finding of bias in their source selection”, is somewhat disturbing. Sources have a lot of overall influence on reporting, studies show, particularly by providing information in the context of on-going research projects and new ideas for future stories. Personal Networks To be able to cover their field effectively and efficiently, journalists need a personal network of contacts—an informal group of people with whom the reporter has established trustful relationships. Typically, these people don’t know about each other; journalists shouldn’t brag about their contacts and connections, after all. Trust is essential, but must not be mistaken for the variety that reigns in intimate relationships between close friends, spouses or relatives. Here, it is of the professional kind. From the experience of dealing with a person, a reporter may know that he is not lied to. But that doesn’t imply that a person tells the truth and nothing but the truth. Most of the time, a source will withhold much of what she knows and only acknowledges a piece of information when directly and concretely asked about it. That’s completely rational behaviour, as she can be sure that she is not the only one talking to the reporter—and can thus cover her tracks. At the same time, a source needs to be able to trust the reporter as well: sticking to the deal struck in the context of a research project, protecting anonymity, ensuring that she has something to gain from the transaction, too. Again, knowing, or sensing, individual interests of sources is key to a reporter’s success. Furthermore, what makes a reporter an inviting person to talk to is his knowledge and his centrality in the news flow. Thereby, the source gets a clue of issues that are being discussed in her line of business and may come up publicly before long, and of questions being raised by the public. The relationship between source and reporter should be one at eye level: both sides respect each other’s roles, interests and constrains. Concretely, they talk with each other from time to time, often without a specific research project at hand.

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A personal network serves four objectives: finding out about new developments early on from insiders; getting confidential information and hints to potential stories; testing hypotheses (steps 3 and 4 above); verifying initial information from other sources. Without trusted confidants the first two objectives are up to chance, while the latter two can be time-­consuming tasks. A workable network enhances effectiveness (getting to an exclusive story) and efficiency (doing so in a speedy and low-cost manner). Think of a reporter covering financial policy, a demanding beat that encompasses a wide range of issues: the national (and the EU) budget, the tax system and the national debt pile, the regulation of financial markets and banks, in the Euro area case the management of the common currency, international monetary policy, exchange rate and regulatory issues. Accordingly, a host of institutions and players needs to be watched and taken into account: the national ministry of finance and other ministries with competences in economic policy, potentially also at the regional level; the European Commission (particularly its fiscal policy arm, DG Ecfin) and governments from other EU countries; the (European) Central Bank and national central banks; the Eurogroup of finance ministers; the rapporteurs of the national and the EU parliament; the Euro rescue fund (ESM); the International Monetary Fund (IMF); the Bank for International Settlements (BIS); international rating agencies; business and financial industry associations; trade unions; large companies, financial institutions and accounting firms; research institutes at the national, European and international level; various advocacy groups and NGOs; academics, both national and international; economic advisors and research institutes; financial analysts, independent and from financial institutions; and so on. Usually, the point of entry into these institutions is the press officer. However, the media staff are not prepared to give away more than the current official position of their respective institution. To get closer to where the real action is going on, it’s worthwhile to get into an occasional exchange with people close to the level where actual decisions are taken, such as heads of departments and divisions, members of ministers’ cabinets, councillors—people with plenty of inside-information, but who themselves rarely feature in the news. They also have opinions of their own, that are not always 100 pe cent congruent with their bosses’ agenda, and hence have an intrinsic motivation to bring their pet issues to public attention. There are always and everywhere plenty of people in the hierarchy who are somewhat disappointed with the way how things are going in their institution. For them, letting off steam by talking to a reporter can

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serve as a valve. First encounters usually happen in the course of specific research projects. To establish a lasting relationship, reporters need to stay in touch with sources one way or another, often by creating reasons to talk, even when not working on a concrete research project at the time.

9.2  Shouting at the Wolves: Where Ideas Come From In this chapter thus far, we have treated the existence of story ideas as largely exogenously provided. Someone is struck by a flash of inspiration, which kicks off the research routine described above. It may be the reporter, an editor or a source who comes up with a topic, an angle, or a frame original enough to differentiate the respective news media from the rest. Seen this way, it is the combination of individual genius, knowledge, and professional craftsmanship that makes a story great. This section strives to deconstruct the genius-part of the equation. It suggests a range of directions where ideas for stories in economic and business journalism come from. News Values Revisited In Chaps. 3 and 6, it was argued that in the scientific literature as well as in journalism practice news values were treated as both a positive and a normative concept: news values describe what the media do cover—and they inform editors and reporters what they should cover. However, already the original formulation by Galtung and Ruge (1965) criticized news values as insufficient; the event-driven nature of news, focusing on attributes such as negativity, conflict, prominence and proximity was deemed hardly suitable for painting a true picture of reality as it unfolds. This is particularly the case for economic journalism, whose quality reveals itself in making the abstract graspable, the overlooked visible, and the future part of the present, as Chap. 3 argued. To perform its role as an independent watchdog, journalism must go beyond reporting events after they have happened and describe their fallout in a timely, correct and impartial manner. Additionally, economic journalism should point to untenable circumstances early on. Readers of quality media shouldn’t be surprised when a financial crisis, a severe business-cycle downturn or a major corporate bankruptcy occurs. That’s why Chap. 3 suggested the ESSF formula. It’s

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meant to be a multi-dimensional yardstick for what to cover and how to frame it: guided by the formula’s objectives, economic journalists should focus on what’s inefficient, unstable, unsustainable, and unfair, and report it in a forward-looking manner. For practical purposes, it’s important to acknowledge that journalism is not just about stressing the welfare-enhancing aspects, that the ESSF formula is built on, but it’s also about reaching an audience. Journalism needs to achieve the twin-goals of providing elucidation and raising attention. The former is worth little, if media fail on the latter—and vice versa. To create meaningful stories, journalists need to consider what’s important (the ESSF formula), but also what’s exciting (news values). Mathematically speaking, economic journalism’s objective function maximizes elucidation, subject to the need to arouse a healthy level of attention. News values should be interpreted as triggers that capture readers emotionally—they are means, not ends. Clearly, when it comes to composing a story, the ends should come first. Economic journalism should focus on the important, relevant stuff, not on some trivial side-show. But sometimes it’s the trivial side-show that gets the audience engaged. Therefore, journalists might as well make use of it—as a vehicle to transport a deeper ESSF message. Issue Attention Cycles Short-lived patterns of media attention are among the binding constraints that journalism faces these days. Public attention over time is distributed unevenly, following a distinct shape that is closely related to the epidemic models that Shiller (2017) proposes. An event triggers a surge in reporting, that focuses on what has immediately happened: the New York City twin-towers have been hit by passenger planes; EU leaders convene for a crisis meeting in Brussels; the US president and his Chinese counterpart meet at a time of high security alert; the European spot-market price for natural gas has just hit the mark of 200 Euros per MWh for the first time ever … In phase two of Downs’ taxonomy (Fig.  9.2) the media report the obvious: what has happened where, who is involved, and how it occurred. With attention for an issue rising quickly other news media jump on the bandwagon, reporting mostly similar aspects. In many cases this amounts to mindlessly parroting other media, the authorities, or social media content. Instead, economic journalists should use attention cycles to

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Intensity of Media Attention

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1

2

3

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Time

Fig. 9.2  The issue attention cycle and its phases. 1: Pre-problem stage, 2: alarmed discovery and euphoric enthusiasm, 3: Realizing the cost of significant progress, 4: Gradual decline of intense public interest, 5: Post-problem stage; Source: after Downs (1972, p. 39–41)

illuminate more fundamental issues behind current events. Why has it happened? What are the underlying problems that should have been addressed a long time ago, but weren’t because the public and politics were distracted, as they too often are? How could the situation be improved? What do possible remedies look like? Who is to blame for procrastinating solutions, or staging a political blockade? Here, the strategy is to bring aspects forward that are usually addressed during later phases of the news cycle, as the arrows in Fig. 9.2 indicate. Consider one of the many crisis meetings the EU held at the height of the sovereign debt crisis in 2011. Instead of confining itself to describing the positions of different governments concerning the handling of current ailments and lamenting the EU’s disunity, journalism should have highlighted how the institutional set-up of the currency area could have been fixed, as discussed in Chap. 7. Ideally, simmering problems should be addressed in phase 1 already before becoming acute, so that readers have

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a chance to prepare for problems, or to work on a solution to prevent them from happening in the first place. New Data and Their Interpretations In economic journalism numbers can trigger events, their release can even be the event. Every day, all kinds of figures are being published, from national accounts, corporate earnings, surveys, forecasts, sentiment and expectations, goods prices and stock market valuations, (un)employment and participation rates, wages, volatility indices and forward rates, opinion polls, demographic indicators, emissions, exchange rates, official reserves, temperatures and rainfalls, trade volumes and freight rates, crude oil production, and much more—all of which can be important at a certain point in time. Journalists need to keep up with the numbers relevant for their beat, but they also need to stay up-to-date regarding data covering the macro environment. If they don’t, they risk pursuing economic narratives that are based on outdated facts, a fallacy that Chap. 4 warned against. An economic journalist’s regular news diet should include forecasts and reports from national and international institutions such as the IMF, the BIS, major research institutes, leading analysts, releases of statistics offices and large corporations, to name just a selection. Some of these numbers may signal substantial changes in circumstances and should thus trigger a story. Again, the ESSF formula is a useful guide. Unusual movements in the data point to breaks in the trend. Hence, they may not just be short-term fluctuations, but long-term developments that are just taking off. Possibly, they may even trigger a sequence of events that lends itself to formulate an economic narrative. For example, a better-than-expected purchasing managers survey may signal faster improvements in the real economy than previously thought, which in turn could prompt the central bank to raise rates more forcefully, with potential consequences for capacity utilization (efficiency), inflation and financial health (stability). Or: rapidly rising yields of government bonds indicate that markets are calling the solvency of a country into question, particularly if a jump in yields coincides with a depreciating currency—a situation that clearly violates the stability objective. Or: the coexistence of rising unemployment and high vacancy rates suggests that the labour market is plagued by inefficiencies. Or: severely high temperatures in major cities point to the unsustainability of both the path of global warming and the adaption to rising temperatures. Or:

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stubbornly high poverty rates at a time of buoyant economic growth could be a sign of skewed labour market institutions, violating the fairness objective and potentially triggering future political backlashes. Or: real estate valuations far above their long-term averages point to a bubble that, once it bursts, may cause severe stress in the financial system, indicating both efficiency and stability concerns. In all these cases, the potential implications make up the core of a story and inform the journalistic framing. They add meaning to raw figures, making sense of the present and gauging the immediate future. What’s the problem? Where does it lead us? What are we to expect to happen next? Who is at fault? And what could be done about it? In search of ideas for my columns, I occasionally browse current data somewhat aimlessly, hoping that it triggers some idea. In December 2020, while flicking through the OECD Economic Outlook that had just been published, in tables covering developments in individual member countries I noticed that savings rates had shot up dramatically. During the Corona pandemic, people had started to put aside a much larger share of their income. In the US and in the Euro area savings rates had doubled, in the UK they had tripled, in Canada they had risen by a factor of five. This was exceptional. There had not been a comparable jump in the time series before. Even more surprisingly, the OECD didn’t address the issue at all in its lengthy report. From my point of view, it was ideal material for a column: pieces of data that clearly indicated severe and unexpected, but plausible, implications for aggregate demand, capital markets, inflation, retail sectors, employment. What would happen to all those access savings once the lockdowns were relaxed? Would those piles of money be spent on whatever extravaganza came to consumers’ minds? Would savings rates return to pre-pandemic levels eventually, and if so, how quickly? Or would an entire generation be tainted with the experience of catastrophic uncertainty and hence spend the rest of their days saving more than before? At the time, we didn’t know. So, it was a brilliant opportunity to pursue the journalistic strategy of informed speculation. Even better, it was an issue readers could relate to personally. Didn’t many people at the time try to gauge how bad things might get and how big a pile of precautionary savings was necessary? It was data that could be expected to strike a nerve. Luckily, I quickly found a couple of scientific studies that dealt with long-­ term influences of severe uncertainty on savings rates. My column cautiously answered some of these questions—trying to reconcile the twin-goals of economic journalism: elucidation and attention.

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Challenging Narratives Chapter 4 stressed the importance of economic narratives regarding the perception and the workings of the economy. It held that journalism should lean against the wind of dominant narratives. There are three basic strategies to do this: highlighting what’s outside the dominant narrative’s scope; offering alternative interpretations of widely acknowledged facts; confronting the popular narrative with new facts and figures that do not fit the bill. The report mentioned at the outset of Chap. 6 is an example of trying to dampen exuberance, in that case the image of the US as a super-hero economy. At a time when praising America’s economic model was the flavour of the year, the story confronted the all too positive perception with some aspects that didn’t loom large in the public’s eye, namely the fate of old industrial regions, where economic problems and social tensions coincided. Meanwhile on the other side of the Atlantic, a different dynamic prevailed: Germany, the central part of the common market and the Euro area, went through a difficult period. The dominant national narrative was one of gloom and doom. From the mid-90s to the mid-­2000s, the country was stuck in a pessimism trap, as economic stagnation and reform fatigue formed an unhealthy relationship. In such a case, journalism should not just reflect what a nation presently is, but also what it could become. In 2005, I did a report on Germany’s imminent economic comeback. The story was based on two pillars: a study conducted by a team of economists and consultants I had asked to calculate a scenario that extrapolated the trend of falling unit labour costs and combined it with the likely effects of a cut in corporate taxes that was being prepared at the time. The second thread of the story was a line-up of senior executives, economists and strategy consultants to support the results of the study, that concluded a strong rebound of the German economy, particularly from an investor’s perspective. Falling costs and tax cuts had the potential to propel Germany to the top of the league of the most attractive locations to do business in Europe, the model’s results showed. The tone of the story was measuredly optimistic.1 However, a lot of people refused to believe it. Among co-­ workers of mine on the editorial staff, there was substantial scepticism. Even the economists who conducted the calculations for us were not convinced whether the general thread of the analysis was correct. Luckily, we would be proven correct. A year after the story was published, Germany

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was in the midst of a boom that economic forecasters had missed to spot completely. Where did the idea come from? Admittedly, I had read a leader in the Economist earlier that year, that stressed the trend of falling unit labour costs (i.e., productivity was rising faster than wages) and the likely positive effects on overall economic activity.2 I had noted the figures before. But it was only after I had read the piece in the Economist that I felt emboldened to argue forcefully in the same direction—self-critically speaking, I resisted howling with the doomsaying wolves, but needed some consonance with international news media to be sure that I was on the right track. What we did, then, was testing the basic hypothesis and putting it on a much broader factual footing with an exclusive empirical study and a bunch of interviews. At the time of writing this book, Germany’s economic model looks ripe for a general overhaul again. The long-term success of its large manufacturing sector is in danger, as the industrial catch-up of emerging economies has slowed down, companies there have become potent competitors, and trade-tensions have ushered in a new phase of “slowbalization” (The Economist). Only this time, the structural problems have not been widely appreciated yet. The narrative of Germany as the selfacclaimed “world champion of exports”, that’s shipping high-quality factory output to the rest of the world, is still dominant. It’s time to confront the story with timely figures. In fact, industrial output has been declining for years now, due to sluggish demand,3 underlining the need for structural change. Often, the counter-narrative to a current dominant one makes for an elucidative story. If everybody believes that the European Commission is a wicked and corrupt institution, a close-up portrait that puts the EU’s executive branch in a more favourable light might be a story idea—provided that the hypothesis is backed by facts and hard data. Or: if company executives, analysts, consultants and investment bankers believe in a dominant narrative holding that diversified conglomerates are bad corporate strategy, a management story might stress the opposite, i.e., that there are successful conglomerates that fare better (in ESSF terms) than highly focused companies. The public, as well as the circles of corporate strategists and investors, are prone to fall for fads and beliefs. Confronting them with sceptical stories is a valuable journalistic strategy.

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Consonance The howl-with-the-wolves strategy of consonance is unavoidable to some degree. After all, journalism needs to be surfing the waves of issue attention part of the time to reach a sizable audience. What’s more, journalism is about working in a thematic environment of uncertainty: not being the only one putting some issue or framing forward diminishes a reporter’s individual uncertainty—if a narrative proves to be wrong or overrated, you weren’t the only one who got it wrong, which may provide some comfort. However, economic journalism as a product requires originality and differentiation, as Chap. 2 argued; it also needs to distinguish itself from the opinionated and wild content of social media to live up to its role as a guiding authority in the wilderness of modern media landscapes (Chap. 8). In contrast to howling with the wolves (consonance), independent journalism should rather pursue a shouting-at-the-wolves strategy. That, in turn, implies deep research and stubborn conviction. As this chapter’s initial episode has shown, even major news outlets are by no means immune to the effects of consonance. But: getting your initial inspiration from an article in another newspaper does not equate to just replicating it. The low-cost variant of consonance works like this: simply adopt the framing of articles you’ve read somewhere else and add some voices you found on the internet, particularly in social media forums. The variant I pursued when being assigned the my-job-is-killing-me report was a high-cost one: take the inspiration and go through the entire research routine from 1 to 7, thereby verifying and altering the general thread. At last, a story needs to be true and new. If the research routine yields results, that render the original framing wrong, the reporter has the obligation to turn the assignment down. I call this the bullshit test (in the strict meaning of Princeton philosopher Harry Frankfurt, cited in the introduction). After all, it’s the reporter’s name that’s in the by-line—and hence on the line –, not her bosses. If she screws up, it’s her reputation that’s at stake. At least, after having completed research for the my-job-is-killing-me report, I was pretty sure that the hypothesis—an ever-tighter work environment was detrimental to mental health—was correct. My story centred on sectors where stress symptoms were most acute, as statistics showed: health care, logistics, IT. One reason for the more condensed nature of work was that the unions’ push for shorter work weeks had led to more pressure during the remaining time at the job. Even though the story idea was not original, at least the resulting text was candid.

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Other Strategies Social media content is usually the first thing that comes to my students minds when I ask them about the origins of inspirations for stories. Social media are supposed to reflect the wisdom of crowds. To balance the twin-­ goals of elucidation and attention, contributing to trending topics is a logical extension of classic issue attention cycles, and even more so, since social media themselves have become a major distribution channel for journalistic content. However, by boosting news flashpoints thoughtlessly media outlets would only contribute to the mental instability of modern hyper-mediatized societies. Since the major objective of social media companies is maximizing user engagement, the rise and fall of public attention is not necessarily founded in facts but in algorithm-fabricated fads. Still, social media can be a source of information and aspiration, if journalists use social media as a virtual extension of their personal real-world network. Following scholars, in particular, can be an efficient way of keeping up with developments in science, in particular when economic news needs to take thus-far under-appreciated fields of expertise into account: gauging developments during the Covid-19 pandemic required making sense of epidemiologic factors; gas shortages due to dwindling Russian deliveries turned the technicalities of Liquid Natural Gas logistics and the global LNG market into critical factors in 2022; military tactics and the specifics of weaponry turned into economically relevant knowledge when the Russian assault on Ukraine started weighing on economic activity. To name just three examples. Expert knowledge was available quickly and conveniently on social media. Also, the immediate transmittance of social movements abroad facilitated by social media is highly valuable, from the Arab Spring to anti-lockdown protests in China to Iranian anti-regime demonstrations, even though content needs to be treated with due caution, as it is hard to distinguish fakes from facts. Revisiting stories is another idea-stoking strategy. Follow-up coverage of issues whose attention cycles lie dormant in their post-problem phase is of utmost importance. Keeping track of developments and holding authorities accountable to act—or for failing to do so—is a central task of journalism. Personal observations spawn story ideas more often than not. Journalists’ personal encounters and experiences can be important first-hand signals of new developments. This is particularly true for the coverage of local news. You may have the impression that the number of homeless people on the

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streets is rising? There may be a story. Business news can also be triggered by personal observations. I remember colleagues of mine talking about the Chief Financial Officer of Siemens, a large quoted company, having shaved off his moustache. They took it for a signal that he was now ready to compete for the CEO job—which he was indeed. Applying economic frames to non-economic issues is another strategy to come up with original ideas. Who runs the business behind pop superstar Taylor Swift, say? In which ways can the failures produced by some ministry be attributed to the mismanagement of the institution? How is a new social or political movement organized and who really calls the shots? Stories seeking answers to questions like these have to potential to provide interesting insights. International comparisons can be valuable contributions to national debates. Benchmarking policies and business is a precondition for the enhancement of transborder learning. Think of the sensibility of fiscal rules in different countries, the availability of optic fibre networks, or the innovative abilities of two traditional industrial conglomerates competing in similar sectors, such as Siemens and General Electric. Hooking to long-term trends means that story ideas are derived from specific implications of major developments. A journalist doesn’t start with the details and tries to fit them into the big picture, but vice versa— the universal trend informs the search for specific stories.

9.3   People, Power, Gas, and Cash: Four Long-­Term Trends to Watch Deriving stories from universal long-term trends is a meaningful journalistic undertaking, as it combines big abstractions with graspable concretizations. It is also a strategy to counter populistic deceptions postulating false alternatives (Chap. 6). Here’s a cursory overview of four trends to watch. Demographics The number of people living in a country, and on the planet in general, is the most basic driver of the economy, environmental quality, the international distribution of power, and the competitive edge of companies. In 1798, the British economist Thomas Robert Malthus wrote a treatise in

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which he proposed that population growth would always have the tendency to outpace economic growth. Whenever nutrition was plentiful due to good harvests, the number of people would grow, up to the point where again nutrition was scarce. In other words, population growth was a function of economic growth. There couldn’t be lasting improvements in income per capita because whenever food was plentiful, people started multiplying at faster rates to the effect that temporary rises in living standards were eroded within a generation or so. Two centuries after Malthus we can say that his prediction is no longer valid: the Malthusian trap has ceased to exist. Life expectancy has increased, starting in advanced economies in the nineteenth century, and in emerging and many developing economies more recently. Meanwhile, fertility rates have declined, in many countries below the 2.1 threshold, the level at which the number of people stays constant, as each new generation replaces mother and father in the preceding one. The effects of this demographic transition can hardly be overstated: the world is experiencing the rapid aging of societies as the size of the global population is set to peak in the decades to come. Global demographics are currently heading towards their dramatic crescendo. In 1850, around 1.5 billion people inhabited the planet. In 1950, the number was 2.5 billion, in 1990 it was 5.3 billion and today it is eight billion. The global headcount will reach its historic maximum somewhere between nine and eleven billion in the second half of the century, according to plausible scenarios of the United Nations population projections. In the decades thereafter, the numbers will gradually fall again. Advances in feeding the world are equally impressive. Famines have haunted mankind ever since. Even in 1990, around a fifth of people suffered from inadequate food supplies. Lately, the share of people going hungry has declined to a tenth, as the Food and Agriculture Organization (FAO) estimates— although the population has grown by more than two billion people global over the same period. Of course, 800 million in danger of starvation are still far too many. But the productivity reserves of agriculture should make it possible to provide food for the remaining increase in people. Malthus’ gloomy prediction has been proven wrong by the invention of chemical fertilizers, pesticides, contraceptives, and the shifting social values of urbanites. For the purpose of story ideas consider the implications of the demographic transition. It comes in two phases: first, declining fertility rates lead to an improvement in the age composition. The dependency ratio— the share of children and older people that need to be supported by the

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working-age population—is falling. That means a nation has plenty of resources to invest in the expansion of its production potential. The result is a demographic dividend—fast rises of income per capita. Eventually this constellation is put into reverse. As successive cohorts of young adults are smaller and the number of old people rises due to increased life expectancy. Accordingly, the dependency ratio goes up again. This is the constellation much of the developed world is in now, with dependency ratios set to rise steeply from the 2020s onwards. Working-age populations have already been declining in much of eastern, central and southern Europe, and have levelled off in western and northern Europe, where they are bound to decrease slowly over the course of the twenty-first century. North America is still projected to growth demographically. South America is on course to reach its maximum in the 2030s, India, now  the most populous country, around 2050. There are two rather extreme cases: China has enjoyed a spectacular demographic dividend in recent decades, as a result of a steep fall in dependency ratios due to the Communist Party’s one-child policy of forced fertility restriction. This trend has reversed by now, with China’s population aging and shrinking exceptionally fast: its working-age population is set to halve over the course of the rest of the twenty-first century, according to UN projections—a demographic implosion. The other extreme is Sub-­ Saharan Africa, where population growth still is dynamic. Even in a modestly wealthy country such as Nigeria, fertility rates stand at 5.2 children per female inhabitant, far above the stabilizing level of 2.1; the country’s population is set to rise by half a billion people to over 700 million by 2100. As a whole, Africa’s population is set to double or even triple until the end of the century, to between three and 4.3 billion people, depending on the assumed decline in fertility rates, and will only level off afterwards. Managing the demographic transition will be one of the great challenges in the decades to come. Here are some implications that may serve as starting points for story ideas: Shortages of workers are becoming more and more acute in advanced economies and in China. Public finances are coming under strain, as bigger shares of the budget need to be devoted to pensions and healthcare. Attracting mobile workers will be key for companies and countries alike. Competition for immigrants will be fierce, as the global number of young, able and mobile people is falling. For Europe, demographic pressures from south of the Mediterranean are set to rise. To ease the situation in Africa, financing better schooling, tertiary education,

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vocational training, and schemes of managed immigration and integration ought to be considered. In rich countries, aging workers will need several phases of education over their lifetime to keep them up-to-date, a task for companies and governments alike. Whether aging workforces are good at innovation is an open question, but experience points to a slowdown. Wages are likely to rise considerably, tilting the distribution of income (back) towards labour. The international distribution of power is changing as well, with countries facing a severe demographic decline, such as China and Russia, possibly rushing to increase their influence as long as they are able to, since the size of the working-age population coincides with the number of recruits they can muster. Regional power competition is set to become more severe as well: Pakistan’s population is bound to grow unabatedly, while India’s will be in decline—a shift that has the potential to destabilize a precarious balance of power. Analogous shifts are set to arise between Central Asian countries and Turkey, Iraq and Iran, to name just a few cases. Geopolitics and Globalization Globalization comes in waves, as Harold James of Princeton has argued (James, 2009). Historically, phases of opening up to trade, capital flows, migration, and foreign ideas are followed by phases of closure and conflict. Globalization in a modern sense first took hold in the second half of the nineteenth century. Back then trade, migration and capital flows were largely unrestricted. New technologies facilitated global flows: the steamship made travel and transport cheap and safe; train networks linked inland production sites with ports; the telegraph and later the telephone enabled transcontinental information flows in real-time for the first time ever. Liberalism cum colonialism was the governing ideology throughout the west. However, nationalism and imperialism rose in the early years of the twentieth century, a tendency that ultimately led to World War I and the breakdown of international exchange. After the war, major powers led by Britain strove to restore the old order, but only partly succeeded. World War II and the following drop of the Iron Curtain left the world split in two hemispheres, divided economically and ideologically. Within the western community of democracies re-­ globalization efforts from the interwar period were taken up again, albeit cautiously. Over decades, tariffs and other barriers to trade were lowered

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in successive rounds of negotiations, while flows of capital and migrants remained restricted. Globalization 2.0 only took off after 1990, with the speedy integration of goods and capital markets. Globalization intensity, measured as the difference between growth of world trade and growth of the global economy, rose quickly in the 1990s and 2000s, particularly after China’s accession to the WTO (briefly discussed in Chap. 6), but lost its vigour after the financial crisis of 2008. The 2010s saw a deterioration of economic relations with national populism on the rise (Chap. 7), a tendency that culminated in Brexit and the election of Donald Trump; the former meant leaving the EU’s Common Market, the latter launched a trade war—two distinctly anti-globalist policies. The Covid-19 pandemic caused a severe hit to global supply chains and trade relations as lockdowns and travel restrictions prevailed. From 2022, the Russian war against Ukraine led to a further deterioration of relations between the west and the emerging Sino-Russian block. Whether globalization will remain broadly intact or go fully into reverse remains to be seen. An often-overlooked feature of the “globalization cycle” (Harold James) is the need for an international political order. Globalization 1.0, roughly from 1870 to 1914, was underpinned by an international setting provided by the Concert of Europe: a general understanding of the continent’s great powers (the United Kingdom, France, Austria-Hungary, Russia, and Germany) that provided a framework under which trade deals, standardization, and a common monetary system (the Gold Standard) were facilitated. When this political framework collapsed, economic integration broke down as well. In turn, the cautious integration of western economies after World War II was feasible, only because the United States helped create and ultimately backed the international institutions that brought political stability to the western hemisphere: NATO and other US-led alliances secured external security; the General Agreement on Tariffs and Trade (GATT) set and enforced rules for international trade; the International Monetary Fund (IMF) managed exchange rates; and the World Bank was designed to allocate funds to weak creditors. From 1990, this system was extended to much of the rest of world, backed by the sole remaining superpower, the US. For international economic integration to succeed, either a hegemon or a coalition of like-minded powers is needed to secure stability. However, an international order can only last for a while. Eventually, the globalization paradox sets in (Müller, 2008): as other countries gain means of

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economic and military power, they challenge the hegemonic order (unless they become partners in leadership). The rise of China, and to a lesser extent Russia, calls American supremacy into question, thereby weakening the international political framework that’s underpinning economic integration. This effect partly explains the rise of economic uncertainty, measured by the Uncertainty Perception Indicator (Chap. 5). There is also a technological argument against Globalization 2.0 to continue. Hitherto, trade was about exchanging agricultural produce, raw materials, and manufactured goods. When the exchange was completed and the seller had received the payment, the deal was finalized. Now a growing share of trade involves intellectual property (“intangibles”, as explained in Chap. 3) and data flows: when a company buys a modern machine, a piece of digital infrastructure, or a car, the customer and the producer stay connected as data flows back and forth, providing maintenance, software updates, and maybe more. Awkward security issues arise: Do equivalent legal standards apply in all the countries involved in the transaction? Could the data or the entire technological system be exploited by a political adversary? May political alliances change over time, turning friends into foes eventually? What is more, environmental considerations are seeping into trade relations. As countries seek to slow down climate change, they impose environmental taxes, regulations, and tradable emission permit schemes (“cap and trade”) domestically. As they do so, they consider introducing carbon border tariffs: taxes on imports that are not liable to comparable provisions in the countries of origin. The EU has been the first major trading block to announce such measures. It’s an open question whether this paves the way to escalating trade wars, or to the adoption of similar measures elsewhere. Without a credible international political framework in place to back common rules, a souring of international trade relations cannot be ruled out. Here are some implications that may serve as starting points for story ideas: as trade policy is becoming more politicised, security concerns need to be balanced with the ESSF goals. But protectionist interests of corporations, trade unions and politicians are at play as well. Bringing home sectors from semi-conductors to cars to solar panels by splashing out billions of taxpayers’ money is hardly efficient—or fair, as public funds cannot be spent on other purposes, such as education or healthcare. Ideally, trade policy should focus on setting international rules to reconcile efficiency and sustainability with security considerations. Trade deals to deepen ties

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between western partners, such as the failed transatlantic agreement (TTIP), are preferable to unilateral action in the light of new trade issues such as carbon border adjustment and security concerns. In any case, becoming self-sufficient in key sectors is no sensible goal, in contrast to the diversification of sourcing and export markets. In the setting of the post-globalization disorder the politization of corporate decisions is a widespread phenomenon. Mergers and acquisitions are coming under political scrutiny and are frequently vetoed, specifically when Chinese companies are involved. Whether security concerns are valid in specific cases should be an issue for journalistic research. At the same time, locational decisions of international corporations are being questioned. Does it make sense to open up a new production site in China, or is it too risky as the company could be taken hostage by political confrontation? Political risks of core business activities need to be addressed. With national instincts coming to the fore, EU countries should be asked over and over again, why they are not pushing for common European approaches, particularly concerning the supply of energy and raw materials. There is also a strong argument for the EU to develop a coherent foreign and security policy. In terms of the emerging global (dis)order, the leadership and relative strength of the United States is of particular interest to the rest of the world, but most acutely to its allies. Is America turning inward again? Does it strive to stabilize international relations and institutions, in line with its traditional role after World War II? Or is it stoking conflicts? Whether the rest of the world—countries and corporations alike—is prepared for either scenario, is going to be one of the major questions for years to come. Climate Change and Energy Global warming, mitigating its causes and alleviating its consequences, will be a growing concern going forward. According to plausible scenarios, global average temperatures are set to rise between 2 and 3 degrees centigrade by 2100 relative to pre-industrial levels (IPCC, 2022). Between the late nineteenth century and now, global anthropogenic carbon dioxide emissions have risen tenfold, to about 43 gigatons annually. Two-thirds of accumulated emissions occurred since the 1970s, 43 per cent since 2000. Over the 2010s, emission growth has slowed. In some advanced economies, emissions are already falling, even as nations grow richer. Advanced economies have managed to decouple emissions from economic activity,

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reflecting sectoral change (less manufacturing, more services and knowledge), incremental energy-saving innovation, and the roll-out of renewables, whose efficiency has improved spectacularly since 2000. The global scenario is not all gloom, but improvements are too slow to get to “net-­ zero” by 2050 globally at the latest, the goal climate scientists have set in order to limit global warming to two degrees or less. Today, China is the biggest emitter, contributing 28 per cent to global Green House Gases (GHG), followed by the US (14.5 per cent), the EU (8 per cent), and India (7.2 per cent). These four players account for more than half of global emissions. They are part of the G 20 group, a forum of the 19 most important economies worldwide (plus the EU). Together the G20’s GHG share is around 80 per cent. To get to a coalition that could make a meaningful contribution to lowering emissions, the Dirty Four would need to form the core of a “climate club”. Since they are also the world’s largest trading powers, they could set global standards among them that others would have to follow. Countries that fail to commit to climate policies would be made to pay a carbon tariff—a levy imposed on imports from countries without adequate emission-curbing measures in place. Such a climate club could exert an enormous pull. Alas, given global political tensions and the lack of cooperation, it’s hard to imagine such a group forming any time soon. The climate debate is also about historic guilt and redistribution. The argument made by developing countries that advanced economies could grow rich by off-loading their dirt into the atmosphere cannot be dismissed easily. If you add up the total emissions of the past one and a half centuries, the USA and the EU (including Great Britain) each have contributed about a quarter. China may be the dirtiest country by current standards, but it accounts for only 13 per cent of accumulated carbon dioxide, catching up fast, though. If, for the sake of global justice, poorer countries were allowed to keep emitting, the biosphere would likely be doomed. Today, an average Chinese still causes only 40 per cent of the CO2 emissions of an American, an Indian only 11 per cent. The planet could hardly support billions of people more at today’s US emission levels. Due to considerations of historic equity, a “loss and damage” fund has been agreed upon to support poor countries coping with the consequences of climate change, while trying to persuade them to subscribe to a low-­ emissions development path. Whether this deal will go ahead as announced, remains to be seen. But still, it sets a precedent and introduces an instrument that is likely to be sharpened later on, like many provisions and

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concepts have been over the past 30 years, since the climate policy regime was launched at the summit of Rio in 1992. Undoubtedly, climate diplomacy is a tedious arena. It’s slow, too slow, but it is overblown to argue that nothing has happened in the past decades, as climate activists claim. In terms of story ideas, the effects and implications of greenhouse gas emissions as well as the fight against climate change touch upon a wide range of issues. Altered climate conditions lead to higher temperatures, melting ice shields, droughts, floods, storms and other extreme weather events. There are costs to be borne arising from adaption (e.g., enforcing dykes, making buildings tornado-proof) and mitigation (e.g., installing renewables, enhancing grids). Rewiring energy networks to reach carbon neutrality is a multi-trillion Dollar undertaking. New markets need to be created, for internationally tradable emission rights, carbon capture and storage facilities, and electricity storages. The change-over is bound to leave stranded assets, that need to be written down, a process that might bring down entire companies and potentially needs to be dealt with politically. Private households and investors also need to adapt and reconsider their consumption and mobility patterns as well as their asset allocations. Issues of efficiency and fairness arise: as producers of renewable energy are subsidized and taxpayers have to foot the bill, they can expect that the money is spent at lowest possible cost. Energy and climate risks, in turn, pose a challenge to business operations and entire business models. Accounting rules need to be adapted. Questions about the insurability of assets located in risky areas need to be tackled, for instance in tornado-prone Florida. Big cities face massive health problems due to extreme heat and need to implement ways to cool down their micro climate and to provide air-conditioning to poorer inhabitants. At the same time, there are countries that hope to benefit from global warming. Consider the case of Russia. Its economy is built on oil and gas. Dwindling global demand for fossil fuels would call into question the Kremlin’s economic model, an arrangement that has already been hurt by president Putin’s international law-defying war and the weaponization of gas exports. In addition, the country could hope to benefit from higher temperatures: the thawing of North Pole ice opens up new transcontinental shipping routes. Siberian permafrost might be converted into farmland. It’s hardly surprising, that Russia’s position on climate change is dismissive. Thanks to low production costs, the Gulf States can hope to remain in business even if absolute demand falls and climate taxes increase in

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consumer countries—and producer prices fall accordingly. This perspective could lead to perverse incentives: The United Arab Emirates, for example, have expanded capacity and increased production in recent years. Russia and Saudi Arabia have fought price wars, each of them pumping record amounts of oil to secure market shares. Uncoordinated production among petro-states could lead to record supplies—a dirty competition that would run counter to climate-preserving measures in consumer countries. Climate change mitigation is unlikely to usher in an era of cleanliness and peace, but has the potential to exacerbate international conflicts. The Middle East is full of countries that rely on oil and gas exports: Iran, Iraq, Saudi Arabia and the Emirates. Then there is Russia, Libya, Algeria, Nigeria, to name just the most important ones. All of these countries, that are not among the most stable, to put it mildly, rely on petroleum income. With peak demand in sight, they are nearing a situation where their major source of income is being eroded. These conflicts could be eased, if a new division of labour took hold in global energy markets. Think of sunny petro-states that could produce green hydrogen on a large scale powered by solar energy. Thereby, they could turn themselves into exporters of climate-neutral fuels. Former oil companies, in turn, could extract CO2 from the atmosphere and store it in depleted oil and gas fields (“carbon capture and storage”). The preservation of the rainforests in Brazil or in the Congo Basin could become a global task—and a lucrative source of income for these states. As the collection of issues involved shows, the implications of climate change are endless, and so is their potential as a source for story ideas. The three mega-trends—aging, geopolitical turmoil, and global warming— can be seen as the undercurrents that will shape the decades to come. What is more, they are bound to interact in complex and often unforeseen ways. It is warranted for economic journalism to keep addressing them, whenever their effects show up in current affairs. The Future of Money Understanding what money actually is, how it works and influences real economic activity, individuals and societies, is constantly in flux. Crypto currencies such as Bitcoin have challenged the monetary arrangements established in the twentieth century. The big idea behind crypto is that the present combination—state-run central banks with monopoly powers

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over the creation of legal tender (cash, central bank reserves) plus a banking and financial services sector that provides credit and other financial services to citizens and companies—is not the natural order of things, but a rather recent invention. At the international level, (mostly) national currencies are linked through foreign exchange markets, where relative prices (nominal exchange rates) are determined. State interference is abundant, mostly in the form of capital controls and (occasional or systematic) forex interventions, but major currencies are fully convertible and mostly floating freely, with the US Dollar still being the major international currency and ultimate store of value. Crypto currencies were created to offer a private alternative, run by algorithms rather than human central bankers. Results have so far been disappointing to catastrophic, as crypto markets have not only proven to be highly volatile, but also corruption-prone. However, it is by no means certain that the established dual system of national monopoly central banking and a mostly private financial industry will last forever. Three major problems arise: stability, costs, and power. Let’s start with stability. Outsized credit creation in recent decades has left much of the world’s private sectors and governments with levels of gross debt relative to economic output that dwarf historic precedent. How this situation is going to play out is an open question. If disruptions occur, however, their impact will be felt in the real economy. The financial crisis of 2008 and later the unexpected outbreak of inflation in the wake of the Covid-19 pandemic have posed awkward questions concerning the conduct of monetary policy. After all, inflation targeting, a central bank strategy that has become the international norm since the 1980s, may not be suited best for providing predicably stable price levels. Recent crises could be interpreted as side-effects of a too narrowly defined central bank mandate. Seen through this lens monetary authorities made momentous mistakes in recent decades. In an environment of structurally low inflation—due to globalization, abundant labour, and cheap energy (see the three megatrends discussed above)—monetary authorities have allowed, or even fostered, money supply to grow fast, outpacing the growth of the real economy over prolonged periods of time. This has contributed to asset inflation and a polarization of the distribution of wealth: rising valuations of stocks, bonds, real estate and other asset classes have enriched their owners, while posing risks to financial and price stability at the same time. The evolution of central bank strategy and its implementation clearly is an issue to cover for economic journalists in years to come.

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From time to time, more fundamental reform options are being discussed. One of them is a completion of the government monopoly on money creation: “full money”, meaning that retail banks can only lend up to the amount of their central bank reserves, would get rid of much of contemporary banking activity and is deemed to make the financial system completely crisis-proof. Such an approach has been advocated after Black Friday of 1929 (“Chicago plan”) and again dug up in the wake of the financial crisis of 2008 (Kumhof & Benes, 2012). That “full money” has never been tried out is not only due to massive lobbying by the banking industry, but also to fundamental economic concerns: restraining the financial sector too much could hamper real economic activity and thus depress progress and innovation. Still, making the financial system sounder is an ongoing quest. Then there is the question of costs. Private providers of money and payment systems, such as banks or credit card companies, charge customers substantial fees. They also leave the more vulnerable parts of the citizenry “unbanked”. As costs per transaction are negligible in the age of digitalization, questions of fairness and efficiency arise. These concerns could be addressed by regulation, but also by introducing outright government services. The result would be a diminished involvement of the private financial sector. An imminent reform option is the introduction of Central Bank Digital Currencies (CBDCs). In principle, these systems allow for a wide range of low-cost government-provided services, from facilitating payments, nationally and internationally, to permitting private citizens and companies (“non-banks”) to open central bank accounts, that governments could also use for transfer payments (“helicopter money”). While all these ideas come with trade-offs, not least concerns regarding privacy and government overreach, they offer interesting approaches to fixing problems that we have grown used to. They also represent an endless source of story ideas. Lastly, international money and the global distribution of power are matters of chronic concern. Unstable exchange rates and recurrent international debt crises, particularly in countries that have accumulated credit in US dollars, make for a less than satisfying situation. The freezing of Russia’s international reserves denominated in western currencies as part of the sanctions implemented after the invasion of Ukraine in February 2022, has created considerable unease in non-western countries, most notably in China.

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After World War II, the US Dollar became the global monetary standard, in the western Hemisphere at least, formalized by the Bretton Woods system of fixed but adjustable exchange rates, managed by the IMF. Although this system broke down in the early 1970s, the Dollar has remained the most popular international means of payment and store of value. Arguably, it has become even more central in the era of globalization, as Asian economies have started relying on the US currency as well. Alternatives to the Dollar are not obvious. The Euro, the second global currency, is lacking a solid institutional framework to ensure investors of its enduring stability (Chap. 7). China’s autocratic political system is hardly fit to support credible institutions. Creating a global currency backed by international institutions, such as the raw materials-based “Bancor”, an idea advocated by the British economist John Maynard Keynes in the 1940s and taken up by Chinese officials after the financial crisis, seems chanceless in a global political environment of great power rivalries. But the search for alternatives to the current arrangement is going on.

9.4   Conclusion This chapter’s goal has been to translate the more abstract considerations presented in previous chapters into the practice of economic journalism. What’s needed is a workable balance between journalism’s normative goals and the media economic constrains it faces—a sensible trade-off between elucidation and attention. Journalistic quality is not only about informing the public reliably and impartially, it is also about producing differentiated media goods that users are actually willing to consume and to pay for. To get to stories that provide multi-perspectivity, a research routine was proposed that encompasses the assessment of data and scientific analyses as well as the views of experts, the experience of people on the ground, and the perspective of decision makers who bear responsibility for a specific situation. It’s meant to bring together abstract—intersubjectively verifiable—assessments with real-life experiences. The proposed scheme centres on research objectives: hypotheses formulated early on in the process to envision what the story might look like. Having a concrete aim in mind enhances efficiency and effectiveness. Part of this chapter was devoted to the development of ideas for stories—how to address relevant issues in a forward-looking manner and still get the audience to pay attention. After all, economic journalism should

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not mindlessly follow issue attention cycles that go wild in contemporary public spheres. To remain relevant, it needs to contribute original stories, facts, thoughts, aspects, and angles to media landscapes shaped by specific interests and outright deception. In the final subsection four megatrends were discussed at some length, with an eye to their implications for business and economic policy, hoping to stimulate readers’ imagination and creativity regarding their own story ideas.

Notes 1. https://www.manager-­magazin.de/magazin/artikel/a-­366069.html 2. https://www.economist.com/europe/2005/03/10/mind-­the-­gap 3. https://www.spiegel.de/wirtschaft/unternehmen/energiekrise-­deutschlands-­wirtschaft-­braucht-­den-­neustart-­a-­8ab8feec-­8dff-­44d4-­9937-­ 4d7ef74f21ca

References Attfield, S., & Dowell, J. (2003). Information seeking and use by newspaper journalists. Journal of Documentation, 59(2), 187–204. Boczek, K. (2019). Vielfalt als journalistischer Wert? Eine Analyse der Nutzung von Expertenquellen in der Berichterstattung mit Text-Mining und klassischer Inhaltsanalyse. (Diss.) Department of Cultural Studies. TU Dortmund University. doi:https://doi.org/10.17877/DE290R-­20109 Dimitrova, D.  V., & Strömbäck, J. (2009). Look who’s talking. Journalism Practice, 3(1), 75–91. https://doi.org/10.1080/17512780802560773 Downs, A. (1972). Up and down with ecology: The issue-attention cycle. The Public, 28, 38–50. Galtung, J., & Ruge, M. H. (1965). The structure of foreign news: The presentation of the Congo, Cuba and Cyprus crises in four Norwegian newspapers. Journal of Peace Research, 2(1), 64–90. Haller, M. (2016). Methodisches Recherchieren. UVK. Hertzum, M. (2022). How do journalists seek information from sources? A systematic review. Information Processing and Management, 59(6). https://doi. org/10.1016/j.ipm.2022.103087 International Panel on Climate Change (IPCC). (2022). Climate change 2022: Impacts, adaptation and vulnerability. Full report. https://report.ipcc.ch/ ar6/wg2/IPCC_AR6_WGII_FullReport.pdf James, H. (2009). The creation and destruction of value: The globalization cycle. Harvard University Press.

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Kumhof, L. & Benes, J. (2012). The Chicago plan revisited. IMF Working Paper No. 2012/202. https://www.imf.org/en/Publications/WP/Issues/2016/ 12/31/The-­Chicago-­Plan-­Revisited-­26178 Luhmann, N. (2017). Die Realität der Massenmedien. 5th edition (1st edition 1995). Springer. Müller, H. (2008). Die Sieben Knappheiten. Wie sie unsere Zukunft bedrohen und was wir dagegen tun können. Campus. Shiller, R.  J. (2017). Narrative economics. American Economic Review, 107(4), 967–1004. https://doi.org/10.1257/aer.107.4.967 Shoemaker, P. J., & Reese, S. D. (2014). Mediating the message in the 21st century: A media sociology perspective (3rd ed.). Routledge/Taylor & Francis Group. Tiffen, R., Jones, P. K., Rowe, D., Aalberg, T., Coen, S., Curran, J., Hayashi, K., Iyengar, S., Mazzoleni, G., Papathanassopoulos, S., Rojas, H., & Soroka, S. (2014). Sources in the news. Journalism Studies, 15(4), 374–391. https://doi.org/1 0.1080/1461670X.2013.831239

CHAPTER 10

What’s at Stake: An Outlook for Economic Journalism

During a decade of educating prospective economic journalists, I have repeatedly been asked about the future of the profession. Not just about the outlook concerning jobs and pay, but also about the evolution of the broader sector. These are mostly idealistic young adults. They are not driven by money, but rather by a desire to contribute to the vitality of democracy, at a time when civil liberties, welfare, and justice are under attack by authoritarian strongmen and populists. Nevertheless, my students would certainly like to be reassured that they will be able to make a decent living, working for viable news corporations that are not caught up in a death spiral of declining revenues and deteriorating journalistic quality. I usually give a measured, albeit lengthy answer that comes down to this: economic journalism is indispensable, which is why business news were invented in the first place in the early phases of capitalism (Chap. 2)—and will likely be the last to vanish. Better, more analytical and forward-­looking journalism is needed, that independently scrutinizes and assesses the conduct of business and economic policy (Chap. 3), and I certainly hope that my students are well-equipped in terms of practical skills and knowledge (Chap. 9) to perform their jobs as narrative economists (Chap. 4). Precisely because media markets have been altered profoundly by digitalization, quality is what distinguishes journalism from the rest. Hence, without substance there are no marketable journalistic products. End of sermon.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 H. Müller, Challenging Economic Journalism, https://doi.org/10.1007/978-3-031-31030-0_10

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Of course, my students and alumni also have real-world experiences, that, at times, contrast somewhat with my upbeat outlook. During years when successive rounds of cost-cutting haunted the news industry, work environments could have been more inviting, to formulate coyly. As a consequence, a few of my smartest graduates have decided to leave journalism for, what they deem, more promising fields: one is working in politics now, another for the European Commission, others are in public relations, investor relations or at the chamber of commerce. More recently, though, the situation has changed profoundly: there are a lot more job offerings than graduates to fill open positions. Apparently, we are in the midst of a structural transformation that intersects with a hog cycle: digitalization was a shock that has led to job losses at many news outlets. But as digital business models have been developed, it has become apparent that journalistic knowhow, particularly in economics and business, is a prerequisite for these products to succeed. Quelle surprise! At the same time, journalism has ceased to be as fashionable a profession as it used to be. Talk about poor job prospects—maybe also the dissing of the “fake news media” by populists—has deterred some young people from entering the profession. This seems to be changing, too, as the job market improves (and sensible people realize what’s at stake for democracy). Therefore, my intermediate résumé is optimistic as far as the outlook for jobs is concerned. Economic journalists are needed and wanted. Clearly, there is substantial effective demand from specialized upmarket publications and public-service media (that hire most of my graduates). However, considering what’s ahead for public spheres as a whole the outlook is a bit gloomier. That’s what this final chapter is about: a scenario for economic news provision going forward—and some ideas on how to deal with it.

10.1   A Scenario for the Not-So Distant Future Although the economy is a vital part of social life and well-being, economic journalism of the serious kind runs the risk of being pushed to the fringes of public awareness. This is a direct result of the attention economics in the digital age that have resulted in a fierce battle for people’s limited time budgets. Since economic issues are rather complicated and abstract in nature and tend to be little fun concerning oneself with, they lack competitive edge in the mass market given the proliferation of more entertaining media content.

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Economies of scale are a crucial factor here, and digitalization has supersized it (Chap. 2). That’s why smaller media brands have a problem (unless they cater to an audience with specific information needs and high willingness and ability to pay). For one, this effect creates problems in local news markets, where newspaper brands have a hard time surviving on digital revenues. While major metro areas can still muster the masses of readers necessary to support local media, smaller cities, towns and rural areas have partly turned into “news deserts”, where no professional local media coverage is available anymore. It used to be the norm that in local news markets there were two or more competitors. Now towns are lucky when there is just one media brand left. Where print circulations have held up, newspaper brands have survived by catering to an aging readership. This is not a sustainable strategy. In consequence, towns without journalistic media need to go without anybody professional to watch out for misconduct at the city council or the finance committee, and nobody is covering local companies or the labour market. It’s true that economic and business journalism has remained underdeveloped at the local level anyway. But the prospects for the future are even more dire. A similar story can be told for general news markets at the national level in smaller countries and language areas, where even general media brands with a national readership have problems staying afloat. As they turn themselves into digital media brands, they tend to focus more on what attracts lots of readers, which is typically not the ongoing coverage of some dull industrial company or the specifics of the tax system, but some scandal, or the assertion thereof. With shrinking budgets, the temptation looms large to turn media brands into an attention arousing populist venue of the “ugly” variety (Chap. 3). This, in turn, is an invitation for media start-ups with contrary populist leanings, a constellation that is likely to result in a fragmented and polarized media sphere. In these circumstances, news production and topic selection are not so much about providing impartial information anymore, but about jumping on the next attention cycle, or kicking one off oneself. National business media, in turn, feel the pressure from English-­ language international media. As Anglo-Saxon publications like The Economist, the Financial Times, and the Wall Street Journal are able to exploit economies of scale to a massive degree, they have expanded their readership far beyond their traditional home markets. Among business leaders and economic experts, they are already among the most frequently read publications the world over (Chap. 6). This implies that national

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media are not just competing amongst each other, but with the world-­ class resources their counterparts in London and New  York are able to muster. However, international newspapers have little capacity to cover the specifics of national economies and businesses. Even biggish European countries such as France, Italy or Germany, that are covered frequently in international newspapers, do not get the appreciation they receive in their own national media. In a scenario where national business media have to downsize, the coverage of national businesses and the economy necessarily becomes fragmentary. Finally, there is the news market for the pros. Business-to-business media get by with capturing small segments of the news-consuming public, as their usership is mainly quoted companies and institutions that have specific information needs. International news agencies like Bloomberg and Reuters not only provide news, their core business is financial data. For them the websites, magazines and video services directed at broader audiences are mere side-shows. The same applies to highly specialized publications (“verticals”) catering to lobbyists and company executives, readers with a strong professional interest and a high willingness to pay for quality information. What is missing in this scenario is quality mass media: the wider public risks being deprived of a continuous, comprehensive, balanced, and independent coverage of economic and business developments. These are worrisome prospects. As argued in the introduction, independent quality journalism is a prerequisite for well-functioning institutions: where journalism degenerates to become mere propaganda or entertainment, corruption, cronyism, rent seeking, and exploitation prevail, undermining overall well-being and fairness.

10.2  The Rise of Western Oligarchs Fixing the problem of a thinning supply of economic quality mass media is no easy task. Government subsidies, an approach that has been tried in some European countries, where ailing newspapers have been bolstered, runs counter to the requirement of economic independence (Chap. 3). Just as problematic is government aid in the form of buying advertising space; as this practice is selective, political pressure can be exercised using taxpayers’ money. While saving small local newspapers may have a folksy appeal, subsidies for national elite media is politically contentious. What is more, government aid that tries to keep established print media from

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vanishing, risks preserving untenable market structures, as the development of more agile competitors could be hampered. Plus, if enhancing the coverage of national economic affairs is the overriding objective, government provisions for eligibility to receiving subsidies would need to include editorial guidelines concerning news selection, for example a certain number of articles to be published, or a list of topics deemed newsworthy. All this is clearly incompatible with maintaining a “fourth estate” at eye level with the branches of government. Direct political meddling in quality news markets leads down a dangerous path. Alas, a purely private solution does not look too promising either. Rich individuals snapping up news media assets results in awkward questions concerning the concentration of power. In southern European countries, media owned by industrialists has long been a feature of national markets. In France, basically all major media brands are owned by billionaires: Le Monde belongs to a group of investors including telecoms entrepreneur Xavier Niel. The liberal business newspaper Les Échos is controlled by luxury group LVMH, founded by another billionaire, Bernard Arnault. Conservative Le Figaro is owned by the Dassault family’s holding company; the group otherwise specializes in arms and aircrafts. Billionaire Vincent Bolloré controls media group Vivendi, that holds sway over Pay TV group Canal+, radio Europe1, and magazine Paris Match.1 In Italy, the national business association Confindustria is the publisher of business daily Il Sole 24 Ore, while the general mainstream dailies La Stampa and La Repubblica are owned by Exor, the investment vehicle of the Agnelli family who owns major stakes in carmakers Stellantis and Ferrari. In recent years, this trend has spread elsewhere. Amazon founder Jeff Bezos bought the Washington Post in 2013. Elon Musk, chief of Tesla and SpaceX, acquired Twitter in 2022 (a platform he has advertised as an alternative to “conventional news”). Whether such accumulations of wealth and media ownership are compatible with the workings of market democracies needs to be watched closely. There is a risk of liberal societies decaying into oligarchies, run by a small group of rich and powerful families. In any case, the media involvement of rich individuals has become sizable to a degree that purely philanthropic motivations can be ruled out. Regulation restricting ownership of media, is becoming harder if the alternative to billionaire involvement is bankruptcy and consequently diminished media supply. Clearly, competition can tame the concentration of power. The rise of the internet has lowered barriers to media market entry, and in some cases independent newcomers have been able to benefit. In France, mediapart,

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an independent online publication founded in 2008, has earned itself a reputation for investigative journalism, financed by subscription fees. In Germany, correctiv, a research-focused outfit modelled after US start-up Pro Publica, is mostly philanthropy-financed. While these newish media brands pose a welcome challenge to oligarchic tendencies, they do not offer a broad and continuous coverage of economic and business issues.

10.3  Economic News as Market Failure If neither government involvement nor the market by itself seem fit to solve the problem, it helps to go back to basics. As the discussion in Chap. 2 highlighted, economic journalism is plagued by a set of market deficiencies. Massive economies of scale are one aspect of this. Others involve information asymmetries and positive externalities. These are most pronounced for Economic Policy Journalism: information asymmetries mean that the general public can hardly determine the correctness or relevance of media content, which calls for strong brands enjoying high levels of trust. At the same time, non-professional readers who concern themselves with economic policy issues do so primarily as responsible citizens, not for direct private gains. Being informed of economic policy issues benefits society, but not primarily the individual. In these circumstances, economic theory predicts an undersupply of the respective good, and possibly no supply at all. Indeed, business newspapers and magazines and their digital derivatives are mostly bundles of different types of economic journalism: they sell a news package containing Business, Financial Market, Private Investor and (luxury) Consumer Journalism, plus Economic Policy Journalism, as they need to assemble audiences large enough to finance the fixed costs accruing from sizable qualified staffs. It helps, too, that the other varieties of economic journalism are less plagued by externalities and therefore come with a higher willingness to pay. In recent years, though, the calculus has been changing somewhat. In the digital era, economies of scale have become more forceful, now enabling the internationalization of upmarket segments, where Anglo-­ Saxon media offer hard-to-beat quality coverage supported by huge global readerships. At the same time, economic policy issues have become more complex and hence more cumbersome to make sense of. This implies that the costs of information processing to be borne by individual media users have risen—to the effect that consumption of sufficiently comprehensive economic policy stories has become less attractive, other things being equal.

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From a welfare economic perspective, economic policy journalism in some aspects is turning into a public good: economies of scale are substantial, so that marginal costs are effectively zero, once fixed costs have been covered. There is non-rivalry in consumption, meaning that the quality of a digital news product does not diminish with the number of people using it. And it yields positive externalities, as an informed public can be expected to make better political and economic choices. The fourth characteristic of a public good, non-excludability, though, does not apply anymore: modern digital distribution, relying on paywalls and user tracking, enables publishing companies to exclude non-paying users. Indeed, this is the case with many business models of quality news media. As revenues from print editions have dwindled and digital ad revenues have frustrated expectations, formerly free-for-everybody digital editions have been turned into subscribers-only sites. The problem is that—overall—too few people sign up and pay. Instead, many turn to cheap-to-produce partisan media of the “ugly” variety. Put differently, what is a perfectly sensible strategy from an individual publisher’s point of view, who needs revenues to pay journalists and other staff, needs to be appraised differently from a welfare perspective: if a lot more people could be catered to without incurring additional cost (since marginal costs are zero), it would be socially beneficial to do so. After all, consuming quality journalism enhances politically relevant knowledge and pushes back partisanship and populist demagogy.

10.4   A Public-Service Supply of Economic and Business News? The standard answer to the public good problem given in economics textbooks is to have the state provide it, financed by general taxes. In the case of journalistic media this approach is problematic, though, as it is incompatible with the requirements of editorial independence: when parliaments get to decide on media funds and governments are to disburse them, it is an invitation to political meddling. To keep such aberrations in check, an intermediate solution has evolved: public-service media. Run by institutions separate from the state, supervised by boards comprising members from all walks of public life (in theory, at least), and financed by special household fees, their aim is to provide impartial information and a basic platform for public discourse.

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From the 1920s onwards, this model was pioneered by Britain and the Nordic countries and later adopted elsewhere in Europe. It is a cornerstone of the “Democratic Corporatist Model” of media systems, whereas the “Polarized Pluralist Model” of Mediterranean countries features strong political intervention in broadcasting media, while the “Liberal Model” of Anglo-Saxon countries relies mostly on the private provision of media, except for Britain’s and Ireland’s public broadcasters (Hallin & Mancini, 2004, p. 67). With the introduction of radio and, later, television broadcasting in the twentieth century, technologies appeared that featured non-excludability: anyone with a receiver could consume the programs. Authoritarian governments exploited the new system for arousing propaganda, prominently Nazi Germany via the government-sponsored “Volksempfänger” (“people’s receiver”), whereas the British and Nordic approach was one of public, not state, ownership. Originally run as monopolies without allocating bandwidth to private media companies, the public-service system has evolved to be part of more competitive media markets, with substantial private sector involvement since the 1980s. In recent decades, public-service broadcasting has turned into public-service media, offering digital content as well. The public character of these media is to be ensured by four key features that set them apart from state institutions, as stressed by Syvertsen et al. (2014, p. 71): public ownership and universal availability; institutionalized freedom from editorial interference; an obligation to provide diversity and quality output; and a “broad political compromise”. Therefore, public-service media do not solely thrive on suitable institutions and formal rules enshrined in laws. They also need to be anchored in professional standards and social norms. As a consequence, mimicking the Nordic model has proved difficult for countries who tried to convert their state broadcasters into public ones, particularly in southern and eastern Europe (Donders, 2016, p. 41). On the other hand, in countries with a public-service broadcasting tradition these systems show remarkable resilience (even as they have come under increased pressure from private media lobbyists, populist politicians and citizens tired of having to pay license fees at a time when there is plenty of alternative private media supply).2 Hence, in many European countries there already is an infrastructure to counter deficiencies in news markets. Typically, public-service media are obliged to report on domestic politics and international affairs, social and economic issues, culture and science. They are not only supposed to inform the public, but also to educate and entertain it, which is why they

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also broadcast gameshows, sitcoms, sports events, and movies. Whether all this is justifiable by market failure is debatable. And indeed, advocates of public-service systems have typically avoided the “neoliberal” public good argument, but stressed the cultural dimension of media provision (e.g., Garnham, 2000). According to this view, media add to the matrix on which culture and humane progress flourish. It is about citizens, not consumers (Donders, 2021, p. 1). That sounds great, but this line of reasoning makes it hard to justify any privately provided content, as possibly every bit of media content can be interpreted as of cultural value too precious to be left to the market. However, if we accept that media competition is beneficial in principle, there is a need to focus public-service media on those aspects that markets fail to provide in sufficient quantity and quality. It follows from the scenario sketched above that economic policy and business journalism, both at the national and at the local level, are the most precarious types. So, I would argue that there is a case for more intense and systematic coverage of these two areas in public-service media, in countries where these systems exist. In reality, though, this type of content is typically underrepresented, particularly on public-service television. Regrettably, stories focus primarily on consumer or even shareholder issues. That is somewhat odd, as these are precisely the fields of economic journalism where market deficiencies are least pronounced; consumers and private investors have an individual interest in, and a willingness to pay for, journalistic products. That’s why there is ample market supply. What is scarce—and arguably getting scarcer going forward—is the coverage of economic and business issues from a broader perspective. Like with domestic politics or international affairs, an ongoing public-service media coverage is needed, accompanied by formats of in-depth reporting. This does not need to crowd-out private sector business media, but may well enlarge their audience: people whose interest in economic issues has been stoked by public-media are likely to be more inclined to become users of more specialist publications. Journalism Can’t Go It Alone In this book, I have tried to stake off what economic journalism is, and what it could become. Each chapter looked at the subject through a different lens, highlighting media economic aspects (Chap. 2) and normative quality considerations (Chap. 3). It explored the relevance of narratives

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for economic development, and journalism’s part in it (Chap. 4). It chipped in some methodological thoughts concerning the empirical measurement of media narratives and the use of media-derived data in economic analyses (Chap. 5). The importance of giving international and European developments adequate room was stressed in Chaps. 6 and 7. The changing role of journalists in contemporary media landscapes was discussed in Chap. 8, while Chap. 9 strove to boil down all those rather abstract considerations to practical implications for newsroom routines, topic selection, and research. The writing was informed by the literature, my own research activities with different collaborators, and professional experience both as a journalist and as a scholar. I hope this has added multi-perspectivity to the analysis. As the reader may have noticed by now, the book clearly isn’t written from the perspective of a detached observer. The underlying thread of the book can be summarized as follows: we need to get better—more pointed, more far-sighted, more entertaining, more analytical, more investigative, more inventive, more factful, more considerate of what’s going on abroad and in other areas of the public sphere, more efficient, fairer, faster, smarter … And preferably all that at the same time. Naturally, this is an unattainable goal, but an ideal that journalists should strive for. It’s a stance rooted in the conviction that, at a time of sweeping political and economic transformation, journalism can make a decisive contribution to improve prospects. Clearly, journalism can’t go it alone. Without a receptive audience, news outlets who wish to publish anything meaningful are doomed. There is a need to ensure that public spheres, and societies as a whole, preserve their sanity and soberness. In particular, I see three policy areas where reforms are needed, and are indeed underway in some respects: schools and kindergartens where media and economic literacy need to become part of the curriculum; social media that need to be regulated so that they can live up to their promise of enhancing deliberation; public-service media (or public media in places where government involvement is the norm) that need to be recalibrated as to fit ensuing under-supplies of journalistic content. Nobody told me there’d be days like these, as John Lennon once put it. But who are we to doubt that we will make it, eventually.

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Notes 1. https://www.bnnbloomberg.ca/billionaire-­f rench-­s hipping-­t ycoon-­ expands-­hunt-­for-­media-­assets-­1.1846541 2. It is well-documented that the countries who have media systems of the Nordic model fare better in terms of trust towards fellow citizens, institutions and the media themselves (e.g., Müller, 2020, p.  96). Among EU media users television enjoys the highest level of trust compared with other media  – except for Poland and Hungary (Eurobarometer, 2022, p.  37), where a politization of public TV has occurred in recent years.

References Donders, K. (2016). Public service media and the European internal market: Friends or allies? Digiworld Economic Journal, No. 101, 1st Q., 41–61. Accessed December 06, 2022, from https://www.researchgate.net/ publication/309581343_Public_Service_Media_and_Policy_in_Europe Donders, K. (2021). Public service media in Europe: Law, theory and practice. Routledge. https://doi.org/10.4324/9781351105569 Garnham, N. (2000). Emancipation, the media, and modernity: Arguments about the media and social theory. Oxford University Press. Hallin, D.  C., & Mancini, P. (2004). Comparing media systems: Three models of media and politics. Cambridge University Press. https://doi.org/10.1017/ CBO9780511790867 Müller, H. (2020). Kurzschlusspolitik. Wie ständige Erregung unsere Demokratie zerstört. Piper. Syvertsen, T., Gunn, E., Mjøs, O. J., & Moe, H. (2014). The media welfare state. University of Michigan Press.

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Index

A Activists, 8, 56, 60, 66, 93, 166, 214, 231, 236, 256 Advertising, 23, 24, 33, 59, 60, 81, 85, 113, 217, 220, 266 Africa, 250 Agence France Press (AFP), 147 Agenda setting, 2, 4, 8, 42, 48, 52, 55–57, 61, 77, 114, 116, 128, 151, 163, 167, 192, 197, 199, 201, 202, 212, 214, 216, 222, 238 intermedia, 115 Algeria, 257 Algorithm, 24, 117, 120, 121, 132, 157, 247 Alphabet, 24 "Alternative” News Media, 32–33 America, 143, 145, 151, 175, 244, 250, 254 American Revolution, 186 Angle, 7 Anglo-Saxon economies, 96 Apple, 44

Arnault, Bernard, 267 Artificial Intelligence (AI), 218 Asia, 12 Associated Press (AP), 147 Asymmetric information, 19–22, 34, 66, 82 Attention cycles, 47, 77, 199, 240, 247, 261 Audience, 5, 6 Authoritarianism, 66, 74, 78 B Bagehot, Walter, 16 Bank for International Settlements (BIS), 96, 97, 135, 238, 242 Bank of England, 86 Benjamin Day, 15 Bezos, Jeff, 61, 267 Big business, 93 Bitcoin, 257 Bloomberg, 137, 167, 266 Bloomberg, Michael, 16 Bolloré, Vincent, 267

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 H. Müller, Challenging Economic Journalism, https://doi.org/10.1007/978-3-031-31030-0

295

296 

INDEX

Bonds, 12 Brandeis, Louis D., 19 Branding, 34–35 Breitbart, 33 Bretton Woods system of exchange rates, 260 Brexit, 4 British, 12, 15, 50, 153–155, 248, 260, 270 British Broadcasting Corporation (BBC), 187 British piracy, 12 Bullshit, 3–4 Business cycle, 9, 49, 82, 95, 110, 115, 121, 129, 188, 222 C Caijing, 17 Calvinism, 13 Canada, 161, 173, 183, 243 Carbon dioxide emission, 65 Carbon leakage, 65 Causality, 77 Censorship, 14, 15, 17, 59, 78, 148, 151 Central bank, 6, 28, 38, 45, 57, 78, 79, 84, 105, 107, 135, 150, 170, 193–195, 222, 242, 258, 259 reaction function, 107 China, 2, 7, 17, 56, 90, 110, 129, 145–148, 151, 156–161, 164, 170, 171, 181, 182, 205, 216, 221, 247, 250–255, 259, 260 Climate change, 48, 53, 54, 64, 65, 128, 146, 163, 202, 205, 218, 221, 253, 255–257 CNN, 23 Collective Action, 54–55 Communism, 79 Compact, 33 Competition Law, 32

Consumer Reports, 30 Content analysis, 12, 112, 115, 117, 121, 137, 148, 153, 154, 158, 175, 189 Continental Europe, 15 Conviction Narrative Theory (CNT), 85, 96, 98 Corona (Covid-19) pandemic, 53, 55, 120, 125, 184, 199, 243 Corporate earnings, 44 Correctiv, 268 Correspondent, 143, 158 corruption, 7, 65, 201, 203, 258, 266 Cost-benefit analysis, 63 Courantes, 13 Covid-19, see Corona (Covid-19) pandemic Crimea, 52, 171 Crisis, 5 Current account balances, 51, 65 D Dagens Næringsliv, 110 Demographic dividend, 250 Demographics, 248–251 Deprivation rate, 65 Der Spiegel, 35, 116, 179 Deutsche Bundesbank, 105, 106, 135 Die Welt, 122, 130, 175, 195 Digitalization, 6, 33, 34, 56, 215 Dijsselbloem, Jeroen, 152 Distant reading, 117 Distribution, 22 Distribution network, 22 Distribution of income, 65, 218, 251 Division of labour, 4 Domestication, 149–151, 155, 166, 168, 174 Dortmund Center for data-based Media Analysis (DoCMA), 106, 119

 INDEX 

Dow Jones, 16 Draghi, Mario, 99, 193–195 Dual process theory, 19, 85 Dutch Golden Age, 13–14 E Echo chambers, 33 Economic interests, 8 Economic narrative, 76, 81, 87, 90, 99, 135, 192, 242 Economic welfare, 63, 64, 66 Economies of scale, 15, 17, 19, 22–24, 29–32, 37, 214, 265, 268, 269 Economist, 16, 22, 31 Economization, 4 Editorial Leaning, 62–63 Editorial routines, 59 Elite media, 114, 169, 214, 266 El País, 192, 194 Employment, 5, 27, 65, 66, 83, 97, 234, 242, 243 England, 14 Erdogan, Recep Tayyip, 78–80 ESSF formula, 7, 9, 63–67, 92, 171–174, 199–203, 231, 239, 240, 242, 245, 253 EU, 4, 9, 52, 56, 91, 98, 99, 126, 148, 152, 154, 159, 161, 162, 164, 170, 172, 173, 176, 180–189, 191, 192, 195–206, 211, 212, 238, 240, 241, 245, 252–255, 273 Euro Crisis, 2, 9, 51, 52, 125, 184, 191–193, 196, 197, 199 Europe, 9, 11, 13, 14, 23, 35, 47, 52, 61, 67, 98, 110, 130, 131, 135, 137, 143, 152, 154, 167, 171, 173, 179–206, 211, 244, 250, 252, 270

297

European Central Bank (ECB), 9, 99, 105, 108, 193 European colonies, 12 European integration, 9, 154, 180, 181, 183, 186, 188, 191, 192, 195, 203, 206 Europeanization (of media coverage), 188–192, 195, 199, 204, 205 European Public Sphere (EPS), 187–189 European Stabilization Mechanism (ESM), 184, 186, 191, 238 European Union (EU), 98 Eurozone, 51 Exchange rates, 12, 51, 65, 183, 242, 252, 258–260 Expectations, 11, 49, 81, 83–90, 99, 107, 108, 111, 124, 131, 136, 168–170, 174, 185, 195, 242, 269 rational, 87 Experience good, 20, 36, 97, 214 Experts, 4, 8, 54, 60, 62, 63, 81, 167–169, 185, 231, 233, 234, 236, 260, 265 F Facebook, 24, 59, 67, 114, 218, 221 Fairness, 7, 9, 21, 26, 42, 64, 66, 67, 83, 92, 171, 172, 174, 192, 202, 203, 233, 243, 256, 259, 266 Fake news, 4 Federal Reserve Bank (Fed), 106, 194 Financial Conduct Authority (FCA), 50 Financial Crisis, 2, 52, 53, 63, 132, 154 Financial markets, 12, 44, 49, 65, 66, 82–84, 109–111, 115, 126, 130, 169, 218

298 

INDEX

Financial Times, 16, 17, 22, 27, 31, 58, 131, 167, 265 Fiscal policy, 49 Fixed costs, 23 Food and Agriculture Organisation (FAO), 249 Forward guidance, 107 Fox News, 33, 86 Frame, 7, 45, 57, 63, 74, 77, 122, 129, 134, 151, 157, 171, 202, 204, 206, 227, 239, 240 Framing, 8, 9, 28, 33, 45, 46, 60, 62–64, 74, 77, 82, 112, 126, 145, 150, 157, 158, 191, 192, 195, 202, 204, 214, 231, 235, 243, 246 France, 15, 16, 33, 64, 91, 148, 173, 180, 183, 184, 189, 191, 193, 195, 197, 214, 252, 266, 267 Frankfurt, Harry, 246 Frankfurter Allgemeine Zeitung, 105, 167 Freedom of expression, 15, 36, 59 Freedom of the press, 7 Fuggerzeitungen (Fugger newspapers), 11, 12, 15, 17 Fukushima, 47 G Gatekeepers, 2, 92, 215 General Agreement on Tariffs and Trade (GATT), 159, 252 General Electric, 81 General newspaper, 17, 23, 24 Germany, 16, 30, 32, 33, 51, 67, 91, 98, 111, 119, 124, 130, 131, 133, 135, 136, 148, 150, 153–155, 158, 161–163, 171, 173, 179, 183, 184, 186, 187, 190–193, 195, 196, 212, 214, 236, 244, 245, 252, 266, 268, 270

Global Compact, 64 Global Financial Crisis, 44 Globalization, 2, 6, 9, 31, 129–131, 145, 159, 160, 162, 164, 166, 167, 251, 252, 254, 258, 260 Glorious Revolution, 14, 36 Google, 24, 59 Government debt, 44 Government intervention, 1, 7 Greece, 51, 152, 191, 192, 195, 197, 201 Greenspan, Alan, 106 Gresham’s Law, 4 Gross Domestic Product (GDP), 5, 21, 44 H Haarlems Dagblad, 13 Handelsblatt, 16, 110, 122, 130, 160, 175, 195, 197 Hard-news, 6, 18, 32 Hierarchies of Influences, 58–60 Housing market, 144 Hungary, 189, 201, 204, 252, 273 Hybrid media landscapes, 41 I Ideology, 79 Ifo institute, 91 Il Sole 24 Ore, 16, 35, 195, 267 Immigrants, 5 Independence, 8, 35, 57–59, 61–63, 67, 97, 159, 174, 202, 216, 219, 222, 230–231, 235, 236, 266, 269 economic, 58 ideological, 58, 60 intellectual, 58 journalistic, 57–58, 61

 INDEX 

Inflation, 2, 6, 45, 49, 65, 78, 79, 84, 86, 88, 90, 96, 106, 108, 109, 121, 127, 131–136, 150, 180, 194, 234, 242, 243, 258 low, 107 Inflationary shock, 6 Inflation Perception Indicator (IPI), 131–136 Information asymmetric, 7, 21, 27, 28, 35, 37, 201, 268 as a market resource, 11 Innovation, 23, 52, 53, 143, 166, 251, 255, 259 Instagram, 24, 67, 218 Intangibles, 44–45, 253 Interest rates, 2, 27, 38, 49, 75, 78, 79, 107, 170, 171, 180, 183, 194 long-term, 107 lower bound, 107 International Monetary Fund (IMF), 51, 110, 144, 238, 252 International trade, 5 Intertemporal effects, 50 Intertemporal trade-offs, 49 Investment, 2, 26, 27, 30, 44, 45, 49, 65, 80, 90, 95, 97–99, 109, 110, 133, 147, 150, 152, 156, 161, 162, 170, 200, 202, 245, 267 Investor sentiment, 114 Iran, 148, 251, 257 Iraq, 125, 144, 148, 251, 257 Ireland, 51, 98, 198, 201, 270 Issing, Otmar, 105 Issue Attention Cycles, 52 Italy, 16, 99, 180, 183, 184, 191–193, 195, 196, 201, 266, 267 J James, Harold, 251, 252 Japan, 128, 148, 150, 161

299

Journalism school, 1 Journalistic routines, 5 Journalists, as gatekeepers, 1 K Kennedy, Paul, 182 Keynes, John Maynard, 75, 84, 85, 89, 260 L Labour markets, 52, 65 La Stampa, 191, 192, 194, 267 Latent Dirichlet Allocation (LDA), 110, 111, 117, 119–123, 129, 131, 132, 157, 160, 191, 193, 195 LDA Rolling, 132 Le Pen, Marine, 91, 180 Leaning against the wind, 9, 51, 97, 99, 100, 106, 244 Lehman Brothers, 44 Les Crises, 33 Les Échos, 16, 195, 197, 198, 267 Libya, 257 Life expectancy, 65, 250 Life satisfaction, 65 Literacy rates, 12, 13 Lobbying, 53, 56 Lobbyists, 26, 53, 56, 57, 60, 66, 93, 159, 213, 231, 236, 266, 270 M Malthus, Thomas Robert, 248, 249 Markets for lemons, 21 stability of, 1 Media accountability, 35, 61–62 Media economics, 9, 222

300 

INDEX

Media journalism, 14 Median voter model, 116 Media owners, 61 Media ownership, 59, 60 Media sphere, 5 Media systems, 35 Mediatization, 4 Mediterranean model (Hallin and Mancini), 12, 61, 250, 270 Merit good, 19 Meritoric good, 41 Merkel, Angela, 191 Meta, 24, 82 Middle East, 257 Migration, 146, 149, 168, 170, 176, 218, 251 Minimum wage, 21, 52 Monetary policy, 4, 38, 45, 78, 79, 87, 106–109, 135, 136, 194, 197, 238, 258 Monti, Mario, 185 Mortgage-backed securities (MBS), 50 MSNCB, 86 Musk, Elon, 61, 81, 267 N Narratives, 9, 73–78, 82–86, 89–92, 94, 97, 98, 106, 112, 129, 131, 134, 145, 150, 155, 161, 182, 184, 195, 199, 227, 233, 244–246 corporate, 81–84 Disclosure Tone, 82 economic, 73–100 economic policy, 79–81 grand, 79 hierarchy of, 82 macroeconomic, 96 media, 77 meta, 78–80, 82, 91, 92 monetary, 78, 108 social functions of, 74

Narrative Economics, 75–77 Nationalism, 79 Natural Language Processing (NLP), 117 Netherlands, 13, 16, 184, 197 New economy, 75 New York Sun, 15 New York Times, 35, 86, 160, 167 News agencies, 15, 23 News deserts, 164, 265 News flashpoints, 47, 166, 218, 247 News Flows, 146–149 Newspapers, 1, 11–17, 20–22, 25, 32, 34, 55, 56, 60, 62, 67, 84, 87, 108, 110, 114, 115, 120, 122, 123, 132, 137, 147, 148, 153–157, 160–162, 164, 167, 175, 187, 190–195, 197–199, 214, 217, 227, 229, 234, 236, 246, 265–268 elite, 116 News values, 8, 46, 64, 67, 146, 148, 165, 171, 202, 239, 240 Niel, Xavier, 267 Nigeria, 170, 250, 257 Nowcasting, 109, 110, 136 NRC Handelsbladet, 16 O OECD, see Organization for Economic Cooperation and Development Oprechte Haelemse Courant, 13 Organization for Economic Cooperation and Development (OECD), 64, 110, 243 Output gap, 38 P Philips curve, 45 Poland, 186, 190, 204, 273 Politico, 16, 28

 INDEX 

Populism, 2–4, 6, 19, 28, 46, 74, 91, 99, 125, 126, 151, 153, 164–167, 169, 173, 174, 176, 180, 203, 204, 252, 265, 269, 270 Populist politics, 2 Portugal, 51, 190, 201 Positive externalities, 18, 19, 27–29, 31, 34, 268, 269 Postmodernism, 80 Poverty, 5 Poverty rate, 65 Press freedom, 190 Productivity, 2, 65, 151, 166, 227, 245, 249 Professionalization, 15, 37, 219 Propaganda, 4, 17, 34, 57, 60, 61, 77, 78, 148, 151, 153, 189, 203, 204, 266, 270 Propaganda model, 60 Pro Publica, 268 Protectionism, 4 Public discourse, 34 Public finances, 83, 189 Public good, 31, 167, 269, 271 Public opinion, 2, 18, 28, 53, 106, 111, 115, 122, 186–188, 192 Public Opinion Tribunal, 14, 17–19, 28, 37, 57, 186 Public-service media, 187, 264, 269–272 Public sphere, 1, 2, 9, 48, 54, 77, 78, 98, 166, 184, 187, 193, 215, 216, 222, 272 Purchasing manager indices, 84 Putin, Vladimir, 79, 80, 256 Q QAnon, 55 Quality, 8, 13, 14, 19–22, 26, 27, 30–37, 41–43, 45, 48, 50, 54,

301

55, 57, 60–62, 66, 67, 73, 74, 113, 126, 152, 167, 171, 187, 202, 216, 217, 222, 229, 231, 237, 239, 245, 248, 260, 263, 266, 268–271 Quality criteria, 43 Quantitative easing, 107, 184 R Radio, 23, 25, 35, 218, 267, 270 Rating agencies, 50, 238 Rational expectations hypothesis, 89 Reality, 3 Rebellyon, 33 Recognition lags, 92 Redistribution, 26, 83, 107, 133, 135, 183, 255 Reformation, 12, 13 Refugee crisis, 52 Religion, 79 Rent Seeking, 53 Restauration, 15 Reuter, Paul, 16 Reuters, 15, 23, 137, 147, 266 Rogoff, Kenneth, 144 Rotary printing, 22 Russia, 2, 7, 17, 33, 52, 79, 128, 147, 148, 151, 171, 180, 181, 251–253, 256, 257, 259 Russia Today, 33 S Saudi Arabia, 257 Scandinavia, 32 Scepticism, 6 Schuman, Robert, 183 Serendipity, 24 Share buy backs, 49 Shiller, Robert, 75 Singapore, 7

302 

INDEX

Social media, 4, 20, 24, 32, 33, 42, 47, 55–57, 93, 108, 114, 148, 153, 165, 201, 212, 214, 215, 217, 220, 229, 232, 240, 246, 272 Social norms, 7 SpaceX, 61, 81, 267 Spain, 184, 191–193, 201 Sputnik News, 33 Stereotypes, in international new coverage, 146–155 Stern, 225, 230 Stock market, 44, 75 Storytelling, 73 Structural reforms, 49, 96, 98, 99, 194 Subscriptions, 13, 33, 113 Süddeutsche Zeitung, 120, 122, 130, 135, 160, 175, 191–195, 236 Syria, 52, 171 T Taxes, 17, 26, 49, 53, 62, 75, 185, 186, 244, 253, 256, 269 Telegram, 214 Telegraph, 23 Tesla, 44, 61, 81, 267 Test, 30 Third person effect, 89, 111, 116, 169 The Times of London, 227 Trade, 2, 6, 11–13, 16, 44, 45, 52, 64, 65, 73, 74, 91, 120, 125, 126, 149, 151, 156–163, 165, 168, 170, 172, 173, 180, 182, 188, 196, 211, 212, 238, 242, 245, 251–253, 259, 260 international, 4 war, 173, 196, 252 Transatlantic Trade and Investment Agreement (TTIP), 56, 162, 211, 212, 214, 254

Transparency, 61–62 Treaty of Lisbon, 197, 199 Treaty of Maastricht, 184 Trump, Donald, 3, 4, 125, 126, 145, 151, 160–162, 164, 173, 196, 212, 214, 218, 252 Trust, 21, 34–37, 41, 57, 61, 82, 169, 174, 232, 237, 268, 273 Trust in the media, 34–36 Truth, 3–4 TTIP, see Transatlantic Trade and Investment Agreement TV, 1, 23, 25, 34, 35, 42, 55, 60, 67, 114, 149, 151, 221, 229, 267, 273 Twitter, 56, 61, 114, 214, 218, 221, 267 U UK, 16, 111, 126, 148, 150, 153, 154, 187, 203, 205, 214, 243 Ukraine, 52, 79, 88, 98, 125, 126, 128, 129, 131, 180, 183, 189, 191, 247, 252, 259 Uncertainty, 6, 9, 34–36, 74, 82, 86, 94, 100, 106, 109–111, 119–131, 147, 235, 243, 246, 253 in journalistic research and investigation, 228 policy, 110 positive, 112 radical, 109 taxonomy of, 120 Uncertainty Perception Indicator (UPI), 111, 119, 122–131 Unemployment, 2, 21, 38, 44, 45, 84, 95, 242 Unions, 27, 28, 49, 53, 63, 66, 97, 135, 229, 238, 246, 253

 INDEX 

United Arab Emirates, 7, 257 US/USA, 3, 4, 16, 19, 23, 30, 33, 53, 54, 56, 67, 86, 90, 108, 114, 116, 125, 126, 143–145, 147, 148, 151, 155–157, 160–162, 166, 167, 170–173, 175, 181, 183, 184, 194, 205, 211, 221, 236, 240, 243, 244, 252, 255, 258–260, 268 Uses and gratifications approach, 18, 20, 25, 30

303

V Vedomosti, 17

Wall Street Journal, 16, 17, 27, 110, 167, 168, 265 Washington Post, 61, 160, 267 Welfare, 7, 15, 32, 53, 63, 64, 67, 91, 92, 135, 173, 202, 216, 240, 263, 269 Welfare economics, 7 White, William, 97 World Bank, 252 World Trade Organization (WTO), 156, 159–163 World War II, 154, 159, 183, 251, 252, 254, 260 WTO, see World Trade Organisation (WTO)

W Wages, 49, 52, 65, 79, 95, 97, 133, 203, 242, 245, 251

Y Yield curve, 44 YouTube, 20, 24, 34, 56, 114, 214