Debits and Credits

Fortune suspends disbelief with Cheney; WSJ and FT advance knowledge, etc.

Fortune published an exclusive interview with Dick Cheney on the economy under the headline, “Why is Dick Cheney Smiling?” The story falls down on a couple of points.

We don’t question the news value of the piece—readers can judge for themselves—but we do say the magazine fails to provide proper context and to challenge some self-serving assertions that may not be (and probably are not) true. This basic journalism work is left undone. The piece also pretends that information that is known is news.

You might imagine that Dick Cheney, a well-known worrier, would be thinking dark thoughts about the economy. […]

That Cheney would have an upbeat view of the economy is no surprise. It would be in his interest to say so. It is acceptable that the interview is self-serving, but Fortune should at least acknowledge the point.

And really, would it have been too much for Fortune to point out that Cheney’s credibility is not at a high point now on a number of issues? He was optimistic about Iraq early on, too. We’re not asking for partisanship, just some critical distance.

Here is some more non-news:

In fact, when he looks at the sub-prime mortgage catastrophe that’s at the root of most of the economy’s troubles, he’s more concerned about Washington’s impulse to fix it—a view that sets him slightly apart from his Treasury Secretary and firmly at odds with well-meaning Democrats on Capitol Hill.

And there are occasions where Fortune just goes too far—when it knows better—to provide a friendly forum.

The Bush-Cheney economy remains a work in progress. Cheney will be wielding his unprecedented clout for one more critical year, keeping up his guard against congressional Democrats and even members of his own administration who would challenge his tax-cutting, small-government principles.

To call the Bush-Cheney economy “a work in progress” will never be false, but it’s not really true, either. It would be better for Fortune simply to acknowledge the widespread, almost universal, concern about the economy and go from there.

Much of the piece, to us, passes off unsurprising information as a surprise, including the fact that Cheney’s primary economic concern is the “prospect of sabotage aimed at disrupting the oil market.”

That’s not surprising. To the extent that it is, the idea should be tested. Is sabotage really the primary concern right now?

This isn’t news either:

The fact is, Cheney plays a surprisingly major role in shaping the administration’s economic policy.

And then this is raised and left hanging:

As he did on intelligence matters, Cheney has built his own independent network of information on the economy, drawing from a pool of more than a dozen prominent economists for private conversations.

Again, it is strange to raise this concept and not to at least point out that Cheney’s “independent network of information” on intelligence is widely believed to have contributed to a foreign-policy disaster of historic proportions.

Fortune didn’t have to make so many concessions for this interview. In doing so, it lets its readers down.

Rick Brooks and Ruth Simon provide a service with their Wall Street Journal story that demonstrated that many people stuck with high-priced subprime loans actually qualified for conventional loans, and that the trend accelerated as the boom went on.

In 2005, the story says, good borrowers got 55 percent of subprime loans sold as securities.

The analysis also raises pointed questions about the practices of major mortgage lenders. Many borrowers whose credit scores might have qualified them for more conventional loans say they were pushed into risky subprime loans. They say lenders or brokers aggressively marketed the loans, offering easier and faster approvals — and playing down or hiding the onerous price paid over the long haul in higher interest rates or stricter repayment terms.

Our quibble is with the edit: The story’s main point seems buried. The lead paragraph backs in too cautiously:

One common assumption about the subprime mortgage crisis is that it revolves around borrowers with sketchy credit who couldn’t have bought a home without paying punitively high interest rates.

It is a compliment to say that the story’s findings merited much tougher language at the top and throughout.

Our British pals, The Financial Times, published an erudite think piece by Francesco Guerrera and Jonathan Birchall.

The gist is that marketers are failing to adapt to the Me Generation’s willingness to spend its children’s inheritance.

The 2,300-word essay plods in places, but its thesis—that Baby Boomers “will control a larger proportion of wealth, income and consumption than any other generation in the country—the first time that consumers over 50 have held such sway over the world’s largest economy”—gave it enough momentum to get us to the end.

Over the past few years, as more and more boomers joined the pensioners’ ranks, their long-held dominance over America’s society and its economy was widely expected to fade. But unlike previous trend-setting generations - such as the ‘New Dealers’ born between 1936 and 1945 and the ‘Silents’ that preceded them - the boomers do not appear ready to step aside in favour of younger blood. On the contrary, new research by McKinsey, the management consultancy, found that boomers will instead tighten their grip on America’s economic levers over the next few years.

Lots of good data and analysis in here, including this:

…consumers aged 18-49 have been a fast-growing, big-spending group for decades, (leading) companies and marketing gurus to concentrate on mining what became known as ‘the golden demographic’… Marketing experts argue that the continued focus of large companies such as Procter & Gamble and Gap on the youth of ‘generation X’ and ‘generation Y’ overlooks a simple statistic: the 18-49 age group will grow by only 1m people in the next 10 years, compared with the 22.5m Americans set to enter the 50-plus bracket.

All across America people born after the 1960s (who read the FT) are rolling their eyes at the notion that the vast horde of Boomers are “neglected.” But snap to, youngsters! You might make a lot of money catering to the desires of what promises to be the most free-spending generation of American oldsters.

Discussion of the line between blogging and journalism is becoming a bit of a chestnut.

New York Times editor Bill Keller gave this speech in England last week in which he reaffirms the now well-worn point that bloggers depend on reporters for most of their information, while noting that the Times itself is (wisely or not) churning out blogs.

But Felix Salmon, who writes a “mainstream media” finance blog for Portfolio, has some interesting things to say about the contested space between journalists and bloggers, and how reporters could benefit from paying attention to, and interacting with, the new commentariat after the ink dries.

…professional journalists tend to think of their article as the end of a process of reporting, while bloggers tend to think of their entries as the beginning of a process of commenting.

Salmon says reporters should understand bloggers can help them keep a story from calcifying once it’s printed by using their readers’ feedback and insights to “refine and improve” what’s already been written.

That’s a good point. The mainstream press has long been forced to pretend its account is authoritative and comprehensive—that is, that the piece includes all relevant information and perspective available as of deadline. That’s a lot to ask, and not possible, especially in newspapers.

Salmon points out that finance is a particularly difficult subject to write about for a general audience and recommends an econoblog, Calculated Risk, for its work in the area.

This brings up a final thought. The term “blogging” calls to mind writing that is hurried, casual, and unreported—writing that places a premium on speed and timeliness, with less concern for thoughtfulness.

If that’s the definition, it’s time to expand it.

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Anna Bahney is a Fellow and staff writer for The Audit