The media and the meltdown

For the second time in the last decade, journalists are asking a painful question: What did we know and when did we know it?

The country’s media powerhouses botched it on the build-up to war in Iraq. Most cried uncle and issued detailed mea culpas, promising to avoid that kind of quisling group-think in the future.

Then came the economic implosion. And once again we learn that journalists were asleep while the bottom was falling out of the global finance system.

Some pundits — notably Jim Cramer of the business network CNBC — are insisting that they aren’t to blame. Here’s the transcript, reported by Huffingtonpost:

“We weren’t behind this. CNBC, in particular, has been out front on this,” [Cramer] argued, appearing on sister-network NBC. “I think there are people who bear so much more responsibility [than the media] that it’s just wrong-headed — the politicians, the regulators, the SEC, the lenders, the investment banks. … It’s just a naive focus, it really is Meredith.”

Put bluntly, Cramer is wrong. Journalism’s job is to probe aggressively for the truth, not to cheerlead or entertain or pass along corporate press releases.

Through the last eight years, reporters knew that Federal regulators were taking a hands-off approach. The Bush Administration bragged openly about its laissez-faire, deregulatory agenda.

Reporters knew that banks were indulging in more complicated investment mechanisms, with more leveraged debt.

But reporters were swayed by the same “irrational exuberance” that once swept the dot-com industry.

In passing the buck on this failure, journalists run the risk of proving their own irrelevance.

If Cramer and CNBC (and other media outlets) don’t accept this debacle for what it is, and implement real improvements in their editorial policies, who would be stupid enough to trust their reporting in the future?

Tags: economy