Where was biz media during sub-prime disaster?

Danny Schechter, editor of MediaChannel.org, writes an opinion piece for Editor & Publisher that questions whether the business media did enough to warn consumers about the sub-prime mortgage crisis.

Schechter wrote, “There is more to this very sad failure. Many newspapers and TV outlets were complicit. They accepted and made tons of money carrying slick and often deceptive advertising for shady mortgage lenders and credit card companies encouraging readers and viewers to accept more debt. Some major newspaper are tied into local real estate syndicates and get kickbacks from sales tied to their extensive advertising of homes for sale.

“Was there a conflict of interest perceived in taking these ads — which were important sources of revenue in a soft ad market — and producing watchdog journalism warning of the dangers of buying into subprime loans and other injurious products?

“Is the press too imbued to our government’s mission of inspiring consumer confidence? Is that, in turn, connected to using the news pages to benefit advertisers? Think of all those local TV reports ‘live at the mall’ at Christmas time cheerleading for more shopping? At the time, it appeared as if everyone was buying everything. It was only later, well after the fact, that we learned that it was the worst Christmas season in five years.

“What’s worse is that the coverage may have missed the truly criminal aspects of this crisis, the issue so far being raised mostly overseas. This will be fought out in courtrooms worldwide when those who purchased worthless mortgages sue the companies who sold them knowing their true value. Why are the RICO laws not being used to prosecute a scam involving so many ‘entangled’ companies? There is no shortage of data on this fraudulent and discriminatory scheme.”

Read more here.