Covering Your BFF

by digby

Here’s a familiar story:

The media and the financial crisis: Journalism failed

Columbia Journalism Review this month took the first steps toward transforming the ghost stories and urban legends of America’s current recession into the formalized analysis of history. In “The List,” a table of 727 stories from the business media, CJR tracks the history of the recession’s coverage from its first rumbles and murmurs in 2000 to the cataclysms of 2007. In the process, the publication explores whether the media did, in fact, do everything that it could to protect its readers.

In its final analysis, the answer seems to be a resounding “no.”

Part of the problem has been a sort of institutionalized Stockholm syndrome. Much of the financial media have been all too easily swayed by the arguments of the very people and institutions they were supposed to watch. In some ways, this is completely understandable. In the context of an $85 billion bailout, the hundreds of thousands of dollars AIG spent on corporate retreats amounted to pennies. When one looks at a trillion-dollar mess, a few hundred million in bonuses seems almost meaningless. Given those terms, the outraged screams of America’s middle class seemed ignorant and shortsighted.

However, when one considers that the average American family lives on roughly $50,000 per year, a multimillion-dollar bonus isn’t an accounting error; it’s a judgment error. Moreover, when Wall Street’s gargantuan salaries were fueled off a combination of taxpayer dollars and the ill-gotten gains of exotic financial instruments, it starts to seem like many of AIG’s money men deserve not retreats and bonuses but fines and jail time.

More importantly, it starts to seem that insider knowledge about traditional ways of doing business becomes less a decoder than a blinder.

In all the navel gazing about the future of journalism, it seems to me that one of the most important is consideration of the cracking of the insider culture. The media’s failures of the past decade can be at least partially explained by its insular nature and class based identification with those they cover. (As James Wolcott so pithily illustrated with his description of Judy Miller and Scooter Libby “buttering each others’ toast” at the St. Regis.)

Good journalism requires something that is in short supply among many establishment journalists: a healthy skepticism toward power, money, celebrity and elite opinion. Unfortunately, all too many elite journalists swim in the same social and professional pool as the people they cover. I thought it was bad in politics, but when you watch the financial media it’s almost dizzyingly cozy and self-reinforcing.

Writing is hard, and nobody has more respect for good journalism than I do. And there are many, many good reporters out there doing great work, some of them at the biggest and best papers and news networks. But the fact is that American journalism is in crisis. They can pretend it’s all about the financial model and parasite bloggers or whatever other excuse they can come up with. But one of the reasons is a catastrophic loss of credibility because they are consistently either missing the most important stories of our time or helping the powerful manipulate them. And one of the reasons for that is because they are part of the same elite system they are covering.

Update: The NY Times public editor thinks Elizabeth Bumiller should have used more skepticism with her shoddy reporting on the Pentagon “terrorist recidivist” story. Same old story. Cheney’s minions give a story to the NY Times (Bumiller says she had to fight for this one, which makes it all the sweeter) and then Cheney goes on TV and quotes the NY Times as the authority.

And now it’s out there.

.