So while some lawmakers are arguing that if taxpayers are going to bail out Wall Street screw-ups, then we're entitled to a piece of any future profits -- it's only fair! -- well, maybe taxpayers should also get a cut of the key accessories to the crime: the financial media. After all, if the big bailout is meant to prop up Wall Street firms that would otherwise go under, it stands to reason that the bailout will also prop up the financial media that are dependent on those firms both for reportorial fodder and advertising support.
Bubbles are, simply, media phenomena; irrational exuberance doesn't exist in a silent vacuum. Financial manias are media manias; while they may start with Wall Street greed mongers, they need compliant media -- in particular, financial journalists who are all too happy to drink Wall Street's Kool-Aid -- to really take off.
Of course, just as we're getting more self-pity than humility from Wall Street these days, we're not exactly getting much in the way of mea culpas from the financial press. Nobody's really been stepping up to the plate to say, "With our woefully incomplete and often shamefully gullible reporting on the murky financial underpinnings of the real-estate bubble, we let our readers and/or viewers down."
Not that the media aren't capable of such introspection. We did see a remarkable degree of media self-flagellation in regard to the war in Iraq -- with some media organizations admitting (years later) they were too gullible, too dependent on compromised sources and insufficiently skeptical of Bush administration claims about WMDs and Iraq and al-Qaida links. But I fear that the rushed, unquestioning tenor set by the likes of Rupert Murdoch's New York Post -- sibling of the Fox Business Network -- is more likely to prevail in the aftermath of the crisis. Last week, for instance, the Post splashed "MOVE YOUR A$$!: DEMS DAWDLE ON BAILOUT AS FEAR HITS STOX" on its cover. In other words: Just do what the bureaucrats and Wall Street bigs who got us into this mess say we should do -- and do it right this second, without asking any hard questions.
Really, you could argue that Wall Street, during the subprime boom, was simply doing its job: getting away with what it could get away with. (Hey, if regulators were willing to turn a blind eye to the dubious profiteering and financial smoke-and-mirrors ... well, if the government says it's OK, it's OK, right?) But you can't say the same for much of the press, which spent a lot of time over the past few years celebrating the feats of financial "wizards" -- and not enough time peeking behind the curtains and questioning the too-good-to-be-true magic.
Granted, there's been increased sensitivity in the past couple weeks among some media in regard to, at least, semantics. For instance, in The New York Times last week in a piece titled, "Amid Market Turmoil, Some Journalists Try to Tone Down Emotion," Richard Pérez-Peña noted that some reporters are steering clear of terms such as "meltdown" and "panic" to avoid further inflaming an already-twitchy market.
Don't get me wrong: Politely tip-toeing through the apocalypse after the fact is a nice gesture! But it hardly makes up for the fact that few financial journalists really questioned the meaning and ramifications of toxic Wall Street voodoo such as "credit-default swaps" and such until it was way, way too late.