We’re all for aggressively skeptical interviewing—I’ve often wished we could import Brits to do our presidential interviews, for instance. But it’s a problem when one group of people get interviewed adversarially and another group gets deferential treatment.
That contrast has been clear on CNBC in the last few weeks in a series of interviews with liberal bank critics Neil Barofsky, Paul Krugman, and Eliot Spitzer. The comparison to how the network has recently treated the bankers who actually created the financial crisis is striking.
Barofsky, the former special inspector general of the TARP, is one of a very few prominent government officials to take a sharply skeptical stance toward the big banks. He went on CNBC’s Squawk Box last week to talk his new book Bailout, which makes the case that the TARP bailouts staved off a complete financial collapse but failed to fulfill its mandate to spur lending and help homeowners. In other words, he says Treasury rescued and, importantly, re-empowered Wall Street, while “foaming the runway” for the banks with most everyone else (besides the car companies).
This shouldn’t be controversial or hard to understand, but then you have to actually listen to Barofsky’s argument instead of interrupting him when he tries to answer, as Steve Liesman repeteadly does.
At one point, when Barofsky criticizes “the general attitude, which was this level of deference to the banks. And it’s extended over the past two years to program after program… Again and again it was always from the perspective of Wall Street,” he might as well have been talking about CNBC instead of the Obama Treasury.
Here’s a clip of Becky Quick lecturing Barofsky that “Wall Street made good on its side of the bargain” on TARP because it paid back its megabailouts plus a bit of interest:
Here’s Steve Liesman interrupting Barofsky repeatedly and mischaracterizing his statements, apparently unable to comprehend that Barofsky can criticize TARP while also saying that it averted financial collapse (note that these screen caps are the same, but the clips are different):
Then there’s this snide question from Liesman, which Barofsky bats down with a nod to SIGAUDIT Dean Starkman:
Shortly after his interview, Barofsky wrote on Twitter that he “definitely got Krugmanned.”
He was referring to Paul Krugman’s appearance on Squawk Box a few weeks earlier where the Nobel-winning economist and NYT columnist was bombarded by zombie lies and called a “unicorn” and never asked about his book, which was the ostensible purpose of the interview.
Krugman afterward wrote, “Among other things, people getting their news from sources like that are probably getting terrible advice about any kind of investment that depends on macroeconomics. But it’s amazing just how skewed the policy views are too.”
But if Barofsky got Krugmanned, at least he didn’t get Spitzered. Check out how CNBC’s Maria Bartiromo treated Eliot Spitzer two days after the Krugman interview:
Bartiromo is offended that Spitzer says former AIG CEO Hank Greenberg committed fraud.
At one point, Bartiromo wags her pen at Spitzer and actually says this, “Some people say that the collapse of AIG lays at your feet, because if Hank Greenberg were there he would not have allowed some of that craziness and that risk being taken on,” in a way that makes it clear that she is one of those “some people.” Those “some people” would be The Wall Street Journal editorial page, naturally, and the idea’s insane.
The next minute she’s yelling at Spitzer, saying, “You can’t say ‘fraudulent’ because there is no indictment, you can’t just throw around the word fraud.”
This is just flat wrong. As Spitzer tried to note and which he reported on his own Current show later, Greenberg paid $15 million to settle an SEC fraud complaint against him, which he has miraculously spun as absolving him of fraud. AIG kicked Greenberg out of the company, settled SEC, DOJ and New York state charges for a whopping $1.6 billion shortly thereafter. It makes no sense that this is just a Spitzer thing (Matt Taibbi has more on this).
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One quick note on Greenberg & AIG is though he's probably not to blame for MBS CDS, he did do the following:
1) Set up AIG FP, because he needed a new area for growth that was uncorrelated to insurance, which enabled the open ended risk taking without much oversight.
2) Bulked up the balance sheet with a lot of debt. In 1989 AIG had little debt, by 2005, it was significant.
3) Ran a sloppy reserving culture on the P&C side, which led to periodic "big baths"
4) Bought rather aggressive life insurance companies that have their own sets of reserving issues.
5) Never institutionalized a risk-control practice, which might have saved the firm after he was gone.
6) Did a number of things that looked like earnings manipulation.
7) Ran a culture of fear, which suppressed bad news.
I worked there for 3 years, and wrote this piece in 2009:
http://alephblog.com/wp-content/uploads/2009/04/To%20What%20Degree%20Were%20AIG%E2%80%99s%20Operating%20Subsidiaries%20Sound.pdf
#1 Posted by David Merkel, CJR on Wed 29 Aug 2012 at 12:55 PM
Since we're talking about 'how the interview with Sandy Weil should have ended' and Matt Taibbi, he raised an interesting question:
http://www.rollingstone.com/politics/blogs/taibblog/when-did-sandy-weill-change-his-mind-about-too-big-to-fail-and-why-20120803
So, getting back to the point, it appears that Sorkin did get something right in that infamous interview: Weill did have a major change-of-black-heart sometime between 2009 and last week. In 2009 he was so far from recognizing that the Too-Big-To-Fail model was faulty, or that he’d done anything wrong, that the only “mistake” he could cop to in public was ... depriving Citigroup of his continued leadership!
So what changed? Well, one astute friend of mine in the investment world forwarded some information that might shed light on the issue.
Some background: in the CNBC interview, Weill was asked about the compensation issue. "I think compensation is important," he said. But, he added, "I think right now everyone's shooting at compensation. I'm glad I'm not working."...
Fast forward to this summer. On the day he gave that interview to Sorkin on Squawk Box, Citigroup shares traded at $25.79 at the close, which doesn’t sound too bad, until you figure in the fact that the company did a reverse stock split last May. Through that move, Citi turned every ten shares into a single share.
So to put this another way, Weill’s shares are actually worth ten times less now. If the stock traded at $25.79 on the day Weill blabbed to Sorkin, they were actually worth $2.58 to Weill.
To sum up: Weill was sitting on $792 million worth of shares when he left in in 2003. But fast forward a few years, and Weill’s 16.8 million shares, if he hasn’t gotten rid of them already, are now worth a total of $43,344,000 – basically nothing at all. Hell, there are black basketball players who have more than that!
Anyway, one has to wonder if Weill’s nagging poverty had anything to do with his change of heart. A few years ago, when he was still blasting Reed, he probably thought Citi would bounce back. Citi was trading between $3-$4 back then (pre-split). How could things get any worse? He couldn't have imagined that two and a half years later, the stock would actually be lower. Could the shock of that ugly truth have played a role in his "good thing" idea?
It was strange that Squawk Box didn’t wonder about this question. As my friend put it: “I was floored that Sorkin and the other talking heads didn’t ask Weill about his Citi shares. This is the money business, and they didn’t ask the guy about money? Now we’re shy?”"
#2 Posted by Thimbles, CJR on Wed 29 Aug 2012 at 02:40 PM
And yeah, that interview with Taibbi by Spitzer about Eric Holder is required viewing.
http://www.rollingstone.com/politics/blogs/taibblog/matt-taibbi-eliot-spitzer-discuss-eric-holders-failure-20120822
The fact that more agents were put on the "steroids in baseball" question than the "trillions of wealth destroyed by big wall street banks" question makes one question the priorities of both the Treasury and the Justice Department..
#3 Posted by Thimbles, CJR on Wed 29 Aug 2012 at 02:45 PM
"put on the "steroids in baseball" question"
Link eater.
http://www.slate.com/blogs/spitzer/2012/08/10/goldman_sachs_prosecution_fails_why_can_t_the_justice_department_fight_wall_steet_.html
So yeah, one really has to question the priorities especially when considering this little mentioned exchange between Sherrod Brown and Eric Holder a few months back where Sherrod asks 'Dude, do you need an extension on the statues of limitations? Perhaps some more agents and money for the task force? Like, do you need ANYTHING?'
And Eric's response is 'Naw, we're good.'
http://news.firedoglake.com/2012/03/11/whistleblower-lawsuits-against-banks-extinguished-in-foreclosure-fraud-settlement/
" I guess you mentioned there are 55 federal personnel to vote (ph) to this new the (ph) RMBS task force. That’s the federal component.
But one of the things that I think is unique about that is that we’re working with our state and local partners, and in particular state attorneys general. And so the number of people who are ultimately devoted to that task force will be, I think, substantially greater than that. And I suspect we will also be adding people from various U.S. attorneys offices around the country.
I think we’re looking at four or five that will be intimately involved in this. So I think that number will ultimately go up. We’re going to have adequate resources in terms of the numbers of people to do the job that we need to do with regard to the residential mortgage-backed securities working group.
In other words, this isn’t a priority for Justice at all. They could give a damn about accountability or deterrence. The Administration wants to hold some press conferences where they can tout relief for a couple individual homeowners, maybe with big novelty checks, while nobody who committed this total disaster that led to millions of foreclosures and millions more unemployed, the ones who broke the US residential housing market and engaged in a mass scheme to cover up their crimes, will in any way feel pain for any of this. That guarantees that we’ll be back here again, maybe in the near future. Because protecting corrupt and criminal banks only invites more corruption and crime."
#4 Posted by Thimbles, CJR on Wed 29 Aug 2012 at 02:55 PM
Once again, I plead to "Thimbles" and that true moron, "Padikiller:" GO GET YOUR OWN DAMN BLOGS! They're cheap and easy to do. Stop dominating and thread-jacking every single post here at CJR.
Maybe THE GODDAMNED EDITORS AT CJR would wake up and ban these twits so that the comments section could serve as some kind of basis for lively discussions among, oh, I don't know, maybe JOURNALISTS? Instead, people are driven away from any kind of conversation by these two pigs.
#5 Posted by Brian O'Connor, CJR on Wed 29 Aug 2012 at 03:47 PM
LOL!
Brian O'Connor, the "professional journalist" who wants readers to believe that a woman who made $32 an hour and elected to take early retirement to split her time between Palm Beach and the Outer Banks is a societal "victim" who is getting ripped off by Social Security because she has a hard time coming up with jet fare and the money to pay her satellite TV bill?
You post this kind of stupidity and then have the nerve to jump down our throats?
I don't see you adding anything worthwhile to the discussion (except bitching like a sissy).
Go report something and get back to us.
#6 Posted by padikiller, CJR on Wed 29 Aug 2012 at 04:11 PM
@Brian O'Connor,
Seems if Thimbles and Padikiller are blocked, you'll get to a have a nice "lively" journalist discussion with yourself.
Have you made it to the business classes on journalism yet?
/r
Centurion
#7 Posted by Centurion9.41, CJR on Wed 29 Aug 2012 at 04:12 PM
"Once again, I plead to "Thimbles" and that true moron, "Padikiller:" GO GET YOUR OWN DAMN BLOGS! They're cheap and easy to do. Stop dominating and thread-jacking every single post here at CJR."
Or, here's an idea, if you've got something to contribute that would enhance the discussion of the subject, you and your colleagues could do it and then I wouldn't need to. I have better things to do with my time from a personal priority perspective and if someone else says what should be said, I'm not going to duplicate the effort. So yeah, make the f'in effort instead of whining about someone else's.
Oh wait. In this day and age you can't:
http://www.cjr.org/swing_states_project/rethinking_objectivity_a_wisco.php
If a reporter can get canned for making a tweet or signing a petition, a controversial blog comment could be the the kiss of death.
So allow me to say things that might not be said otherwise, because you may lack the knowledge or fear the risk, and I'll try not to get on your case too much about why reporters have been such failures in the age of tv and politico gossip.
And please note I said I'll try, because some of those failures have been inexcusable.
"Maybe THE GODDAMNED EDITORS AT CJR would wake up and ban these twits so that the comments section could serve as some kind of basis for lively discussions among, oh, I don't know, maybe JOURNALISTS? Instead, people are driven away from any kind of conversation by these two pigs."
Shorter Brian O'Connor: "Maybe if there was less free speech, PEOPLE WOULD TALK MORE!"
Dude, don't like what I say? Don't read it. I'm not forcing anyone to do anything. If people want to talk, they can. The post button is easy to locate. I'm trying to foster discussion, not shut it down.
What are you trying to do? Because I don't think calling me a pig is germane the topic.
#8 Posted by Thimbles, CJR on Wed 29 Aug 2012 at 07:56 PM
A couple of weeks prior to Neil Barofsky's interview on CNBC, he was interviewed on Canadian TV via the BNN TV Network. The fair treatment and courtesy he received North of the border was remarkable in comparison to the ill-treatment he received at the hands of CNBC's savages- jmho.
Check it out for yourself : http://watch.bnn.ca/market-sense/august-
2012/market-sense-august-2-2012/#clip733184
I concluded that BNN at least sees it's mission as one of trying to inform it's viewership. Exactly what CNBC is trying to accomplish is anyone's guess?
#9 Posted by artie520 , CJR on Wed 29 Aug 2012 at 10:39 PM
Conflict of interest in journalism....That's what happens when your major advertising sponsors (life blood) are the people you are supposed to be vetting and keeping honest... it doesn't happen
#10 Posted by PAS13, CJR on Wed 29 Aug 2012 at 10:45 PM
Sorry, corrected html link from previous post:
Canadian TV interview of Neil Barofsky
http://watch.bnn.ca/market-sense/august-2012/market-sense-august-2-2012/#clip733184
#11 Posted by artie520, CJR on Wed 29 Aug 2012 at 10:49 PM
Not sure where to begin. CNBC may be biased, but Mr. Chittum is an ill-informed fool. Many of things that he regards as "self-evident" or "non-controversial" are patently false myths propagated by reporters who do not have much understanding of finance or economics.
#12 Posted by Dave, CJR on Thu 13 Sep 2012 at 07:26 PM