News Media Can Not Be Objective

A friend in the financial industry sent over an article that began,

Hedge funds run by women have outperformed a broad benchmark of alternative asset managers over the past five years, raising fresh questions about why there are so few female portfolio managers.

This is a great example of the “fake news” phenomenon and will serve to illustrate why news media is not and can not be objective in its presentation of facts.

First, news gathering and publishing is part of the discipline of history– it deals primarily with events and information that have already taken place, even while commenting on or attempting to predict events yet to happen. When you open up a newspaper, you are reading articles about things that happened in the past, albeit the recent past. The only difference between what you read in a history book and what you read in a newspaper is how much time has passed between your present reality and the events portrayed in the book or article. In a news article, that time period may be hours, days, weeks or even a few years; in a history book, it may be decades, is often centuries and is sometimes millennia.

Second, as a specimen of history, news gathering and publishing suffers from the same philosophical problem that history in general does, namely, developing a criterion for selecting meaningful facts and data to tell a particular story from the essentially infinite quantity of such facts and figures available. To write history, you first need a person (the author) who has a set of values or curiosity that dictate his desire to explore a particular historical topic. Once he has selected a topic, he has to come up with a theory about the topic and then use the theory to select from and interpret the available data to tell a story about the topic. The news journalist works the same way– start with a person, the journalist (or their editor, advertiser, owner or other primary influencer) who uses their values and judgment to determine what stories need to be told, then, using pre-existing theories of how the world works, select and interpret relevant data to tell the story that needs to be told.

History does not write itself, and neither does the news. Historians write history, journalists write the news, and some innate values and beliefs are necessary in each to cause sufficient motivation to inspire the act of writing and publishing in the first place. Given the motivation, pre-existing logical theories of cause and effect are necessary to determine which facts and data belong to the story and which do not and how they are relevant. At no point in this process up to this point, or after it, is any “objectivity” involved.

Returning now to the example of the story my financial friend shared with me, what can we make of it? A few questions and observations come to mind, using the framework above:

• Why (what theory/value) is the proportion of female versus male money managers a story that needs to be told?
• Why was a five year period of data used for observing the phenomenon of relative outperformance?
• How did the female active managers perform against a genderless, passive index strategy?
• Were any male active managers able to outperform the broad benchmark used? Were they able to beat the female managers’ performance?
• Do women want to run hedge funds?
• Is there is a systemic reason for female fund managers outperforming a benchmark that is persistent and not attributable to luck?

Of course, none of these are addressed in this news story. That is because the job of interpreting the news falls on the consumer of the news, not the news itself– for the news to attempt to interpret itself would be a highly problematic and morally suspect enterprise!