With the economy apparently already in recession, gas prices near record levels, food prices rising, and inflation generally gaining momentum, economic issues are moving to the center of the presidential campaign. Political reporters have been forced to learn the financial crisis on the fly, while business reporters have had to learn to speak to an ever-growing audience. In March, Dean Starkman,
who runs The Audit on CJR.org, spoke with Jeff Madrick, the editor of Challenge magazine, to discuss the roiling economy and how the press is covering it. Madrick is also a visiting professor of humanities at The Cooper Union, and director of policy research at the Schwartz Center for Economic Policy Analysis, The New School. He is a regular contributor to The New York Review of Books, and a former economics columnist for The New York Times. His forthcoming books are The Case for Big Government (Princeton) and The Age of Greed…And the Men Who Made It (Alfred A. Knopf).

What’s going on out there?

Well, we’re facing a credit crisis of very broad potential damage, the likes of which we haven’t faced since the early thirties. What has happened is, by giving mortgages to people who really didn’t qualify, we’ve created a problem that’s having a domino effect. It’s not like the Savings and Loan crisis of the eighties, which could be isolated to s&ls and the kinds of real-estate investments they made in their localities. This problem is worldwide. These bad mortgages were packaged with relatively good mortgages, and all kinds of financial institutions—virtually all the major financial institutions—bought these packages of securities. Pension funds bought these packages of securities. And the securities in turn were used as collateral for other borrowing. So we have all these credit crises linked together....

Complete access to this article will soon be available for purchase. Subscribers will be able to access this article, and the rest of CJR’s magazine archive, for free. Select articles from the last 6 months will remain free for all visitors to CJR.org.