Veteran Business Journalists Criticize “Sky Is Falling” S&P Coverage

Several veteran business editors and reporters have criticized press coverage of the Standard & Poor's downgrade and its financial fallout since Friday.

Those who spoke with Media Matters had concerns with everything from the panic approach taken by some news outlets to the inadequate explanation of what the change means.

“It is a little bit of Chicken Little - 'the sky is falling',” declared Marty Steffens, chair in business and financial journalism at the University of Missouri School of Journalism and former editor of the San Francisco Examiner. “You are still very safe in holding American securities ... there have been a lot of good stories about how it is not terrible. What happens is journalism gets responsible in a lot of things, but it doesn't dominate the chatter in the headlines.”

Several other veteran business journalists agreed, though none singled out specific news outlets.

Paul Steiger, former managing editor of The Wall Street Journal and currently editor-in-chief of ProPublica.org, said the ratings of S&P and others should not be taken as seriously as the have been:

“To get too exercised about what (ratings agencies) do or don't do is a waste of time,” he said. “Ratings agencies lead and they also follow.

”My view is to never get very excited about actions by ratings agencies because they are just one voice." He later added, "...and the record isn't great."

Steiger was referring to some ratings agencies' past history of mistakes, such as their failures in the run-up to the financial crisis and economic scandals that include Enron and WorldCom.

New York Times columnist and Nobel Prize winner Paul Krugman offered his own such criticism earlier this week in a piece that stated:

[I]t's hard to think of anyone less qualified to pass judgment on America than the rating agencies. The people who rated subprime-backed securities are now declaring that they are the judges of fiscal policy? Really?

Kevin Hall, national economics correspondent for McClatchy Newspapers, said he was surprised at the hype since last Friday.

“I did not expect this much,” he said of the coverage. “This (downgrade) is expected, what is the big deal? The (media) reaction has been stronger than we expected.

”In terms of media coverage, my first instinct was it's overblown ... It is probably less of a deal than we're making it because it is an issue of the future, it is a judgment on our ability to get our longer term finances in order. You don't see that in reporting as much as you should."

He later added, “When all the dust settles, I think the media will realize 'oops, we overstated this.'”

Warren Watson, co-founder of the Reynolds Center for Business Journalism and executive director of the Society of American Business Editors and Writers, said it is not time for panic.

“Much like any story that is on a specialty topic, the rest of the media kind of jumps in and does the best it can and sometimes that's a little clumsy and the stories don't contain as much context as they should,” he said. “I think it's too early to panic. It's just an overall tone of 'boy we better worry about this.' You get a lot of little pieces that take time to figure out what it means.”

David Cay Johnston, former Pulitzer Prize-winning business reporter for The New York Times and a current Reuters columnist, may have taken the harshest stand against coverage.

“It is extremely overdone,” he said of most media reports on the downgrade. “It's quite clear that many of the journalists, especially on television covering this have not even read the downgrade statement or they don't understand what it means,” he said. “This fear and this panic is totally unnecessary.”