Audit chieftain Dean Starkman made an appearance on The NewsHour with Jim Lehrer on Friday to discuss the performance of the business press in the years building up to the financial crisis.
Dean faced off with BusinessWeek’s Peter Coy and the Los Angeles Times’s Kathy Kristof, and made his case that the business press largely failed. Coy and Kristof largely disagree.
Here’s the money quote from Dean:
But I think, when you look back at the record, you’ll see that confronting powerful institutions about their lending practices, not to mention Wall Street, was inadequate.
Coy defended the press, BusinessWeek in particular, by citing specific good stories it did years before the meltdown.
I think that Kathy and Peter, you know, reflect the institutional response to the question. I don’t fully agree with it, or I don’t really agree with it at all.
But, you know, the issue is… what was the message delivered over time? And you can cite really excellent stories that did appear episodically over time, but you also have to take into account other headlines that you could mention.
“Washington Mutual is using creative retail approach to turning the banking world upside down,” Fortune in 2003. “Sachs Appeal: Goldman Sachs has Emerged from the Market Bust as a Trading Colossus,” Forbes, 2007. You could really pick any number of these stories.
And what you’re looking at there are stories that aren’t really warnings, but, in fact, is the opposite. They’re basically saying, hey, these institutions are all clear. And I think that has to be taken into account.
Meanwhile, Kristof is incredibly weak here:
JEFFREY BROWN: All right, let me let Kathy Kristof weigh in here. What did you see that was done well, what not so well?
KATHY KRISTOF: Well, you know, I think all of the major publications had done a number of stories about toxic mortgages, about companies that were going way off the rails on what they were approving.
The problem is, is kind of what the other two have been just nipping at, is that we were early. And we kept on, you know, being the voice in the wilderness, the voice in the wilderness, the voice in the wilderness. And pretty soon, you say, “OK, how many times can I do that story?” And so you stop. (Ryan here: Nooo!)
And we also got incredible flak toward the end of the bubble when we would write stories about toxic mortgages, because there were all sorts of bloggers who were trying to keep this fraud going. And they would just attack you, attack the people who you had quoted. They would do all sorts of things in order to stop you from publishing.
Alternate Ending: Damned bloggers!