Where was the financial press?

Howard Kurtz of The Washington Post writes Monday about the role the business media has played in not warning investors and consumers about the current financial and economic crisis.

Kurtz writes, “After being burned by years of cheerleading before the dot-com collapse, the media warned repeatedly that the surge in housing prices might turn out to be a bubble. But the emphasis was generally on the potential toll on homeowners, not the banks that would be left holding bagfuls of bad loans. As in the savings-and-loan scandal of the late 1980s, the press was a day late and several dollars short.

“Marcus Brauchli, The Washington Post‘s new executive editor, who was the Journal’s top editor until this past spring, says no policymaker who followed those papers, the New York Times, the Financial Times and CNBC could have been unaware of the explosive growth of derivatives that embedded debt across the financial system.

“Still, he says, ‘I regret that when I was at the Journal, we didn’t keep the focus on some of these questions, including the possible moral hazard posed by the structure of Fannie Mae and Freddie Mac. These are really difficult issues to convey to a popular audience. . . . You do have an obligation as a journalist to push important issues into the public consciousness. We also have to remember you’re pushing against a powerful force, which is greed.’

“It is not easy for journalists to take on the masters of the financial universe, especially when the market is going up and everyone is happy. Franklin Raines, then chief executive of Fannie Mae — which was seized by the government last month — complained to Brauchli about critical Journal stories in 2001.”

Read more here.