“The government, the financial industry and the American consumer—if they had only paid attention—would have gotten ample warning about this crisis from us, years in advance, when there was still time to evacuate and seek shelter from this storm.” Diana Henriques, New York Times business reporter, speech at The George Washington University, November 8, 2008

“But anybody who’s been paying attention has seen business journalists waving the red flag for several years.” —Chris Roush, “Unheeded Warnings,” American Journalism Review, December/January, 2009

“I’m kind of curious as to . . . why is it that people were shocked, given the volume of coverage.” —Nikhil Deogun, deputy managing editor, The Wall Street Journal, quoted in “Unheeded Warnings”

“For in an exact sense the present crisis in western democracy is a crisis of journalism.” —Walter Lippmann, Liberty and the News, 1920
These are grim times for the nation’s financial media. Not only must they witness the unraveling of their own business, they must at the same time fend off charges that they failed to cover adequately their central beat—finance—during the years prior to an implosion that is forcing millions of low-income strivers into undeserved poverty and the entire world into an economic winter. The quotes above give a fair summary of the institutional response of the mainstream business press to the charge that it slept on the job while lenders and Wall Street ran amok. And while the record will show this response is not entirely wrong, one can see how casual business-press readers might have a problem with the idea that final responsibility for failing to stop escalating dangers in the financial system has somehow shifted to them.

Dang, Margaret, we blew it again.

It is understandable that the business press would want to defend its record. But it is equally understandable, I hope, that some readers might want to see some support for these claims. You know the old journalism saying, “If your mother says she loves you,” etc.

For if the institutional response is correct, and all was done that could be done, then journalism has even bigger problems than Google and Craigslist. In the best case, if this response is to be believed, the financial press faces the problem of irrelevance—all that newsprint and coated paper, those millions of words, the bar graphs, stipple portraits, glossy photos of white guys, the printing presses, delivery trucks, and Yale degrees, is worth about as much as a New Century share.

Lippmann, I think, would understand the problem. Without facts, the public is powerless. With them, well, it can lick Countrywide and Goldman Sachs put together. In his book, Liberty and the News, Lippmann wrote: “Everywhere today men are conscious that somehow they must deal with questions more intricate than any church or school had prepared them to understand. Increasingly, they know they cannot understand them if facts are not quickly and steadily available.” Without them, he says, there can be no liberty.

He was talking about a crude and corrupt press that manipulated public opinion around World War I. We’re dealing with a financial press that is neither of those things, but is nonetheless a battered and buffeted institution that in the last decade saw its fortunes and status plummet as the institutions it covered ruled the earth and bent the government. The press, I believe, began to suffer from a form of Stockholm Syndrome. Now, it is in the awkward position of telling its readers they were insufficiently attentive to what it wrote.

I can think of several reasons why this is a bad approach, optics-wise. For one thing, it sounds a bit like telling customers they didn’t read the documents carefully enough, just what Ameriquest used to say about its Pay-Option ARMs. Don’t go there, press friends.

For another thing, readers could answer that while it is true that they may have missed warnings, they do recall hearing messages that didn’t sound like warnings at all. Anyone “paying attention” might have thought that the most important thing about Washington Mutual on a given day was that its “Creative Retail Approach” had turned “the Banking World Upside Down” (Fortune, 3/31/03); that Lehman Brothers was “Trading Up” (The Wall Street Journal, 10/13/04); that Ken Lewis had become the “Banker of America” by “Ignoring His Critics” (Fortune, 9/5/05); that Angelo Mozilo was merely pugnacious (“The Mortgage Maker vs. The World,” The New York Times, 10/16/05); that Citigroup was “Cleaned Up” (!) though “Falling Behind” (Business Week, 10/05/06); and, additionally, that Goldman (drum roll) had “Sachs Appeal” (honk) (Forbes, 1/29/07).

Nothing about mortgage boiler rooms and CDO factories there, no matter how carefully you read.

Dean Starkman , CJR's Kingsford Capital Fellow, runs The Audit, CJR.org's business desk. Megan McGinley, a CJR intern, and Elinore Longobardi, an Audit staff writer, provided research. This story and the two following were supported with a grant from the Investigative Fund of The Nation Institute, for which we are deeply grateful.