Why the media didn't see the financial crisis coming-they had a vested interest

There is a very good interview with the Danny Schechter , a respected investigative journalist and the author of Plunder, over at Editors Weblog.

The question that is going to be asked of the media for a long time is why did they not cat as the 4th estate as the financial crisis was brewing.

It is very interesting to hear what Danny has to say and I recommend that you look at the full transcript.

In particular though he believes that the media failed because of vested interests.

one of the key sources of revenue for newspapers is real estate advertising in weekend supplements and classifieds, as well as advertisements for credit card and refinancing companies. As a result, he argues there is a connection between the real estate and newspaper industry, their future and success are intertwined. Schechter says, "The newspaper industry is the marketing arm of the real estate industry. In some cities you actually had newspapers getting a piece of the action of sales through the ads that they generated. So they were actually part of the corruption of this whole relationship. So of course there was little real scrutiny about what was actually happening in the neighbourhoods where houses were flipping, where people who couldn't afford to buy houses were buying them with bogus mortgages. Newspapers were making money on the sales of these homes."

So newspapers had an vested intertest in a continuing house price bubble and ignored the warning signs of the overheating economy.