The big banks are continuing to fight Bloomberg’s Freedom of Information lawsuit against the Fed, which would force it to reveal what toxic assets of theirs it’s taken on in as part of a $2 trillion bailout. They say they’ll take it all the way to the Supreme Court.
Their excuse for why the public should be denied this information is interesting:
“Our member banks are very concerned about real-time disclosure of information that could cause a run on the banks,” said Paul Saltzman, the group’s general counsel, in an interview yesterday.
In other words, what it would show is so bad that people would panic and take their money out of the banks the Fed is bailing out. Sorry, but holding the bank-run gun to the American people’s heads isn’t going to work. It just makes it all the more important we find out why.
… subpar content is a logical consequence of Demand’s business model as it’s presently constructed. The question for me is why anyone would want to read this content, or why USA Today would put its name on it.
— Contrast that with Ken Doctor over at the Nieman Journalism Lab, who writes that the deal is:
… just one example of news companies starting to get it about content brokering. The principle is simple: Obtain the highest quality content you can (or at least sufficient to what the market of readers and advertisers demand) at the lowest possible cost.
Well, no. USA Today can either be a low-middlebrow news provider like it has always been or it can devalue its brand and mar by assocation its other journalism by dealing with bottom feeders like Demand Media. It can’t have it both ways.
Pro news organizations have to bet on quality work. That’s the only thing that separates them from the great cesspool of mediocrity and trash out that’s just a click away. Tying up with Demand Media is short-term thinking.
I think the right thing to do is to simply acknowledge that, in trying to quickly summarize Krugman’s nuanced position, Sorkin over-simplified and got it wrong. Krugman did not call for the nationalization of the entire banking system, and, unless Sorkin can produce a citation to the contrary, he did not say it was necessary because otherwise the banks would fail again and cause a worldwide domino effect.
As a bonus, this is worth a chuckle:
Krugman and Sorkin told me that they talked Thursday. Sorkin said the conversation was “very cordial.” Krugman called it “not much fun.”