I'll attest that business journalists as a rule are as smart, sophisticated, and plugged-in as they seem. And yet that army of professional business reporters—an estimated 9,000 or so nationwide in print alone—for all practical purposes missed the biggest story on the beat. Why?
writes former Wall Street Journal staff writer Dean Starkman.
Much has already been written on the subject and more no doubt still will be.
According to Dean in a long and detailed piece
There was a handful of heroes at the major publications who tried to get the word out. But the good, hard-hitting, arm's-length stories will have to be compared to what else was gushing out of the 30-inch business-news drainpipe—those Citigroup earnings stories, those edgy-yet-flattering profiles of Merrill Lynch's Stan O'Neal, Lehman Brothers' Dick Fuld, et al., the pieces noting how Countrywide Financial's Angelo Mozilo liked to dress well, etc., not to mention the Home Depot marketing stories, the personal finance columns, and all the cheerleading and Flip That House fluff that diverted resources from the real task at hand.
One reason that Dean identifies is the newsroom cuts which he says coincided with the first warning signs of the end of the bull market.
But that wasn't the only reason
Jesse Eisinger, a former financial columnist for the Journal and now a senior writer for Portfolio, says the paper, like business journalism generally, clung to outdated formulas. Wall Street coverage tilted toward personality-driven stories, not deconstructing balance sheets or figuring out risks. Stocks were the focus, when the problems were brewing in derivatives.
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