The evolution of a business news story from trade press to mainstream
The Deal executive editor Yvette Kantrow writes Sunday about how the story about the Treasury’s banking bailout scrapped a provision of the tax code that limited tax breaks financial institutions could take after buying loss-ridden banks has moved from the trade press to the mainstream media.
Kantrow writes, “One of the earliest full-blown stories on the move appeared in the Nov. 2 issue of Crain’s Financial Week. Headlined ‘How IRS breaks could boost bank bailout tab,’ the piece pointed out the tax waiver in question ‘will eventually add billions of dollars to the cost of the $700 billion Wall Street bailout.’ But that wasn’t the story’s focus — nor was it a source of anger or surprise. Instead, Financial Week walked through how the rule change encouraged PNC Financial Services Group Inc. to buy the ailing National City Corp. and Wells Fargo & Co. to take over a sputtering Wachovia Corp. And it told readers that some ‘tax attorneys argue that tax relief is indeed an essential element to making Treasury’s plan to revive credit markets a success.’ In other words, go Hank!
“Fast-forward to one week later. On Nov. 10, The Washington Post ran a front-page story headlined ‘A Quiet Windfall For U.S. Banks.’ The 2,000-plus-word piece put a price tag on the tax code change — up to $140 billion — and revealed that many lawmakers didn’t even notice it was tucked into the bailout. What’s more, the paper reported, a change to the tax code by Treasury may well be illegal.
“Unlike Financial Week, WaPo bore in on the politics behind the move, explaining that conservative economists and some Republicans have long wanted to repeal the tax and that the bailout bill was a stealth way of doing so.”
Read more here.