Welcome Dean Starkman (DeanStarkman.com) (Columbia Journalism Review) (Twitter) and Host Jim Sleeper (JimSleeper.com) (Yale University)

The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism

It’s pretty well known that the near-meltdown of the American financial system and economy in 2008 shocked virtually every Very Serious public player and prognosticator, from Alan Greenspan to Wall Street Journal reporters and editorialists and the Street’s own carnival barkers, like CNBC’s Jim Cramer. But why were they shocked?

Obviously, predatory lenders and those reaping billions from underwriting and trading on their scams kept mum, some because they hardly recognized the social consequences of what they were doing. But why didn’t those whose job is to monitor and critique such practices use their inside access to sound alarms? Why didn’t the watchdog hear the “outlier” reporters at small, regional newspapers and a few bloggers who did get the story right, only to end up like trees falling in a vast, silent forest where no one could hear?

No one is better positioned to answer such questions than Dean Starkman. He was an inside player as a business reporter at the Wall Street Journal 1996 to 2004 and, as time went on, an in-house critic and more recently, the supervising editor of the Columbia Journalism Review’s business website, “The Audit.”

I first “met” Dean without knowing him in 2007, when we were both writing critically – he at “The Audit” and I in Dissent and the Guardian — about Rupert Murdoch’s bid to take over the Wall Street Journal. I recognized the rare reporter who addresses and assesses those he writes for and about not just as consumers of his information but as fellow citizens who do care enough about the public consequences of private actions to notice the Invisible Hand’s twitches in ways its apologists usually don’t.

Dean doesn’t charge that business journalists were lazy or corrupt before the crisis. From the moment it broke open, he notes, they did lots of excellent investigative reporting and analysis of virtually every major player’s contribution to the debacle. Yet they never really investigated the failure of one major player: themselves.

That’s why Dean has written his book. It was really begun in 2009, when he and a small team of researchers at the Columbia Journalism Review surveyed what the business press actually wrote, and didn’t write, in the years leading up to the crisis.

It’s a pretty damning survey, and you’ll find it woven into The Watchdog. But the book isn’t prosecutorial; it seeks to understand and explain the failure by drawing a couple of important distinctions.

First, Dean distinguishes “access” journalism from “accountability” journalism. “Access” reporting is necessary to all journalism, because it involves cultivating access to inside sources who would cut it off if the reporter disclosed too much that threatened them. But these days, Dean notes, access journalism is like the “messenger boys” who delivered quick inside information up and down Wall Street; now, it’s driven algorithmically (like the stock market itself) to boost news organizations’ profits, and it suspends all critical judgment of the premises and practices in its mad scramble to get the news out.

“Accountability” journalism is harder, more stressful, and makes enemies. But its investigative reporting can lead to what Dean calls “the Great Story,” which exposes the more systemic rights and wrongs –explaining what predatory lending is, for example, and how it crosses the legal line – in ways that can inspire prosecutions and better regulation. Accountability reporting thus holds financial drivers and their drones up to the light of a public judgment that sees what the Invisible Hand cannot. Accountability reporting’s difficulty in market-driven society is that it “tends to help everyone in general, but no on in particular,” as he puts it.

Second, though, Dean shows that although journalists and citizens can and do make choices to pursue and rely on investigative reporting out of a public-mindedness that confounds the seemingly irresistible seductions and imperatives of access, accountability journalism requires resources and dispositions that most of the internet has yet to provide as reliably as the great old newspapers did when their own market models were flourishing.

Now that print journalism can no longer make enough profit from classifieds and features to subsidize painstaking investigative reporting, the internet hasn’t yet taken up the investigative slack, despite its terrific and unprecedented instantaneity, interactivity, and collaborative potential.

Dean isn’t condemning online journalism; far from it. He’s trying to awaken it to civic challenges that can’t be met simply by letting anyone with a keyboard sound off. Real accountability journalism “is not a medium, like print or TV,” he explains. “It’s not an institution, like The New York Times or the Huffington Post. It’s neither alternative nor mainstream. It’s neither inherently analogue nor digital. It’s a practice.”

Even under the best of conditions, it’s difficult. Can it really be done on sites that remain independent of the “inside” interests that brought us the Great Recession yet that also command enough attention to make powerful players and masses of consumers and investors sit up and recognize that they have a problem? It’s a delicate question, and fortunately, Dean is here with us to tackle it!


[As a courtesy to our guests, please keep comments to the book and be respectful of dissenting opinions.  Please take other conversations to a previous thread. - bev]

55 Responses to “FDL Book Salon Welcomes Dean Starkman, The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism”

BevW February 15th, 2014 at 1:46 pm

Dean, Jim, Welcome to the Lake. (Dean is in Budapest tonight.)

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

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Jim Sleeper February 15th, 2014 at 1:48 pm

Dean, One of your memorable chapter titles mentions the CNBCization of business news, meaning that news organizations have downplayed investigation and analysis and, like Wall Street’s messenger boys decades ago, have delivered mainly instant messaging about the latest financial developments. Since that ended up costing investors, which includes a lot of us, and all other citizens, why wasn’t there enough of a market for news organizations to supply with real investigation and analysis?

dakine01 February 15th, 2014 at 2:00 pm

Good afternoon Dean and Jim and welcome to Firedoglake this afternoon.

Dean, I have not had an opportunity to read your book so forgive me if you address this in there. Here at FDL, we had the privilege of reading the excellent work done by David Dayen during the height of the meltdown. He was often days if not weeks or months ahead of many TradMed outlets on his reporting.

What outlets of any kind, TradMed, Internet, Cable News, whomever, do you perceive as having done the best accountability reporting (even as it was ignored by the TradMed and DoJ)?

BevW February 15th, 2014 at 2:07 pm

Dean is with us – responding to the first question.

Jim Sleeper February 15th, 2014 at 2:10 pm
In response to dakine01 @ 3

That’s an excellent question, because David Dayen has reviewed Dean’s book in The American Prospect, and he, too, poses our question, Dakine01. While we’re waiting for Dean to respond, I’m wondering if David’s work (which I confess I’m not familiar with) really analyzed and explained elements of the crisis enough to command the kind of attention — and thereby perhaps really change the big players’ behavior — that the Wall St Journal or the NYT would have commanded if they had been doing such work. I’m wondering why those who “got it right” early on didn’t manage to head off some of the crisis by sounding louder alarms.

Dean Starkman February 15th, 2014 at 2:12 pm
In response to Jim Sleeper @ 2

Hi JIm, Thanks so much for that generous summary and introduction. Here’s my take: one of the traits of investor oriented news is its short and intermediate-term focus. Trouble was, during the mortgage era, no one could be happier with bank performance, profit-wise, than investors. Earnings at banks like Citigroup, Merrill, Goldman, and the rest were hitting record levels. Citi alone did $25 billion in net income in 2004, one the biggest numbers in public company history. The market rewarded both that performance, and business reporting that took a narrow investor-focus was helpless against the predations that made that possible. It was only later that everything fell part and we learned those earnings weren’t only unsustainable, but were actually laying the seeds of disaster. The market here wasn’t the answer. As is too often case, public interest reporting really isn’t always an economic proposition.

eCAHNomics February 15th, 2014 at 2:14 pm

What about analytical journalism, that is, not accepting answers that don’t make sense in the world in which we live.

A few simple examples.

Everyone knows that austerity increases budget deficits, does not reduce them. Why do journalists keep puppeting the Washington consensus line?

Before the mortgage bubble burst why didn’t journalists print stories about how the poor couldn’t afford the mortgages they were being given, couldn’t service them. That had nothing to do with either access or accountability (possibly a false dichotomy) but about common sense.

One more. In the late 1990s, when interest rates were near their lows and the economy was growing strongly, so that rates were sure to rise, Greenspan issued statement that it was good time to borrow on adjustable rates. Either he needed to be fitted for a white canvas blazer with arms that fastened around the back, or he was deliberately suckering borrowers. Why was the lunacy of his remark not reported on?

spocko February 15th, 2014 at 2:17 pm

I’ve worked with both public and private companies reguarding their financials and product news. Could you talk about the ways that people doing any kind of investigative journalism are thwarted by accounting laws, guidance rules and communications practices?

So for example, having both produced and participated in financial “news” conferences and earnings calls I see all the ways the company and CFO don’t have to answer questions. Also how the reporters are culturally discouraged from asking tough questions and technologically blocked from follow ups.

Dean Starkman February 15th, 2014 at 2:19 pm
In response to dakine01 @ 3

Hi Dakine0!,

Thanks for the good question. I’m a fan of David’s work, as well. But if you have a chance to read my book, you’ll see that one of the main problems it tries to address is how to explain complex problems to a mass audience, emphasis on the mass. As I wrote, there was indeed great accountability reporting that let readers into on the mayhem overrunning the financial system — Mike Hudson, Richard Lord and others working in the alternative media. And yet, their outlets didn’t have the reach, the power, and the audience to mobilize public opinion. The point of my book is to illustrate NOT that mainstream outlets are ineffectual. Quite the opposite. It is that they have the ability to do the same kind of reporting that can change the public agenda, but just didn’t use it. And that’s the tragedy. More TK.

Peterr February 15th, 2014 at 2:19 pm

I’ve only dipped into the book thus far, but the word that keeps going through my head is bubble — not the “tech bubble” or “housing bubble” or other episodes of overly inflated prices that burst and things come crashing down, but “people living in a bubble”.

CNBC is probably the biggest example of folks who cannot really understand a world outside the Wall Street/CEO/Big Money atmosphere in which they themselves operate.

To what degree does this insular thinking play into your assessment of the financial media?

Teddy Partridge February 15th, 2014 at 2:20 pm

Thank you both for joining us today.

Do you examine the “a man’s paycheck depends” theory about financial reporting? By which I mean that clearly there’s a cheerleading aspect to much of the financial reporting in America today: CEO worship, ego-stroking of Players, and that coveted Golden Ticket to “report” at Davos. But the bosses of these journalists (using that term loosely) are peers of those being reported on, or interviewed, or discussed. Won’t employees run afoul of their employers’ desired outcome about their friends? And doesn’t that affect the accountability we can expect?

As long as corporate journalism is a plaything of the rich — and when hasn’t it been, really? — won’t the vassals toiling within its ranks be required to adopt a certain tone, push a perfect pitch, and endorse certain outcomes?

(PS I love your book’s cover! Couldn’t be a better image for *all* our “liberal media!)

Dean Starkman February 15th, 2014 at 2:22 pm
In response to dakine01 @ 3

Just a bit more, dakine01: Naked Capitalism, Calculated Risk, 4clousure Fraud, and others did excellent work. That’s not in dispute, but not really the issue. Rather than niche publications speaking to specialists or to a narrow group, I was looking at mass market publications that had the capability – as there own history shows, as I tried to demonstrate — but just didn’t use it.

eCAHNomics February 15th, 2014 at 2:23 pm

As a follow on to spocko’s question, why is it that a relatively junior (and female) reporter was able to work thru Enron’s accounting and figure out there was no there there. No on else did that. Why not? Why did no one do the straightforward analytical work that would have uncovered the illegal schemes, leverage, fraud, criminal role of “ratings” agencies. None of that is rocket science.

spocko February 15th, 2014 at 2:24 pm
In response to eCAHNomics @ 7

This is a good point. Also “news” is often reactive in its nature. Investigate journalism might actually, “make” news. I’ve found that the MSM waits for the crisis, covers it and the goes onto the next crisis.

eCAHNomics February 15th, 2014 at 2:29 pm
In response to spocko @ 14

Greenspan’s every statement was news. As I recall, it was widely reported but no one said it was nuts. On the contrary, it was trumpeted.

BevW February 15th, 2014 at 2:30 pm
In response to eCAHNomics @ 13

Another example was the college student that analyzed the Reinhart – Rogoff Study. (NYTimes)

That was a 2010 research paper by Carmen M. Reinhart and Kenneth Rogoff of Harvard, also authors of a best seller, “This Time Is Different: Eight Centuries of Financial Folly.” The economists, analyzing 3,700 separate economic observations, found little relationship between growth and debt for countries with debt-to-gross-domestic-product ratios of 90 percent or less. But for countries with debt loads equivalent to or greater than 90 percent of annual economic output, “median growth rates fall by 1 percent, and average growth falls considerably more.”

Dean Starkman February 15th, 2014 at 2:30 pm
In response to eCAHNomics @ 7


i agree it’s important to think of news in categories. I have plenty of respect for news analysis and pointing out that the emperor has no clothes. There’s a long and important tradition in American journalism in just that. But I’m concerned with news gathering — bringing new information into the public domain, and in my view, that’s journalism’s most important tool.

Obviously, Greenspan was a huge part of the problem and no one’s idea of a solution and it was incumbent on commenters to point out the nonsensical nature of his remarks.

But the main story — unknown to the likes of Greenspan, most of the financial players, AND to commenters, was that the mortgage lending system was running amok, that is to say, was functionally corrupt. That was the essential piece that was missing, in my view.

And I have to say, when it comes to fact-gathering, the access-accountability polarity is a pretty useful frame for viewing the news.

Jim Sleeper February 15th, 2014 at 2:33 pm
In response to Peterr @ 10

This reminds me of a great line from Dean’s book, re: the rise of predatory lending: “There was a bubble, all right, and the business press was in it.” That’s a statement worth unpacking, I think, with emphasis on the business press’ own corporate ownership and investors.

spocko February 15th, 2014 at 2:34 pm
In response to Dean Starkman @ 12

I think it’s no surprise that some of the most interesting business reporting is coming from a music publication. Matt Tiabi at Rolling Stone. I spoke to him about this work at a book signing and asked, “what are these big WS firms and banks afraid of?”
He said, “Not journalists, that’s for sure.”
He said the only thing that worried them were the few remaining laws on the books from regulators they hadn’t captured yet. They hire the old regulators away to understand how they work and then get laws changed that will be a problem.

Dean Starkman February 15th, 2014 at 2:35 pm
In response to spocko @ 8

Great question, spocko. My answer is that reporters should avoid confining their sources to CEOs, accounting firms, IR folks and others who could be described as insiders. In my view, the story of the brewing financial crisis lay elsewhere — among state regulators, borrowers, community groups, academics, state attorney generals and banking commissioners who were more than willing — in fact were pleading — for their story to be told. Outsiders had the story here that insiders either didn’t have or weren’t willing to reveal. More TK on this.

Dean Starkman February 15th, 2014 at 2:38 pm
In response to Peterr @ 10

To a huge degree, Peterr. I don’t want to overdo the point, but CNBC and their ilk reply on access reporting — information from powerful insiders, be they execs, analysis, PR folks, many economists, raters, you name it. If you confine your sourcing to this group, you are certain to relay only an elite view. And the danger is that you will end up living in the bubble that you speak of and perpetuating and enlarging it.

Dean Starkman February 15th, 2014 at 2:44 pm

A couple of points here, Teddy.

Won’t employees run afoul of their employers’ desired outcome about their friends? And doesn’t that affect the accountability we can expect?

Yes. But if you get a chance to read my book, what I tried to show is that news isn’t static, but its frame change over times. There are eras when the news, and yes, MSM, is capable of powerful accountability reporting. Don’t believe it? That’s why I wrote the book, in part. To show the press can actually be a formidable watchdog. See if I don’t make my case.

The point is that the narrow frames you describe are not set in stone but can be expanded. But it takes a a courageous professional cadre to do it and a sophisticated readership to demand it.

spocko February 15th, 2014 at 2:45 pm
In response to Dean Starkman @ 21

Just to illustrate this point in a humorous way, her is Salon reporter Alex Parnee questioning Jamie Dimon on a CNBC show
http://www.salon.com/2013/09/30/how_i_botched_it_on_cnbc/ video is great.

Jim Sleeper February 15th, 2014 at 2:47 pm

When Matt Taibbi told Spocko that Wall Streeters aren’t afraid of journalists, was he in effect blaming the public for not reacting to good reporting and analysis like his? Or was he really underscoring your point, Dean, that Wall Street doesn’t fear journalists because most of them haven’t really been doing their jobs?

In other words, how much should we blame on bad reporting priorities, and how much on “The Public”– and how much on the sheer power of narrow self-interest and greed over the lesser power of enlightened self-interest?

Dean Starkman February 15th, 2014 at 2:47 pm
In response to spocko @ 19

Taibbi’s work has been a provocative, fact-filled, and useful counterpoint to what I think all of us see as a fairly complacent mainstream press posture toward Wall Street. See my critique of his Goldman piece here: http://www.cjr.org/the_audit/taibbi_goldman.php?page=all

I guess my point is that while MSM might not want to adopt his language, they have their own tools and traditions that are at least as effective, if they are employed.

Suzanne February 15th, 2014 at 2:47 pm

welcome to fdl mr starkman – thank you for hosting today’s discussion mr sleeper

mr starkman, let me echo teddy’s comment above about the cover of your book (love it!). my question is about how so many corporations have merged and taken over ownership of so many media outlets – news is about their bottom line instead of reporting the truth. we’ve seen it in he said/she said reporting in politics and financial matters – all to the detriment of actual reporting of the facts. i’ve not finished your book yet and hope you see a way out — a way to bring back investigative journalism — do you? do the mega corporations owning media outlets need to be regulated to actually do the job of being journalists instead of being stenographers or will public shaming be enough?

Dean Starkman February 15th, 2014 at 2:53 pm
In response to Jim Sleeper @ 24

Jim, I suspect you already know my answer here. I’m sure Taibbi was pointing the finger directly at fellow journalists, and rightly so. In any case, the public gets zero blame. The public is that which journalism serves. There is not other relationship. It has no other obligation than to demand forthright reporting from journalism. The public is an essential part of the reform dynamic, obviously, but it needs to be let in on the game. And that’s up to journalism, especially the mainstream outlets that purport to represent the public interest. If the public isn’t engage, it is almost certain the story wasn’t old the right or enough. The public is always ready, in my experience, for the great story.

Dean Starkman February 15th, 2014 at 2:59 pm
In response to Suzanne @ 26

Complicated question, but I’d say there are two components to answer: a structural one and a cultural. Structurally, the media, as everyone knows, is in a state of insane disruption that may result in some real advances in journalism, but right now has had a disastrous effect on accountability journalism — both in losses of professional reporters and in the super-stressed work environment in which reporters still working now operate. Suffice it to say, it is uncongenial to the kind of reporting the public needs. Obviously, that needs to be fixed and news organizations need to be put on stable financial footing.

But if they are, and the new result is stenographic reporting and access journalism, then it’s all for naught anyway. There needs to be cultural change within the news organizations themselves.

BevW February 15th, 2014 at 3:00 pm

Do you see a new form of journalism / journalists coming of age after the 2008 financial crisis? Are there more websites, or young journalists in large MSM that are willing to investigate stories?

Teddy Partridge February 15th, 2014 at 3:07 pm

Don’t you think there’s a “cult of the savvy” journalism, too, though? Like in political reporting, where there are intermediary journalists pumping out the propaganda from their sources, for the consumption by folks who think themselves insiders? I worry about the online day-trader who watches Jim Cramer and thinks he’s getting some kind of inside track. My dad, who used to read Barrons cover to cover every Sunday, told me that he read it to understand what was widely known and no longer relevant, not what was coming-up and soon-to-happen: he maintained that anything that got into Barron’s (or the WSJ, on weekdays) wasn’t worth acting on, because the smartest money had already been made on it.

Isn’t the biggest market for financial *news* those people who think they are getting the inside story, but are really being manipulated by those with the puts and calls in place to make money on the upcoming market movement? I mean, the Big Guys on Wall Street aren’t going to share anything with a reporter, no matter how pet and tame, until their position is in place.

That’s why I call it propaganda, not information, that folks on television get from their sources: there’s an angle, and by not seeing and reporting on that angle, they are ensuring more propaganda comes their way. Which keeps their audience and Q score up!

Suzanne February 15th, 2014 at 3:07 pm
In response to Dean Starkman @ 28

thank you for replying! cultural change in both the news organizations and the public who have had their expectations lowered by the dumbing down of news into ‘infotainment’ instead of actual news.

Dean Starkman February 15th, 2014 at 3:10 pm
In response to Jim Sleeper @ 18

Right, Jim. There’s always been a tension between news owners and professionals in the newsroom. But the best news organizations over the years have shown that great journalism and ownership interests can actually coincide — but only if the organization takes the long view. Dow Jones, the New York Times, CBS, and others during certain moments of their history showed that great journalism can be a great value creator, but it takes a certain amount of enlightenment on all sides. And some luck.

Jim Sleeper February 15th, 2014 at 3:11 pm

Dean, I do know (agree with) your view that alternative-media journalists like Matt Taibbi are well justified in pointing fingers at MSM business journalists who let the public down by not really informing it or sounding alarms. But, as you know, some readers out there suspect that the public’s problem involves a lot more than journalism’s failures to alert it. It involves bad education, it involves the torrent of counter-propaganda from the “one percent,” and so on. And I understand you to be saying that while the problem is indeed larger than journalism alone, journalists have got to do their part by doing what they, and often they alone, can do best.

You also note that there’s an important loop between strong journalism and strong prosecutions and regulation. Would you care to expand on that a bit here?

spocko February 15th, 2014 at 3:14 pm
In response to Dean Starkman @ 25

I guess my point is that while MSM might not want to adopt his language, they have their own tools and traditions that are at least as effective, if they are employed


I understand what you are saying but I also see the unintentional double meaning, “if they are employed.”
I’m friends with some reporters whose investigative reporting desires were discouraged through the simple process of a shrinking newsroom.

I was talking to Robert Mcchesney about how to fund upcoming journalist. He pointed to a few groups, like ProPublica but he noted that other countries don’t all have the funding coming from business, and pushed for more government funding journalism. And that it has a great history in the US. But instead of moving toward that places like PBS is moving toward more corp backed funding. Today’s scandal is PBS getting funded by Enron trader for a piece attacking pensions.
And of course the RW constant attack on Public broadcasting pushes them in that direction.

dakine01 February 15th, 2014 at 3:14 pm
In response to Dean Starkman @ 32

I had to laugh when I saw the news reports when Murdoch was buying Dow Jones and The Wall Street Journal that he would be sure to maintain the “Editorial integrity” (laughable as the WSJ was right wing central editorially.) The problem was, he has wound up screwing the reporting integrity that the WSJ used to have.

Jim Sleeper February 15th, 2014 at 3:14 pm
In response to Jim Sleeper @ 33

Dean, I see that you’ve already answered the first part of my question just above. The Bancrofts, the Sulzbergers, and others who hold (or once held) special shares of stock that permitted them to look beyond narrow “fiduciary” responsibilities have been abdicating that power and judgment. I wish I knew how to restore that lost sense of public responsibility.

Dean Starkman February 15th, 2014 at 3:17 pm

Teddy, Basically, yes.

That’s one of the reasons I came up with the Access/Accountability framework. It was just way of trying to figure why so much information, like that that we get from CNBC, may be factually true but irrelevant and worse, sometimes a dangerous distortion of reality.

If we confine our sources to those on the insider, we are certain to appear savvy to insiders. But the risk is that we won’t have a clue as to what’s really going on.

Dean Starkman February 15th, 2014 at 3:22 pm
In response to BevW @ 29


Objectively speaking, there are about a third fewer professional reporters — 15,000, 20,000 fewer — working for American newspapers, still the backbone of American journalism. So, just in terms of staffing, we are far FAR below where we need to be. I’m thinking of local and regional reporting especially. Yes, there are plenty of startups but they are still small, on a relative scale, and the amount of accountability reporting they produce small still.

Having said that, I work with younger reporters, and, hoping I don’t sound patronizing, I’m so impressed by their spirit and commonsense idealism. There’s a lot of reason for pessimism, but the people coming into the field are the reason things are going to be okay. Or that’s how I feel these days.

Jim Sleeper February 15th, 2014 at 3:23 pm

This point by Teddy strikes me as very important — it’s a comment about the nature of markets, especially in these algorithmically driven times. He asks,

“Isn’t the biggest market for financial *news* those people who think they are getting the inside story, but are really being manipulated by those with the puts and calls in place to make money on the upcoming market movement? I mean, the Big Guys on Wall Street aren’t going to share anything with a reporter, no matter how pet and tame, until their position is in place. That’s why I call it propaganda, not information….”

Doesn’t this make investigative journalism all the more necessary even as it also makes it all the more difficult? Is there a way out via news organizations that are public traded and hence deeply ‘invested’ in what Teddy calls “the biggest market for financial ‘news’”?

Dean Starkman February 15th, 2014 at 3:24 pm
In response to Suzanne @ 31

Suzanne, people have always wanted to be entertained by the news, and there’s nothing wrong with that. But as I’ve said above, if you provide them with great reporting, they will invariably respond. They always do.

Dean Starkman February 15th, 2014 at 3:31 pm
In response to Jim Sleeper @ 39

Jim, I agree Teddy’s point is excellent. I want to say, and probably repeat, the difference between investor interests and the public interest is only a matter of time. That is to say, if you’re concerned about the next quarter or even the next few years, the incremental, minute-by-minute information will suffice both for the investors and for the news organizations purporting to serve them– until it doesn’t. If you are interested in LONG TERM value, both from a markets perspective AND from the perspective of a news organization, then you have to look deeper, broader, and see the news not just from the perspective of internal metrics (e.g. earnings) but from societal costs, which will always, eventually hit home.

Great investors always take that perspective, as should great news organizations. And when you wish for enlightened stewardship, you’re really wishing for enlightened, *longterm* self-interested stewardship.

Dean Starkman February 15th, 2014 at 3:37 pm
In response to spocko @ 34

Yup. I don’t agree with Clay Shirky about everything, but he was right when he said that journalism has always been subsidized, in some way. During the post-war heyday, it was subsidized by news organizations’ quasi-monopoly over local and regional ad markets and, in the case of the networks, over the national broadcast ad market. Now that subsidy is disappearing, if it’s not gone altogether.

Like a lot of news types, I’m as wary as anyone about public subsidies. But McChesney makes subtle arguments along these lines and his ideas should be given serious consideration. The PBS case is absolutely on point about the dangers of corporate or private funding of news (as opposed to commercial fundings, which is a very different matter). The PBS affair is a case study in the dangers of “philanthropic” models.

Jim Sleeper February 15th, 2014 at 3:40 pm
In response to Dean Starkman @ 41

I completely agree that investors have to take the long view — which usually means a more public, socially responsible view — if they really mean to ensure their own profits, let alone their own pride. I’ve been puzzling about the loss of that capacity and that inclination in our investing class. Some would say that the supposed “democratization” of investment has let in a mob of people who simply, crassly, want the quickest returns imaginable and hence drive the corporations they invest in to think similarly. But I’m not sure that that’s quite right. Something in the training of business leadership itself has failed, and I don’t know if great journalism can revive great investing. Again, though, I agree with you that great journalism has to do what it, and often only it, can do to clarify what’s at stake and what’s going wrong in the current strategies.

Dean Starkman February 15th, 2014 at 3:40 pm
In response to dakine01 @ 35

The Murdoch experience at the WSJ is nuanced, but I basically agree. Murdoch over the years as made explicit his distaste for the very idea of journalism in the public interest. He says the purpose of newspapers is to make a profit. That’s a short sighted view and it really shows in the current incarnation of the WSJ, in my view.

bigbrother February 15th, 2014 at 3:43 pm
In response to Dean Starkman @ 37

Dean a subject that needs a lot of light “Restricted Reporting”. First Bill Black prosecuted successfully the prior housing bubble. Second The Corporate Culture of Corruption rules the “Market Place”. To explain most bosses encourage their employees to systematically rip off the investor public who do not have the advantage of insider information like the giant hedge funds.Corporate bonds are a setup, small governments are the target of big lenders. Fees and penalties rake in unearned billions. In short the “Business Plan” for the whole financial sector which in 20 years expanded to 1/3 of the Gross National Product while producing nothing is steal all they can. Making 100 millions live on the poverty line. Off shoring good jobs replaced with slave wage jobs. And corporate corruption cannot stand the light of honest truthful reporting so themedia has been consistently bought out by them toshut the reporters up. Maybe First Look will move reporting in a more open honest direction though I doubt the leach will be lengthed.

Dean Starkman February 15th, 2014 at 3:46 pm
In response to Jim Sleeper @ 43

Jim, This goes to the broader question of share-holder capitalism, which has been in vogue only in the last couple of decades, and stake-holder capitalism, which, it could be said, prevailed in the post-war era (of unprecedented broad-based economic growth). Peter Drucker and others were aghast at the rise of short-term-ism among the investor class and, as a result, in the corporate world, and sought to find ways to change the emphasis and the culture. That debate, surprisingly, has not taken hold as I hoped it would but that’s the one we need to start having.

gigi3 February 15th, 2014 at 3:50 pm
In response to eCAHNomics @ 13

Do you really believe Bethany McLean ferreted out what she needed to expose Enron without substantial help? I don’t. Among many other things, I’ve read her email exchanges with Marc Cohodes. In one he compares Enron to Fairfax (FFH) and refers to them as the Canadian Enron. Cohodes arranged a meeting between her and Rick Sauer (former SEC atty. – also worked for hedge fund Copper River). This was late 2006 and early 2007. Her Fortune piece was in March 2007.

BevW February 15th, 2014 at 3:52 pm

As we come to the last minutes of this great Book Salon discussion. Any last thoughts?

Dean, Thank you for stopping by the Lake and spending the afternoon with us discussing your new book, and a hard look at the journalism that failed us.

Jim, Thank you very much for Hosting this great Book Salon.

Everyone, if you would like more information:

Dean’s website (DeanStarkman.com) and book – Jim’s website (JimSleeper.com) and (Yale Univ.)

Thanks all, Have a great weekend. Tomorrow: Gareth Porter / Manufactured Crisis: The Untold Story of the Iran Nuclear Scare; Hosted by Andrew Cockburn / Harpers’ Magazine.

If you would like to contact the FDL Book Salon: FiredoglakeBookSalon@gmail.com

Dean Starkman February 15th, 2014 at 3:54 pm
In response to bigbrother @ 45

Bill Black has been spot-on through the post-crisis period. His experience points to the necessity — and there is no other word for it– of uncompromised regulation in the financial sector and in the corporate world more broadly. Ultimately, this is a political question. Capitalism, as we all agree, is a powerful force for good, but also, as we know, for ill. There is no magic bullet. No simple answer. But stout, capable, and forthright regulation — including, when needed, criminal prosecution of fraud and other corporate crime — is an essential component of well-functioning economy. There is no substitute. This really just a practical imperative that unfortunately has gotten bound up in ideological wars. But we have regulations for a reason. And since we have them, they need to be credibly enforced.

Jim Sleeper February 15th, 2014 at 3:54 pm

It’s been a real pleasure. Dean, your The Watchdog That Didn’t Bark has jump-started a larger public discussion that needs to continue. (There’s still just enough time left for some of you who’ve been reading along but not jumping in to go ahead and post your contribution to this stimulating discussion and maybe even for for Dean to respond.) I urge all who’ve been reading along or participating to get the book and expand your reckonings even further. Thanks tremendously to Firedoglake, to Bev and Suzanne, and, most of all, to Dean Starkman, who’s been participating in this discussion from Budapest after midnight!

bigbrother February 15th, 2014 at 3:56 pm

One of the latest great scam is to rip off the pension funds of public employees. The news says they are overpaid while the states announce growing surpluses. The nuances of the story spin it toward the 1% interests. It reflects the society in generals willingness to lie and cheat each other in the name of competition. I see the whistle blowers prosecuted for releasing revealing data. How can reporters protect their sources when the NSA spies on them all. AP was one of the first to get the shaft. The it all with “Looking Forward Policy”

wigwam February 15th, 2014 at 3:58 pm

His experience points to the necessity — and there is no other word for it– of uncompromised regulation in the financial sector and in the corporate world more broadly.

Also to the POSSIBILITY of such regulation.

Dean Starkman February 15th, 2014 at 3:59 pm
In response to BevW @ 48


I’d just say thanks to you and FDL for providing this forum, and to commenters for a fantastic discussion. One of the biggest dangers of the experience of the crisis, and of journalism’s own financial travails, is that we might begin to feel that the public has no shot in having a say in solving the complex problems that we all face. I’d just say that that despair isn’t an option, and that journalism, and the public, have to find a way, and I really think we will. Thanks so one and all for a wonderful couple of hours.

BevW February 15th, 2014 at 4:00 pm
In response to Dean Starkman @ 53

Our pleasure, thanks to you and Jim for being here.
Safe Travels home.

Dean Starkman February 15th, 2014 at 4:04 pm
In response to Jim Sleeper @ 50

Jim, my most heartfelt thanks as always. For those who don’t know him, Jim has been a inspiring voice for many years in finding ways to reengage the public in helping to fix our battered democratic institutions. I owe him a huge debt and the public does, too.

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