Five years after the collapse and bankruptcy of Lehman Brothers, media are turning a blind eye to persistent economic inequality and poverty, and whitewashing the effects of austerity on preventing economic growth.
September 15 marked the fifth anniversary of the collapse of Lehman Brothers, the investment bank whose bankruptcy set off a global financial crash and dramatically accelerated a recession that began in the United States in December 2007. For nearly two years, the American and global economies were marked with enormous job loss, a collapse of housing and investment values, and the looming prospect of economic depression. Five years later the economy has yet to fully recover.
In the past five years, in large part thanks to unprecedented government intervention, financial markets have more than recovered from the 2008-2009 collapse. Since bottoming out on March 9, 2009, investment markets are up across-the-board. The Dow Jones industrial average crossed the 15,000 point threshold on May 7 for the first time ever and currently sits near its all-time high set on August 2. The other major indices are doing just as well. The S&P 500 crossed the 1,700 point threshold on August 2, when the NASDAQ also set a new 13-year high.
Corporate profits have ballooned along with the soaring stock market. CNNMoney reported in December 2012 that quarterly corporate profits set a new record, but it also noted that workers' wages had "fallen to their lowest-ever share of GDP." When Business Insider reported on the same phenomenon in April, profitability had continued to rise as wages continued to fall. Wage growth has largely been captured by the highest earners.
The top end of the economy has recovered from the collapse and recession, but other indicators remain stuck. Stagnant and falling wages contribute to growing economic inequality and diminish the purchasing power of the American consumer economy. The Economic Policy Institute detailed the effect that a decade of wage stagnation has had on the shrinking middle class and swollen ranks of working poor.
Unemployment, while falling, remains a drag on economic growth and has remained higher than pre-recession levels thanks largely to policy decisions in Washington.
Economist Jared Bernstein notes that poverty rates have barely fallen since the end of the recession, yet another indication that the growth seen over the past several years is not reaching the broader economy.
The economy is growing, but media have done a poor job acknowledging the causes and symptoms of lingering structural inequality. Five years after the Lehman Brothers collapse, media have been complicit in exacerbating structural inequalities by failing to cover the issues or grant a voice to groups that continued be to economically disadvantaged.
New research shows that the gap between the rich and poor in the United States in 2012 rose at the fastest rate since 1928. This revelation comes at a time when television and print media outlets largely underreport economic inequality.
According to research from economists at the University of California, Berkeley, the Paris School of Economics, and Oxford University, in 2012, incomes for those in the top 1 percent of earners rose by roughly 20 percent. According to the Associated Press, the share of income captured by the wealthiest was the highest since 1928, a year before the onset of the Great Depression .
The remaining 99 percent of earners, meanwhile, saw a 1 percent increase in income.
The research findings reinforce previous warnings from economists that rising income inequality poses a threat to economic well-being.
While economists have repeatedly shown that income inequality is a real, systemic issue in the American economy, media outlets have largely shirked their duty in reporting the problem over recent months.
A recent Media Matters report on economic inequality coverage in local print outlets found that, of articles with substantial mentions of policies and programs that affect low-income individuals, only 19 percent mentioned structural inequality and poverty.
The lack of coverage of inequality in local print media follows a similar pattern shown in nightly cable and broadcast news. Over the second quarter of 2013, only 9.3 percent of news segments on the economy mentioned inequality and the impact of current policies on low-income households
With news that economic inequality is reaching historical highs, media have a responsibility to bring this to light.