The FT admitted that the results were “a setback for John Thain.” The WSJ, with phrasing that doesn’t quite blame Thain himself, noted:

The past continues to haunt Merrill Lynch & Co. Chairman and Chief Executive John Thain.

And the NYT observed the differences between the expectations for and the results of Thain’s Merrill tenure, the “comedown” as the Times story puts it.

But Thain is still surprisingly unscathed, because the press in general continued to take him at his word even though he had already failed in his main task: to properly assess and candidly disclose the extent of the problem left by a predecessor.

David Weidner, at Dow Jones, was ahead of the pack when he drew the conclusion July 22 that “Thain Should Shoulder Some Blame at Merrill.” It would be several months until this idea, which was right, really took hold.

The FT, on the other hand, took a common tack July 30, when it noted that

while more writedowns may lie in store, the general view is that Mr. Thain has taken an embarrassing but necessary step in the right direction.

And yet again Thain took his case to the media. The NYT reported that “John Thain said he had to do something to stop the bleeding at Merrill Lynch.” And while he was at it, he “disputed the notions that he misled investors about his intentions to raise capital.” He elaborated in an August 18 BusinessWeek interview. And he still managed to earn positive reviews from the WSJ September 12.

When news of Bank of America’s takeover of Merrill came in mid-September, many news outlets wrote as though straw had been spun into gold. Here, for example, is the lede of a September 15 Washington Post story:

Bank of America struck a $50 billion deal yesterday to buy Merrill Lynch, a merger that will unite the nation’s largest consumer bank with one of its most celebrated investment banking firms, according to sources familiar with the negotiations.

Celebrated? That had never been true, and now?

In a similar vein, The Globe and Mail informed us September 16:

In less than 48 hours, Mr. Lewis had transformed Bank of America from a big retail bank in the United States into a global financial powerhouse.

Powerhouse? Remember, this is the fall of 2008.

The NYT was more cautious, but even it couldn’t help observing that “the purchase of Merrill puts [B of A] at the pinnacle of American finance, making it the biggest brokerage house and consumer banking franchise.”

Pinnacle?

The WSJ even suggested Thain to head a new Treasury Resolution Trust Corp., as Thain’s name also floated around both as the possible successor to Ken Lewis at B of A, where he had been appointed head of global banking, securities and wealth management, and as a possible McCain Treasury secretary. Can you imagine? By December, the WSJ offered plaudits to both Thain and Lewis.

We are not the only ones to wonder at the tone of this coverage. In mid-September, Dow Jones’s Jon Friedman wrote:

I cringed as I watched the press conference for Ken Lewis of Bank of America and John Thain of Merrill Lynch on Monday. The two gathered to discuss B of A’s proposed acquisition of Merrill.

The event should have been regarded as a sorry state of affairs, yet another glaring sign of greed, stupidity and mismanagement on Wall Street. Why else would Merrill Lynch, Wall Street’s most acclaimed ambassador to Main Street, among other verities, be forced to sell itself in such an inglorious way?

With all the carnage, you might expect to see a pinstripe lynch mob of sorts encounter the two chief executives. But the media were so polite and deferential to the two CEOs, they behaved as if the press conference were a victory lap for the financial services industry.

Ouch.

If you want a more appropriate tone, try this mid-September BusinessWeek piece. And we can’t help but point out the impressive Gretchen Morgenson at the Times, who offered us an excellent early November piece in which she traced Merrill’s years-old subprime strategy and subsequent fall. Thain doesn’t figure prominently here, and he shouldn’t. Morgenson pulls us away from the hero/antihero narrative and gets us back to looking at systematic problems. The difference is clear. And yet the business press never learns this lesson.

December 2008 was a pivotal month for Thain, when Merrill’s cracks became so wide that his carefully crafted persona was impossible to sustain.

The first week brought no major damage. December 5, shareholders of the two companies approved the sale despite doubts. Thain still looked pretty good.

But then came the bonus issue.

Elinore Longobardi is a Fellow and staff writer of The Audit, the business-press section of Columbia Journalism Review.