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The 2008 Financial Crisis & Global Media
Write a 450-500 word response to the prompts. You must answer ALL Sections—A, B &
C Note the instructions to each of the sections. Creatively title and subtitle your piece. Do
not number your paragraphs!
this week we will explore works that critique the corporation as an economic entity and
social actor. The by-now classic (2003) Joel Bakan, Mark Achbar and Jennifer
Abbott documentary, The Corporation takes pains to explore the history of the corporation
from its legal inception just after the Civil War to the economic juggernauts with the power
to create and destroy, that global corporations have become today. With the rise
of neoliberal globalization, in process in various ways since the late 70s, massive
transnational corporations, product creators, investment banks and media enterprises have
come to dominate the global scene—many with holdings larger than the GDPs of many of
the world’s nations. Canadian documentary filmmaker, Terrance McKenna’s
(2010) Meltdown: The Secret History of the Global Financial Collapse labors to identify the
source of the 2008 collapse, likening it to the 1929 collapse that sparked The Great
Depression. McKenna also tracks the effects of the US situation to markets, governments,
financial sector workers and private citizens across the planet. While the corporations, nonprofit NGOs and social media platforms that you may chose for your second paper may not
appear any where near as nefarious as some of the firms captured in these pieces, the critique
of runaway corporate capitalism (or corporatism) that these filmmakers and authors make,
offer important threads of economic analysis that will be highly applicable to your chosen
platforms. The 2008 Financial crisis, given its impact on the reality of globalization, remains
one of the most hyper-mediated moments of recent US and global history.
_____________________________________________________________________________
_
SECTION A:
The Corporation – Feature Documentary – (writer: Joel Bakan directors: Mark Achbar &
Jennifer Abbott) : Focus on 0:00:00-0:60:00 mins only !
The Corporation (2003 film) – Wik.pdf
download
https://www.youtube.com/watch?v=zpQYsk-8dWg&t=5733s (Links to an external site.)
(1) What was the initial purpose of the corporation according to Bakan, Achbar & Abbott?
How did corporations initially come into existence? How did legal language from the 14th
Amendment of the US Constitution, allow for the birth of the corporation? What/who was
this legislation initially designed to protect? Where lies the irony in the manner in which
this amendment has ultimately been repurposed? What is ironic about this the early history
of the corporation?
(2) What is the primary and often singular motivation of a corporation? How does this drive
often put the corporation at odds with human communities? According to the film
commentators, what are some of the inherent problems with legally according much of the
rights of personhood to corporations?
(3) Drawing from film commentator and Wall Street Commodities trader, Carlton
Brown (See film at 54:40 mins), what were the effects of 9/11 in his area of the market? Why
the profound sense of shock and disbelief, but also irony in his tone? What contradictions in
the US financial system does he refer to? Draw direct quotes from Brown to enrich your
discussion.
______________________________________________________________________________
______________________________
SECTION B: Pick any (2) of the (4) lettered prompts in this section and respond if full with
as much citing and quoting as possible.
The Meltdown: The Secret History of the Global Financial Collapse – Terrance McKenna
(2010) – Parts 1-4
https://www.youtube.com/watch?v=0yZ5mjbB11I (Links to an external site.)
(1) Name some of the countries outside of the US that McKenna explores in Meltdown. How
did pre-crisis financial practices in these spaces contribute to the conditions that would
produce the 2008 financial crisis? Name some of the major corporate and government players
in these spaces. Quote from commentators in this section of the film to enrich your
discussion. Name some of the US investment banks/firms that were at the center of the
crisis.
https://www.youtube.com/watch?v=5fz-InnEtUo (Links to an external site.)
(2) Outline (1-2) human stories of individuals affected by the “mortgage/housing crisis” of
the 2008 Financial collapse. What was the California dream? “It’s only in America,” retorts
one displaced person. Draw quotes to enrich your discussion. See film section at 00:17:00
mins
https://www.youtube.com/watch?v=vmQn6conur4 (Links to an external site.)
(3) “Violence is not only physical, it can also be psychological ,” claims a Union leader in
France. What was the impact of the 2008 collapse in that nation? How did layed-off French
workers respond? What was “Boss-napping” as it occurred at the US-owned Caterpillar and
Molex plants? What do you make of that practice as a tactic? Was this degree of “union
militancy” justified in your opinion? Is employment a privilege, or an essential human-right
in your estimation? How did protest-singer, Horour Torfason respond to similar labor unrest
in Iceland?
https://www.youtube.com/watch?v=wJeUbgoE8bs (Links to an external site.)
(4) Who was London City boy and what kind of financial practices did he whistle blow
against? What did the case of criminally-charged US hedge fund managers, Ralph Cioffi and
Matthew Tannin say about the state of the financial and legal system in the US? How was the
behavior of the largest US investment bank, Goldman Sachs indicative of the deep problems
in the US financial system? Some would argue that the Birj Khalifa in Dubai stands as an
amazing feat of technological advancement and that Dubai’s “The World” Island project is a
creative, visionary futurist real estate project. How would you respond to these claims?
______________________________________________________________________________
______________________________
SECTION C: You must answer this section
The Watchdog That Didnt Bark – The Financial Crisis & the Death of Investigative
Journalism -Intro – Dean Starkman (2014).pdf
(1) Why according to author, Dean Starkman did the financial press, exploitation watchdogs
that they were supposed to be, fail to warn the public and other industries of the
looming 2008 Financial Crisis? How were finance journalists and the papers they worked for
entangled and implicated in the inflated system that would lead to the 2008 crisis? Did their
failure to sound the alarm, signal their complicity in the system that would eventually
crash? Draw quotes from Starkman to enrich your discussion.
4/2/2020
The Corporation (2003 film) – Wikipedia
The Corporation (2003 film)
The Corporation is a 2003 Canadian documentary film
written by University of British Columbia law professor Joel
Bakan, and directed by Mark Achbar and Jennifer Abbott. The
documentary examines the modern-day corporation. Bakan
wrote the book, The Corporation: The Pathological Pursuit of
Profit and Power, during the filming of the documentary.
The Corporation
Contents
Synopsis
Interviews
Release
Box office
Versions
TVO version
DVD version
Theatrical release poster
Reception
Critical reception
Directed by
Awards
Produced by
Jennifer Abbott
See also
Notes
Mark Achbar
Mark Achbar
Bart Simpson
Written by
Joel Bakan
References
Harold Crooks
External links
Downloads
Mark Achbar
Synopsis
The documentary shows the development of the contemporary
business corporation, from a legal entity that originated as a
government-chartered institution meant to affect specific public
functions to the rise of the modern commercial institution
entitled to most of the legal rights of a person. The documentary
concentrates mostly upon North American corporations,
especially those in the United States. One theme is its
assessment of corporations as persons, as a result of an 1886
case in the United States Supreme Court in which a statement by
Chief Justice Morrison R. Waite[nb 1] led to corporations as
“persons” having the same rights as human beings, based on the
Fourteenth Amendment to the United States Constitution.
https://en.wikipedia.org/wiki/The_Corporation_(2003_film)
Narrated by
Mikela J. Mikael
Music by
Leonard J. Paul
Cinematography Mark Achbar
Rolf Cutts
Jeff Hoffman
Kirk Tougas
Edited by
Jennifer Abbott
Production
company
Big Picture Media
Corporation
Distributed by
Zeitgeist Films
Release date
September 10, 2003
(Toronto
1/6
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The Corporation (2003 film) – Wikipedia
Topics addressed include the Business Plot, where in 1933,
International Film
General Smedley Butler exposed an alleged corporate plot
Festival)
against then U.S. President Franklin D. Roosevelt; the tragedy of
January 16, 2004
the commons; Dwight D. Eisenhower’s warning people to
145 minutes
beware of the rising military-industrial complex; economic Running time
externalities; suppression of an investigative news story about Country
Canada
Bovine Growth Hormone on Fox affiliate television station
English
WTVT in Tampa, Florida at the behest of Monsanto; the Language
invention of the soft drink Fanta by The Coca-Cola Company Box office
$4.84 million[1]
due to the trade embargo on Nazi Germany; the alleged role of
IBM in the Nazi holocaust (see IBM and the Holocaust); the Cochabamba protests of 2000 brought on by
the privatization of a municipal water supply in Bolivia; and in general themes of corporate social
responsibility, the notion of limited liability, the corporation as a psychopath, and the corporate
personhood debate.
Through vignettes and interviews, The Corporation examines and criticizes corporate business practices.
The film’s assessment is affected via the diagnostic criteria in the DSM-IV; Robert D. Hare, a University
of British Columbia psychology professor and a consultant to the FBI, compares the profile of the
contemporary profitable business corporation to that of a clinically diagnosed psychopath (however,
Hare has objected to the manner in which his views are portrayed in the film; see “Critical reception”
below). The Corporation attempts to compare the way corporations are systematically compelled to
behave with what it claims are the DSM-IV’s symptoms of psychopathy, e.g., the callous disregard for the
feelings of other people, the incapacity to maintain human relationships, the reckless disregard for the
safety of others, the deceitfulness (continual lying to deceive for profit), the incapacity to experience
guilt, and the failure to conform to social norms and respect the law.
Interviews
The film features interviews with prominent corporate critics such as Noam Chomsky, Charles
Kernaghan, Naomi Klein, Michael Moore, Vandana Shiva, and Howard Zinn, as well as opinions from
company CEOs such as Ray Anderson (from the Interface carpet and fabric company), and viewpoints
from business gurus Peter Drucker and Milton Friedman, and think tanks advocating free markets such
as the Fraser Institute. Interviews also feature Dr. Samuel Epstein, who was involved in a lawsuit against
Monsanto Company for promoting the use of Posilac, (Monsanto’s trade name for recombinant Bovine
Somatotropin) to induce more milk production in dairy cattle and Chris Barrett who, as a spokesperson
for First USA, was the first corporately sponsored college student in America.[2]
Release
Box office
The Corporation grossed around $3.5 million in American box office receipts and had a worldwide gross
of over $4.8 million,[1] making it the second top-grossing film for Zeitgeist Films.[3]
Versions
TVO version
https://en.wikipedia.org/wiki/The_Corporation_(2003_film)
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The Corporation (2003 film) – Wikipedia
The extended edition made for TVOntario (TVO) separates the documentary into three 1-hour episodes:
“Pathology of Commerce”: About the pathological self-interest of the modern corporation.
“Planet Inc.”: About the scope of commerce and the sophisticated, even covert, techniques
marketers use to get their brands into our homes.
“Reckoning”: About how corporations cut deals with any style of government – from Nazi Germany
to despotic states today – that allow or even encourage sweatshops, as long as sales go up.
DVD version
The DVD version was released as a 2-disc set that includes following:[4]
Disc 1 includes the film, 17 minutes of deleted scenes, 2 tracks of directors’ and writer’s commentary,
filmmakers’ Q’s & A’s and interviews, theatrical trailer, 60 minutes of Janeane Garofalo interviewing
Joel Bakan on Air America Radio’s The Majority Report, 10 minutes of Katherine Dodds on
grassroots marketing, subtitles in 3 languages (English, French, Spanish), and descriptive audio.
Disc 2 includes 165 never-before-seen clips and updates sorted by person (“Hear More From…”) and
subject (“Topical Paradise”). “Hear More From…” includes updates and goodies like the Milton
Friedman Choir singing “An Ode To Privatization”. “Topical Paradise” includes 22 topics. “Related
Film Resources” includes 15 film trailers and a 30-minute UK animated film.
In 2012, a new Canadian educational version was released for high school students. This “Occupy Your
Future” version is exclusively distributed by Hello Cool World, who were behind the branding and
grassroots outreach of the original film in four countries. This version is shorter and breaks the film into
three parts. The extras include interviews with Joel Bakan on the Occupy movement, Katherine Dodds
on social branding, and two short films from Annie Leonard’s Story of Stuff Project.
Reception
Critical reception
Film critics gave the film generally favorable reviews. The review aggregator Rotten Tomatoes reported
that 90% of critics gave the film positive reviews, based on 111 reviews with an average rating of 7.4/10.
The website’s critical consensus reads, “The Corporation is a satisfyingly dense, thought-provoking
rebuttal to some of capitalism’s central arguments.”[5] Metacritic reported the film had an average score
of 73 out of 100, based on 28 reviews.[6]
In Variety (October 1, 2003), Dennis Harvey praised the film’s “surprisingly cogent, entertaining, even
rabble-rousing indictment of perhaps the most influential institutional model for our era” and its
avoidance of “a sense of excessively partisan rhetoric” by deploying a wide range of interviewees and “a
bold organizational scheme that lets focus jump around in interconnective, humorous, hit-and-run
fashion.”[7]
In the Chicago Sun-Times (July 16, 2004), Roger Ebert described the film as “an impassioned polemic,
filled with information sure to break up any dinner-table conversation,” but felt that “at 145 minutes, it
overstays its welcome. The wise documentarian should treat film stock as a non-renewable
commodity.”[8]
https://en.wikipedia.org/wiki/The_Corporation_(2003_film)
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The Corporation (2003 film) – Wikipedia
The Economist review, while calling the film “a surprisingly rational coherent attack on capitalism’s most
important institution” and “a thought-provoking account of the firm”, calls it incomplete. It suggests that
the idea for an organization as a psychopathic entity originated with Max Weber, in regards to
government bureaucracy. The reviewer remarks that the film weighs heavily in favor of public ownership
as a solution to the evils depicted, while failing to acknowledge the magnitude of evils committed by
governments in the name of public ownership, such as those of the Communist Party in the former Soviet
Union[9] or by monarchies and the Church.
An interview clip with psychiatrist Robert D. Hare appears for several minutes in The Corporation. A
pioneer in psychopathy research whose Hare Psychopathy Checklist is used in part to “diagnose”
purportedly psychopathic behavior of corporations in the documentary, Hare has since objected to the
manner in which his work was presented in the film and the use of his work to bolster what he describes
as the film’s questionable thesis and conclusions. In Snakes in Suits: When Psychopaths Go to Work
(2007; co-written with Paul Babiak), Hare writes that despite claims by the filmmakers to him during
production that they were using psychopathy metaphorically to describe “the most egregious” corporate
misbehavior, the finished documentary obviously intends to imply that corporations in general or by
definition are psychopathic, a claim that Hare emphatically rejects:
To refer to the corporation as psychopathic because of the behaviors of a carefully selected
group of companies is like using the traits and behaviors of the most serious high-risk
criminals to conclude that the criminal (that is, all criminals) is a psychopath. If [common
diagnostic criteria] were applied to a random set of corporations, some might apply for the
diagnosis of psychopathy, but most would not.[10]
However, in his monologue in The Corporation and the transcript with added comments, Hare, in
addition to pointing out differences between corporations, clearly uses generalized terms such as “tend”,
“most”, “almost”, “routinely”, “much the same”, “almost by their very nature”, and “by definition” with
regard to numerous of his characterizations of psychopathy applying to corporations.[11] Nonetheless,
Hare insists that his guarded, qualified comments on the “academic exercise” of diagnosing certain
corporations as psychopathic was used in support of a larger thesis that he was not informed in advance
about and with which he did not agree.
Awards
The film was nominated for over 26 international awards [12] including the World Cinema Audience
Award: Documentary at the Sundance Film Festival in 2004, a Special Jury Award at the International
Documentary Film Festival Amsterdam (IDFA) in 2003 and a Genie Award – Documentary in 2005.[13]
See also
Corporatocracy
Empire (Negri and Hardt book) (2000)
Manufacturing Consent: Noam Chomsky and the Media (1992 film), co-directed by Mark Achbar
Manufacturing Consent: The Political Economy of the Mass Media (1988), the book upon which the
eponymous film was based
Psychopathy in the workplace
https://en.wikipedia.org/wiki/The_Corporation_(2003_film)
4/6
Introduction
Copyright 2014. Columbia University Press.
All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law.
Access and Accountability
I have made no criticism in this book which is not the shoptalk of
reporters and editors. But only rarely do newspapermen take the
public into their confidence. They will have to sooner or later. It is not
enough for them to struggle against great odds, as many of them are
doing, wearing out their souls to do a particular assignment well. The
philosophy of the work itself needs to be discussed; the news about
the news needs to be told.
—walter lippmann, Liberty and the News, 1920
T
he U.S. business press failed to investigate and hold accountable Wall Street banks and major mortgage lenders in the
years leading up to the financial crisis of 2008. That’s why the
crisis came as such a shock to the public and to the press itself.
And that’s the news about the news.
The watchdog didn’t bark. What happened? How could an entire
journalism subculture, understood to be sophisticated and plugged
in, miss the central story occurring on its beat? And why was it that
some journalists, mostly outside the mainstream, were able to produce work that in fact did reflect the radical changes overtaking the
financial system while the vast majority in the mainstream did not?
This book is about journalism watchdogs and what happens when
they don’t bark. What happens is the public is left in the dark about
and powerless against complex problems that overtake important
national institutions. In this case, the complex problem was the corruption of the U.S. financial system. The book is intended for the lay
reader—not journalists, not finance aficionados—but those whom
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2  Introduction: Access and Accountability
the historian Richard Hofstadter called the “literate citizen[s].” That
would be anyone who wonders why an entirely manmade event like
the financial crisis could take the whole world by surprise.
Few need reminders, even today, of the costs of the crisis: 10
million Americans uprooted by foreclosure with even more still
threatened, 23 million unemployed or underemployed, whole communities set back a generation, shocking bailouts for the perpetrators, political polarization here, and instability abroad. And so on and
so forth.
Was the brewing crisis really such a secret? Was it all so complex
as to be beyond the capacity of conventional journalism and, through
it, the public to understand? Was it all so hidden? In fact, the answer
to all those questions is “no.” The problem—distorted incentives
corrupting the financial industry—was plain, but not to Wall Street
executives, traders, rating agencies, analysts, quants, or other financial insiders. It was plain to the outsiders: state regulators, plaintiffs’
lawyers, community groups, defrauded mortgage borrowers, and,
mostly, to former employees of financial institutions, the whistleblowers, who were, in fact, blowing the whistle. A few reporters
actually talked to them, understood the metastasizing problem, and
wrote about it. You’ll meet a couple of them in this book. Unfortunately, they didn’t work for the mainstream business press.
In the aftermath of the Lehman bankruptcy of September 2008, a
great fight broke out over the causes of the crisis—a fight that’s more
or less resolved at this point. While of course it’s complicated, Wall
Street and the mortgage lenders stand front and center in the dock.
Meanwhile, a smaller fight broke out over the business press’s role.
After all, its central beat—the one over which it claims particular
mastery—is the same one that suddenly melted down, to the shock
of one and all. For business reporters, the crisis was more than a
surprise. There was even something uncanny about it. A generation
of professionals had, in effect, grown up with this set of Wall Street
firms and had put them on the covers of Fortune and Forbes, the front
page of the Wall Street Journal and the New York Times, and the rest,
scores of times. The firms were so familiar, the press had even given
them anthropomorphized personalities over the years: Morgan
Stanley, the “white-shoe” WASP firm; Merrill Lynch, the scrappy
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Introduction: Access amd Accountability  3
Irish Catholic firm, often considered the dumb one; Goldman, the
elite Jewish firm; Lehman, the scrappy Jewish firm; Bear Stearns, the
naughty one, and so on. Love them or hate them, there they were,
blessed by accounting firms, rating agencies, and regulators, gleaming towers of power. Until one day, they weren’t.
Critics contended, understandably, that the business press must
have been asleep at the wheel. In a March 2009 interview that would
go viral, the comedian Jon Stewart confronted the CNBC personality
Jim Cramer with the problem.1 Stewart said, in effect, that business
journalism presents itself as providing wall-to-wall, 24/7 coverage of
Wall Street but had somehow managed to miss the most important
thing ever to happen on that beat—the Big One. “It is a game that
you know is going on, but you go on television as a financial network
and pretend it isn’t happening,” is how Stewart framed it. And many
understood exactly what he meant.
Top business-news professionals—also understandably, perhaps—have defended their industry’s pre-crisis performance. In
speeches and interviews, these professionals assert that the press
in fact did provide clear warnings and presented examples of precrisis stories that told about brewing problems in the lending system
before the crash. Some have gone further and asserted that it was the
public itself that had failed—failed to respond to the timely information the press had been providing all along. “Anybody who’s been
paying attention has seen business journalists waving the red flag for
several years,” wrote Chris Roush, in an article entitled “Unheeded
Warnings,” which articulated the professionals’ view at length.2
Diana Henriques, a respected New York Times business and investigative reporter, defended her profession in a speech in November
2008: “The government, the financial industry and the American
consumer—if they had only paid attention—would have gotten
ample warning about this crisis from us, years in advance, when
there was still time to evacuate and seek shelter from this storm.”
There were many such pronouncements. Then the press moved on.
It is only fair to point out that, beyond speeches and assertions,
the business press did not publish a major story on its own peculiar role in the financial system before the crisis. It has, meanwhile,
investigated and taken to task, after the fact, virtually every other
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4  Introduction: Access and Accountability
possible agent in the crisis: Wall Street banks, mortgage lenders, the
Federal Reserve, the Securities and Exchange Commission, Fannie
Mae, Freddie Mac, the Office of Thrift Supervision, the Office of the
Comptroller of the Currency, compensation consultants, and so on.
On it own role, the press has been notably silent. This kind of forensic work is entirely appropriate. But what about the watchdog?
In the spring of 2009, the Columbia Journalism Review, where I
work as an editor, undertook a project with a simple goal: to assess
whether the business press, as it contended, did indeed provide the
public with fair warning of looming dangers when it could have made
a difference. The idea was to perform a fair reading of the record of
institutional business reporting before the crash. I created a commonsense list of nine major business news outlets (the Wall Street
Journal, Fortune, Forbes, Businessweek, the Financial Times, Bloomberg, the New York Times, the Los Angeles Times, and the Washington
Post) and, with the help of two researchers, used news databases
to search for stories that could plausibly be considered warnings
about the heart of the problem: abusive mortgage lenders and their
funders on Wall Street. We then asked the news outlets to volunteer
their best work during this period, and, to their credit, nearly all of
them cooperated. (A description of the methodology can be found
in chapter 7.)
The result was “Power Problem,” published in CJR in the spring
of 2009. Its conclusion was simple: the business press had done
everything but take on the institutions that brought down the financial system. As I’ll discuss in later chapters, the record shows that
the press published its hardest-hitting investigations of lenders and
Wall Street between 2000 and 2003, even if there were only a few of
them. Then, for reasons I will attempt to explain, it lapsed into useful but not sufficient consumer- and investor-oriented stories during the critical years of 2004 through 2006. Missing are investigative stories that directly confront powerful institutions about basic
business practices while those institutions were still powerful. The
watchdog didn’t bark.
To read various journalistic accounts of mortgage lending and
Wall Street during the bubble is to come away with radically differing representations of the soundness of the U.S. financial system. It
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Introduction: Access amd Accountability  5
all depended on what you were reading. Anyone “paying attention”
to the conventional business press could be forgiven for thinking
that things were, in the end, basically normal. Yes, there was a housing bubble. Any fair reading of the press of the era makes that clear,
even if warnings were mitigated by just-as-loud celebrations of
the boom. And yes, the press said there were a lot of terrible mortgage products out there. Those are important consumer and investor issues. But that’s all they are. When the gaze turned to financial
institutions, the message was entirely different: “all clear.” It’s not
just the puff pieces (“Washington Mutual Is Using a Creative Retail
Approach to Turn the Banking World Upside Down”; “Citi’s chief
hasn’t just stepped out of Sandy Weill’s shadow—he’s stepped out of
his own as he strives to make himself into a leader with vision”; and
so on) or the language that sometimes lapses into toadying (“Some
of its old-world gentility remains: Goldman agreed to talk for this
story only reluctantly, wary of looking like a braggart”; “His 6-foot-4
linebacker-esque frame is economically packed into a club chair in
his palatial yet understated office”);3 it’s that even stories that were
ostensibly critical of individual Wall Street firms and mortgage lenders described them in terms of their competition with one another:
would their earnings be okay? There was a bubble all right, and the
business press was in it.
Trouble was, the system it was covering was going to hell in a
hand basket. Institutionalized corruption, fueled by perverse compensation incentives, had taken wing. The subpriming of American
finance—the spread of a once-marginal, notorious industry to the
heart of the financial system—was well underway. If this had been a
big secret, that would be one thing, but if that were true, how was it
that Forbes, of all magazines, could write a scathing exposé of Household Finance, then a subprime giant, under the headline “Home
Wrecker” in 2002, but not follow it up with a similar piece until it
was too late?4 How could the Wall Street Journal publish stories like
the brilliant “Best Interests: How Big Lenders Sell a Pricier Refinancing to Poor Homeowners . . .” around the same time, on its prestigious Page One, then nothing of the sort later, when the situation
got much, much worse.5 Meanwhile, still in 2003, a reporter named
Michael Hudson was writing this:
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6  Introduction: Access and Accountability
A seven-month investigation by Southern Exposure has uncovered a pattern of predatory practices within Citi’s subprime
units. Southern Exposure interviewed more than 150 people—
borrowers, attorneys, activists, current and ex-employees—
and reviewed thousands of pages of loan contracts, lawsuits,
testimony and company reports. The people and the documents provide strong evidence that Citi’s subprime operations
are reaping billions in ill-gotten gains by targeting the consumers who can least afford it.6
Who is Michael Hudson? And what on earth is Southern Exposure?
For that matter, why was an urban affairs reporter for an alternative
weekly in Pittsburgh, with no financial reporting experience, able to
write this (emphasis added):
By its very nature, the mortgage-backed securities market encourages lenders to make as many loans at as high an interest rate as possible. That may seem a prescription for frenzied and irresponsible
lending. But federal regulation, strict guidelines by Fannie Mae
and Freddie Mac, intense and straightforward competition
between banks, and the relative sophistication of bank borrowers have kept things from getting out hand, according to the
HUD/Treasury reporter. Those brakes don’t apply as well in the
subprime lending market, where regulation is looser, marketing
more freewheeling and customers less savvy.
The date? 2004.7
One type of journalism told one kind of story; another presented
an entirely different reality. What accounts for these dramatically
opposed representations? And why was the conventional business
press perfectly capable of performing both kinds of journalism when
the problems were small but incapable of providing the valuable,
powerful kind later, when it counted?
Walter Lippmann, the great twentieth-century journalist and
thinker, is as right today as he was in 1920. It’s not enough for reporters and editors to struggle against great odds as many of them have
been doing. It’s time to take the public into our confidence. The news
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Introduction: Access amd Accountability  7
about the news needs to be told. It needs to be told because, in the
run-up to the global financial crisis, the professional press let the
public down.
It needs to be told, and told now, because the mortgage crisis
and its aftermath have coincided with a crisis in the news business.
Google and a new vanguard of Internet companies have wreaked
havoc on traditional news-media business models, siphoning away
a huge chunk of the advertising revenue that had long sustained
American journalism. Once-great newsrooms have been devastated,
and thousands of former print reporters are out on the street or in
PR. Their former colleagues now operate in a harrowing and harried new environment of financial distress and sped-up productivity requirements. Meanwhile, a new digital journalism ecosystem
has bloomed with new publications, models, forms, practices, idioms, tools, and institutions—and new people. A whole generation of
journalists, many from technological backgrounds, has entered the
field, it seems, even since the Los Angeles Times’s parent company
went bankrupt in 2008. There is conversation and community.
There is also chaos and confusion.
Another fierce argument is underway about the future of news—
about who will do it, what it will look like, and, indeed, who—or
what—is this “public” that journalism is supposed to be speaking to.
As in all times of crisis, the consultants, marketers, and opportunists of various stripes—never far from journalism—step forward to
proclaim that they know what the future holds. But in fact, no one
really knows. The only thing we can be sure of in journalism is that
everything is in question, everything on the table: business models, forms, roles, practices, values. Will news organizations survive?
Can amateur networks help? Is storytelling out of date? Is statistical
analysis—known as Big Data—the next breakthrough? That the new
digital era has not lived up to its promise is no reason to dismiss it.
So we stand at a moment when established journalism can be
fairly said to have failed in a basic function, and, as usual, the future is
uncertain. And the present, well, it’s a bit of a mess. Is there no hope?
Actually, there is. One form of journalism has proven itself a reliable and effective advocate for the public interest, a true watchdog,
and proven itself at least since the great Ida Tarbell in the early
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8  Introduction: Access and Accountability
twentieth century. This kind of journalism is not a medium, like print
or TV. It’s not an institution, like the New York Times or the Huffington Post. It’s neither alternative nor mainstream. It’s not necessarily
professional or amateur. It’s neither inherently analogue nor digital.
It’s a practice.
The practice—the one watchdog the public can count on—has
never really had a good name. Sometimes it’s called “accountability
reporting.” Sometimes it’s called “investigative reporting.” Sometimes it’s called “public-service reporting” or “public-interest reporting.” Sometimes it’s called something else. We’ll go with “accountability reporting.” Accountability reporting is a journalism term of
art—the shoptalk of reporters and editors, as Lippmann would put
it. But it’s one the public would do well to better understand.
Accountability reporting sounds like something everyone would
be for, but that’s actually not the case. It only arrived as a mainstream, professionalized practice in the 1960s and has had to fight for
its existence within news organizations ever since. Confrontational
and accusatory, it provokes the enmity of the rich and powerful as a
matter of course. When Theodore Roosevelt dubbed it “muckraking” in 1906, he didn’t mean it as a compliment.8 Risky, stressful,
expensive, and difficult, it perennially faces resistance within news
organizations and tries the patience of bureaucrats, bean counters,
and hacks. News corporatists, such as the late USA Today founder
Al Neuharth and the mogul Rupert Murdoch, deride public-service
reporting—or anything that resembles it—as a form of elitism, an
affectation of prize-mongering and self-important reporters, journalists writing for “other journalists,” as one Murdoch biographer
puts it.9 Withholding resources for public-interest reporting, as we’ll
see, is invariably couched as opposition to “long” and “pretentious”
stories foisted on the public by “elitist” reporters. But opposing long
and ambitious stories is like fully supporting apple pie but opposing
flour, butter, sugar, and pie tins. In the end, there is no pie.
In our digital age, impatience with accountability reporting is, if
anything, more pronounced. As we’ll see, the economics and technological architecture of online news militate against accountability
reporting. As a result, digital-news advocates, too, tend to ignore it
or dismiss it altogether. “The whole notion of ‘long-form’ journalism
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Introduction: Access amd Accountability  9
is writer-centered, not public-centered,” as Jeff Jarvis, a leading
digital-news thinker, tweeted.10 Yet accountability reporting is a
core function of American journalism. It is what makes it distinctive,
what makes it powerful when it is powerful, independent when it is
independent. It is the great agenda setter, public-trust builder, and
value creator. It explains complex problems to a mass audience and
holds the powerful to account. It is the point.
Now, I would suggest, is a good time to consider what journalism
the public needs. What actually works? Who are journalism’s true
forefathers and foremothers? Is there a line of authority in journalism’s collective past that can help us to navigate its future? What creates value, both in the material sense and in the sense of what is good
and valuable in American journalism?
Accountability reporting comes in many forms—a series of revelations in a newspaper or online, a book, a TV magazine segment—
but its most common manifestation has been the long-form newspaper or magazine story, the focus of this book. Call it the Great Story.
The form was pioneered by the muckrakers’ quasi-literary work in
the early twentieth century, with Tarbell’s exposé on the Standard
Oil monopoly in McClure’s magazine a brilliant early example. As
we’ll see, the Great Story has demonstrated its subversive power
countless times and has exposed and clarified complex problems for
mass audiences across a nearly limitless range of subjects: graft in
American cities, modern slave labor in the United States, the human
costs of leveraged buyouts, police brutality and corruption, the
secret recipients of Wall Street of government bailouts, the crimes
and cover-ups of media and political elites, and on and on, year in and
year out.11 The greatest of muckraking editors, Samuel S. McClure,
would say to his staff, over and over, almost as a mantra, “The story is
the thing!” And he was right.
Accountability reporting can be juxtaposed against “access
reporting,” another journalistic term. Access reporting, the practice of obtaining inside information from powerful people and
institutions, is the long-standing rival of accountability reporting.
They are American journalism’s two main tendencies, and the tension between the two can be said to define the field. These are competing sets of journalism practices, values, and worldviews that
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10  Introduction: Access and Accountability
dramatically affect the content of the news the public reads. The
access and accountability schools represent radically different
understandings of what journalism is and whom it should serve. The
two practices produce entirely different representations of reality,
and this difference proved critical in the run-up to the crash.
Access reporting emphasizes gaining inside information about
the actions or intentions of powerful actors before they are widely
known. Its stock-in-trade is the scoop, or exclusive. In business
news, the prototypical access story is the mergers-and-acquisitions
scoop. Accountability reporting, in contrast, seeks to gather information not from but about powerful actors. The typical accountability story is the long-form exposé.
I usually keep in mind proxies for the two schools: Gretchen
Morgenson, the great investigative reporter and editor for the
New York Times, and Andrew Ross Sorkin, who runs a thriving unit
of the same paper that focuses on inside scoops about business
mergers and acquisitions, Dealbook. Morgenson was the first to
reveal—in the face of furious opposition from Goldman Sachs,
among others—the beneficiaries of the bailout of the American
International Group, namely, well, Goldman Sachs and other Wall
Street banks. Sorkin’s monumental crisis book, Too Big to Fail, lionized Wall Street figures for their (failed) efforts to avert a catastrophe their own institutions had caused. That the two leading
representatives of the two journalism poles work for the same newspaper only emphasizes the degree to which journalism must balance
both tendencies.
One way to think about the difference is that access reporting
tells readers what powerful actors say while accountability reporting tells readers what they do. The differences are so stark that they
can be plotted on a graph, and I do so in chapter 5. Access reporting
tends to talk to elites; accountability, to dissidents. Access writes
about specialized topics for a niche audience. Accountability writes
about general topics for a mass audience. Access tends to transmit
orthodox views; accountability tends to transmit heterodox views.
Access reporting is functional; accountability reporting is moralistic. In business news, access reporting focuses on investor interests;
accountability, on the public interest.
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Introduction: Access amd Accountability  11
Access and accountability, then, are journalism’s Jacob and Esau,
Gog and Magog, forever in conflict over resources, status, and influence. But it’s hardly a fair fight. Access reporting is journalism’s
dominant strain, its bread and butter. Its stories are, if not easier, certainly quicker to produce and rarely confrontational, making them
more compatible with news-productivity needs. Accountability
reporting, meanwhile, is forever marginal, a cost center, burdened
with stories that are time consuming, stressful, and enemy making.
Access reporting is halfway around the world while accountability
reporting is still putting on its shoes. But of the two strains, only one
speaks to, and for, the broader public.
I come to this debate from a thirty-year career as a journalism
practitioner, ten of those as an investigative reporter, ten as a business reporter. I’ve done both access and accountability reporting
and understand the necessity of both. The problem for journalism
and the public, however, is that accountability reporting is at once
the most vital and, at the same time, the most vulnerable. The difference between the two is the difference between probing Citigroup in
2003 and profiling it in 2006. Put simply, accountability reporting—
the watchdog—got the story that access reporting missed.
This book will trace the development of the watchdog from its
roots in muckraking and its struggle to win a place in the mainstream
media. In a sense, I hope to write the story of the Great Story. The reasons for this historical approach are threefold: to demonstrate that
accountability reporting is indeed a potent weapon on the public’s
behalf; to show why its absence was so harmful during the mortgage
era; and to secure its future in whatever journalism emerges from the
digital disruption—because without accountability reporting, journalism has no purpose, no center, no point.
The first goal is especially important in order to rebut what I
regard as facile criticisms, from both the political right and left and
the digital-news advocates, that tend to dismiss all “mainstream
media” as either hopelessly biased (as the right contends), uselessly
timid (as the left has it), or just generally lame (as new-media enthusiasts believe). All three critiques may have some merit. Much of the
old MSM indeed should be left by the wayside. But the practice of
accountability reporting is not one of them.
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12  Introduction: Access and Accountability
The access-accountability tension has been a key fault line running through professional American journalism since least the time
of Ida Tarbell, the great muckraker who is the subject of chapter 1,
and Charles Dow, Edward Jones, and Clarence Barron, founders of
Dow Jones & Co., publisher of the Wall Street Journal, discussed in
chapter 2. Indeed, in business journalism, access and accountability reporting began as separate functions performed by separate
institutions representing entirely different journalism subcultures.
Both styles of journalism purported to cover business and the economy, yet their work contained radically different representations of
reality. One strain of business journalism provided information to
emerging markets. But muckraking changed the world. It also laid
the foundations for journalism’s accountability school and its practitioners were, as we’ll see, heroes of their day. Despite the many
changes in the business-news industry, exactly what the muckrakers
did and how they did it are relevant for us today.
Business news, as we’ll see, has roots in an entirely different tradition, an intramarket messaging function. It was born of access
reporting, which remains a core function. Early business journalism
was actually part of the emerging financial system that it covered.
Valuable in its own way, it also left a problematic legacy.
The history of U.S. business news over the twentieth century is
the story of expansion, a broadening of its audience and its own ideas
about itself. The flowering of business journalism was led by the
great Wall Street Journal editor and news executive Bernard Kilgore,
who brought storytelling, narrative, in-depth reporting, and investigations to financial news and, in doing so, revolutionized both it and
American newspapers in general. Building on Henry R. Luce’s ambitious business magazine, Fortune (founded 1930), Kilgore bestowed
on business journalism its most powerful weapon: the Great Story.
As a consequence, he was a key figure in the democratization of
financial and economic knowledge for the American middle-class.
That’s chapter 3.
In chapter 4, we’ll see how the accountability values of the muckrakers were incorporated into mainstream media, beginning in the
1960s, in the form of the investigative-reporting movement at metropolitan newspapers, and how those values extended to business
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Introduction: Access amd Accountability  13
coverage. Despite the fact that accountability reporting did not
always come easily to business news culture, we’ll see that the mainstream business press has in the past grappled with, investigated,
and held to account corporate and financial miscreants of all stripes,
and done so with vigor. In these chapters, we’ll meet, among others,
the reporter Michael Hudson of the Roanoke Times and later of the
Wall Street Journal, whose work during the 1990s and 2000s exposed
the financial system’s radicalization for anyone who wanted to know.
But journalism norms change over time. I’ll argue that in the
1990s, with the stampede of the middle class into the stock market,
business news shifted to accommodate them. The balance of business news tipped away from public-interest reporting and toward
insider, investor-oriented concerns, a process coinciding with and
influenced by the rise of CNBC (chapter 5). This emphasis on speedy,
access-oriented, investor-focused journalism only increased after
2000, when news organizations’ own finances were rocked, first
by the “Tech Wreck” and the ad recession that followed and later
by the toll taken by the rise of the Internet. As we’ll see, the Internet, besides wrecking news-industry finances, also presents severe
structural barriers to accountability reporting.
As the twenty-first century dawned, business news pulled back
from its own sense of mission, moving toward insiderism, granularity, and scoopism. Meanwhile, business and especially Wall Street
grew in size and power. Most consequentially, beginning in the early
1990s, Wall Street and the financial sector generally moved into
and vastly expanded the rough-and-tumble business of subprime
lending and, in doing so, adopted its ethics and norms. Put another
way, the down-and-dirty, street-corner values of the subprime/
consumer-finance business, unchecked by Bush/Greenspan-era
regulation, spread to mainstream banking while parts of the press
fought to keep it check (chapter 6).
One of the most notable and frustrating aspects of the precrash
journalism story is that mainstream organizations, feeding off regulatory and public activism about predatory lending, did their most
impressive, hard-hitting work, as noted, from 2000 through 2003,
before the mortgage frenzy did its worst damage. What’s more, the
reporting was effective in helping to police some of the worst actors
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14  Introduction: Access and Accountability
in the subprime sector. When Big Journalism took on Big Finance,
journalism won (chapter 7).
Generally, though, business news, caught in old paradigms, was
incapable of grasping this financial radicalization. Some journalists,
including Gillian Tett of the Financial Times, reported on the derivatives industry and wrote of looming troubles there and potential risks
to institutions and the financial system. Hudson and others, meanwhile, saw the increasingly rogue behavior of the mortgage industry
from the street level, but their reporting was published mostly in
smaller, alternative publications and was not able to break through
and inform the journalists who were trying to puzzle through the
new world of financial derivatives. Mainstream business publications, focused on corporate executive boardrooms, had no way of
knowing of the unseemly process—the perverse incentives, misrepresentations, forgery and fraud, and mortgage “boiler rooms”—that
had produced the loans that made up the raw material of subprime
derivatives. As a result, reporting on derivatives could only warn of
risk and leverage, which might fail, not of institutionalized corruption and systemic fraud, which could only fail (chapter 8).
At best, business media produced work that only hinted at the radicalization of the financial sector. And when I say that institutional
business media “failed to investigate big lenders and their Wall Street
backers,” this is not an assertion or a guess. The mainstream business
press did produce work that was exemplary, risky, and valuable. But
it did not directly confront major financial institutions about basic
business practices, a failure that was especially glaring during the
critical years of 2004 through 2006. And to repeat, this is not a detail.
Muckraking reporting about wrongdoing by brand-name institutions—while they were doing wrong—was the missing “facts” that
were not “quickly and steadily available,” as Walter Lippmann puts
it, during the critical years before the blowup.12 Meanwhile, investororiented, insider-focused journalism—the corporate profiles and
features on Wall Street houses and big banks—not only missed the
story but was part of the problem, and not a small one (chapter 9).
Now what?
As the argument about the future of news rages on, technologically centered ideas have gained the upper hand, coalescing into
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Introduction: Access amd Accountability  15
something I call the “Future of News” (FON) consensus, which has
roots in network theory. Some of the ideas are promising and have
already been helpful. On the other hand, it has been unnerving to witness how the Internet’s strengths—limitless space, a 24/7 publishing
schedule, precise quantity and popularity metrics—have meshed
with old-fashioned corporate imperatives of sped-up reporter productivity and indifferent journalism quality. High-flown rhetoric of
futuristic digitism is deployed, as we’ll see, to justify reckless and
unnecessary cost cuts in regional newsrooms and to marginalize
reporting in the public interest. Digitally driven journalism, both in
current theory and practice, actually shares more traits with access
reporting than with accountability reporting. Unless rethought, it
represents a darkening cloud over the future of news.
But that’s chapter 10. Now, it’s time to begin at the beginning.
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