April 26, 2017

 The 2008 Financial Crisis and the Five Fields of Communication

In 2008, due to subprime mortgages, everyone who wanted a house got one. This flawed mortgage system set the stage for economic collapse, creating a financial crisis. In regards to the five fields of communication, each had to adapt to what the American public wanted to hear, both during and after the crisis. In the beginning, they inaccurately portrayed the depth of the economic problem, deceiving the public. After the crisis, the five fields had to adapt to a changed audience that hungered for more information on why the crisis occurred. The fields communication changed their methodologies of disclosure during and after the recession to align with what the public now needed by giving information in different forms to make the bailout understandable.

Commercials, were needed to spread the idea that subprime mortgages were good, encouraging risky spending. Advertisements propped up the banks that paid for them- regardless of whether this was the morally correct message to send to the public. The slogan of “loans are good” was propagated so as to reach all different types of groups. In commercials from 2005, comedy, sex appeal, and fear are all utilized to appeal to different audiences regarding their preconceived notion of a loan. Nowadays, advertisers steer clear of mortgage themed commercials due to the crisis.   

            Traditional advertising in the U.S.A was predicted to deteriorate due to the economic collapse. It instead changed mediums, making the leap from print to digital. The “financial crisis [became] the definitive opportunity for digital advertising,” resulting in a decrease in corporate spending, and lowering ad budgets. Digital became the opportune way to reach a wide range of people without spending a fortune (Digital Advertising, 2008).

            Advertising, before 2008, used commercials as a means of informing the public about subprime mortgages.  Ameriquest mortgages, one of the largest lenders at the time, used the slogan “Don't judge too quickly...We won't” (Lobello, 2011). Their witty commercials took economics and made it palatable to the average American. Presenting information in a funny, unintimidating way so as to draw consumers in. An example from their campaign is a scene in which two doctors are trying to swat a fly over a comatose patient. One doctor exclaims, after killing the bug with defibrillator paddles, that “this [electrocution] killed him alright” just as the patient’s family walks in (Ameriquest commercial). Awkward funny situations, like this linked the mortgage company with humor, making loans less intimidating. These commercials spearheaded the crisis by selling a bad idea in a humorous light.

Due to this, Journalism faced repercussions because bad information was allowed to spread. And Journalists did not efficiently catch the mistakes big banks were making at the time, only furthering the spread of the crisis. Journalism now is seen to have failed Main Street. This has now created an over eager journalist community, who are trying to expose every latest scandals to make up for their lack of coverage leading up to the crisis. Journalism, during the crisis, is now called “a sort of institutionalized Stockholm syndrome” because of negligence (Watson, 2009). The people who should have been watching the financial groups were much “too easily swayed by the arguments of the very people and institutions they were supposed to watch” (Watson, 2009). This is problematic because journalists are supposed to be the mediators of facts for the people. API further defines it as the “gathering, assessing, creating and presenting news and information” (Supa, 2017). This has lead to the rise in citizen reporters because the professional journalists are now no longer enough when it comes to covering large scale events. While citizen reporting is not always reliable, it is one of the consequences of absentee professional journalism community.

            The topic of finance was not a hot topic for stories. Therefore, information about it was not avidly being relayed to the public. Because of the media’s lack of financial reporting the current “freshly chastened news industry is now all too eager to find flaws with big banks” (Watson, 2009). Finance, no longer just a short footnote in white collar worker’s newspapers, has become a topic the average American wants to understand. The problem is trying to find a way to get media to report the unvarnished news, without making their sole goal to feed off of the public’s need of comprehensive financial information. One way this was done was through books, Too Big To Fail is an example of a journalist trying to make the narrative of the crisis understandable yet entertaining.  If journalists can accurately report the truth and make informing the public its number one priority, it can start to distance itself from its tarnished reputation.  

Television, specifically news, began dropping coverage of the economy during the crisis.

The economy, “was still three times the next largest subject, [with] terrorism at 7%, but [the economy] was no longer sweeping away coverage of a wide swath of other subjects” (Great Recession, 2009). The news, shifting its focus away from the economy, had similar motives as to why journalism did not report everything about the crisis-in this case “good news equals less news.” The lack of reporting bred false hope, because if “bad news” is ignored the audience could choose to turn a blind eye to negative economic situation (Great Recession, 2009). Television programs, therefore, were mostly concentrated on how people were trying to maintain their lifestyles before the crisis creating a figurehead (greedy bankers) to pin the blame on. Along with sparse coverage of the crisis, news networks were also over-emphasizing coverage of other non-economic events: the 2008 presidential election, Michael Jackson’s death, the battle over health care legislation, and the unrest from the Iranian election (Great Recession, 2009). These events took up airtime that was previously dominated by economics, and while extremely important, they distracted the public. This pattern of distraction is being mimicked even today after the crisis.

During and after the financial crisis public relations focused on damage control and demystifying the fog surrounding the inner workings of Wall Street. PR not only grew, but its massive expansion “outstripped that of …advertising business[es]” (Rogers, 2009). In this case, establishing a form of personal dialogue, was extremely important. Transparency and reestablishing trust for large banks and corporations is now PR’s goal. Even after the recovery, this is a hot topic, because the “many financial [service] companies are still feeling [the crisis’s] impact when it comes to reputation” (Hesney, 2016). Because of the general lack of trust, public relations firms are now more popular than ever due to their ability to do damage control during a crisis.

            PR also shifted from forms of promotional messages to crisis management (Rogers, 2009). Adapting its business to fit the needs of corporate America during and after the financial crisis, because company’s perceptions were “still being impacted by the financial crisis.” PR is faced with having to adapt to re-asses the narrative they are communicating with their client’s shareholders (Hesney, 2016). The name of Wall Street has been muddied, therefore PR firms hired by Wall Street now face the task of rebuilding their reputations.

Films, a medium easily understood by the public, has used traumatic events for entertainment under the guise of being educational. The “lag between harmful events and the American public’s desire to see them portrayed in films is not a new phenomenon” (Donilon, 2016). After the crisis, movies such as Inside Job (2010), The Big Short (2015), and Too Big to Fail (2011) became popular because they were a way of providing an education about the crisis in an entertaining narrative. They seemed to comprehensibly boil down the crisis and make it an entertaining story the public could understand without feeling like they were being talked down too.

Movies such as Too Big to Fail, adapted from Andrew Ross Sorkin’s book, and The Big Short an American comedy drama, provide easy mediums for the public to understand the crisis. Yet, they fall short of thoroughly analyzing the crisis because they are ultimately still movies. While films help educate the public about a matter they would not normally go out of their way to research, the summing up of a big crisis prioritizes a narrative structure over an accurate recollection of events. The 2008 crisis needed a villain, causing the film industry to turn Main Street audience against the “villainous” Wall Street bankers.

The problem with this is that a crisis cannot be accurately summed up in two hours. Adhereing to cinematic time constraints means an extreme reshaping of events. For example, this is seen with films portrayal of only one side: the supply side with greedy bankers who think the world is theirs to conquer. Versus the “demand side is rarely portrayed in film,” (Donilon, 2016) due to it not being as entertaining and not drawing audiences in with a common hatred towards “corrupt” Wall Street. Hollywood’s “interest of …making money,” will always take precedent over accurately portraying economic detail (Donilon, 2016). Movies, therefore, can be seen as a basic education and entertainment tool, but the information should be taken at face value.

 Whether in a movie, on television, a newspaper - all of the above medias tried to make the crisis easier to understand for those who did not have an extensive financial background. With the fields adapting to changing markets impacted by recession, narratives were re-written for educating Main Street. 

Reference Page

Covering the Great Recession: Why Did Coverage of the Economy Decrease?. (October 5, 2009). Pew Research Center. Retrieved from http://www.journalism.org/2009/10/05/why-did-coverage-economy-decrease/

Donilon, Sarah. (April 16, 2016). Selling the Recession: Hollywood and the Financial Crisis. The politic. Retrieved from http://thepolitic.org/selling-the-recession-hollywood-and-the-financial-crisis/

Donilon, Sarah. (April 16, 2016). Selling the Recession: Hollywood and the Financial Crisis. The politic. Retrieved from http://thepolitic.org/selling-the-recession-hollywood-and-the-financial-crisis/

Hesney, Doug. (September 26, 2016). Guilty by PR Association: 86% of Financial Services Pros Say 2008 Meltdown Still Impacts Their Company’s Reputation. Bulldog Reporter; PR News, Views and Resources. Retrieved from https://www.bulldogreporter.com/guilty-by-pr-association-86-of-financial-services-pros-say-2008-meltdown-still-impacts-their-companys-reputation/

Lobello, Carmel. (September 11, 2013). 5 commercials for subprime mortgage loans from before the financial crisis. The Week. Retrieved from http://theweek.com/articles/460145/5-commercials-subprime-mortgage-loans-from-before-financial-crisis

Mumenmezher (Youtube page). (2008, April 27). Ameriquest-All 5 Funny Commercials. Video retrieved from https://www.youtube.com/watch?v=UzzMir7zbN4.

Rogers, Danny. (January 4, 2009). Good news: it's time to deliver bad news. The Guardian. Retrieved from https://www.theguardian.com/media/2009/jan/05/public-relations-pr-financial-industry

Supa, D. Journalism lecture. April 6, 2017. Retrieved from in class lecture notes/slide show.

Watson, Bruce. (May 28, 2009). The media and the financial crisis: Journalism failed. AOL. FINANCE. Retrieved from https://www.aol.com/article/2009/05/28/the-media-and-the-financial-crisis-journalism-failed/1554278/