Although the Senate is scheduled to vote tonight to save the financial rescue package, there is a massive amount of finger pointing about who was to blame for Monday’s failure in the House vote. Democrats blame Republicans, Republicans blame Democrats, dogs blame cats, and vice versa. Alas, my former brothers and sisters toiling in business journalism’s verdant field must shoulder their share of the blame, not for the vote but for not really covering the on-going scandal of greed and duplicity that led to the need for such a vote.
So, to help former colleagues still covering business news for a living, I offer a few thoughts about how they covered the current financial crisis. Hopefully, it may improve their coverage in the future because there are some inconvenient truths they need to face squarely and fix successfully.
The business media claims to cover business, and its reporters cover nothing more closely than Wall St. Their unique knowledge is what separates them from reporters on other beats; it is why there is a business media. But the beat covered by many publications, reporters and editors has collapsed.
For business reporters, editors and producers, there are only two options when considering what happened, neither particularly pleasant.
There are two disturbing possibilities about why there was such “surprise” at the market’s collapse and the near-total freeze of credit markets.
Either business journalists provided appropriate, arms-length scrutiny of the financial-services industry, including investigative work, opinion, analysis and rigorous beat reporting that provided decision-makers and readers with fair warnings of the coming collapse, and the coverage was ignored by people who could have fixed the problem in time. Or, reporters didn’t do their job in the first place.
The answer is a complicated mix of the two.
It pains me to say so, but there was as massive a failure of journalism in the financial crisis – as big and devastating as journalism’s failure during the run-up to the Iraq war. Had reporters been digging through the underlying documents of credit swaps and the other convoluted financial products being created, my hunch is that a lot of the current problems might have been avoided as few of them could have withstood the bright light of public scrutiny.
Sources to help explain what was unfolding were around and willing to talk, see “Thanks GOP, For Ruining An Economy As Your Friends Got Wealthy“. That you didn’t seek them out and then write what you were told is abominable and, sadly, the only conclusion I can draw is that you did not do your job.
Best And Brightest
The current crop of business reporters is the best-educated and most sophisticated ever; certainly, much better than I was when I served as an assistant editor of one of the world’s premier business publications. Everyone knows they are entirely capable of providing the needed scrutiny and requisite skepticism, if properly directed. This didn’t happen because there was a leadership failure in newsrooms.
True, business journalism has been thinned of its most experienced ink-stained wretches, as has happened on nearly every other major beat, thanks to the news media’s financial troubles. And investigative reporting is a thing of the past. Still, we all paid a price for this and it’s another issue for editors, publishers and network executives to work through.
Business media outlets that claim to provide authoritative coverage of Wall Street during good times should be first in line for scrutiny now. These would include any with the words “wall” and “street” in its name, as well as anything named “deal,” “New York,” “business,” “investors,” “times” and “day.” For some reason, Bloomberg boasts of its supremacy in covering the markets that just blew up yet it missed the story entirely until it was exploding in its face. Oh well. By the way, the good folks at Business Week, Forbes and Fortune are equally culpable, as well.
Criticism of business publications and networks is harsh already and will get more biting. Much of the criticism is unfair, driven by ignorance, opportunism and an anti-business bias on the left along with a congenital anti-journalism bias on the right. Some of it, though, will be very fair.
On the other hand, as the messy process of finger-pointing begins, it is worth remembering that the bailout is only part of the hardship ordinary people are bearing for the financial services industry’s excesses.
The first comes in the yet-to-be-measured equity loss and mental agony felt every day by the four million people who wake up and remember they lost their homes. Basically, the massive foreclosure crisis is simply a wholesale transfer of wealth from the bottom to the top. British and European newspapers and networks have done a far better job of covering this aspect of the crisis in the US than have our own, home grown, media.
The second part is the extended recession we are entering. Millions of people will lose their jobs, their health care, retirement savings and their hope for the future. There is a lot of talk about “Main Street” but too little coverage of what is occurring to the people who read or watch the coverage yet live far from Wall St.
To me, it is shocking that such stories only began appearing this week.
Third are the losses suffered by pension and mutual funds from Wall Street’s sale of billions of dollars worth of defective and possibly fraudulent products. It will be hard for the business media to explain how this happened, but it will be much harder for their readers and viewers who are seeing the value of their mutual funds, 401(k) plans, IRA’s and other savings schemes disintegrate before their eyes. After all, several trillion dollars of wealth – much of it belonging to individuals working and saving for their future – were wiped off the books over the past few weeks.
Falling Resources, Rising Responsibility
The last decade has seen a dramatic decrease in journalism’s resources, unfortunately occurring just as journalism’s responsibilities have increased just as dramatically.
Disemboweling the SEC, the Office of Thrift Supervision, the Comptroller of the Currency, the Commodity Futures Trading Commission, the Justice Dept. and other key federal agencies, piled more and more responsibilities on the press – responsibilities editors and producers did not recognize in time that they had and were not prepared to shoulder in any event.
Fully three times since the turn of the 21st century, the only business activity so unique, so special and so important that it is specifically protected by the US Constitution, failed the country miserably: Reporting on what was in the Patriot Act, unveiling the lies being fed to the nation to trumpet the unnecessary Iraq war, and now the collapse of the financial sector.
These aren’t trivial matters; indeed, providing tough, independent, in-depth reporting of these stories is the reason journalism exists. But when owners, executives, reporters, editors and producers collectively fail to do their job, our nation is less free and, in the case of the current crisis, a whole lot poorer.
If you’re born in Milwaukee, you are born a Democrat. And so I gravitated naturally to liberal politics, first as journalist and then an activist. I’ve been writing since I was eight years old and, after working in newsrooms for far too long, I have devoted much of the past decade as an independent investigtative jouralist. When not writing about politics or George Bush, I scribble out essays on the peculiarites of modern times.
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