As The Bailouts Begin, The Media is Rationalizing, Not Reporting
NEW YORK: Politics tends to be reactive. Issues often aren't issues until they make news. Media outlets and political candidates tend to speak out after disasters occur, not before, even when that old handwriting is on the wall.
So it is with the financial crisis, which seems to be toppling bank after bank, affecting company after company and threatening the global economy and the bailouts that followed.
Many of us have been in denial about this financial avalanche perhaps because, until now, we were not directly affected or it seemed abstract, perhaps even incomprehensible. Or perhaps because it has also been a slow-motion crisis building steam since the markets first melted down in August 2007.
What's happened since has been unprecedented: a freeze-up of all credit and massive multi-billion dollar write-downs by brand name banks. Three and a half million families faced foreclosure, and then one after another major financial dominos started toppling, triggering seven interest rate cuts and requiring infusions of capital in the hundreds of billions. Then Bear Stearns fell, followed now by the troubles at Lehman, Fannie Mae, Freddie Mac, AIG, etc....
It doesn't seem to be stopping, as a thousand banks are expected to fall. Words like "bailout" and "plunge protection" are becoming more common. Government officials are now planning to spend $700 billion on a new entity to cleanse the markets of "toxic waste"-what they call "illiquid mortgage assets" -and billions to prop up money market funds. These measures backed by injections of capital seem to be driving the market up. The NY Times even used the "surge" word to euphorically describe the engineered upswing last Friday.
There was little euphoria in the comments section on the Times website where reader after reader was contemptuous and furious about taxpayers being left with the bill from the largest bailout in American history that could eat up 7% of our GDP.
"This 'No Banker Left Behind' proposal will do nothing for the average family," wrote one reader in Texas.
"Lead parachutes for them all," suggested another in Trenton, N.J.
Gregory in Venice Beach, California said, "The Beast is showing it's face. Quick, get a picture of it. Ooops, it's gone."
There's less outrage among politicians. Perhaps because up until this past week, most of the the economic pain and uncertainty leading up to what may still become a catastrophe had mostly been buried in the business section, not up front where politics is given more space. That is probably why these issues had been overlooked by both parties in their platforms and by both leading presidential candidates on the campaign trail.
Events are now forcing them to respond to the disaster, but the issues and choices we face are still not being discussed clearly.
Bloomberg News reported during the conventions that even as we confront the most serious economic crisis since the depression, the reasons our economy is not working are not discussed.
Part of the problem is that media itself is not putting the issue on the agenda, asking candidates about it only in a breaking-news context. Rather than expose predatory subprime loans when Wall Street was riding high, many media outlets were carrying deceptive ads for lenders and credit card companies.
And even now, as disaster threatens, the coverage is tepid, superficial and misleading, as the Marketwatch website argued:
"There was an absence of tough, in-your-face questions... But where was the skepticism or the sense of outrage by the media? We're supposed to be the proxies for the public. When I saw television networks interview the (wo)man on the street during the crisis, I saw more emotion in the faces of ordinary citizens than in those of the journalists."
The same thing must be said about presidential candidates John McCain and Barack Obama. It won't do for McCain to rail against fraud and corruption on Wall Street without someone pointing out that the Republicans have been in charge while all this is going on.
It won't do for Obama to mouth platitudes and make this into a partisan issue when many top Democrats, including his running mate, were on the wrong side during the debate on the 2005 bankruptcy bill.
I have been trying to rouse concern about this crisis dating back to 2006 first with a film In Debt We Trust exposing subprime loans and the role of Wall Street firms that profited on them, the regulators who turned the other way and the press that missed the story. I documented that claim in an article for Harvard's Nieman Reports, a media review.
I have just followed up with a timely book, PLUNDER: Investigating our Economic Calamity (Cosimo) detailing the existence of a white-collar crime wave and a mass of victims who are losing their homes and their hope. Thirty-two publishers passed on it, many saying that I was exaggerating.
As we can all see now, I wasn't. (For more on what's in the book, see the first detailed review by Steven Lendman.)
So far, I am getting more airtime on Al Jazeera and Iranian TV than on the American networks I once worked for. The US network panels are dominated by centrists and journalist who prefer to rationalize what the government is doing rather than report on the implications with any critical inflection. Some will blame greed but others will caution against "playing the blame game." No wonder that the public is rarely told about the origins of the problem and who profited and who lost.
Everyone I know has been shocked with the trillions of dollars that seem to being flushed down the drain, and the fact that some of the companies once considered the smartest of the smart managed to destroy themselves in the grip of unrelenting greed. It is amazing to see conservatives denouncing the former chairman of Goldman Sachs, Henry Paulson, as a Socialist for trying to save the market from itself. It's instructive to see officials wait until the system is unraveling to step in and do something.
So what do we do now?
l. Educate ourselves about how this system collapsed and about the need for new financial regulation and personal financial responsibility. We need to spark a national conversation about these issues.
2. Encourage the politicians we support to get away from symbolic stances and trivia and focus on our economic well-being.
3. Insist that our media explain these structural problems and offers diverse perspectives on how to solve them. We need other voices on the air, especially from the countries we depend on for loans and investments.
4. Demand an economic bill of rights for all Americans that promotes fairness and equality. We must begin thinking about how to promote debt relief in America in the same way that Third World peoples have fought for it for years.
5. Back the campaign of the Institute for American Future to get these issues into our media and on to the agenda. See Ourfuture.org
This financial crisis is going to be with us for a long time and may get much worst before it gets better. The days of denial are over. The days of engagement are here.
Danny Schechter is the blogger-in chief for Mediachannel.org, the director of In Debt We Trust and author of PLUNDER: Investigating Our Economic Calamity now available at online bookstores. Comments to dissector@mediachannel.org.