The Media’s Role in the 2008 Crash Included Enriching Itself Rather than Informing the Public
There was a terrific book a couple of years ago entitled “The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism” by Dean Starkman. It’s an incisive analysis of how the media failed to sound the alarm before the crash and became lapdogs, cheerleaders and ad revenue dependents on finance. He breaks it down into “access” vs. “accountability” journalism. It remains a book well worth reading.
I was reminded of that book when I read John Authers’ recent column “In a crisis, sometimes you don’t’ tell the whole story.” He is the Chief Markets Commentator and Associate Editor at the Financial Times. Rather than discussing lessons learned in the ten years since the collapse of Lehman Brothers or the progress made in strengthening and stabilizing the financial system, he instead used the 10th anniversary of the financial crisis to make a startling confession, although he clearly does not understand the import of his confession.
Authers discloses that not only did he know things about the imminent crash of the financial system that he didn’t tell his readers, but he took immediate direct action to use that withheld information to protect his own wealth. Rather than reporting the information to the public, he went to his bank to divide up his money into multiple accounts in the names of his family members to maximize Federal deposit insurance in the event that his bank failed. To make matters worse, he also disclosed in this column ten years later that lots of other in-the-know Wall Streeters were with him at his bank branch in New York doing the same thing.
The only people who didn’t know were his readers because he didn’t tell them. He decided it was better for them not to know what he knew, which deprived them of taking action to protect themselves like he did. (Sure, he justifies it ten years later because the financial system didn’t collapse, but no one knew that then as evidenced by his own actions.)
And worse still, what he and the rest of the Wall Streeters in his story did was to shift their potential losses to the US government and US taxpayers. Think about that for a minute.
The 10th anniversary of the financial crisis has provided ample opportunity to reflect on the mistakes made a decade ago. To that end, Authers deserves some credit for publicly confessing (albeit ten years later), but he doesn’t evince any awareness of how inappropriate his actions were and, in fact, suggests he’d do it again: better not let the great unwashed know what’s going on, lest they panic and cause problems. Meantime, he rushes to protect himself and his family. This confession should cause some deep self-reflection on his decisions and his actions.