By Sean Sposito
DENVER – Dean Starkman tried to play it cool.
He squirmed, crossed his arms and appeared to sweat when he told roughly 200 business journalists they blew it, that they failed to cover the impending financial crisis before it was too late.
“This issue of what was and wasn’t said, what the press did and didn’t do is really a matter of opinion,” said Starkman, an editor and writer for the Columbia Journalism Review’s audit site. “If the question is: Did the press provide adequate warnings to the public? The answer would be: No.”
Starkman was taking part in the opening session at the annual conference: “Coverage of the meltdown: Did 9,000 business journalists blow it?” An all-star cast moderated by Paul Steiger, former managing editor of the Wall Street Journal, discussed the shortcomings and successes of business journalism leading up to the latest recession caused by the credit crisis.
Panel member Larry Ingrassia, business editor of The New York Times, disagreed with Starkman. Ticking off a series of front-page NYT stories dating back to 2000 that included work by SABEW board member Diana Henriques, he said journalists did their best to warn the public about predatory home equity loans, housing price bubbles and out of control mortgage markets.
Steiger, now president and CEO of the New York City-based non-profit ProPublica, mentioned special editions of the Journal that covered the disparity between executive and employee pay.
“I think the record shows that the press was there and ringing the alarm bell,” Ingrassia said.
But, personal finance author Jane Bryant Quinn admitted that journalists didn’t dig hard enough, early enough to make an impact.
“I wrote about these terrible mortgages, but I didn’t think about following the daisy chain back” to the banks and the mortgage lenders and the markets, said Quinn, a columnist for Bloomberg News and Newsweek. “I never heard of the credit default swap until all of the sudden it was hitting me in the head.”
Another panel member, Greg Miller, said the complexity of financial institutions also makes the financial system more difficult to cover – in the past bankers and brokers knew everything about their business.
“(Now), everyone has a specialization,” said Miller, an associate professor at the University of Michigan’s Ross School of Business. Miller said he’s visited banks where one employee couldn’t reference the responsibilities of his superiors or his colleagues.
He added that, while business journalism made strides to cover the beginnings of the financial crisis, it also fell short.
“Yeah, there were lots of articles that seemed to question this,” Miller said. “But there were also lots of articles that seemed to support it, too.”
Panel member Alan Dodds Frank, TV journalist and president of the Overseas Press Club, said as regulation eased, broadcast journalists gave more preference to CEO interviews rather than probing questions.
“We’ve sort of adopted the mentality of the White House press corps,” he said. “Oh my god, if I ask this tough question to this CEO they will never talk to me again; so everybody throws soft balls.”
Said Quinn: “I think that Alan has put his finger on something, the extent to which we did or didn’t drink the Kool-Aid.
“The missing piece that we weren’t covering, and now we are getting around to is the regulation question, because it became very unfashionable to say that we were going to regulate” financial institutions until recently, said Quinn.
SABEW member Mimi Whitefield, of The Miami Herald, asked the panel if readers were complicit by refusing to listen to the media warnings of impending dangers.
“It kind of reminds me of what happened during the tech boom, everybody thought they were part of the” investor elite, she said.
Starkman, of the CJR, said readers are still receptive to good journalism. And, though stories were being written before the subprime mortgage bust, they weren’t compelling enough to move public opinion.
Said Quinn: “You can only move the dial when you do get the public behind you, and if it is not in their interest to hear what you”™re saying, they’re not going to listen.”
Replied Starkman: “It’s a big mistake to think in those terms. I think that the idea that your readers aren’t receptive to good journalism, I don’t think that is supported. If you want to get into the argument with the readers, it doesn’t make sense journalistically or logically.”
Steiger said part of the problem was the distance between recessions. From the end of World War II to 1987 there were seven recessions with an average of five years in between them. Since 1987, there have been two with an average of 11 years between today’s slump and the last.
“There will be blood, there will be crashes, and the longer you go between them, often the worse they are, but that doesn’t give us a pass,” he said.
Sean Sposito is graduating in May from the University of Missouri at Columbia and interning this summer at The Boston Globe. He received a SABEW Chair scholarship to attend the conference.
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