Enron shows the myth of adversial press

Los Angeles Times’ columnist Tim Rutten reminds us, with the closing of the Enron trial, that the role of the business press in society failed in the case of the Houston energy company.

Rutten writes, “One of the answers has to do with inherent limitations the press often is loath to admit. Today, there are an increasing number of stories of great consequence — like Enron — whose complexity too often simply outstrips the competency many of the reporters assigned to cover them. (When was the last time you read a hard-hitting and comprehensible story on a hedge fund?)

“By and large, the people now running major news operations don’t want to take the time or pay the money that it would take to field suitable reporters. It’s also true that some institutions are all but impenetrable to even the most enterprising journalists, who — unlike prosecutors — don’t have the subpoena power that batters down doors. (If you want to understand why the inhabitants of Enron’s executive suite were so closed-mouthed for so long — and why some of them finally talked — watch any episode of ‘The Sopranos.’)

“But the media’s failure in the waning months of the go-go ’90s had a deeper, more insidious cause. Not long after Enron’s collapse, the Conference Board published a pseudonymous piece by a ‘longtime-publishing insider,’ who correctly diagnosed the problem this way: ‘Most of the mainstream business media has been too busy morphing CEOs into celebrities and giving us guided tours of their royal lifestyles. There’s been no time to do reality checks on their balance sheets and business practices. Instead, ‘the press gave us personal information about Ken Lay’s brilliance, his wife’s wonderful taste in furniture, and the glamorous lives of other business executives,’ says Ron Berenbeim, the Conference Board’s expert on business ethics. ‘They didn’t think we were interested in those boring footnotes in the balance sheet and earnings reports.’

Read more here. It’s a reminder of what the business press needs to avoid in the future.