No golden age of business journalism

Columbia University’s Todd Gitlin writes about the lack of a Golden Age in journalism for Salon magazine, and uses financial journalism as an example.

Gitlin writes, “Start to finish, financial journalism was breathless about the market thrills that led to the 2007-2008 crash: the financialization of the global economy, the metastasis of derivatives, and especially the deregulation underway since the late 1970s that culminated in the 1999 congressional repeal of the 1933 Glass-Steagall Act (with President Bill Clinton blithely signing off on it).  That repeal paved the way for commercial and investment banks, as well as insurance companies, to merge into ‘too-big-to-fail’ corporations, unleashed with low capital requirements and soon enough piled high with the potential for collapse.

“A Proquest database search of all American newspapers during the calendar year 1999 reveals a grand total of two pieces warning that the repeal of Glass-Steagall was a mistake.  The first appeared in the Bangor Daily News of Maine, the second in the St. Petersburg Times of Florida. Count ‘em: two.

“On February 24, 2002, as the scandal of the derivative-soaked Enron Corporation unfolded, the New York Times’s Daniel Altman did distinguish himself with a page-one business section report headlined ‘Contracts So Complex They Imperil The System.’  He wrote: ‘The veil of complexity, whose weave is tightening as sophisticated derivatives evolve and proliferate, poses subtle risks to the financial system — risks that are impossible to quantify, sometimes even to identify.’ He stood almost alone in those years in such coverage.  Most financial journalists preferred then to cite the grand Yoda of American quotables, Federal Reserve Chairman Alan Greenspan.  And he was just the first and foremost among a range of giddy authorities on whom those reporters repeatedly relied for reassurance that derivatives were the great stabilizers of the economy.”

Read more here.