The story, among other things, notes that Paulson opposed a bill that would make Wall Street firms responsible for what they sold:

One provision would make firms that package and sell subprime mortgages liable for damages if loans violate certain minimum standards, including ensuring a borrower’s reasonable ability to repay. Paulson criticized the liability idea in an Oct. 16 speech at Georgetown University in Washington.

“We need to ensure yesterday’s excesses are not repeated tomorrow,” Paulson said. Penalizing Wall Street for packaging mortgage loans “is not the answer to the problem,” he said.



This is accountability reporting, pure and simple, although Pittman’s calculation of Goldman’s toxic CDO share took an unusual degree of sophistication.

Given that Bloomberg has more than 2,000 journalists on staff (compared to 110 business journalists at the Times and 750 at the Journal as of last summer), it could do a lot more. But still, someone over there understands the business-journalism game has changed.

And note this headline:

Evil Wall Street Exports Boomed With ‘Fools’ Born to Buy Debt

—October 27, 2008.

No, this is not Mother Jones. It’s Bloomberg.

Yes, the Journal has done fine work that offers glimpses of what is possible. The irreplaceable Ellen E. Schultz discovered that as much as $40 billion in bailout money could go to pay for executives’ specially crafted pensions and deferred compensation (my emphasis).

The government is seeking to rein in executive pay at banks getting federal money, and a leading congressman and a state official have demanded that some of them make clear how much they intend to pay in bonuses this year.

But overlooked in these efforts is the total size of debts that financial firms receiving taxpayer assistance previously incurred to their executives, which at some firms exceed what they owe in pensions to their entire work forces. (3)

The paper nailed the story of the strange bird who ran the Reserve Primary Fund, the supposedly ultra-conservative money market fund that managed to lose money, or “break the buck” and sent financial markets into deep freeze.

After a slow start on AIG, the Journal has bested its rivals in following it. In a November 12 story Serena Ng and Liam Pleven found that a reworked AIG rescue plan would benefit mostly AIG’s irresponsible Wall Street trading partners, who get to keep $35 billion in collateral they pried from AIG earlier and yet still get made whole by selling their junk securities to a new government-backed entity. And here’s my favorite quote (my emphasis):

A person familiar with the government’s rescue plan says it wasn’t specifically designed to benefit individual banks at the expense of U.S. taxpayers and AIG, which will end up bearing the risk of the CDOs. However, officials wanted to give banks sufficient incentives to sell the securities so that AIG could cancel the swaps. (4)

As long as that wasn’t specifically the point, just generally.

The Journal widened its new lead with a story by Ng, Carrick Mollenkamp, and Michael Siconolfi on how AIG has lost another $10 billion not previously known on other bad bets with Wall Street banks.(5)

Too bad the paper couldn’t find room for either of them on page one, but this to me is part of the broader problem. It is the same problem that would lead the paper to make this sweeping claim:

With retirement accounts tumbling and millions of homeowners struggling to pay their mortgages, a realization is dawning on many Americans: The banks, brokerage firms, insurance companies and other players in the financial-services industry have failed them…

and put it on page B1. And get this headline:

Some Consumers Say Wall Street Failed Them

“Some consumers”? This is a joke, right?

To me, that story is your year-end series. Instead, it’s a 1,200 word afterthought. You may not like this vision, but at least I have one.

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.