For business journalists, as well as for their readers and viewers, the question “where was the press?” in the run-up to the greatest financial calamity since the Great Depression strikes me not as one question among many, but central to assessing whether journalism has anything, anything at all, to learn from this historic implosion. If journalists are watchdogs, what does this mean? If journalists are not watchdogs, then what are we?
Unfortunately, answering the question is not going to be so easy as simply rounding up opinions. In reality, no one knows where the press was because no one’s really checked yet. What was written and aired over major financial news outlets in the years leading to the spring of 2007, when the crisis burst fully into public view with the collapse of the Bear Stearns hedge funds, that’s all out there, waiting in electronic data bases for someone with the time, patience, and stomach, to sort through it all.
And, as much as some journalists would like, it won’t be as easy rummaging through the archives to find the good stories—and they are out there—that gave clear and eloquent warnings of certain bad practices in the lending industry and on Wall Street.
Certainly, there will be a list of heroes. Mara der Hovanesian and Peter Coy of BusinessWeek will no doubt find their way onto it, as will Diana B. Henriques, Richard A. Oppel Jr., Patrick McGeehan, Gretchen Morgenson, and probably others at The New York Times, and Scott Reckard of The Los Angeles Times. The Wall Street Journal’s James R. Hagerty and Ruth Simon will be there, I’m sure. Bloomberg’s Jonathan Weil will make it on the first ballot, as will the Journal’s John Hechinger, the author of this, and note the date:
Best Interests: How Big Lenders Sell A Pricier Refinancing To Poor Homeowners —- People Give Up Low Rates To Pay Off Other Debts, Putting Houses at Risk —- `Bill Collector Was on My Back’; 7 December 2001
I’ve already written about reporter Mike Hudson here and here. Cognoscenti, meanwhile, point to Sandra Fleishman’s work in The Washington Post and, especially, to Richard Lord, author of American Nightmare, for his work at Pittsburgh City Paper.
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But assembling a list of good stories strikes me as a little too simple. This isn’t about individuals, after all, but news organizations and the business press as an institution. Any fair measure of press performance will have to take some measure of the record in its entirety. What was the business-press narrative about, generally speaking? What else was written about Wall Street and the financial-services industry? Who was on the covers?
Were the good stories the rule or the exception that proves it?
It will also be important to reconstruct the news cultures created by senior editorial leadership, which, it should not be doubted, sets the tone and sends the unspoken-but-unmistakable message to reporters as to what kind of stories are in favor and which are not. If you don’t think this is important, you haven’t worked at one of these places. We’ll never know what wasn’t done. There will be no list, for instance, of goats, the mid-level types who responded to unspoken signals from above and sat on valuable stories, kicked away ideas, and shied away from confrontation.
And, I’d argue, if you’re really going to do this right, a fair assessment will also have to take into account what was in the available public record and match that—keeping in mind the benefit of hindsight—against the priorities adopted by the leading news outlets.
I think a common misunderstanding of the business press’s role, made by Fortune’s Andy Serwer above and others, is that the standard for business journalists is whether they issued warnings about the future—predicted that “this whole thing’s going to collapse,” as he puts it. That seems to set the bar artificially high, and in doing so lets journalism off the hook. Who can predict the future?
For me, journalism isn’t about reporting what’s going to happen. It’s about reporting what is happening now. We’re not soothsayers. But we’d better be reporters.
And that’s where Spitzer comes in. He and his fellow attorneys general, state banking regulators, even state legislatures were ringing wild alarm bells about mortgage-industry practices well before the fateful years of 2004 and especially 2005-2006, when the financial services industry and Wall Street expanded subprime lending from a fringe market into the mainstream. Never mind the community groups, like the Center for Responsible Lending and others that turned out to be right on target. These were elected officials.
This public record must form the backdrop to any assessment what news outlets were or weren’t writing.