• Cover Story
• Table of
  Contents
• Contents By
  Topic
• Columns
  • Brownstein
  • Cook
  • Crook
  • Powers
  • Rauch
  • Stokes
  • Schneider
  • Taylor Jr.
• Regular
  Features
  • Hotline Extra
  • Inside Washington
  • Insiders Poll
  • K Street Corridor
  • People
  • The Week on the Hill

Not much is booming in the American economy these days, but there's a bull market in blame. All over the media, people are pointing fingers at those who supposedly got us into this mess. Some say that Alan Greenspan did it. Others fault, variously, President Clinton, President Bush, Congress, and, of course, Wall Street. And let's not forget the foolish people who took out all of those crazy mortgages in the first place.

But there's one culprit the media don't mention much: themselves. This is a little strange because the news business has become quite good at publicly whipping itself for all kinds of sins. Many outlets employ columnists whose sole duty is to scold colleagues for their errors.

Yet when the major print and broadcast outlets look into the roots of the financial crisis, as they've been doing lately with verve, their own work doesn't figure prominently in the discussion. "Who Caused This Nightmare?" asked The Times of London last week. Answer: "The culpable are spread across the whole gamut of America's political, economic, and banking infrastructure."

"What Created This Monster?" The New York Times asked four days later. The answer was more detailed but essentially the same.

At the bottom of the Times of London story, as it appeared online this week, the first reader comment was from an S. Andrew of Croydon: "Blame is easy and useless. Journalists might have investigated if they had understood. Why did they not find out what was going on and publish [earlier]?"

In fact, the media did foresee this disaster, to a certain degree. As the trade journal Editor & Publisher noted this week, in March 2005, The New York Times ran a front-page story that began: "Real estate-crazed Americans have started behaving in ways that eerily recall the stock market obsession of the late 1990s." There were many other prescient stories about the dangers of a real estate bubble and the havoc it could wreak for everyday Americans. I read them in real time, often via the eagle-eyed Housing Bubble blog, which saw the crash coming long ago.

But, as some editors in the E&P story conceded, the coverage tended to focus on homebuyers rather than on the complex, dimly understood financial instruments that made the bubble possible and that now threaten the broader financial system. Jim Henderson, a managing editor at USA Today, said, "I'm not sure the mainstream press covered that. It was so institutional and at a highly sophisticated level."

And that is the crux of media culpability in this crisis. Journalists focused on the surface aspects of the bubble -- rising home prices, growing consumer debt -- and didn't work hard enough to figure out what was happening at the "highly sophisticated level" where the richest and most powerful make their money.

To draw a rough analogy, it's a bit like what happened in the run-up to the Iraq war. A lot of smart people in the media thought that something might be fishy in the administration's WMD claims. And a few news outlets dug into the fishiness and poked some holes in those claims. But by and large, the media culture was content to see what it could see, report the soothing things that senior officials said, and leave it at that.

Covering financial markets is very tricky because there are myriad levels, many of them hidden and arcane. The easy route is the well-trodden one followed by CNBC and other popular outlets: Cover the markets as a fun game that anyone can win. And go along with the popular mood. When the bulls are running, cheer them on. When there's blood in the streets, cry murder, while assuring your audience that good times could be just around the corner. Because that's what people want to hear.

One day this week, as the financial markets were digesting bleak new housing numbers, one perky CNBC anchor asked, "Is this indeed, as some are saying, the biggest buying opportunity of the year, at this particular point?"

An awful lot of question marks are floating around financial journalism these days -- an apt symbol of how much the media really know about this stuff.