You can ladle a lot of weighted meaning on top of the collapse, last week, of Silicon Valley Bank: it’s a sign of the economic shakiness of the tech industry; of the dangers of what happens when the CEO of a failed bank also sits on the board of its regulator; of the moral hazards of rescuing corporate depositors who should have known better.
What it is not is a pit stop on the campaign trail for 2024. And yet, in the week since the collapse of the nation’s sixteenth-largest bank, news outlets have been unable to resist the red meat of political conflict—a piece of journalistic malpractice that led some journalists to ignore some of the serious economic issues at play, and at times even risked making this crisis worse.
First, let’s dismiss what should be obvious: Silicon Valley Bank didn’t fail because its board was too distracted by diversity initiatives, as an absurd Wall Street Journal opinion column put it, or because its investment in climate solutions was too taxing. In fact, the bank wasn’t an outlier in either its diversity or its so-called ESG investing, as a corrective article in the New York Times pointed out.
Those facts, unsurprisingly, did not stop politicians, mainly on the right, from running with the narrative that SVB was a “woke bank.” And the fact that such claims were ridiculous didn’t stop some in the Beltway media from boiling the situation down to a both-sides standoff. Semafor gave the story its templated treatment:
THE VIEW FROM REPUBLICANS:
…For Donald Trump, the specifics of the crisis and response were less important than that something bad was happening under his successor’s watch. “JOE BIDEN WILL GO DOWN AS THE HERBERT HOOVER OF THE MODRRN AGE [sic],” he wrote on Truth Social. “WE WILL HAVE A GREAT DEPRESSION FAR BIGGER AND MORE POWERFUL THAN THAT OF 1929. AS PROOF, THE BANKS ARE ALREADY STARTING TO COLLAPSE!!!”
THE VIEW FROM DEMOCRATS:
…Rep. Katie Porter told supporters she’d write “legislation to reverse that risky law,” teaming up with her mentor, Massachusetts Sen. Elizabeth Warren, while Rep. Adam Schiff planned his own bill to “claw back” SVB executive bonuses.
Turning everything into a politics story is a dangerous road that journalism has been down many times before. It happened most dramatically with covid, when Trump and his followers dismissed health warnings and put Americans’ lives at risk. Health disinformation was amplified by the right-wing press, and healthcare workers got caught in the nation’s culture war. To their credit, most mainstream journalists eventually pushed back against the anti-mask and anti-vaccine movements, and the coverage of covid would largely count as a journalistic success in this country.
Covering bank failures is also a serious business. Overhyped coverage and misinformation can make existing problems worse, and politicizing the story often contributes to the dumbing down of complicated economic and regulatory issues. In CNN’s Reliable Sources newsletter this week, Oliver Darcy reflected on this complexity in an exchange with Andrew Ross Sorkin, of the Times:
It is a story Sorkin described covering as “a balancing act, a little bit like walking a tight rope.” On one hand, he told me, journalists must avoid sparking panic and causing a catastrophic run on the banks. But, on the other hand, journalists also owe it to their audiences to deliver them a clear-eyed assessment of the state of affairs.
“Our job as journalists is to tell the public what is happening—and if you believe in transparency, we should all want that,” Sorkin said. “The downside of transparency in real-time is sometimes news that may not be positive can pile on itself in a way. And so I think it is really just about trying to contextualize what we’re seeing.”
If anything, the story has become even more complicated since SVB’s demise. Signature Bank, a regional bank that catered to crypto companies, was also forced to close; later in the week, European regulators had to step in to help the banking giant Credit Suisse. It’s easy to see why investors, and readers, are jittery. And it’s inevitable that they will, again, ask where the media was in warning of this new crisis.
The sad truth is that the business press does not have a good record when it comes to foreseeing, and forewarning of, such things. Part of that is down to prudence, an aversion to creating the sort of panic that we have seen this week. But there is also, as I have noted before in this newsletter, an institutional blind spot on many business-news desks. Howard R. Gold documented the structural limits of business news for CJR in a September 2018 piece marking the ten-year anniversary of the last financial crisis. Ahead of that crash, Gold wrote, the world of journalism
failed to alert its readers to the coming disaster, to appreciate the complicity of the Wall Street banks, and to understand the inability or unwillingness of regulators to grasp the problem. That business journalists are still defending their role in a meltdown that happened ten years ago speaks to how deep the criticism cut and how raw the debate still is.
Gold went on to ask:
If business journalists missed critical parts of the story before the crisis hit and didn’t see the need for fundamental change in its wake, what are the odds they’ll spot the next crisis, before it comes?
I’m afraid we saw the answers before us this week. You can read Gold’s piece here.
Other notable stories:
- Last year, it emerged that ByteDance, the Chinese parent company of TikTok, used the app to surveil US journalists, including Emily Baker-White, of Forbes. Now Baker-White reports that the Department of the Justice and the FBI are both investigating the surveillance, with the DOJ having subpoenaed ByteDance. ByteDance has recently come under increasing pressure from the Biden administration to sell its stake in TikTok.
- According to Michael M. Grynbaum, of the Times, afternoons are the “new prime time” when it comes to TV news; The Five is now the most-watched show on Fox News, ahead of Tucker Carlson and Sean Hannity, while daytime and early-evening hosts on CNN and MSNBC are also starting to outstrip their prime-time colleagues. The reasons for the trend include the allure of streaming services and a less compelling news cycle.
- Michael DeWitt, the editor of the Hampton County Guardian in South Carolina, praised the performance of local media in covering the case of Alex Murdaugh, whose recent conviction for murdering his wife and son blew up into an international true-crime craze. “We wouldn’t be where we are today without the media,” Eric Bland, a lawyer for alleged financial victims of Murdaugh, said. “The South Carolina press deserves a Pulitzer.”
- Paul Huntsman, who chairs the board of directors and the editorial board at the Salt Lake Tribune in Utah (and is the brother of that state’s former governor), has launched a new weekly paper and news site in Coronado, California, where he owns a home, after noting a deficit of reporting on local beach closures. The Tribune has more. (And the Post reported last year on a controversy involving Paul Huntsman and the Tribune.)
- And the LA Times—which, during World War II, advocated that Japanese Americans be imprisoned in camps—said that it would stop using the word “internment” to refer to that practice, and instead call it “incarceration” or similar. Teresa Watanabe, a journalist at the Times whose parents were incarcerated, wrote that some staffers have long pressed for the wording change, which the paper made in the spirit of “accuracy and reconciliation.”
ICYMI: Canada imitates Australia’s news-bargaining law, but to what end?Kyle Pope is the editor in chief and publisher of the Columbia Journalism Review.