Alas, News Corp.’s innovations have gone in precisely the wrong direction. Attempting to become a new New York Times has left the Journal neither fish nor fowl. And was this really the year to shift emphasis away from business news? Misguided attempts to make the Journal “newsier” has just served to elevate commodity-type business stories to multi-column headlines on page one, effectively burying the occasional gems that are being done and adding to the impression of aimlessness. Dismantling the paper’s page-one operation has cost the paper its elegance and writing advantage.

And the Journal’s white-hot pursuit of scoops is also a turn toward insiderism. Scoops are valuable—if you’re a trader. For the rest of us, not so much. But this debate was always a false choice. The Journal has always won scoops. Pushing too hard just leads to scoops that turn out to be wrong, as when the Journal revealed that Citigroup was considering firing its chairman and later splitting up the company. Both those stories were a month ago.

When it comes to Citigroup, we don’t need scoops. We need somebody to probe how it led us all here. Did you know that in 2000, nearly three of four Citi mortgages were made by a subprime unit? I didn’t think so.

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.

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.