If you think, by the way, that his prostitution bust means Spitzer was wrong about predatory lending, my advice would be to check your 401(k).

But obviously the point isn’t whether the federal government should regulate nationally chartered banks alone or whether states should, too—I personally don’t care, just as long as somebody does—or whether the preemption doctrine should apply to banking law, or even what percentage of the current crisis is attributable to problems with the national banks (probably about a quarter).

No, the point is that the lending industry’s dangerous practices were openly discussed by public officials, including a nationally prominent one, for many years—way, way before the practices led to the international problem that hangs over us today.

What happened to these mortgages in the aftermarket—Wall Street’s creation of what George Soros calls “the superbubble”—is another matter and should be the subject of a separate inquiry. But without the mortgages, there are no securities, and there is no crisis.

But let’s be clear: reporting on problems in the mortgage industry itself did not require any special forecasting abilities or even particular insight. Any honest discussion of the press’s performance during the run-up to the mortgage crisis must take this into account.


1. “Spitzer attacks plans that may protect banks from state laws.”

12 December 2003

Financial Times

2. “STATES VS. THE FEDS: A FRAGILE TRUCE; In policing money pros, a tug-of-war over who’s in charge.”
BusinessWeek

29 September 2003

3. “A new case tests who regulates America’s banks”

The Economist

24 January 2004

4. “The Enforcer: As His Ambitions Expand, Spitzer Draws More Controversy —- In Latest Move, He Pushes Fund Giant to Cut Fees; New Clash With the SEC —- Eyeing Drugs and Annuities”

The Wall Street Journal

11 December 2003

5.”Bank-Cop Fight: Spitzer Takes On U.S. Regulator,”

The Wall Street Journal

22 March 2004

6.”Tough Washington Insider to Face His Critics on Bank Regulation”

The New York Times
2 June 2004

7. “Countrywide Settles with NY Official”

Origination News
1 January 2007


Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014).

Follow Dean on Twitter: @deanstarkman.