Maria Bartiromo’s BusinessWeek interviews aren’t exactly must-read business journalism. But this is ridiculous.
What would you ask if you got a sitdown with Obama’s economic svengali Larry Summers? I’m sure you can think of a dozen or so off the top of your head, any of which would be better than Bartiromo’s softballs.
Bartiromo, whose day job, of course, is on CNBC (which explains a lot), leads off with a perfectly dumb question:
What impact would the proposed regulatory reforms have on banks and investment banks?
You’ll be shocked to know that Summers somehow was able to muddle through his answer to that one.
But you know, sometimes you’ve got to serve up the softballs early to get your subject to warm up a bit. So question No. 2:
How is this different from what the Fed has been doing for 70 years?
Kind of a weird follow-up, but maybe No. 3 will brush him back a bit:
Since most of these institutions are global, do you need an overseer in step with other economies?
What’s he going to say? “No”? A better question might have been: Do you need an international overseer to coordinate global finance rules? That might actually get an interesting thought out.
No. 4:
What about ratings agencies? Will they be regulated?
Good topic. Not-good question. How about: Why did your plan not say anything about ratings agencies? How will you change their business model and their role in the financial system?
You just knew that No. 5 would probably be out of deep concern for Big Business’s point of view:
Right now a lot of businesspeople are unnerved about the proposed new taxation on the international profits of American companies. Where does that stand?
But it’s an important topic and one that will be a big fight, so okay.
No. 6:
Have you been hearing about this from a lot of business owners and CEOs of multinationals?
Are you serious?
No. 7 comes from the good ol’ “liberal media”:
The Congressional Budget Office predicts that the deficit will hit $1.43 trillion in fiscal 2010. We all know taxes alone won’t really put a dent in the deficit. What programs would you recommend cutting?
Well, actually, when we get through bailing out Bartiromo’s pals in the banking industry and the economy recovers from the hole blown in its side by said bankers, that deficit will shrink dramatically because tax receipts will increase. And much of that $1.43 trillion hole is for one-time expenditures for the stimulus package required to patch that hole in the economy. Two years later, the CBO projects it to be $633 billion.
No. 8 is the kicker. It’s your last chance, Maria:
The buzz is you’d like to be chairman of the Fed when Ben Bernanke’s term ends. Do you want that job?
Who cares?
Now these are edited down from the real interview, which aired on CNBC, but this is all BusinessWeek readers get. Still, the unedited transcript isn’t much better.
Bartiromo—again—doesn’t ask Summers about his being “bought and paid for” by Wall Street, as Portfolio’s Ryan Avent put it—pointing to a Felix Salmon rundown of Summers’ earnings from DE Shaw—after the last Bartiromo-Summers faceoff just two months ago.
As Avent said then:
But at least he’s smart enough to pick an interviewer who won’t ask him the really tough questions, like whether his actions as Treasury secretary helped to pump up the financial-services bubble whose implosion we’re all now suffering through, and whether he owes the American people an apology.
Right. And here are some other questions she doesn’t ask:
Hey, Larry, why did you fight so hard against your own administration for Wall Street to keep derivatives unregulated back in the 1990s? Do you want to apologize to Brooksley Born? Why should anyone listen to what you say after you’ve gotten so much so wrong? Why and how have you pushed aside Paul Volcker in the Obama administration? Why not put a cap on the size of Too Big to Fail institutions and break them up? Why do you still get F’s in “plays well with others.”
Poor showing.
ChickaBOOMer: Maria Bartiromo Stops Breathing During Interview. Cuts Oxygen To Brain.
http://chickaboomer.blogspot.com/2009/06/maria-bartiromo-stops-breathing-during.html
#1 Posted by StewartIII, CJR on Fri 26 Jun 2009 at 09:07 PM
Hey, I like your questions better. Anyone got Larry's phone number?
#2 Posted by Benedict@Large, CJR on Sat 27 Jun 2009 at 04:41 PM
the honest truth is, although Bartiromo and all the other financial "commentators"/fluffballs of both genders are, well, morons,
Saint Oobama picked L. Summers to lead us, and doing an intelligent interview with him is not going to make a bit of diff. Journalism might possibly help (even of your aggregating sort on the CRA idiocy—very nice), but who writes or reads that any mo?
And, dearest CJR (i have had a print sub since the 80s..), how much reporting did you do on the pitfalls of business journalism being simply a mouthpiece for the industry? Or on the death of labor journalism in favor of gogo children like Andrew Ross Sorkin, who is far from the worst?
#3 Posted by sorry, CJR on Tue 30 Jun 2009 at 12:18 AM
I have often said that a subscription to a magazine like Business Week and a newspaper are essential to understanding what is happening in our world. This magazine especially is the executive summary of the market, and worth the subscription price and time to read through it. I am, however, stunned and disappointed by Maria Bartiromo’s recent light-weight interview with Larry Summers. It reads like he told her what questions he was willing to answer. Critics of this interview have called it ridiculous, which is far too polite.
Who is Summers? And, who cares anyway? Summers said that women were intellectually inferior to men. The remark while he was at Harvard provoked international media coverage, caused a firestorm, and got him booted. What does his bigotry towards women have to do with the financial crisis and Obama’s Council of Economic Advisors, of which Summers is a member? (And, why would Bartiromo allow this bigot to control a dumbed-down interview to set her up to prove his point?)
Summers blocked a female – Brooksley Born of the Commodity Futures Trading Commission – from regulating credit default swaps in 1998. He pulled in the Federal Reserve’s Alan Greenspan, the SEC’s Arthur Levitt, and Treasury’s Robert Rubin. Together, they worked Congress over. When they were through with her, Congress and the mainstream media labeled Born a “rogue regulator” and Greenspan “a genius.” Afterwards, a bill that became the Commodity Futures Modernization Act of 2000 was tucked into an 11,000-page appropriations bill. It was never debated or discussed, barred not only a regulatory agency from regulating, but also left the issue of credit default swaps to work its way across Wall Street’s world of structured finance and set the stage for companies that would grow to become too big to fail. Because of these factors, misguided is as misguided gets.
Born knew what she was doing. And, so did Summers. Consider the backdrop:
*Credit default swaps were connected with the 1994 bankruptcy of Orange County, California. The municipality had $2 billion in debt with Merrill Lynch, which had structured it as collateralized debt obligations that were hedged with what at the time were relatively unknown derivatives known as credit default swaps.
*Also in 1994, the late Dr. Lazlo Tauber of Potomac, Maryland refused to pay Merrill Lynch $600 million due to foreign exchange trades hedged with credit default swaps. Why? The trades went bad.
*In 1998 the hedge fund Long Term Capital Management (LTCM) failed. It had over relied on statistical modeling, which is now in every academic text book theory – Black-Sholes for stock option pricing (for those of you who were asleep in class). The value of the credit swaps tied to LTCM was $1.25 trillion, or 5 percent of the global gross domestic product. When the Russian Currency Crisis kicked in, LTCM fell like a domino. Federal Reserve Bank of New York orchestrated a $3.6 billion bail out.
One of the world’s leading hedge fund managers – George Soros – claimed that he did not understand how credit default swaps worked at the time. Why should he? They weren’t regulated, so there were no standardized disclosures or any oversight to protect him or anyone else.
But, this financial innovation stole the hearts of Greenspan, Summers, Levitt, and Rubin. They made sure that their friends on Wall Street were protected. And, the “wild west” that characterized the free market, and government with its head buried deep in the sand, stayed on their respective sides of the streets. Eight years later, credit default swaps were at the heart of the collapse of Wall Street firms like AIG. As Warren Buffet said, these things are financial weapons of mass destruction. Today, Born is vindicated – she correctly saw and warned. But, because of Summers’ bigotry, there was a different outcome, and everybody paid the price for his erroneous position and approach. This
#4 Posted by Peter Hebert, CJR on Tue 30 Jun 2009 at 12:04 PM