Having been a business reporter for 30 years this summer I understand the natural bias to identify with your subject.
The job of a journalist is to organize and advocate an industry, place or lifestyle. Thus, a certain bias favoring the political views held by the group you write about is natural.
But at some point your ideological blinders have to come off, or else you’re doing your readers and viewers a disservice.
This has plainly happened with the financial press.
Media coverage of the Big Shitpile has ignored the Big Fact. This happened because unregulated markets were allowed to be created, to grow, to soak up much of the world’s capital. When two brokers or hedge funds repackage mortgages or other things into new types of trading instruments, they are printing money, just as the Federal Reserve prints money. They’re doing it in the same way, by declaring the existence of new paper, by putting a price on it, and making a market in it.
Anyone who does this has a fiduciary responsibility. You become the trustee of your investor’s interest, which is supposed to trump your own. Ethical rules can police such a responsibility. So can laws and regulations.
What happened in this decade is entirely new markets and new instruments were allowed to be created, which lacked these controls.
Nothing I have seen, either from the Administration or the financial press, addresses this key point. Nothing I’ve seen endorsed from either is designed to control these markets. It’s all window-dressing, pushing papers and organization charts around in the appearance of doing something while in fact doing nothing.
This guarantees the scandal will happen again, sooner rather than later.
Will you read this in Forbes? Will you see this on CNBC? No you won’t. Jim Cramer won’t tell you either. The ideological blinders of all these outlets cause them to hide from this simple truth.
We must regulate our markets, or we will lose them.
Let me put this in a way Cramer might understand. You have two casinos. One is regulated. The other is not. Where will you place your bets? Will you do it at a place where, if the casino plays 3-card monty on you they will be caught and punished? Or will you do it where the game is crooked and there’s no cop on the beat?
Regulators are cops. When conservatives go on this knee-jerk "anti-regulation" jag they’re arguing for lawlessness. Markets which can’t guarantee transparency, which act as unregulated casinos, will over time be rejected in favor or markets where honesty is assured.
The growth of the U.S. financial industry over the last 80 years has been driven by its honesty, by its transparency, by the wealth of information on players and games which regulators of all types have imposed. Eliminating these regulations, or going around them, does not make markets more efficient. It makes them more crooked.
Law good. Lawlessness bad.
By identifying entirely with the knee-jerk ideological choices of their readers, the financial press has done them all a horrible disservice. They’re as much to blame for the current mess as anyone else. Sometimes in this journalism business you have to tell your readers hard truths. Otherwise you’re not serving them — you’re enabling them and sucking up to them.
That’s what today’s financial press is doing. They’ve been doing it for years. And as far as I can see it’s just getting worse.
What this tells me is there is a once-in-a-lifetime opportunity here for young journalists who will tell this story as it is, who will support meaningful regulatory reform, who will call a bear market a bear market. There are some honest brokers and analysts out there. They’re cleaning up.
The journalist who joins them will be the next Charlie Dow.
