Life on the wealth beat like any other biz news beat
by Chris Roush
Robert Frank is an award-winning CNBC journalist, best-selling author and leading journalist authority on the American wealthy.At CNBC, he oversees the “Inside Wealth” portion of its website.
Prior to joining CNBC, Frank was with The Wall Street Journal for 18 years, serving as a foreign correspondent in London and Singapore, and later covering Wall Street and corporate scandals.
For eight years, he was the paper’s wealth reporter, covering the lives, culture and economy of the new rich.
Frank is the author of two books: “Richistan,” a New York Times bestseller, and “The High-Beta Rich,” released in 2011. His blog, “The Wealth Report” was named by Time magazine as one of America’s most influential financial blogs.
Frank spoke with Talking Biz News by email about how he covers the wealth beat. What follows is an edited transcript.
Few people in business journalism cover the wealth beat. How did you develop the beat at The Journal?
When I came back in to the U.S. in 2002 after being a foreign correspondent, I was struck by how much sudden wealth had been created. So many more giant homes, super cars, outrageously priced restaurants, soaring art prices…salaries for hedge fund managers reaching hundreds of millions a year. When I dug into the data, I found a chart from the Federal Reserve that showed that the number of millionaire households in the U.S. had doubled over the decade.
I went to my editors with the chart and said “This isn’t an article it’s a beat. What if we spent a year telling the story of the new American wealthy. Who are they? How did they get there? What are they doing with their money? And how are they effecting the rest of America?”
They loved the idea and, what was supposed to be a year-long experiment, continues to this day. No one else was really covering the wealthy and these questions so directly.
Equally important is the way I decided to cover the beat. Funny story – the first month I started reporting on wealth, I went to a yacht show in Florida to find rich people to talk to (like Willie Sutton I go where the money is). I was standing on the dock looking out over the marina filled with yachts, like a Wal-Mart parking lot on Black Friday, but with mega-yachts. An owner came up to me and said “Incredible right? You’d think it was another country.”
The phrase stuck with me. “Another country.” The rich had become numerous enough to form their own country, and certainly wealthier than many countries. So I called it “Richistan” and decided to cover it like any other exotic country, just as I had covered Albania or Thailand or Fiji. The goal wasn’t to judge or stereotype or mythologize or attack them. It was to cover the people and places of a remote land, and send home great stories. That’s still my mission today.
Why is such a beat important for consumers of business journalism?
The great economist john Kenneth Galbraith wrote that “Of all the classes the wealthy are the most noticed and the least understood.” The wealthy are have a huge and growing impact on our economy, companies, financial markets and government. The top 5 percent own more than 80 percent of the individually held stocks and bonds in this country. They top 5 percent of earners account for more than a third of consumer spending. The top 1 percent of earners pay more than a third of the taxes (and earn more than 20 percent of the income). Just look at Super PACs to see the impact a few billionaires can have on a national discussion and election.
To understand where the country, economy and markets are headed, we have to understand the minds and money of the wealthy.
How do you find your stories?
When it comes to finding stories, I rely on my training as a deals reporter: source like hell. After 10 years covering wealth, I have a contact list of hundreds of millionaires and billionaires from around the world. I also talk to butlers, art dealers, mansion brokers, yacht manufacturers, fashion designers, Ferrari dealers, personal arborists, you name it. If they sell or deal with the truly rich, I try to know them.
What types of stories do you want to cover on Inside Wealth?
On “Inside Wealth,” I cover five basic areas: investing, spending, politics/taxes, philanthropy and people. So it’s how the wealthy make, spend, give away and fight for their money.
How do you get the wealthy to talk about these stories?
Getting the rich to talk on the record about their wealth has become increasingly difficult. The rich have always been press-shy, but today they’re targets, they know they’ll be attacked for saying just about anything related to their wealth. So they’ve gone quiet.
That’s made my job tougher, but I have a contact list of hundreds of millionaires and billionaires who know me and trust me. They know I may write something critical, but they also know I’ll take pains to be accurate and to understand every detail of the story before publishing or going on air.
Wealth seems to be a major issue in the current election. How do you tie that into your coverage strategy?
The election has politicized wealth. I think it’s positive for the country that we’re now having a serious discussion about the role and responsibility of the wealthy, and the structures in America that create and distribute wealth. The election has become, in part, a referendum on wealth. But facts have also become a casualty of the class wars — there are distortions and over generalizations from both sides of the political spectrum. The wealthy are either portrayed as saints or devils in this campaign.
They’re neither. They’re a complex economic group with widely varied agendas, backgrounds and impacts on the country. It’s seductive to see the world as a struggle between the 99 percent and the 1 percent. But it’s not that simple. These labels serve politicians, but they don’t serve readers or reporters. Polls show that despite all the heated rhetoric, the American public still feels the same way about the wealthy that they did five, 10 even 20 years ago. They largely admire people who got rich by working hard and creating something of value, and they hope to be wealthy themselves someday. But they also worry about a system that can seem rigged for the privileged few
Who reads wealth stories? Is it just the wealthy, or do the middle class and lower also read these stories?
Everyone, especially since the tax debate has cast a spotlight on the wealthy. “Inside Wealth” readers include rich and non-rich alike (what I call the wealthy and pre-wealthy), anyone interested in how the wealthy influence the economy, markets, spending or culture. Some of the interest is prurience — people wanting to see a $600,000 watch that doesn’t tell time or the largest private jet in the world.
Readers like stories about the psychological side of the rich, and their kids. But readers turn to me most for the policy and economic side of wealth: deeper analyses of taxes, incomes, global shifts in wealth, luxury spending, wealth management, philanthropy, big political donors, and who’s making and losing big fortunes today.
Will business journalism begin to focus more on the wealth beat as the economy evolves?
All business journalists focus more on wealth as economy evolves. I think once the election is over, and when the economy improves, the coverage will become less political and return to more economic questions: who are the new rich? How are they spending and investing their money? How is the world of wealth and “Richistan” changing? I think we’re going to see a return to conspicuous consumption in the next few years, which will make for some interesting news stories.
Who do you see as your biggest competitors on the wealth beat?
When I started the wealth beat nine years ago, no one else was really covering the wealthy as a group. Today, there is lots of coverage and much of it seems to fall into one of two categories: spending porn or political rants. I believe that “Inside Wealth” uniquely covers the wealthy consistently and really delves more deeply into the economy of the rich.
What’s the one wealth story that a business journalist anywhere should be doing right now?
Profiles. Readers like nothing more than human portraits, with the good bad and the ugly of today’s rich. I love reading them, I love writing them, and while they are among the toughest stories to do, they are hugely rewarding.