The Media, the Public and the Great Financial Crisis

This chapter examines the background to the Great Financial Crisis of 2008. It focuses on how since 1979 regulatory and tax policies introduced by both Conservative and Labour governments fostered the growth of the City of London at the expense of other sectors of the economy. This period saw a rapid growth in financial innovation which led the sector to play an ever more significant role in the economy. The chapter also examines why political elites chose to favour the interests of finance over other sectors of the economy. In part, this was a consequence of extensive lobbying by the sector, but it was also because financial innovation came to underpin a new growth model based on expanding consumer debt which helped to compensate for stagnant wage growth. However as the events of 2008 proved it was a model that was both dangerous and unstable.

This chapter examines how the British national press and public service broadcasting reported on the 2008 Banking Crisis and its aftermath. Key questions addressed in the chapter include: Who did the media cite as responsible for the crisis and how was it explained? How were the bank rescue plans evaluated and critiqued? Who were the key sources in news coverage? What was the range of debate on the nationalising the failed banks? What reforms to the finance sector were discussed? The results indicated that although there were some important differences between press and broadcast reporting there were significant areas of overlap. In particular, both press and broadcasting presented the view there were no alternatives to the bank bailouts and featured few voices calling for far-reaching systemic reforms to the sector. Instead much of the coverage was fixated on the relatively peripheral issue of restricting banker’s bonuses.

This chapter draws on the findings of 16 focus group discussions conducted in Glasgow, Surrey and the Midlands over the summer of 2009. The focus groups were drawn from ‘naturally occurring’ groups of people and discussed participants’ media consumption and understanding of the banking crisis. The research revealed that interest in the banking crisis was high and that in trying to understand events participants drew on knowledge of previous crises, personal experience, books and conversations with friends and family. However it was clear the mass media were the key information source for most people. This could be seen in the range of actors that that participants saw as responsible for the crisis, what they thought caused the crisis, their views on the bailouts and knowledge of reforms to the sector—all of which closely corresponded to what appeared in media coverage. The findings therefore suggest that the media had a powerful ability to influence the parameters of audience understanding and attitudes towards the crisis.

This chapter examines how the British national press and public service broadcasting reported on the debate over the rise in the public deficit in 2009. It begins by laying out the background to the rise in the deficit and placing Britain’s debt and deficit in both historical and international contexts. It then presents an analysis of news samples from the national press and the BBC’s flagship television news bulletin, News at Ten. The chapter finds that press reporting was characterised by fear appeals, the presentation of misleading data and false comparisons. BBC reporting provided accurate information about the deficit and its origins but shared with the press a view that the deficit threatened macroeconomic stability. The chapter also found the consistent endorsement of austerity measures, in both press and broadcasting despite their consistent history of policy failure during recessions.

This chapter draws on the findings of 16 focus group discussions conducted in Glasgow, Surrey and the Midlands over the summer of 2009. The focus groups were drawn from ‘naturally occurring’ groups of people and discussed participants’ media consumption and understanding of the deficit debate. The chapter finds that participants’ views on the deficit were very negative and alarmist reflecting the reporting of the issue in the media. Participants misidentified the key causal factors that drove the rise in the deficit. Rather than seeing the rise as a consequence of a shrinkage of the tax base during a severe recession most participants pointed to elements of public spending that had high and sustained media visibility such as government waste, immigration, welfare, bank bailouts, foreign wars, quangos and the EU. When questioned about what should be done to address the deficit participants advocated addressing the causal factors they identified—such as cutting immigration, welfare and waste. The chapter points to a powerful interaction between low levels of public understanding of the public finances and the impact of emotive media messages.

This chapter further unpacks the source of beliefs about the deficit and public spending that were identified in Chap. 5. In particular, it examines how two beliefs common in my focus groups reflected recurrent themes in press reporting in the period following Labour’s re-election in 2001. These were the belief that much of Labour’s post-2001 spending increases had been wasted and that public sector pensions, immigration and welfare had become increasingly unfair and unsustainable burdens on the taxpayer. To locate the development of these narratives Nexis searches going back to 2000 were conducted in four right-wing national newspapers. These revealed that the frequency of these themes rose substantially after 2001 and then increased again when the financial crisis hit in 2008. The chapter concludes by considering the contribution of the media in relation to other factors which may have influenced public knowledge and attitudes in this area.

This chapter explores the factors that structured the reporting of GFC news. To do this the chapter draws on a series of telephone and face to face interviews conducted with leading print and broadcast journalists between 2015 and 2018. This research finds that a wide variety of factors structured the process of news gathering. These included issues that have consistently been identified in previous studies such as the ideological preferences of newspaper proprietors, elite sourcing, public relations, information subsidies and source strategies. Although the analysis suggests there are a number of general processes at work grounded in political economy and the routines of newswork, there are also other factors that are much more organisation, subject and time specific. Ultimately, this shows that a comprehensive understanding of how news is produced needs a granular analysis that recognises the myriad and shifting complexities grounded in news production at specific times and places.

This concluding chapter pulls together the results from research on all three elements of the circuit of communication (production-content-reception) highlighting how the research reveals the media’s role in representing the process of bank reform and the policy shift to austerity in public discourse. I, then, reflect on the implications of the research findings for three issues. First, I consider what the book’s results say about media influence and whether the rise of the internet and social media mean that the press and television are now less significant as an information source on the economy. Second, I discuss what the book’s findings say about the BBC in relation to the Corporation’s impartiality, representativeness and role as public educator. Third, the chapter concludes by analysing the implications of the book for debates over the Labour party’s strategic communication policy.