Many have remarked, and I predicted, that the Journal was being made to resemble the FT. The FT is a fine little paper, just like Britain and Australia are fine little countries. But the FT’s newsgathering operation in this crisis has been irrelevant. It effectively has no investigative capability. Why, if you are The Wall Street Journal, would you want to imitate it?

Let’s take a look at the record. And yes, this will be highly selective, but I’m going to try to fairly reflect the ocean of material these outlets produce.

On September 27, the Times’s Gretchen Morgenson published a story that hit at the heart of the AIG bailout by exploring who benefited. Answer: Goldman Sachs, among others, which would gain if AIG could meet its obligations and lose if it couldn’t. Morgenson also pried loose the fact that Goldman chief executive Lloyd Blankfein, successor to the current treasury secretary, met with Fed officials on September 15, the day of the Lehman bankruptcy and a day before AIG was bailed out.

Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said.

This story prompted strenuous denials from Goldman that it had any material interest in AIG’s fate, disputes that reached even The Audit. The Times was forced to correct an error that put Blankfein and Treasury’s Hank Paulson in the same September 15 meeting at which AIG’s fate was decided. Goldman, however, was forced to acknowledge that current and former Goldman CEOs did attend other meetings at the Fed that weekend, and that Blankfein was the only Wall Street CEO at the AIG meeting.

Point being, the Times story set the agenda for all subsequent coverage of AIG. That’s precisely the kind of journalistic courage that readers all too often take for granted.

As remarkable as that story was, two days later, Bloomberg, led by rising investigative star Mark Pittman, one-upped it with a blockbuster that flatly contradicted any inference that Goldman did not benefit from the bailout (my emphasis).

Sept. 29 (Bloomberg)—As much as $37 billion from federal bailout loans to American International Group Inc. has gone to investment banks including Goldman Sachs Group Inc., the firm Treasury Secretary Henry Paulson used to run.
Without the government money, Goldman, Merrill Lynch & Co., Morgan Stanley, Deutsche Bank AG and other firms could have become some of the biggest creditors in a bankruptcy filing by AIG, the world’s largest insurer, because of its billions in losses on subprime bonds and corporate debt.

On November 3, the Journal advanced the ball with a fine story on a consultant/Yale professor whose risk models failed to protect AIG from a colossal system failure. But a look at the key paragraph—known as the nutgraph—reveals that the story asks questions that are already answered. The emphasis is mine:

A close look at AIG’s risk-management operations, and the rapid-fire chain of events that crippled the firm, raises questions about the run-up to the financial crisis: Did firms like AIG plunge into lucrative but perilous new markets without thoroughly understanding the pitfalls? Had the sheer complexity of the financial products made it all but impossible to fully calculate the risk? And did firms put too much faith in computer models to assess dangers?

The answers are obvious—aren’t they?—just as they were the moment they were written.

I don’t mean to belittle this excellent story, but I believe comparisons with the earlier entrants are instructive. It is good to probe the rubble of an already failed financial experiment. It is better to reveal—expose, bring to light—the indirect transfer of public funds—money needed for food stamps, unemployment benefits, Medicaid—to Wall Street investment banks engineered by current and former executives of one of the beneficiaries, all in the face of fierce opposition from the most powerful firm on Wall Street. (And to think that readers get it for free on the Internet, without so much as a thank you.)

A five-part series by Bloomberg at the end of last year, while uneven, and, it must be said, not beautifully written, exemplified the wire service’s sense of urgency and mission.

One story found the thirty-something bankers and lawyers who met after hours at Deutche Bank to create the standardized contract that allowed for subprime securitization:

Those meetings of the “group of five,’” as the traders called themselves, became a turning point in the history of Wall Street and the global economy.

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.