To read various journalistic accounts of mortgage lending and Wall Street during the bubble is to come away with radically differing representations of the soundness of the US financial system. It all depended on what you were reading. Anyone “paying attention” to the conventional business press could be forgiven for thinking that things were, in the end, basically normal. Yes, there was a housing bubble. Any fair reading of the press of the era makes that clear, even if warnings were mitigated by just-as-loud celebrations of the boom. And yes, the press said there were a lot of terrible mortgage products out there. Those are important consumer and investor issues. But that’s all they are. When the gaze turned to financial institutions, the message was entirely different: all clear. It’s not just the puff pieces (“Washington Mutual Is Using a Creative Retail Approach to Turn the Banking World Upside Down”; “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”; etc.) or the language that sometimes lapses into toadying (“Some of its old-world gentility remains: Goldman agreed to talk for this story only reluctantly, wary of looking like a braggart”; “His 6-foot-4 linebacker-esque frame is economically packed into a club chair in his palatial yet understated office”). It’s that even stories that were ostensibly critical of individual Wall Street firms and mortgage lenders described them in terms of their competition with one another: Would their earnings be okay? There was a bubble all right, and the business press was in it.

Trouble was, the system it was covering was going to hell in a hand basket. Institutionalized corruption, fueled by perverse compensation incentives, had taken wing. The subpriming of American finance—the spread of a once-marginal, notorious industry to the heart of the financial system—was well underway. If this had been a big secret, that would be one thing, but if that were true, how was it that Forbes, of all magazines, could write a scathing exposé of Household Finance, then a subprime giant, under the headline “Home Wrecker” in 2002, but not follow it up with a similar piece until it was too late? How could The Wall Street Journal publish stories like the brilliant “Best Interests: How Big Lenders Sell a Pricier Refinancing to Poor Homeowners . . .” around the same time, on its prestigious front page, then nothing of the sort later, when the situation got much, much worse? Meanwhile, still in 2003, a reporter named Michael Hudson was writing this:

A seven-month investigation by Southern Exposure has uncovered a pattern of predatory practices within Citi’s subprime units. Southern Exposure interviewed more than 150 people—borrowers, attorneys, activists, current and ex- employees—and reviewed thousands of pages of loan contracts, lawsuits, testimony, and company reports. The people and the documents provide strong evidence that Citi’s subprime operations are reaping billions in ill-gotten gains by targeting the consumers who can least afford it.

Who is Michael Hudson? And what on earth is Southern Exposure? For that matter, why was an urban affairs reporter for an alternative weekly in Pittsburgh, with no financial reporting experience, able to write this (emphasis added):

By its very nature, the mortgage-backed securities market encourages lenders to make as many loans at as high an interest rate as possible. That may seem a prescription for frenzied and irresponsible lending. But federal regulation, strict guidelines by Fannie Mae and Freddie Mac, intense and straightforward competition between banks, and the relative sophistication of bank borrowers have kept things from getting out hand, according to the HUD/Treasury reporter. Those brakes don’t apply as well in the subprime lending market, where regulation is looser, marketing more freewheeling and customers less savvy.

The date? 2004. One type of journalism told one kind of story; another presented an entirely different reality. What accounts for these dramatically opposed representations? And why was the conventional business press perfectly capable of performing both kinds of journalism when the problems were small but incapable of providing the valuable, powerful kind later, when it counted?

Walter Lippmann is as right today as he was in 1920. It’s not enough for reporters and editors to struggle against great odds as many of them have been doing. It’s time to take the public into our confidence. The news about the news needs to be told. It needs to be told because, in the run-up to the global financial crisis, the professional press let the public down.

Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.