Of course, anyone would applaud the astute and highly skilled journalists who looked at brewing systemic problems, as did Bloomberg’s David Evans (“Credit Swaps, Some ‘Toxic,’ May Soar to $4.8 Trillion,” 6/26/03); Business Week’s Der Hovanesian (“Taking Risk To Extremes; Will derivatives cause a major blowup in the world’s credit markets?” 5/23/05); the Journal’s Mark Whitehouse (“Slices of Risk: How a Formula Ignited Market That Burned Some Big Investors,” 9/12/05; “Risk Management: As Home Owners Face Strains, Market Bets on Loan Defaults,” 10/31/06), and Gillian Tett, John Plender, and others at the Financial Times (numerous stories). But even these virtuoso efforts are still not the same as confronting a Wall Street firm head-on for its role in underwriting mortgage boiler rooms across the country.

A good place to start would have been Citigroup, apparently, since Hudson—he of the Ameriquest stories—did it in his spare time. Freelancing while working full time for The Roanoke Times, he pulled the cover back on Citigroup’s huge subprime operation in 2003 (!?) and won a Polk Award in the process (“Banking on Misery: Citigroup, Wall Street and the Fleecing of the South,” Southern Exposure, summer 2003). He mentions the mortgage aftermarket only in passing, but that’s where the national press can take over for ground-level reporting. If only.

No reader, not even one really applying herself, would have found adequate warnings about the Wall Street/subprime nexus. She would instead have found plenty of coverage focused on the earnings horserace (“Putting the Muscle Back in the Bull; Stan O’Neal may be the toughest—some say the most ruthless—ceo in America. Merrill Lynch couldn’t be luckier to have him,” Fortune, 4/5/04), personalities (“Rewiring Chuck Prince; Citi’s chief hasn’t just stepped out of Sandy Weill’s shadow—he’s stepped out of his own as he strives to make himself into a leader with vision,” BW, 2/20/06), and situated comfortably within frames set by the industry itself (“Joining the Club—Inside Goldman’s Secret Rite: The Race to Become Partner,” WSJ, 10/13/06). I find Lehman and Citi coverage to have been especially poor, again, given what was known by 2003 (“Lehman’s New Street Smarts; Under CEO Fuld, the bond house has become a dealmaking power,” BW, 1/19/04; “The Unlikely Revolutionary: Critics are sniping and the stock is lagging, but Citigroup’s Chuck Prince keeps charging ahead, blowing up business practices put in place by his famed mentor, Sandy Weill,” Fortune, 3/6/06).

Only after the crackup had already begun is Wall Street’s role in subprime again laid bare (“Debt Bomb—Lending a Hand: How Wall Street Stoked The Mortgage Meltdown . . . ,” WSJ, 6/27/07):

Lehman’s deep involvement in the business has also made the firm a target of criticism. In more than 15 lawsuits and in interviews, borrowers and former employees have claimed that the investment bank’s in-house lending outlets used improper tactics during the recent mortgage boom to put borrowers into loans they couldn’t afford. Twenty-five former employees said in interviews that front-line workers and managers exaggerated borrowers’ creditworthiness by falsifying tax forms, pay stubs and other information, or by ignoring inaccurate data submitted by independent mortgage brokers. In some instances, several ex-employees said, brokers or in-house employees altered documents with the help of scissors, tape and Wite-Out.

Suddenly, the story—the one that counts—was gettable again. It referred, after all, to documents available for years. There is really no excuse.

The author of this Journal piece, by the way, was Hudson. He left the paper later that year and is writing a book about subprime.

It is true that Bush-era deregulation and the media’s financial travails hampered investigative journalism (of course, the Pittsburgh City Paper could manage it, but never mind). But the business press also disarmed unilaterally. CJR’s study, I believe, provides strong support for the idea that sometime after 2003, as federal regulation folded like a cheap suitcase, the business press institutionally lost whatever taste it had for head-on investigations of core practices of powerful institutions.

Too bad that’s precisely what was needed.

In light of this general system failure, what are the lessons for the general reader and the business press itself?

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.