Welcome Anya Schiffrin and Host Cynthia Kouril.

[As a courtesy to our guests, please keep comments to the book. Please take other conversations to a previous thread. - bev]

Bad News-How America’s Business Press Missed the Story of the Century

Cindy Kouril, Host:

Bad News is a collection of essays edited by our guest today, Anya Schiffrin. It features chapters by Ms. Schiffrin, as well as by Nobel Laureate Joe Stiglitz, Columbia Journalism Review’s Dean Starkman, HuffPo Business Editor Peter Goodman, and others in the field from both sides of the Atlantic Ocean.

The book examines the financial press’s version of the Veal Pen, or what Stiglitz calls “cognitive capture.” Just like the political reporters inside the Beltway have become slaves to access, Financial and economic journalists are just as dependent on their sources in industry and government for information and feel the need to keep those sources happy to avoid being cut off from the information flow that is the lifeblood of their production model.

Further, the book raises a question about the actual subject matter competence of some who cover this beat. Evidently, some publications hire reporters with no training in economics, forensic accounting, or gosh, finance to cover the financial beat and assess the statements and actions of superbly well-educated quants and sophisticated Masters of the Universe. The book reveals that, for some reason, the financial desk is considered a career dead-end, and therefore you won’t find up and coming editors with growing power manning that position. So, you have the blind leading the blind in deciding what to cover and how to analyze it.

This disturbs me. I know from background investigating and prosecuting white collar crime that there is a huge amount of information publicly available, if you know where to look and how to read it, making it possible for you to fit the puzzle pieces together. It’s hard drudgery though and hardly a task for a recent college grad biding his time until he can get a job covering sports. Drilling down through a certified financial statement to locate all the gems of information tucked away in the footnotes and “exceptions” takes a special kind of masochistic curiosity, you have to love the puzzle.

Some reporters did get it right well before the financial collapse and the book is replete with examples of specific individuals and stories that were so spot on their authors look prescient. However, these standout articles and television documentaries, no matter how well done, were drowned out in a white noise ocean of puff pieces profiling MOTU, “horse race” stories about which stock was up and which down, and stories extolling the new business models and focusing on market share rather than the sustainability of the business model swallowing up that market.

In order to break through the public consciousness and become conventional wisdom, a story must reach a critical mass of repetition of both depth (how many times the same outlet repeats it day after day) and breadth (how many different outlets repeat it). Despite the few excellent exposés and analytical pieces that were produced before and after the collapse, none of them has broken through that critical mass; none of these stories has grown legs. Still.

Which brings me to a point, the book is a soul-searching backward look at what went wrong in reporting on the financial crisis, which ain’t over yet folks. As far as I can tell, it’s still going wrong and the financial press and front page press are still missing the boat and failing to hold MOTU and government officials’ feet to the fire. They are still missing huge stories.

The last chapter of the book does a good job of talking about the failures to accurately report on the following stories:

-Regulation – normally you would expect increased regulation to come from the collapse and accountability for regulators who were asleep at the switch.

-Debunking the “efficient market” canard – yet politicians of both parties continue to spout it like gospel without any skepticism or fact-based pushback from the press.

-the Social Security is Bankrupt lie – Social Security has not caused or contributed one dime to the deficit and won’t for decades to come, returning SS taxes to cover 90% of wages would also return to surplus status.

-Bailing out the banks will create jobs – no, bailing out the consumer will increase demand for products which will, in turn, create jobs.

There are more examples in the book of stories not being covered, being inaccurately covered, or just being made up bovine fertilizer.

I’d like to add another to the list of huge story not being told: Where are the criminal prosecutions?

In the 1980’s during the Savings & Loan crisis, the Department of Justice made it a priority to investigate and prosecute those who embezzled, lied, made false filings, etc., in connection with abusing their Savings & Loans. DOJ prosecuted the worst of the worst, then the slightly less worse, and then the somewhat less worst started pleading guilty and looking for plea deals, finally you get down to the not-so-very culpable and you deal with them with fines, administrative and civil penalties, and new regulations. It works that way with any systemic white collar crime, whether it’s the mafia in the construction or waste management industries or price fixing in the fish market; this is standard operating procedure.

Yet the 50 state Attorneys General and the DOJ are putting out term sheets for a civil settlement, which is not only laughable in its mercy, but some fear it will convey criminal immunity on the worst of the worst. Not only that, but the US Attorneys have been given prosecution priorities that do nothing to provide accountability for the crisis, insider trading (rich people ripping off other rich people or rich institutions) and criminalizing Intellectual Property violations.

I’m sorry, but a hedge fund victimized by somebody’s insider trading has the ability to hire very competent big law counsel to vindicate its rights. Likewise DuPont does not need the taxpayer funded lawyers to pay for the defense of its rights to Kevlar. The balance of resources between victim and offender is pretty equal and the civil penalties can make the victim whole and sometimes more than whole.

You know where there is NOT a balance of resources between victim and offender? Mortgage origination fraud cases where people who qualified for prime rates were put into subprime mortgages, or where their names were forged on documents, or where their true financial information was masked with WiteOut and new numbers written in to get them a mortgage they could not possible repay. You know where else? Mortgage foreclosure fraud where homes that don’t have mortgages are being falsely foreclosed on, where perjuries affidavits are piling up in courthouses all over the country, where perjuries assignments and allonges are being fabricated after the fact. Where else? All the material false statements made by executives at Too Big To Fail banks and insurance companies and places like Lehman Brothers and Bear Stearns outright lying about their financial condition and inducing investors to act on those lies.

Where are the prosecutions? Why are members of the press not demanding answers from US Attorneys, State Attorneys General and even local DA’s—think of all those false filings in local courthouses. Where are the Grand Jury investigations? The criminal investigations task forces?

Maybe the reasons and analysis in Bad News have exposed insurmountable systemic problems in financial and economic reporting, or maybe the reporters and editors on this beat have not yet internalized the lessons to be found in this book. If the latter, I hope they catch on in time.

111 Responses to “FDL Book Salon Welcomes Anya Schiffrin, Bad News-How America’s Business Press Missed the Story of the Century”

BevW March 27th, 2011 at 1:57 pm

Anya, Welcome to the Lake.

Cynthia, Thank you for Hosting today’s Book Salon.

dakine01 March 27th, 2011 at 2:02 pm

Good afternoon Anya and welcome to FDL this afternoon. Good afternoon Cynthia.

Anya, I have not had an opportunity to read your book but how can we help to publicize these stories and get around the TradMed’s unwillingness to cover things?

TobyWollin March 27th, 2011 at 2:03 pm
In response to BevW @ 1

Is it a question of ‘don’t wanna know?”

Cynthia Kouril March 27th, 2011 at 2:05 pm

Welcome everyone and Welcome Anya. As always, everyone please keep the discussion on the book and take any O/T comments to another thread.

Cynthia Kouril March 27th, 2011 at 2:06 pm

One of the themes I found present in several different chapters is this “cognitive capture” idea. Anya could you expound on that a bit for the folks?

Anya Schiffrin March 27th, 2011 at 2:08 pm
In response to dakine01 @ 2

Hello Dakine,
Thanks so much for your question. One place where a lot of interesting commentary is happening is the web and the small nonprofits that are covering stories that are not being covered by the traditional media. I loves Yves Smith’s website nakedcapitalism.com and also creditwritedowns.com as well as Propublica. Perhaps those would be good places to look?
Thanks, Anya

Ruth Calvo March 27th, 2011 at 2:10 pm

Thanks, Anya. Some one mentioned to me that Ian Welch often talked about the effects of the wildly pumped up housing market here at FDL. It’s amazing we still see the very ‘business reporters’ that failed to see what was on the way presented to us as authorities who can tell us how to plan our own financial decisions.

dakine01 March 27th, 2011 at 2:11 pm
In response to Anya Schiffrin @ 6

(For what it’s worth, there are a lot of folks at FDL and MyFDL who write on economic topics as well) :})

But I think what I’m asking is how do we get the TradMed reporters and editors to pay attention to the folks like Yves Smith and others out in the blogosphere?

Scarecrow March 27th, 2011 at 2:12 pm

Welcome, Anya Schiffrin and thanks, Cynthia for the intro. If you had to single out the most important financial story or theme that’s being misreported or underreported today, what would it be? And what does that mean for our ability to fix things?

Anya Schiffrin March 27th, 2011 at 2:12 pm
In response to Cynthia Kouril @ 5

Cynthia, I think that “cognitive capture” is used in sociology but the economist Willem Buiter talks about it to explain some of the regulatory failures we’ve seen in this last crisis. Gillian Tett, the editor of the US edition of the Financial Times, uses it to describe the media’s role. It’s a good explanation of how some business journalists believe in the ideology of their sources in the worlds of business and finance. When I interviewed journalists for my book I found that many of them told me they spend so much time talking to people in the markets that they began to believe some of the myths of free market capitalism: that unfettered capitalism is the only way to go and that government regulation should be approached with caution.
I hope that explains this term. We do talk about it quite a bit in my book.
Thanks, Anya

Anya Schiffrin March 27th, 2011 at 2:13 pm
In response to Scarecrow @ 9

Thanks for your question. I’ve been disappointed that the effectiveness of the economic stimulus has not been more widely reported and I would like to comment Time magazine reporter Michael Grunwald for his coverage. I also think the media could do more to question the necessity of budget cutting. In an economy like ours, with unemployment stuck around 9% (and real numbers probably higher) now is not the time to cut spending.
Thanks, Anya

eCAHNomics March 27th, 2011 at 2:14 pm

So as for the real stories not getting enough exposure, how does the marketing, book tours, etc., for your book compare to what you would consider to be a comparable book on the “other” side. Have you or any of your authors been invited onto cnbc, for example? Op-eds? Even cspan’s Wash Journal?

Anya Schiffrin March 27th, 2011 at 2:15 pm
In response to Ruth Calvo @ 7

Dear Ruth, Many thanks. I do think many business reporters are in a tight place: having to write a lot of stories with the pressure of deadlines. Sometimes the best coverage comes from commentators who are not under these pressures and can stand back and write about the big picture. I would say Gretchen Morgenson and Floyd Norris at the New York Times are two good examples.
Thanks, Anya

BooRadley March 27th, 2011 at 2:16 pm

Sorry, just a drive-by; a warm FDL welcome to Anya. Cynthia, have always appreciated all your terrific work at FDL.

Anya your book is high on my priority list to purchase. I look forward to learning much from this thread.

Later.

Scarecrow March 27th, 2011 at 2:16 pm

Agree that Yves Smith and others have helped explain the counter argument. There’s also Simon Johnson, several at FT, Dean Baker and CBPP, etc How do you rate the more trad media, like NYT and WaPo?

Cynthia Kouril March 27th, 2011 at 2:16 pm
In response to Anya Schiffrin @ 10

The cognitive capture described in the book is virtually identical to What jane Hamsher calls the “Veal Pen” in covering inside the Beltway stories. How does a reporter break free of that? Can they? Obviously there ar some who do not fall victim to this, what are they doing right and how can that be systemitized so that the rest of the reporters and editors can be more accurate?

Anya Schiffrin March 27th, 2011 at 2:17 pm
In response to eCAHNomics @ 12

I have not been invited to any of these places but then my book is probably a bit too specialized. I also think television coverage is more superficial than print and so I don’t expect to see great business and economic reporting on tv. That’s too bad as it is what most people consume in this country. Thanks, Anya

Ruth Calvo March 27th, 2011 at 2:17 pm

It’s been most diverting to hear Suze Orman selling her new P.O.V. and book, after advising folks to overextend themselves in real estate for so many years. Do you find that anyone at all will point out that such writers have proved their lack of judgment and shouldn’t be believed now?

Anya Schiffrin March 27th, 2011 at 2:17 pm
In response to BooRadley @ 14

Dear BooRadley, That’s really nice of you to say. I hope you find the book interesting. We certainly tried to present many points of view about the role of the media in covering the crisis. It is something that affects all of us.
Anya

Ruth Calvo March 27th, 2011 at 2:18 pm
In response to Anya Schiffrin @ 13

Thanks, and too bad now it costs a fee to access these reporters!

gigi3 March 27th, 2011 at 2:18 pm
In response to Anya Schiffrin @ 11

John Williams at shadowstats.com calculates the real unemployment figure to be around 22% and the real inflation rate to be just shy of 6%.

http://www.shadowstats.com/

Anya Schiffrin March 27th, 2011 at 2:18 pm
In response to Scarecrow @ 15

Scarecrow,
I think the NY Times is doing a great job on many subjects and I read it every day. I don’t see the Washington Post as often but that paper has suffered from budget cuts and it shows up in some of their reporting.
Anya

CTuttle March 27th, 2011 at 2:19 pm

Aloha, Anya and Cynthia…!

Where are the criminal prosecutions?

Exactly…!

Anya Schiffrin March 27th, 2011 at 2:20 pm
In response to gigi3 @ 21

Makes sense to me. I’ve heard numbers like that as well. I also heard someone say yesterday that the jobs lost by illegal immigrants in services and construction are not included in the numbers so there may be another five million jobs that have been lost that are not included in the official figures.
Thanks, Anya

Cynthia Kouril March 27th, 2011 at 2:20 pm

One thing I learned from the book that was a bit shocking was that reporters assigned to cover the financial beat lack training in the nuts and bolts of finance and economics.

What would posses editors to hire people who are basically unqualified for the job?

Scarecrow March 27th, 2011 at 2:20 pm
In response to Anya Schiffrin @ 11

It’s been hard for those pundits and economists who aren’t deficit hysterics to get much traction when the White House and Dem leaders themselves buy much of the GOP rhetoric. The Administration couldn’t keep it’s own simple talking points — spend now for stimulus, cut later for deficit reduction — straight, so now the message is completely muddled. The debate is not about when to reduce spending, but how much is enough to mollify the Tea-GOPS.

What should or could the media have done to keep that conversation more constructive? And speaking of abolishing the Washington Post . . .

eCAHNomics March 27th, 2011 at 2:21 pm
In response to Anya Schiffrin @ 17

I have seldom seen Stiglitz play much of a role as a public intellectual, even though he writes about his subject clearly. Is that bc he is not invited, or bc he doesn’t want to do it? And if the former, why?

Anya Schiffrin March 27th, 2011 at 2:21 pm
In response to CTuttle @ 23

CTuttle,
I remember some years ago I was back in Hanoi giving a lecture and was asked to speak about Enron. I gave my talk and then took questions. The first one asked was: how many people have been put in jail? I wonder about that too. You would think that after what has happened there would be some folks in prison by now. Thanks, Anya

Anya Schiffrin March 27th, 2011 at 2:25 pm
In response to Ruth Calvo @ 18

There are some journalists who were criticized after the dotcom bubble and accused of having hyped it. Am thinking in particular of Maria Bartiromo. Interestingly when the Great Recession started in 2007 those same journalists were singled out again. So I think some have learned from their mistakes and others haven’t. In my book I do include interviews with reporters who feel guilty about their coverage. Others rose to the ocassion and did a great job such as Peter Goodman who also has a chapter in my book. Thanks, Anya

Anya Schiffrin March 27th, 2011 at 2:26 pm
In response to eCAHNomics @ 27

Joseph Stiglitz gets a vast amount of press requests but you are right that US television does not call on him very often. He certainly gets more coverage overseas than he does in the US. Am guessing it’s a reflection of the political climate in this country.
Thanks, Anya

CTuttle March 27th, 2011 at 2:27 pm
In response to Anya Schiffrin @ 28

It’s not like we’re adverse to locking up people…! 8-(

Scarecrow March 27th, 2011 at 2:27 pm

Anya — one of the criticisms of the WH team overseeing economic/financial reform has been that they seem intent on what’s called an “extend and pretend” policy — just stretch things out for the banks, never force them to acknowledge losses that might reveal their insolvency, don’t push too hard on mortgage modifications, and just hope that over time, balance sheets will improve enough we can stop worrying about having to bail them out again. To our reporters, e.g., David Dayen, this policy has been the essence of HAMP, to the harm of people faced with mortgage foreclosure.

In your reporting, did you encouter that interpretation, and what’s the general consensus of those you interviewed?

Anya Schiffrin March 27th, 2011 at 2:27 pm
In response to Scarecrow @ 26

Scarecrow, I think you have hit on a really important point and one related to the question about “cognitive capture”. To a large extent the media is constrained in that it writes about events that have already happened and the conventional wisdom rather than on what could be.
Thanks, Anya

Anya Schiffrin March 27th, 2011 at 2:30 pm
In response to Cynthia Kouril @ 25

Cynthia, There is often a debate in newsrooms about whether to hire people who can write clearly but don’t know about economics or whether to hire someone with a deep understanding of economics and then teach them to write in a way that normal people can understand. When I was working as a business journalist, editors I knew felt it was better to hire good writers. But I think that business journalism has become more professional now and there are columnists like Martin Wolf at the Financial Times who have PHDs in economics and know how to write.
Thanks, Anya

gigi3 March 27th, 2011 at 2:31 pm
In response to Anya Schiffrin @ 30

It may also have to do with his dirty laundering after he left the World Bank. He has been openly critical of the WB and IMF.

eCAHNomics March 27th, 2011 at 2:31 pm
In response to Anya Schiffrin @ 29

I left Wall St at the peak of the dot-com bubble. As Chief U.S. equities economist at a major firm, I knew it was a bubble & didn’t hesitate to say so. The most frequent reaction of my listeners was wry dismissal.

I had done as much reading as I could find on bubbles/crashes, but it was all very descriptive and not helpful for forecasting mode, which involves assessing magnitude & timing.

I knew bubbles got a lot bigger & lasted a lot longer than anyone who could identify them would ever think.

Afterwards, I figured out that anyone who acted as though there were a bubble would have sold too soon (as I did) and gotten fired (that was not the reason I left), so being wrong but in the pack was the max personal strategy.

Anya Schiffrin March 27th, 2011 at 2:32 pm
In response to Scarecrow @ 32

Scarecrow, I think you will find that around the world, governments are slow to deal with banking crises and often hope that if they throw a little money at the sector it will be enough. Japan is a good example of how this strategy can cause banking crises to drag on for years. When I worked in Vietnam (1997-1999) the government realized it had a banking crisis. The Politburo dealt with this by implementing a law that made it illegal to write about banking!
Thanks, Anya

Anya Schiffrin March 27th, 2011 at 2:33 pm
In response to eCAHNomics @ 36

That is a really interesting story. Thanks for sharing it. I think one of the problems is no one wants to hear bad news. Editors know this and they have an additional problem of worrying that if journalists say the economy is in trouble, people will panic and stop buying and things will get worse.
Thanks for writing. Anya

Ruth Calvo March 27th, 2011 at 2:36 pm
In response to Anya Schiffrin @ 37

‘a law that made it illegal to write about banking!’

Can we be sure that under the present extremist governance, we won’t have a bill like that introduced to prevent further crises here?

Cynthia Kouril March 27th, 2011 at 2:41 pm
In response to Ruth Calvo @ 39

The thing is Ruth, writing about it did not cause the crisis, letting the derivaties increase geomtrically did.

eCAHNomics March 27th, 2011 at 2:42 pm
In response to Anya Schiffrin @ 38

I don’t think it has a lot to do with not wanting to hear bad news. Wall St. can be pretty ghoulish.

Analytically it has a lot to do with missing turning points, either up or down, which is the most difficult thing to do and the only part of my job I thought was valuable. So if you listen to cnbc right before turning points, the guests are more weighted toward those with every reason under the sun to think the current trend will continue.

Cable biz TV, which I was on a lot, doing instant analyses of just-released econ data, was pretty dismal a decade ago when I was doing it and is a lot worse now. However, you can still add quality as the occasional guest does.

One of my sidelines is figuring out how many deep points can be reduced to 15-sec sound bites. You’d be surprised at how often & well that can be done.

eCAHNomics March 27th, 2011 at 2:44 pm

I have to hop.

Thanks for being here. I look forward to reading your book.

gigi3 March 27th, 2011 at 2:44 pm
In response to Anya Schiffrin @ 24

While there are many illegal immigrants losing jobs, thousands more are gaining employment through the fraudulent use of Visas, particularly the B-1. Most are in the US for short periods and them return to their home countries to train other workers. This is prevalent in high tech industries. Dan Rather has an ongoing series about this abuse at HDNet. The one I just watched involved Infosys and employees from India.

http://www.huffingtonpost.com/dan-rather/business-visitor-visa-fraud_b_840633.html

masaccio March 27th, 2011 at 2:45 pm

Recently Joe Nocera wrote an article dismissing the possibility of criminal prosecutions. Nocera generally seems sensible. I know it is possible to prosecute, and have written several posts showing the way, using only publicly available information.

The only people talking about prosecution are regular people. No one does anything and no one writes about it as a real possibility in the traditional media.

This isn’t cognitive capture: it is rank cynicism, and utter laziness.

Anya Schiffrin March 27th, 2011 at 2:45 pm
In response to eCAHNomics @ 41

Your points make a lot of sense. I do wonder though if the fact that business journalists in specialized places are writing for people in the markets feel that they need to be optimistic. But I will need to rethink that as your point that Wall St profits from bad news as well as good is certainly true. Thanks, Anya

Anya Schiffrin March 27th, 2011 at 2:46 pm
In response to gigi3 @ 43

Gigi, Thanks a lot for the link. I will make sure to watch.
I appreciate it.
Anya

Anya Schiffrin March 27th, 2011 at 2:46 pm
In response to masaccio @ 44

Massacio, I agree with you about Joe Nocera. I will look for that post.
Thanks, Anya

Anya Schiffrin March 27th, 2011 at 2:47 pm
In response to eCAHNomics @ 42

Thanks so much for taking the time this afternoon.
Anya

Ruth Calvo March 27th, 2011 at 2:47 pm
In response to Cynthia Kouril @ 40

Hopefully that will be understood by the extremists, but the predominant ignorance that seems to be so well entrenched in congress and especially state legislative bodies doesn’t bode well. (Here in TX we have had bills introduced to give hunting licenses to blind people.)

Anya Schiffrin March 27th, 2011 at 2:47 pm
In response to Cynthia Kouril @ 40

Good point Cynthia. I think we can blame the regulators for this, no?
Or at least some of it?
Anya

Scarecrow March 27th, 2011 at 2:48 pm

One of the things I find frustrating is that the GOP logic for economic growth is something like this:

1. Cut spending on people who need it.
2. Weaken unions and other means for working class to exert economic power
3. Something happens . . .?
4. Jobs!!

Yet the media just repeat the GOP statements about creating jobs without asking, “uh, how does that happen? What’s the logic? and where are there examples that prove this?

Does it seem to you we’re learning anything? Anyone you think doing a particularly good job at getting to these questions?

Cynthia Kouril March 27th, 2011 at 2:48 pm
In response to gigi3 @ 43

Please try to avoid tangential topics

Anya Schiffrin March 27th, 2011 at 2:51 pm
In response to Scarecrow @ 51

Scarecrow, I do think Peter Goodman and Bob Herbert have done a great job covering the question of job creation. Was so sorry to see Bob Herbert is leaving the New York Times and am curious to hear what he will do next. Hopefully he will get a great job somewhere and continue to write about this important subject.
Anya

Cynthia Kouril March 27th, 2011 at 2:52 pm
In response to masaccio @ 44

I tell you, sometimes I think we at the Lake are living in a parallel universe. A univers with accountabilty.

hackworth1 March 27th, 2011 at 2:53 pm
In response to Scarecrow @ 51

Good Point. Leads one to believe that the whole apparatus is totallyt corrupted.

Any effort to confront it with reason is confounded. Rupert Murdoch says it. People believe it. Obama Admin protects the thieves and prosecutes the victims.

Ruth Calvo March 27th, 2011 at 2:53 pm
In response to Anya Schiffrin @ 50

Agree, if Phil Gramm hadn’t freed them from regulation, derivatives would never have been hollowed out of value.

Anya Schiffrin March 27th, 2011 at 2:54 pm
In response to hackworth1 @ 55

I am not a Murdoch fan. That’s for sure. Anya

hackworth1 March 27th, 2011 at 2:55 pm
In response to Ruth Calvo @ 56

Another Big Guy that belongs in prison, but instead remainsis still connected to the reins of power.

Cynthia Kouril March 27th, 2011 at 2:57 pm
In response to Anya Schiffrin @ 50

Strangely derivatives were exempt from regulation. They were treated as private contracts. The trading was done in “Dark Pools”

Scarecrow March 27th, 2011 at 2:57 pm
In response to Anya Schiffrin @ 53

In Joe Nocera’s last column on business page, he said, “this is my last, I’m moving to the op-ed page.” So he appears to be one of the two replacements for Herbert and Rich.

hackworth1 March 27th, 2011 at 2:57 pm
In response to Anya Schiffrin @ 57

That should go without saying. You obvoiusly have some credibility. And sense of Social Awareness.

Anya Schiffrin March 27th, 2011 at 2:58 pm
In response to Cynthia Kouril @ 59

Yes and the Financial Times and Bloomberg did some good coverage of the “Dark Pools”.
Thanks, Anya

Ruth Calvo March 27th, 2011 at 2:58 pm
In response to hackworth1 @ 58

Advisor to McCain campaign – what a coincidence.

Anya Schiffrin March 27th, 2011 at 2:58 pm
In response to Scarecrow @ 60

Well let’s see if he writes about jobs. I will miss Frank Rich. Sundays are not the same without him. Anya

gigi3 March 27th, 2011 at 3:00 pm
In response to Anya Schiffrin @ 50

Our regulators have been captured for many years and it is not limited to the financial sector. Follow the career paths of top officials who leave government service and you will find most of them employed by the very industries they regulated at vastly higher salaries. These people know that “stepping on toes” means career suicide. Just take a look at what happened to Gary Aguirre (SEC).

Cynthia Kouril March 27th, 2011 at 3:01 pm

So, what if anything can be done to make it more likely that financial reporters will “get it right” going forward.

What is the solution?

Anya Schiffrin March 27th, 2011 at 3:01 pm

I was aghast to read how the SEC was warned repeatedly about Bernie Madoff and did nothing! Thanks, Anya

hackworth1 March 27th, 2011 at 3:02 pm
In response to Ruth Calvo @ 63

To Be McCain Treasury Sec. ONly slightly more corrupt than Geithner.

Gramm: Texas Bush Mafia, More corrupt, powerful and self-interested. Sonewhat less beholden to outside benefactors than Geithner.

Anya Schiffrin March 27th, 2011 at 3:03 pm
In response to Cynthia Kouril @ 66

So many solutions: I love the Knight-Bagehot program at Columbia which takes business reporters and sends them off to study finance and accounting for a year. Thoughtful editors who push their reporters to question the conventional wisdom and take risks can make a difference. The blogs are good too as they look at things in a different way and can push a story forward.
Thanks, Anya

kspopulist March 27th, 2011 at 3:03 pm

Thank you for coming and thank you for hosting!!!
Twenty or thirty years ago it seemed de rigeur to NOT over-excite people with ‘scary’ news. Obvious danger being in how people might react. This has obviously changed.
Despite the polls showing ‘analysis’ of a fearful sort leading to behavior that might be typified as a ‘convicted’ sort (teaparty votes) and the consequent profits that can be gleaned from this something I’d call a kind of mass hypnotism …

In the hope to find a way out of this prevalent culture of bad news, in your research have you found a way out that doesn’t merely repeat the tactics of FOX news from a different slant?
Thanks!

Ruth Calvo March 27th, 2011 at 3:06 pm
In response to Anya Schiffrin @ 69

A wonderful professor of economics, Marshall Goldman, insured my interest forever in the subject.

Anya Schiffrin March 27th, 2011 at 3:07 pm

Dear KsPopulist, Thanks for your thoughtful email. As mentioned by Cynthia, the last chapter in my book is written by Robert H. Giles and Barry Sussman. The subject is what would good reporting look like and they talk about a Nieman Watchdog project to find ways to strengthen reporting on economics. It has a number of useful suggestions.
Thanks, Anya

PeasantParty March 27th, 2011 at 3:07 pm

Anya,

Thank you for being here. We are all very interested in this subject. I’d like to know how you feel about mortgages being sold out from under the borrowers without their knowledge? I have always thought a contract was a lawful agreement and both parties had to be acknowledged with an attorney’s seal and signature. In other words, is this trend not a breach of contract?

Cynthia Kouril March 27th, 2011 at 3:07 pm
In response to gigi3 @ 65

Somehow the reforms of the New Deal, reforms that gave us decades of prosperity, created a stron middle class and improved our health and safety have become an anathma in DC.

I was at a political brunch this morning and a NYS assemblywoman gave a little talk about remembering we we chose to be Democrats in the first place and not giving up on the core values that drew us to the platform in the first place.

Politicians kep running on the platform we want, and then running away from it once they get elected. You don’t need a degree in economics to write that story.

And yet, you see so few stories when Electeds do 180 turns away from the platform they ran on

Anya Schiffrin March 27th, 2011 at 3:09 pm
In response to PeasantParty @ 73

Dear PeasantParty, I’ve been surprised by that too. The New York Times has written about this a bit but my favorite book is The Monster by Michael Hudson. After reading his expose of the sleazy subprime lenders and their relationships on Wall Street, I was at a loss for words. Outrage and horror does not begin to describe it. I highly recommend this book.
Thanks, Anya

kspopulist March 27th, 2011 at 3:09 pm

yes, I was already going to get your book ;-)

Anya Schiffrin March 27th, 2011 at 3:10 pm
In response to Cynthia Kouril @ 74

I am with you. Democrat values are something to be proud of!
Anya

Anya Schiffrin March 27th, 2011 at 3:10 pm
In response to kspopulist @ 76

Well, many thanks for that. I am grateful. Anya

Scarecrow March 27th, 2011 at 3:12 pm

Given all the interviews, what suprised you the most about either economists/financial experts or reporters? And any fun anecdotes?

kspopulist March 27th, 2011 at 3:16 pm

Here’s another question. With the oodles of info brought out by the Financial Crisis Inquiry Report that came out last month, have you heard of people in the press industry that are looking into that? E.g. does msnbc or latimes etc have individuals or wings of people devoted to making sense of all that data and trying to connect the dots. Would it be easier for interested parties, say Warren Buffet or Google (random zillionaires) to hire a bunch of people to do that? as it seems that most of the nainstreamedia are fixed on effects of daily disasters rather than news that is years old.

Anya Schiffrin March 27th, 2011 at 3:17 pm
In response to Scarecrow @ 79

Scarecrow, That is a great question. Many thanks. One thing that came as a relief to me was the response to my book as it confirmed a lot of what I had suspected. I got email from journalists telling me about how they had tried to write stories about the mistakes made by Alan Greenspan (2005) and about how badly things looked for the economy (2007) and were discouraged by their editors. Another journalist told me about his editors’ lack of interest in his stories about the subprime loans in the nineties. So even though it was disheartening I felt that my research was on the right track. People in finance tend to be softer on the reporters. I have heard people say they didn’t understand what was going on in the derivatives market so it was not fair to expect journalists to get it when regulators and people on Wall St didn’t. Thanks, Anya

Ruth Calvo March 27th, 2011 at 3:18 pm
In response to kspopulist @ 80

Thought that they’d sent all their staff out to research royal weddings and Liz Taylor.

Anya Schiffrin March 27th, 2011 at 3:18 pm
In response to kspopulist @ 80

Dear KS, I would really hope they do but I don’t know the answer. I am going to ask some of the editors and reporters I know because you have now got me curious. Bloomberg has so many reporters now–way more than the NY Times–so I hope they are looking into it. I will try to find out. Thanks, Anya

Cynthia Kouril March 27th, 2011 at 3:19 pm

Another theme that cropped up in the book and you hit on it a bit upthread, was that the people who get the story wrong, keep getting used as pundits. We don’t see nearly enough of Krugman or Stiglitz on television, but we still get the Suzies, the Cramers, the Marias, etc.

If MSM wants to keep even a shred of credibility you’d think they would flood theie publications and airways with interviews and columns with folks who called it correctly both before the collapse and during the collapse.

How do we convince them to do that?

Anya Schiffrin March 27th, 2011 at 3:20 pm
In response to Cynthia Kouril @ 84

Cynthia, What a good point. Do you think they are responsive to suggestions from viewers? Anya

kspopulist March 27th, 2011 at 3:24 pm
In response to kspopulist @ 80

and another related q, does it seem to anyone else that the government response to disaster of any kind is to assign a commission to look into things, hiring people on the inside and a few others , mostly to avoid the politics: to kick the ball down the road a bit. So when the report comes out the press can say what they want and the pundits can say what they want but the heat of the red-hot-current news story has diminished, left that newscycle and the call for political response – as with the financial crisis – has also dimmed?
I know more people are seeing that as a tactic of collusion between press and government to … get this, avoid accountability. And more and more are getting upset about it.
Again, I realize sometimes this *IS* a good idea to ‘let cooler heads prevail’. But if accountability in GOV and press is the result…

thanks again!

Cynthia Kouril March 27th, 2011 at 3:26 pm
In response to Anya Schiffrin @ 85

You mean email the networks and PBS and the cablenews and say we want “so and so”?

I have no clue, does you research suggest that something like works? We have some experience here at the lake with email and phone campaigns.

kspopulist March 27th, 2011 at 3:27 pm
In response to Anya Schiffrin @ 83

That’s awesome!
I watch bloomberg youtube clips daily to find out trends, even though I know most of what is said there is just to effect markets. Still very interesting if designedly superficial.

Anya Schiffrin March 27th, 2011 at 3:27 pm

I think that Arianna Huffington makes a good point when she says that the legacy media as Attention Deficit Disorder while the online media has Obsessive Compulsive Disorder. It’s true that newspaper editors often feel they have covered a subject and don’t see the need to return to it. All the more reason for the blogs to keep after a subject as long as the coverage is accurate and fair, no?
Many thanks, Anya

Anya Schiffrin March 27th, 2011 at 3:28 pm
In response to Cynthia Kouril @ 87

Cynthia, I have not researched this question but I think it is an important one. I am getting so many good ideas today. Thanks to all of you.
Anya

kspopulist March 27th, 2011 at 3:28 pm

great discussion once again people ! thanks so much to all for the opportunity!!!

dakine01 March 27th, 2011 at 3:30 pm
In response to Cynthia Kouril @ 84

Why is Larry Kudlow on my TV screen every day?

I think he’s the most clueless of all

Anya Schiffrin March 27th, 2011 at 3:30 pm

I am so sorry I have to go now. But I will check back later and answer any questions/comments that have come in. This has been truly inspiring and I am grateful to you all for your insightful comments and for taking the time.
Thanks, Anya

kspopulist March 27th, 2011 at 3:31 pm
In response to Ruth Calvo @ 82

;) jealously coveting Charlie Sheen twiters or gaga appearnces ;)

Cynthia Kouril March 27th, 2011 at 3:32 pm

Thank you Anya for joining us today. I hope this discussion inspires more than a few of you to get your hands on this book. That includes the lurkers as well as those who joined in the discussion.

Ruth Calvo March 27th, 2011 at 3:32 pm
In response to Anya Schiffrin @ 93

Thank you for your thoughtful responses.

Cynthia Kouril March 27th, 2011 at 3:33 pm

For those of you who wish to continue the discussion this thread remains open to do that.

BevW March 27th, 2011 at 3:36 pm

Cynthia,
With Cramer – is he still a Hedge Fund manager, profiting from his “reporting”?

gigi3 March 27th, 2011 at 3:37 pm
In response to Cynthia Kouril @ 74

So, what’s the answer? Do we all need to take crash courses in reading body language and other “tells”? I’m afraid the professional politicians have become such masters of the art of lying, even that may not help much.

Ruth Calvo March 27th, 2011 at 3:38 pm

Incidentally, Aunt Toby mentioned in her post today how the predictions of the coming meltdown from Ian Welch here at FDL pushed her into reporting on food decisions that personally helped control what she could, an interesting point. (and I posted about his predictions of coming disaster this p.m.)

Cynthia Kouril March 27th, 2011 at 3:41 pm
In response to BevW @ 98

IIRC he ditched the hedge fund when he got criticized for conflict of interest. But the flip side of that, is that with no skin in the game, it becomes a papertrading excerise–one where you trades magically get executed as soon as you ask for them, instead of after the broker handles the 50 other trades tha called in beofre yours, take a bathroom break and has a fight over the phone with his girlfriend–meanwhile to stock moves another 3 points while your trade is still pending.

When you paper trade, you get a skewed picture. You only see what trades you would have made and totoal volume, not number of orders or speed of processingthose orders

BevW March 27th, 2011 at 3:42 pm

As we come to the end of this interesting Book Salon,

Anya, Thank you for stopping by the Lake and discussing your new book with us and the quality of reporting in the Financial Sector.

Cynthia, Thank you again for Hosting this great Book Salon.

Everyone, if you would like more information:

Anya’s website and book

Cynthia’s website

Thanks all,
Have a great week!

Cynthia Kouril March 27th, 2011 at 3:43 pm
In response to Ruth Calvo @ 100

Yeah, why don’t I see Ian on CNBC? Even as a guest?

kspopulist March 27th, 2011 at 3:44 pm
In response to Anya Schiffrin @ 89

huzzah!! great points crowned with a funny anecdote!
Arianna may be right in her diagnosis. Funny and seemingly true. whew

Ruth Calvo March 27th, 2011 at 3:45 pm

Maybe an email would help?

masaccio March 27th, 2011 at 3:50 pm
In response to Ruth Calvo @ 105

No one cares what we think. Expertise isn’t nearly as important as power. When we get power, they’ll call and plead for our thoughts.

Scarecrow March 27th, 2011 at 3:52 pm

Oops. Probably late, but . . . Is there a follow up book coming? Any chapters/topics you wanted to write about but couldn’t get to yet? We need more of this. And thanks again for coming today.

kspopulist March 27th, 2011 at 5:13 pm
In response to kspopulist @ 86

that is, if even the perception of accountability in GOV and press is NOT the result in an official inquiry … then why even look at it or have an inquiry?
People are sick of it.
It also seems a convenient way to ‘push’ items off the table of current items – those that can’t be solved judiciously by the Powers that be for themselves (like BoA or AIG, Fannie&Freddie?) but can’t be left to be bashed about continually at the barber shop or in the press. You know, this XXXX disaster will take too long in the courts to resolve but the issue is too hot for crowd control in the short term … so we get a commission and later on a differed judgement that has no effective weight in the courts. Maybe an official censure and a fine that means little to companies and industries so huge.
I fear this is the teflon ceiling we’ll be hitting our heads against again and again for the forseeable future,
with enough supplies of helium or OCD pills to keep sending us up in the clouds doing it ;) right?

defogger March 27th, 2011 at 6:16 pm

It appears that virtually every post here buys into NAFTA and the other free-trade canards.If this is true,then you guys are the ‘other side’ who in no way supported progressives during the Seattle showdown.

marymccurnin March 27th, 2011 at 6:19 pm
In response to defogger @ 109

You need to do a more in depth reading at FDL. Not many here buy into NAFTA.

Anya Schiffrin March 27th, 2011 at 7:03 pm

Scarecrow, I am back again. You may be gone by now but perhaps will see this another time. There were a couple of writers I wish I had included. I adore Michael Massing’s writing on the media but he is working on a book and didn’t have time to write a chapter. Howard Kurtz and Jim Ledbetter also would have been wonderful contributors. Gillian Tett as well. At the moment I am preparing for a course next year on the origins of the business press and am researching old newspapers in India and Ghana. Not sure though what I will write about this though I did a short blog piece for Thomsonreuters last month. Best wishes, Anya

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