Grading Business Journalism

Some things are constant.

The sun came up this morning. The Chicago Cubs are having a tough century. Journalists need to cover business better.

That last item makes for dull chatter, and no disagreement.

But in our business, the spotlight has lit business journalism education, a positive result of the corporate scandals of the early 2000s.

One can even argue that business journalism is necessary to the republic. Why so?

Sixty percent of the voters now are investors. They must manage their own retirement nest eggs. If companies' books are deceptive, if analysts are compromised, if mutual funds are sneaky, if the Securities and Exchange Commission is undermanned, who'll protect the public? Maybe the press.

James Madison couldn't have envisioned today's watchdog financial press, but he would approve. "Advancement and diffusion of knowledge is the only guardian of true liberty," he wrote in 1825. If we all want financial freedom, we require straight facts and analysis.

We do have it. With 30 years' experience as a business journalism educator and practitioner, I'd argue that financial reporting has never been better. You can see it every day. At a conference our university held last year, the great reporter Seymour Hersh said he had come to believe that the best investigative work is being done by business reporters.

But we need to ensure that it keeps on keeping on. We need to ensure that there's a steady flow of eager young reporters who like poring through 10-Ks. How can we do that most efficiently?

The education of business journalists has to go forward on multiple fronts: in school, in the newsroom, at professional meetings such as those currently run by the Donald W. Reynolds National Center for Business Journalism and the Society of American Business Editors and Writers.

Can we do it at the undergraduate level? Perhaps 1 in 500 undergraduates shows interest. But universities with undergraduate business schools should try bridging to journalism. At Northwestern University, we encourage that rare student to pair journalism courses with a sequence called "business institutions." That combo succeeds.

The graduate level works well in developing business journalists. The key is to have them cover actual news for actual readers, encouraging them to put economic concepts into the news report. The worst approach is to have them do windbag small-business features in a lab setting or for a self-published magazine.

I have taught business journalism for 25 years at Northwestern. That means roughly 1,400 graduate students and 80 courses. We operate a news service out of Washington and Chicago that generates about 500 clips per quarter. They work business beats in Chicago.

Perhaps 300 of our students have gone to business journalism as a career choice, usually entering through dailies, wire services, trade magazines and newsletters.

Why is this my specialty? The dean and the faculty hired me because I had been the No. 1 business editor at the old Chicago Daily News and briefly at The Chicago Sun-Times, and I was teaching part time. I had a lot of business clips and an MBA. I also had been a city editor and a features editor and had covered police and politics and riots. Even Eagle Scouts and beauty contests. So I teach other courses too.

I mention police because the most important trait in business journalism seems to be a nose for news. Time in the police shack or on general assignment helps create a better financial reporter. Which leads us to the best place to learn business reporting: the newsroom.

I like the idea of breakouts for working reporters. Most industries send executives and technicians out for training. Professionals such as accountants must do so to stay licensed.

But journalism resists. The mantra is that journalism schools already do all the training that's necessary. Well, I'm there, and it ain't happening. All we can do is get them started.

The journalism industry can take more responsibility. Here's an example: Several years ago, the St. Paul Pioneer Press hired an accounting professor to come in each week. She gave a basic course, and the whole business staff pledged to attend faithfully. (The reporters told me so.) The results in the news hole were spectacular. Maybe it didn't help the paper's bottom line, but it benefited the St. Paul readers.

Those St. Paul reporters already were committed to business journalism, but we need to convert more reporters who already have news skills. Out there coaching, I've found that working reporters have many of the same problems that confront graduate students.

What are the main hurdles to becoming a business journalist? Over the years we've learned what they are, and we confront them, one by one in an order that seems to work.

*Basic accounting. It shows how a company works and it provides the fundamental vocabulary of business. We do accounting exercises until we get it.

* Math. We have run into countless college graduates (with GPAs of 3.4 to 3.8) who cannot understand percentages. Or compound growth. Or ratios. Or slope. Or constant dollars. On and on. So we do little exercises.

*Personal finance. Most college graduates can't tell you the difference between a stock and a bond. Or how money grows. Or how we compute mortgages or finance houses and cars and educations. More exercises.

*Taxation. People have little notion of how tax brackets work. They don't know the difference between a tax deduction and a tax credit. So we do 1040 forms.

* Earnings. We cover them for actual readers, and the mysteries slowly unravel.

* Tables. We learn to read the tables for stocks and bonds and futures.

* Eventually we get into options and hedging.

*Basic economics. Most college students take either macro or micro because they must. But soon an erasure occurs. They recall little. We learn about the national budget, about supply and demand, and how to distinguish between economists.

* Investment theories. We try to understand that money managers have radically different ways of operating.

* Management theories, practices, buzzwords.

* Complexity. We dig deep into indicators, commodities, overseas economies. And finally we're doing some valuable stories.

Every quarter, somebody says, "I thought this would be dull, but my father wanted me to take it, and it isn't dull, and we've been having great discussions on the phone."

That reminds me. Anchor Jim Lehrer likes to say that it takes courage to be dull.