Sunday, February 15, 2009

How Could 9,000 Business Reporters Blow It?

Columbia Journalism Review critic and Former Wall Street Journal reporter Dean Starkman attempts to explain how the entire Wall Street Media establishments missed the biggest collapse since the great depression.

Starkman places primary blame on decimated newsrooms beginning as far back as 2002 and the lack of Federal oversight providing tips to reporters. But these explainations are unsatisfying. While cutbacks have clearly taken place, the NYTs and WSJ have hardly folded up shop and gone away.

The real problem is that the financial reporters and editors (in print and on TV) had a sycophantic worship of those there were covering. Starkman certainly touches on this, first noting, for example "Wall Street coverage tilted toward personality-driven stories, not deconstructing balance sheets or figuring out risks." But the reporting community's worship and lust for access went much further and allowed those they were covering to co-opt them to further their own agendas. Starkman provides some examples,
Increasingly, business coverage has addressed its audience as investors rather than citizens, a subtle but powerful shift in perspective that has led to some curious choices. The Journal, for example, at times seemed to strain to find someone other than Wall Street to blame for the mortgage mess: A December 2007 story announced that borrower fraud "goes a long way toward explaining why mortgage defaults and foreclosures are rocking financial institutions," though no such evidence exists. Another Journal story last March accused "about half"of foreclosed-upon borrowers of trashing their homes. The source for the "half" bit: a PR firm working for real estate clients. Forbes, meanwhile, in a misbegotten investigation last March of Martin Eakes, the head of the Center for Responsible Lending and one of the few heroes of the subprime mess, suggested Eakes had fought to ban abusive lending in order to help the tiny nonprofit credit union he runs. Seriously.
Ultimately, the press was corrupted just like the regulators worshiping the billions being made and losing sight of what they were supposed to be doing.

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