Finally, the press scrambled in late 2006 and especially early 2007 as the consequences of the institutionalized corruption of the financial system became apparent to one and all.
So the idea that the press did all it could, and the public just missed it, is not just untenable. It is also untrue.
We went into the project with the working hunch that something was wrong. This stems from our belief in journalism itself. As journalists, we have to believe that what we do is not entirely ineffectual and that it has some impact on the outcome of events. Otherwise, why bother? Given that the system failure here is absolute, whatever journalism did do, as a matter of logic, was insufficient.
But a second idea going in was that this “debate” about business press performance is not really a matter of opinion at all. Either the work is there, or it isn’t. Facts have a way of obliterating assumptions.
Our approach was fairly straightforward. We picked a date range of January 1, 2000 through June 30, 2007, with the idea that the early date would capture the entire housing bubble and the later date marked the period right after two Bear Stearns hedge funds collapsed very publicly and all warnings were moot.
We then came up with a common-sense list of the nine most influential business press outlets: The Wall Street Journal, The New York Times, the Los Angeles Times, The Washington Post, Bloomberg News, Financial Times, Fortune, Business Week, and Forbes. CNBC and other television outlets were excluded both for practical and substantive reasons. With the help of some colleagues, we searched the Factiva database for the names of important institutions—Bear Stearns, Countrywide, etc.—and matched them with search terms that seemed appropriate, such as “predatory lending,” “mortgage lending,” “securitization,” “collateralized debt obligations,” and the like.
We then asked the news outlets themselves to volunteer their best work during this period. Some institutions were more diligent than others, so, on that score, The New York Times might tend to be overrepresented, while The Washington Post, which declined to participate, might get shorted. Similarly, Bloomberg, the FT, and the Los Angeles Times posed technical challenges. But, while we won’t hesitate to differentiate between the relative performance of different outlets (and reporters, for that matter), the goal was to assess institutional performance, not who “won.” Nobody won.
The articles are in a spreadsheet, which can be found here. I was a staff writer at the Journal from 1996 through 2004, covering commercial real estate during the relevant period, and on contract at The Washington Post for 2005, covering white-collar crime; nothing of mine is on the list or deserves to be there. As of this writing the sheet contains 730 entries, but it remains open and we plan to add stories indefinitely as we come across them. Feel free to send your entry to firstname.lastname@example.org. The database is meant to be used as a companion to this story. I hope it will be a reference for further research and that readers will use it to argue for or against CJR’s conclusions.
The list, then, was designed to capture all significant warning stories, not just some of them. And while 730 may seem like a lot of relevant stories, keep in mind the Journal alone published 220,000 stories during this period, so in a sense these were corks bobbing on a news Niagara. The list also includes as guideposts bits of context that we felt would give readers some sense of what was happening on the finance beat at the time (e.g. “Fed Assesses Citigroup Unit $70 Million in Loan Abuse,” NYT, 5/28/04). Sprinkled throughout are some of those rah-rah stories (“Mortgage Slump? Bring It On; Countrywide plans to grab more of the market as the industry consolidates,” BW, 12/15/03), and a tiny fraction of the run-of-the-mill stories about important, and guilty, institutions that in retrospect were so far from the salient point that one wishes we could have the space and the reporters’ time back (“Power Banking: Morgan Stanley Trades Energy Old-Fashioned Way: In Barrels . . .” WSJ, 3/2/05).
Let’s get to it.