Should Girls Rule?

(To stay in touch with the financial world, I chip in occasional pieces — gratis — for the Tabb Forum, a site for trading folks. Usually, the themes are market-specific, dealing with banking issues, regulation and executive-pay matters. Sometimes, I have a little fun with them. Here’s a piece from today that falls into the latter group.)

Researchers tell us that men are up to two times as likely as women to be involved in fatal car crashes. This raises an interesting question: if there were more women on Wall Street, would we have fewer economic crashes?

Sexist pap, feminists might argue. But the data on female versus male behavior on the road are too substantial to ignore. Check out the post on the Freakonomics blog for details.

Compelling studies cited there explain, as the headline writer said, “why you’d rather ride with a woman than a man.” It seems that men break the rules more often, are too aggressive for their own good and tend to court danger. (Sound like those guys in your trading room at times?)

Look at the evidence. A study by Washington State sociologist Jennifer Schwartz showed that in 2004 more than four times more men than women were arrested for drunk driving. Another case in point: research by Fran H. Norris of the National Center for Disaster Mental Health Research and others showed men are less likely to obey traffic laws.

Why the difference? Testosterone, perhaps. Socialization, maybe. Whatever the reason, other research by Dana Yagil of the University of Haifa suggests that women look at traffic laws as necessary and just, while men tend to think them optional. Anyone who has driven in Israel (or Italy for that matter) knows that guys tend to think even red lights are advisory, at best.

The question is whether behavior on the road is likely to be mirrored in the markets. There is some reason to believe this is so: New York Magazine, in a provocative piece headlined What If Women Ran Wall Street?, points to a study by Vanguard that suggests that men are more likely than women to sell stocks at the bottom of the market. One has to wonder whether women traders are less likely to jump foolishly into bad deals or to be guided by internal flashing yellow lights more than men.

But are there enough women in the game to make a difference? Personal impressions tell me that there are far more men than women in the markets. Women were absent – altogether absent – in most trading rooms for derivatives that I spent time in while covering the Chicago markets. And they are far outnumbered by guys on the exchange floors there. Indeed, writer Cari Lynn in 2004 did a dandy memoir of her days as one of the few women on the floor at the Chicago Merc from 2000-2002, “Leg the Spread: A Woman’s Adventures Inside the Trillion-Dollar Boys’ Club of Commodities Trading.” (Read the review.)

It could be that women are particularly underrepresented in derivatives because of the math bias. People drawn to such arenas tend to be math geeks and more of them tend to be guys. It could also be that many women don’t share the bloodlust the trading world sometimes requires – all those “animal spirits” that John Maynard Keynes famously talked about. And, in part, it may be simple sexism that has kept the doors barred.

Whatever the case, however, few would argue against the idea that appropriate caution and level-headedness are too often missing in the markets. The last few years couldn’t demonstrate that more. And instinct tells me that more women in the arena might bring a needed touch of prudence and good judgment, a sense of when not to leap into the void.

If your trading room doesn’t include a goodly number of women, gents, it might be time to get the recruiters out knocking on doors. And, once the ladies are there, you might want to make sure that they don’t get shouted down by the guys. Listen to them, just as you should listen to your wives in the car. And, judging by the studies, you might want to let your wives take the wheel a bit more often, too.

Business Journalism: Is There a Tomorrow?

A cynic might say that Steve Shepard, my old boss at BUSINESS WEEK, has to believe there is a future for the scribbler’s art. He runs the graduate school of journalism at City University of New York after all.

But it’s more than just where he sits that determines where he stands. Steve is a star in the field. The inveterate New Yorker — betrayed by both his accent and his misguided love of the Yankees — has collected just about every award available to magazine journalists. He knows what readers need.

The best proof of that is how he resuscitated the BW franchise. He turned the magazine into a growth vehicle, in the ’80s, after long-time parent McGraw-Hill had begun treating it as a cash cow, an aging brand that had plateaued in the market. In fact, Shepard later saw the book grow so fat that we had to turn away ads because the page count was busting the staples. That happy time was less than a decade ago. Sadly, of course, it is far thinner today.

Steve offered his views on the future of business journalism in this intriguing interview. He’s upbeat about BW’s future under Bloomberg. He’s convinced, too, that there is a future for business news reporting, though it will have to adapt to new formats. Take a gander:

The Future of Business Journalism from CUNY Grad School of Journalism on Vimeo.

Steve, I believe, is spot on that business journalism will endure. The information that business journalists report — whether up-to-the-minute on the wires or in more long-form settings — is too important for people who have money on the line. Can you imagine if Wall Street ran only on rumors (something that sometimes happens already)?

Of course, the issue is how business journalism will support itself. Bloomberg is an intriguing model, since the biggest consumers of its news service pay a lot for it, something on the order of $20,000 a year for access to the famed Bloomberg terminal. Problem is, that’s a limited market, chiefly serious traders on Wall Street.

Bloomberg’s purchase of BW last fall was designed, in part, to expose the outfit’s news and information to a broader audience. BW brought it some 4.5 million readers in print and even more users of the BW Web site. The pub, with its 80-year-old brand name, is quite a crowd-broadener.

But plenty of questions loom. Steve argues, for instance, that there’s room for one long-form business mag. So, does that mean that Forbes and Fortune disappear? And will Bloomberg subsidize BW if it can’t grow fat again with ads? Is it sufficient that it be a marketing vehicle for the name and terminals or other outlets Bloomberg may develop for its products? Can the product succeed as a loss-leader?

Some folks argue that the general news service at Bloomberg is a big loss-leader already. Former colleagues of mine, such as Steve Baker, contend that traders pay for relatively narrow slices of information relevant to their work and ignore the bulk of the news on the machine. Of course, since Bloomberg is private, outsiders can’t know for sure how the news service fares financially.

For fans of long-form business journalism, the question is whether the format can survive only if it has a Big Daddy like Bloomberg. Will analytic and insightful work, the kind that made BW great, pay its own way? Will consumers pay anywhere near what it costs, now that so many advertisers have found other more cost-effective vehicles? Is the current slump more a reflection of economic stress or something deeper? Will business pubs prove to be niche operations serving elite audiences, much in the way that Harper’s or The Atlantic do?

At the end of the day, it seems clear that people who need financial and economic news will be served. They may be served over cell phones, iPads, the Net or someday by brain implants — who knows? — but their demand for information will be met. The challenge for business journalists is to figure out how to make sure these folks pay the freight so they can keep churning out top-quality work. And, for budding journalists, the challenge is to make sure that they can serve up the goods in whatever form the market requires.

Business Journalism Can Shake Your World

It has been almost 30 years since an economist and a business journalist used reason, logic and some savvy reporting assignments to lead me into a new worldview. Those two teachers at the Columbia Grad School of Journalism unsettled a quarter-century of woolly-headed thinking fostered by Vietnam-era radicalism, an English-major’s naivete and too much rock ‘n roll. In its place, they instilled something closer (on the good days) to a cold-eyed and clear view of how things work.

Now, as I map out a course in business and economic journalism for undergrads at the Nebraska J School this fall, the question is, can I hope to equal the work of Ron Krieger and Chris Welles?

Krieger, a union leader as a young reporter for the Denver Post, earned an economics Ph.D that led to teaching positions at Goucher College, an editor’s spot at BUSINESS WEEK and later a World Bank job. His keen grasp of how labor markets and global economics functioned shook off any sentimental red-tinged leanings that I and most of my dozen fellow students felt – at least in economic matters, if not social ones. From monetary policy to global development, Krieger knew his stuff.

For his part, Welles brought a skeptic’s eye to business. He wrote books about oil companies that rattled their cages so much that they shunned the Bagehot program, the midcareer biz-econ operation he ran at Columbia. He had a take-no-prisoner’s attitude toward business coverage, holding CEOs responsible for silliness and greed that got their companies in trouble. He later went on to serve as a hard-hitting finance editor at BUSINESS WEEK, where we wound up working together on smart stories about such luminaries as Donald Trump.

Over the course of the academic year 1980-81, this pair crammed enough business and economic knowledge into our heads that most of us went on to fairly impressive careers in the field. We made our marks at places such as the Wall Street Journal, the Asian Wall Street Journal, Institutional Investor, The Economist and the Globe and Mail. One fellow grad, Jan Wong, had been a gushy fan of Chinese communism until harsh experience in China and her economics training under Krieger cast her experience in a new light. She wrote a couple books, including the fascinating Red China Blues, about her personal political and economic evolution.

Can I hope to leave any such legacy, to make such a mark in my students? If so, I must give them a solid dose of economics that is both academically sound and real-world enough to overcome the distaste they get for the field in most classroom studies. I must show them how the Fed works, how business cycles occur, how government policies affect the economy – all in a lively way. I must make topics such as comparative advantage and supply-demand curves come alive, much as they, as journalists eventually, will have to for their readers.

On the business front, I must get them revved up about deconstructing corporate strategies, analyzing competitive markets, understanding Wall Street and the commodities bourses. I’ve got to teach them how to write basic earnings stories, how to understand financial statements, how to deal with analysts. I’ve got to show them how to put human faces on their work in these areas, whether by understanding CEO personalities or the all-too-personal consequences of business missteps on jobs. I’ve got to teach them how to appreciate entrepreneurs.

This is a tall order. Fortunately, I will have some help. Friends who teach biz-econ journalism at places such as SMU and the University of North Carolina (Chris Roush publishes the excellent blog, Talking Biz News, from there) have already kindly shared their syllabi. Another friend, former Forbes Chicago bureau chief Mark Tatge, has written a textbook about the field, cleverly using pieces from the New York Times to show students how to do their work. That and works like Freakonomics will help mightily to translate abstractions into newsroom reality.

Perhaps more important, I will also have assists from the business school at Nebraska. Thanks to some foundation funding lined up by our acting dean, I will be able to get assistance for course development from economists and business instructors at the business college. I’m hoping to tap these folk, too, for guest lectures. Busy as they are, some folks there already have offered useful guidance.

For my budding journalists, this will be crucial. Even as mainstream journalism shrinks, biz-econ coverage remains essential. Outfits such as Bloomberg and Reuters are providing vital up-to-the-minute news and information that readers pay for. The Economist, for various reasons, has a lock on business-magazine coverage that hard-pressed rivals such as BUSINESS WEEK, Forbes and Fortune, envy. Successful outfits in these fields will provide opportunities that mainstream mass-media no longer seem to, and I’m determined that my students leave the class skilled enough to take advantage of these chances.

For me, the move into biz-econ was a life-changer in addition to allowing me to see the world anew. I hope I can come close to making it work in the same way for my students.