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Tuesday, May 19, 2009

The Media has Amplfied Confusion and Fear on the Financial Crisis

Rolf Rosenkranz, the Editor of the Development Executive Group, discussed how the international news media has covered the financial crisis. Mr. Rosenkranz keynote at the 23rd Annual ICGFM conference was titled “The Financial Crisis, Networks and Future of News.”

Mr. Rosenkranz pointed out the global reach of American media, particularly on-line. He pointed out that the media began to recognize the crisis in August of 2008. Rather than focus on the causes, the media focused on potential solutions - and not very well. In October, Iceland made more news than the Olympic games. The G20 conference in April 2009 was a milestone event where the media began covering the financial crisis on a global basis.

Much of the media presented the crisis as "gloom and doom." Mr. Rosenkranz favourite headline from the Netherlands was: "Withdraw cash from ATM machines while you can." These articles amplified confusion and fear. Journalists are not experts in financial information. The overload of negative news created desensitization.

Mr. Rosenkranz pointed out the changes in media:

  • Concentration

  • Privatization

  • Less collective bargaining

  • Reduction in pay

  • Shift in generation

  • More contractors

Mr. Rosenkranz suggests that these changes have created self-censureship, reduced investigative reporting and opportunities for corruption. Information is not the same as news. As media is not the same as the press. He asks whether the press should be a "lap dog" or a "watchdog".

Who is winning the news war? Americans who use the Internet consume more international news than newspapers. And, the US media is reducing investments in overseas news. He quoted Nick Davies, the author of “Flat Earth News about Journalism's cardinal sins:

  • Publish easy-to-gather stories

  • Select safe facts and ideas

  • Provide “false balance”

  • Give audiences what they want

The use of news aggregators like Yahoo and Google could spell the end of the traditional news media. Internet users are heading to these sites instead of the local press.

Social media is a major change by turning readers into publishers and creating interactions. Mr. Rosenkranz showed statistics indicating significant use of social media in Asia. Credibility remains a problem with traditional and social media. He believes that specialized network like PEMPAL and Devex provides this credibility.

Mr. Rosenkranz introduced the objectives of the Devex news and social networking sites.


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