It's Strictly Business . . . Or Is It?
Financial PR professionals live in the news. Whether it’s logging reporter movements or tracking economic indicators, our job is to know the comings and goings of the B2B media ecosystem.
This deep immersion is important for our clients, but it also risks us missing the woods for the trees. To wit, our Fourth Estate looks uncertain from a bird's eye view.
President Trump embodies and exacerbates this precariousness. While the commander-in-chief's cries of “fake news” receive headlines, the advent of new technology - internet, social media, mobile - is allowing "alternative facts" to flourish.
Only fifty years ago when President Lyndon Johnson said, "If I’ve lost Walter Cronkite, I’ve lost America," he was conveying a world in which a few television anchors and journalistic enterprises were trusted to tell us "the way it is." Amid the chaos and overstimulation of the digital age, this bygone reality appears credulous, foreign and even poignantly innocent.
The old-guard often invokes the occult powers of social media to describe today's informational vertigo, but in some ways this term is misleading. If social activity is inherently political, and if society is as highly politicized as we lead on, a more accurate term may be "political media." Anyone with sufficient bravado and digital savvy can become an "Influencer."
The business community has its own hierarchy of influencers. But to our benefit, this media space is more immune to disinformation. While there remains ample and spirited disagreement (Active vs. Passive investing, the future of retail, etc.), these differences are mainly interpretive. The rancor of political debate reflects a more fundamental, epistemic fissure.
Nonetheless, business journalism has seen its own share of disruption: The ascent of highly specialized subscription intelligence services at the expense of more generalist investment literature; the longevity, marketability and shareability of online video content, which undermines the ephemerality of daytime broadcast television; and of course, the imperative for print publications to continually adapt their business models to a shifting digital landscape.
What most distinguishes the business from the political press is the former's in-group dynamic. Competition aside, the profit motive exercises a unifying force over the financial sector; shared economic prosperity depends on a reliable network of accessible information and accurate data.
Conversely, the cost of political power has never been payable in facts – and the fragmentation of media has simply amplified the luxury of truth. In our saturated electoral system, a candidate or organization’s “Share of Voice” bears little relation to their honesty. If there is a correlative relationship, it may be inverse.
With these distinctions in mind, a question for us to consider: When and how should we think about the interaction between political and financial media? A timely case study is available in the Consumer Financial Protection Bureau (CFPB).
The CFPB, an independent agency established after the 2008 Crisis, has played an influential role in regulating the banking industry. This looks set to change with President Trump’s recent appointment of Mick Mulvaney as the organization's interim director. Mulvaney recently said of his new role: "We're gonna try and limit, as much as we can, what the CFPB does to sort of interfere with capitalism and with financial service markets."
In other words, more deregulation is coming.
Banks and fintechs should be cautious of the politics surrounding the CFPB in their strategic messaging. Elected Republicans are vocal and unabashed in their support of laissez-faire financial policies, but recent polling suggests that 66% of rank-and-file Republicans and 77% of Independents support the CFPB's mission. Equally telling, Senator Elizabeth Warren, the CFPB's architect and an early Democratic favorite for 2020, is placing op-eds in middle-market newspapers like USA Today decrying Mulvaney's appointment and Trump's deregulatory agenda. Senator Warren knows her message has political momentum.
In the wake of the CFPB drama, banks might do well to confront consumer mistrust head on by positioning themselves as responsible lenders and friends to everyday Americans – foils of Wells Fargo, in essence. The same goes for fintech lenders and other startups who enjoy lucrative partnerships with banks. Meanwhile, the fintechs that have advocated for industry adherence to CFPB data-sharing principles and benefited from greater regulatory scrutiny of charted financial institutions may want to ally themselves with policy goals that prioritize consumers. Some will seek to strike a balanced note, as this fintech consultancy CEO does in an open letter to Mick Mulvaney.
If changes to the CFPB are confusing and concentrated in effect, the implications of the (still pending) Tax Cuts and Jobs Act promise to be bamboozling and influential for the entire private sector. The financial services industry and broader business community should be prepared for a situation in which corporate treasurers are recording windfall profits while key stakeholders - employees, customers, communities, vendors, journalists - are unhappy. Indeed, a recent aggregation of polling indicates that only a third of voters view the legislation favorably.
The 10-year anniversary of the 2008 Crisis is just around the corner, which calls to mind a time when the political dimension of business was magnified and unavoidable. We don’t know when this bull market will become a bear, much less the policies or political developments that are in store for 2018. Regardless, PR practitioners should be prepared for an environment where the financial is political and the political financial. If the last two years have taught us anything, it’s to ignore politics at your own peril.