Russia Guides the Media During the Economic Crisis

by Z*
Special to iVoryTowerz

A casual Google news search of "financial crisis" results in more than fifty thousand English-language articles in the world over the past week. These articles may repeat each other while some of the diversification attempts include labeling the crisis differently: turmoil, meltdown, fiasco, collapse, mess, catastrophe, storm, hurricane. Such creativity perhaps attracts many readers which is desirable for any news outlet. But the implications of the sensationalist craze so revered by the media are literally frightening. The sense of panic is overwhelming for any casual headline reader let alone investors whose indecisiveness and lack of trust keep driving stock indexes up and down.

So when the government of Russia urged its media to restrain from covering too much of the financial crisis it seemed reasonable.

To avoid panic, the Kremlin advised major television stations not to refer to the current financial situation as a crisis or collapse. Stock indexes in Russia were not supposed "to plummet" but rather "decrease." TV made it sound to the general public that the financial crisis is some distant American/European phenomenon that the Russian people do not have to worry about. Curiously enough though, television reports do extensively cover measures taken by the Russian government to tackle the crisis. Anti-crisis policy without crisis? This paradox resulted in either public confusion as to why supermarket shelves look deserted or in opinions that any domestic difficulties are temporary and are solely due to the crisis outside of Russia.

The Russian print media, and, most importantly, the internet, are now teeming with articles analyzing the financial crisis inside and outside of the country. The first October wave of articles criticized the absence of domestic coverage of financial and economic troubles. The main argument was transparency. If the government is so protective of its people and remains secretive about the status quo, it seems Russia's paternalistic instincts keep its decisions concerning the crisis under the table. However, critics insist that people have to know the cruel truth that Russia is not "an island of stability" and that it is the media's job to keep them informed. That view may be in flux, however, as reporters seemingly come to a realization point that a change of thinking is healithier: less information might be better.

Last week, Russian Minister of Finance Alexei Kudrin surprised ordinary citizens by his pessimistic economic predictions. Addressing the lower house of Russia's parliament (the Duma), Kudrin said that "a harsh recession is now beginning." While Russia may not want any analogies drawn to the U.S., the effect produced by those gloomy statements is identical to the ones produced by statements and speeches by the U.S. Treasury Secretary Henry Paulson and the Federal Reserve Chairman Ben Bernanke. And the effect was more panic in the financial markets and plummeting stock indexes. It might be a coincidence that the market neurotically reacts to statements by high-profile officials, but it might as well mean that less media attention will allow the government do its work while calmed investors invest and consumers consume.

So next time you want to write a piece about the financial typhoon or tornado, don't talk about the mess it's creating; neither try to predict where it's going. Rather, think about the cleared fields it leaves behind and how we can make the most of them.

*Z is from a country that made up the Soviet Union, and her writing on cultural and political matters could have a backlash when she returns home from the U.S., so she writes under a pseudonym.

(Graphic by AZRainman. To see more of AZRainman's work, please check out his blog.)

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Rick Rockwell said...

I want to strongly disagree with the conclusions of this posting.

Whenever the state steps in to "suggest" the "proper" phrasing for the media (and our leaders attempt to school the media on "proper" terminology too) that is coercive. The media cannot balance government power without independence from such "guidance." As the suggestions are coming from a Russian state with a long history (even before the USSR) of repression and censorship, I see such "suggestions" as extremely troubling.

However, many younger people with no investments in retirement accounts, mortgages or stocks, do not understand what is at stake in the proper and transparent reporting of the economic crisis. Many young people I have discussed this with feel either the media should obscure the facts to protect the markets or work harder at preventing panic by not reporting at all. This would then prevent consumers from making snap judgments about their money.

But that is the key part: it is their money! The media have a responsibility to report with full transparency about this crisis. Indeed, the media have a responsibility to investigate why there wasn´t better reporting about what led to the crisis in the first place (and the media are complicit here too). Why weren´t the media reporting on GAO reports and others that pointed out we were headed to a precipice? Many of us have mortgages, investments, and retirement accounts affected by the current mess. I want as much information available as possible to make decisions about those investments... not less information.

And Russians (and everyone else too) should have the same rights to information... no matter the concern of states, governments, or the corrupt investment industry that have led us to this place in history.

Sure, the crisis does create opportunities for some to reinvest differently in global markets. However, if the information about economic conditions and the conditions of firms seeking investment cannot be trusted by investors how can anyone make a fair evaluation? The crisis will be solved not just by rebuilding trust in the markets but also by building trust in the information about the market. And that means full transparency.

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