Essay / Brave New World of RAF / How do you address biases in journalism?

Essay / Brave New World of RAF / How do you address biases in journalism?

Promontory Financial Japan

Tsuyoshi Oyama


This month’s theme of my essay series on Risk Appetite Framework (RAF) is “biases in journalism,” which a Nikkei journalist, Takami, discussed in his Nikkei Financial newsletter on August 28 (in Japanese). At first glance, it doesn’t seem to have anything to do with RAF, but I sensed that they share the same deep-rooted issues.
In this newsletter, Takami pointed out that we could easily see biases in the conduct of monetary policy by the BOJ or the conduct of fiscal policy by the MOF. For example, many BOJ staff yearn for non-negative interest rates instead of magical quantitative money supply adjustment as a monetary policy tool. Likewise, many Ministry of Finance staffs dream of the restoration of fiscal discipline instead of using MMT. Takami also argued that Nikkei journalists have biases in their reporting, too. They often prefer a negative tone against the government policies.
Based on this awareness of biases, the newsletter admonishes itself by saying, “it is important to be aware of what kind of biased thinking we have in comparison with others,” and “the media should provide more open discussions where various biases collide.”
I love this confession of a journalist as journalists rarely admit their biases. After being fed up with recent chaotic Covid-19 media reporting, I also see Takami’s arguments helpful to bring in more discipline into journalism, whose use of biases often bewilders the readers.


Why am I tired of the recent Covid-19 media coverage? That’s not because there was bias in their reporting. The biggest reason for this is the “inconsistent” biases in their news coverage. Or, it is because the bias of each news reported by the same media contradicts each other. For example, one day, a newscaster appeals to the audience by lamenting, “what on earth is the government doing when the number of new patients has constantly been increasing, and there are many patients who cannot be hospitalized?” The next day, the same newscaster barked, “many restaurants have been forced to close as a result of the government’s lockdown policy, and their patience is now reaching its limit.” Each phrase may sound pleasing to viewers who are interested in each issue. Still, from the government’s perspective, it is next to impossible to satisfy the needs with 180 degrees opposite direction simultaneously. I sympathize with government officials who may have a grudge against this type of newscasters
There are usually many “tradeoffs” in any policy response or business strategy. As for the Covid-19 related policy measures mentioned above, for example, “complete containment of the spread of infection and minimization of the number of deaths” and “normalization of economic activities at the earliest possible” could be at the opposite extreme. When we need to form a national consensus at somewhere between these two poles, it would only add to the chaos if we were to argue for the realization of these two poles as if there were no tradeoffs.
Similarly, monetary policy has a tradeoff, such as the revival of monetary discipline from a long-term historical perspective (e.g., the memory of hyperinflation) versus the continued easing of monetary discipline to dispel deflation concerns. Fiscal policy also has a tradeoff, such as the recovery of fiscal discipline based on historical lessons of turnouts of lax fiscal balances versus the allowance for the continued increase in the deficit in the face of a constant decline in demand due to demographic factors.


As TAKAMI points out, it is undoubtedly essential for the media to be aware of their biases. Perhaps the use of the term “bias” is not appropriate, considering its harmful sounds. It may be more relevant to call it “position” in the face of tradeoffs of various social problems than bias. I also believe that what is essential is not only reporters’ awareness of their positions but also active communication of their positions to readers and viewers. The latter reduces the uncertainty associated with the position and also serves as a check against opportunistic use of different biases that contradict each other.
For example, in the United States, each media company has a relatively clear political “color” (in the sense of being Republican or Democrat). In that sense, the presence of a “company” is one way to show readers/viewers the position/bias of their news. There are somewhat specific “colors” for each company in Japan, but they are not as straightforward as in the U.S. This situation may have led to the “pleasing everybody” type of reporting as mentioned above. Facing many social issues having tradeoffs with no correct answer, even the American press with the apparent political colors might face difficulties showing their positions for many problems.
So what do we do? This is my somewhat sci-fi-like argument, but in the future, news media should at least identify the position/bias of the reporter who wrote articles and then show that with the pieces. They don’t have to mention the name of the reporter. However, if we can find out what position this reporter holds concerning the vectors of many social issues, we can evaluate the article’s content more objectively. Of course, this requires a standard yardstick to measure position/bias comparably. For example, if you click the writer’s avatar beside the title of the article, with this yardstick, you can see this writer’s position/bias assessment on a scale of 1 (low) to 4 (high), like 4 for [confidence in market function], 2 for [confidence in conventional monetary policy], 3 for [confidence in conventional fiscal policy], 3 for [independent foreign policy with less dependence on other allies), 3 for [Covid-19 related measures in favor of minimizing deaths at the cost of economic activities) ……?
At this point, you may have noticed something in common with RAF. RAF is a system that “visualizes” companies’ choices in the many tradeoffs they face in implementing their business strategies. The same goes for clarifying the reporter’s position who wrote the story on the media. Each media company could set the range of their allowance (like risk appetite) for the reporters’ position/bias. If a reporter’s position goes beyond this range, the company will encourage this reporter to move to other companies. This process is precisely the same as the risk appetite framework followed by many companies.
We are now in the age of “full color,” where, for example, all listed companies are required to disclose the “greenness” of their businesses and assets, and CBDC and blockchain can color money and digital assets. I believe that the time will soon come for us to see the color of reporters behind the story (although, from the journalist’s point of view, it may be politicians’ position which should be first to be visualized than journalists).