Broader Economic Coverage Requires Greater Responsibility

The art of reporting economics and business has developed greatly in the last 30 to 40 years. The business journalist, in print or electronic media, has gone from the statistic-strewn rear of the paper to the front page just because the global economy has intruded on a complacent America and confused it.

At their best, business and economic journalists have become translators of a changing world to the American public, and to other nations too. And their role has been critical in a time of many false alarms.

The great oil price quadrupling of 1973 began a decades-long era of hand-wringing about the waning power of the U.S. Threats were seen coming from other nations or vague malevolent forces. For example, the early belief among the general public — and many editors — was that the oil price rise and general inflation were tricks of the petroleum companies. But business journalists came into their own by being able to explain that the supply-demand situation in oil had changed and that the Organization of Petroleum Exporting Countries — heavily centered in the Middle East — had a dominant share of the world's petroleum reserves.

However, the best way to explain such things was not through highfalutin theory. Rather it was to focus on humble evidence, such as the rising price of a catfish lunch in Baton Rouge, La., where the restaurant owner had to hike charges on the menu because the unregulated price of natural gas that did the cooking had gone way up. From that day to this, the simplest rule to follow in looking at a big economic story is to remember that the global affects the local.

A changing world can be comprehended and explained. U.S. industry had increasing trouble competing against Japanese firms in automobiles, steel and many other fields as the 1980s began. The alert business journalist could have looked at the freeways of California even in the 1970s and predicted the growth of Japanese cars in the marketplace. Clearly, U.S. companies needed reform or protection.

It was historic that the U.S. government chose reform. Foreign cars were allowed to keep coming in and winning U.S. customers. Then the U.S. government, through local content legislation, demanded that foreign companies produce in the United States. The foreign car makers, principally Honda, Toyota and Nissan from Japan, started producing cars and trucks in non-union, modern factories in the Southern states. Later, they were joined by German car makers BMW and Mercedes Benz in South Carolina and Alabama.

As a consequence, one of the most productive automotive industries in the world grew up in the American South. This fact is belatedly recognized today, but was not reported properly for many years because too much of the coverage looked at the story from only one side — call it the global side. Either the story was reported as the industrial might of Japan or the weakness of the Detroit-based U.S. industry.

But if it had truly been seen in a global-yet-local perspective, the three-decade adventure of U.S. and Japanese industry could have made many important trends clear to a broad readership or audience. It could have foretold the decline of U.S. industrial unionism, for example. The United Auto Workers never could organize the new foreign factories in the South. And that was a signal. Today unions represent only 9 percent of the U.S. private sector workforce.

Alert economic journalists also might have taken note of Japan 's economic rigidities and weaknesses that led to its stall in the '90s. Equally, journalism might have given more credit to the continuing flexibility and adaptability of the U.S. economy. At the end of the 1980s, the U.S. economy was roughly 50 percent larger in annual output — gross domestic product — than the next-largest economy, that of Japan. Today, the U.S. economy has pulled away and is more than 100 percent larger than that of Japan, or even of the next five economies combined. How did that happen, two decades after hand-wringing began over the decline of the U.S.?

Well, Japanese and other foreign investment in the U.S. helped make the latter country more productive, whatever it did for the investing countries. Also the Cold War ended, freeing up capital for U.S. business to invest in itself. The available capital and technological advances in computing and communications spurred a virtual entrepreneurial revolution. Superficial comments called the era a "bubble," but business and economic journalists could see and measure the effects of Internet communications and electronic technology on production and distribution. And they could explain that much of U.S. industry was now working on a new, more efficient and global platform.

However, rather than leave the public to chew over those vague concepts, the economic journalist could have gone to U.S. industrial firms in the last year as they greatly increased their output to the world, while employing fewer workers doing it. They could have then foretold and explained the current "jobless" recovery. They also could have explained the relatively advanced abilities of U.S. companies compared to those of most of the rest of the world. And in looking at why those companies have superior abilities, perhaps they could provide a calmer outlook to the present, when anxieties are mounting once again.

The point of all this is both a celebration and a caution. It is wondrous that economic and business coverage has improved so much and become central to news and reportage everywhere. But it imposes a responsibility on journalists to both broaden and focus the vision so that they "see the universe in a grain of sand" and are able to make plain the sometimes difficult realities of the global economy.