I put “everyone” in quotes because a disparate group of professionals—an economist here, a handful of Wall Street traders there, a couple of hedge funds, even a journalist or two—has been identified as having duly warned of, or at least profited from, the great crash centered on the U.S. mortgage market. Indeed, a minidebate has emerged in business-news circles (in which I played some role via a lengthy critical review of precrash reporting, [“Power Problem,” CJR, May/June 2009]) over the performance of the business press in its watchdog role over financial institutions that it purports to cover.
But beyond who-wrote-what-story-when, the crash and ongoing crisis remind us that, in a democracy, it’s not enough to understand only political events and actors, but economic and financial ones as well. The debate can’t be left to experts and cognoscenti (clearly) and must be opened to as wide a swath of society as possible, even people who don’t normally think of business news as their bag. Put another way: hopeful ignorance about matters business and financial is no longer an option, if it ever was.
In assessing the early-twentieth-century Muckrakers, the historian Richard Hofstadter said their importance lay in the fact that their sweeping, investigative style of journalism allowed “any literate citizen to know what barkeepers, district attorneys, ward heelers, prostitutes, police court magistrates, reporters and corporation lawyers had always come to know in the course of their business.” That certainly describes Ida Tarbell’s sober, fact-laden nineteen-part expose of Standard Oil, which became a national phenomenon and changed the national discussion about industrial consolidation, the great economic issue of that era. What insiders already knew, Muckrakers revealed to the general public. They were the great connectors.
That role is now played, more or less, by the business press, supplemented by the general press when it ventures into business, economics, and finance (e.g. The Atlantic, Rolling Stone, This American Life). The definition of the business press has changed radically in the last decade or so. It has exploded with the rise of new media and has also shrunk as industrial-era news-gathering institutions—particularly great metropolitan dailies including the Los Angeles Times and the Washington Post—have seen once-formidable business desks hollowed out. For now, the public still relies to a great extent on what are known as “legacy” news organizations for news gathering and investigations, supplemented by a gusher of economic, financial, and business commentary and analysis from new players, some of it quite fantastic (examples of which are included here).
So for those who read the business press regularly, this book is for you. Skim the table of contents and marvel at how much great stuff you missed in the last year or so. But for those who don’t read it regularly, this book is for you, too.
It’s true, business news has an image problem. Many believe it’s too technical or geared to insiders and people already in the know. There’s some truth to the perception. Business news began as form of elite communications, a pragmatic messaging tool to aid investors and markets, and, until not so long ago, that’s all it was. Indeed, the book you are holding is a result of business news’s long, tortured fight from the cultural margins to the mainstream.
Business news as we understand it arose in the late seventeenth century and gained traction in the early eighteenth century, accompanying the rise of capitalism and early publicly traded companies, like the notorious South Seas Trading Company, which flourished—until it crashed. The economist Robert J. Shiller pointedly notes that the history of financial bubbles coincided with the advent of financial media (you can insert your own CNBC joke here).