Spare me the whining about Americans and their financial illiteracy. It’s not like they are getting any help from institutions which ought to be assisting them.
Media bashing gets a bit cheap at times, but in this realm the broadcast media isn’t delivering anything close to real “business news.” For starters, most of what passes for “business” news on the cable TV outlets is nothing more than financial sector gossip and stock market reporting. When everything is said and scrolled across the screen, what the consumer has gotten is information of the stock markets, by the stock markets and for the stock markets.
If we take the most generous definition of an investor possible – one including individual investors, investors in retirement 401(k)’s, IRAs, mutual funds, and ETF’s – then we can claim that 48% of the adults in the U.S. have money invested in “the market.” [CNN] Meaning, 52% of Americans have no investment in “the market” at all, and one could question how carefully those who have funds in the retirement accounts are attending to the investments made on their behalf. Drilling a bit deeper into the numbers we find that only 13.8% of all U.S. families held any individual stock. [CNN] “Ownership of savings bonds, other bonds, directly held stocks, and pooled investment funds sustained sizable drops in ownership rates between 2010 and 2013, although none of the four types of assets are commonly held, with ownership rates in 2013 varying between 1.4 percent (other bonds) and 13.8 percent (directly held stocks).” [FED pdf]
The best face we can put on this is that what passes for business news in this country is stock market information of direct interest to at best 14% of the nation’s adult population. Why? We can guess — (1) It pleases the managerial types who are focused on short term gains in stock prices? (2) It’s cheap to produce? Reporting on stock prices is really easy, especially if the big driver is something accessible like the Dow Jones Industrial Average. (3) It gives executives an opportunity to tout the value (whatever that might be) of their companies, thus moving their stock prices up? However, what it doesn’t do is give anyone a clear overall picture of business in the United States of America.
If business news isn’t what’s on offer from the news channels which purport to provide it – then where to find it?
The Federal Reserve has all manner of publications available online which will inform the inquisitive about consumer and personal finance. Auto and Student debt is up at the moment, while the home ownership rate is falling, but not as many homeowners are now in default. Interested in income inequality, or wealth gaps? Information is available from the FED on those topics as well. Look and one can find all manner of information and analysis, unfettered from political punditry, on the subject. In fact, one can discover that the way we talk about income inequality may be a function of how we measure it.
The San Francisco Federal Reserve is pleased to highlight its blog, with features ranging from how the FED recycles old currency to how Medicare payments may be curtailing inflationary trends. If more generalized information is the target, then the Beige Book is as good a source as any:
“Commonly known as the Beige Book, this report is published eight times per year. Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and Branch directors and interviews with key business contacts, economists, market experts, and other sources. The Beige Book summarizes this information by District and sector. An overall summary of the twelve district reports is prepared by a designated Federal Reserve Bank on a rotating basis.” [FED]
Think of the Beige Book as “one stop shopping” for general economic news in each of the FED’s regions.
Labor: A steady diet of cable business news might leave a person with the idea that labor news doesn’t exist except so far as it concerns minimum wage issues, or the latest protest of less than living wages. It’s more difficult to find than information about economic trends, but it’s there. A person might want to start with Labor Press.Org. Labor Notes, is another source. Union labor issues are well publicized in AFL-CIO sites. There’s more information available from the SEIU, and AFSCME.
Those cable shows – and they are just ‘shows’ – could fill a goodly amount of their time just from Department of Labor information. They won’t because they’re too busy tossing softballs to CEOs, but they could for example offer the investor’s side of the argument about fiduciary responsibility and financial advisers from DoL information. If it’s numbers that are wanted, there’s a whole bureau for those – the Bureau of Labor Statistics. Want the current consumer price index, the unemployment rate, payroll employment figures, average hourly earnings, the producer price index, productivity statistics, or the employment cost index? All these are available from the Department of Labor.
Doing Business: Republican presidential candidates Cruz and Kasich both proposed eliminating the Department of Commerce. This is taking the Tea Party Express right over the edge into the Silly Swamp. One excellent source of information about our economy is the Bureau of Economic Analysis, which compiles data regarding personal income and outlays – read: income and spending – what could be more “economic” than that? Want information concerning the Gross Domestic Product? Consumer Spending? Corporate Profits? Fixed Assets? Balance of Payments? State and Metropolitan GDP? Quarterly GDP by industry? It’s all available from the Department of Commerce Bureau of Economic Analysis.
When thinking of broadcast media it’s important to remember that what keeps the cable ‘business’ news going are advertising sales, and a commercial which might cost $2,000 to $3,000 for a network broadcast sponsorship could be as cheap as $175 on cable. Little wonder their business seems to be limited to softball interviews and streaming the DJIA numbers on the screen – which you could do at home on any computer monitor. Those shows are relatively banal because they probably can’t afford anything else.
Enterprises like Bush’s Baked Beans, Chef Michael’s Canine Creations, and Slap Chop are right in the mix with Ford, Chevrolet, and Wal-Mart sponsoring what passes for business and news reporting. [HuffPo] We’d be better served to Keep Calm and Do It Yourself.