Two, we indies were also reporting out in the real world, in my case thanks to a magazine that values and invests in place-based reporting. While numbers were a starting point, it was only after I’d spent more than a week in a foot of snow in Cleveland that the scope and workings of the growing crisis began to become apparent. Leads gleaned from foreclosure, property and bankruptcy records, tips from consumer lawyers, and a spreadsheet of recent sales transactions compiled by a community development corporation yielded stories far more vivid and troubling than I could have imagined. Entire streets had been taken over by mortgage fraud schemes that left most houses empty and put remaining homeowners under siege. I met a Croatian immigrant whose 95-year-old father was found dead on the kitchen floor after a break-in. A suburban speculator living out a Flip This House fantasy introduced his low-income buyer to a subprime mortgage broker who fudged the borrower’s financial profile on the mortgage application, and didn’t deny it when I called. A speculator used his girlfriend’s good credit to buy a half dozen dilapidated houses, then immediately resold them to his own companies at double or triple the price. What I’d found was an organized crime scene that extended for miles and into hundreds of millions of dollars.
Lastly, I was free (and predisposed) to question authority, not to mention the basic business practices of large financial institutions. I know not every journalist can say that, and believe me, I’ve come to cherish the freedom. It’s difficult enough for business reporters and editors to challenge conventional wisdom, all the more so if they don’t have a business authority to quote or a financial report to cite. The people telling me that a mortgage crisis was upon us weren’t the Bear Stearns or Fitch analysts I called; it was the community organizers, public interest attorneys and elected officials dealing with the consequences. These weren’t conventional experts, and they hardly had all the answers; sometimes I was the one helping them understand the perverse workings of the mortgage market. But they had to become informed simply to serve their clients and constituents, and they did. Advocates have their biases—like all sources—but as a place to begin identifying the issues that matter, the stories that must be told, they are indispensable.
To be sure, some mainstream business journalists, notably, Peter Goodman and Gretchen Morgenson at The New York Times, among others, have embraced these reporting strategies and values, if only to keep up with the sheer pervasiveness of the mortgage crisis in almost every corner of American life. And that’s all for the best. If there’s one lesson to be learned from the financial crisis, it’s that numbers too often lie; business journalists have a responsibility to readers and viewers to report behind the numbers, from the neighborhoods of the nation, on the real-world consequences of business practices, and not just from the perspective of Bloomberg terminals and earnings reports.
Yet, a year into the crisis, I am sorry to say that business journalism on the whole, has failed to learn from its fatal reliance to an overwhelming degree on bankers, ratings agencies, and all the other usual sources—sources that have many reasons to provide bad information or information that is at best—at best!—incomplete. Mainstream business journalism, I find, continues to speak parochially to investors and their interests, as though the public has only passing interest in the outcome of the discussion. As the past year has taught us, it does so at all of our peril.