06/24/2010 05:12 am ET Updated May 25, 2011

Peter Baker and David Herszenhorn: Wall Street Reform Reporting Lacking

The massive trading and swapping of Collateralized Debt Obligations (CDOs) and other abstractions cooked up by the fertile minds of sociopathic Wall Street "traders" not only did nothing to lubricate the real economy through financial intermediation, but they helped bring down the entire system and cost taxpayers hundreds of billions of dollars.

The role of the ratings agencies, Moody's, Standard & Poor's, and Fitch, as Senator Carl Levin's committee is methodically uncovering, was nothing short of disgraceful. Writing down trillions of dollars worth of Mortgage Backed Securities (MBSs) from "Triple-A" to junk is pretty extreme and the internal emails show they knew exactly what they were doing. The few people in these agencies who still valued being truthful to investors sent warnings to their superiors that were ignored. Turns out the top brass didn't want to lose market share or the lucrative contracts from corrupt issuers who were peddling garbage but needed it labeled "investment grade." In the end, it was the pension plans of fire fighters, police officers, and teachers that took the losses while the rating agencies and the investment banks (along with hedge fund managers like John Paulson) walked away with the cash.

The press must bear some responsibility. Here's how the New York Times' Peter Baker and David M. Herszenhorn conclude their piece that appeared in the paper edition on Friday describing the recent lying by Congressional Republicans about President Barack Obama's Financial Reform proposals:

"Democrats rebutted Republican criticisms on Thursday at a news conference where they showed video clips of Republican leaders making what Democrats called false assertions about the bill. Republicans argued Democrats had not been honest with the American people."

Many of the same journalists, especially those in the business press, who were cheerleaders for Wall Street at the height of the housing bubble are so bought into the system they are now muddying the waters about the legislation that tries to correct the problem. Baker and Herszenhorn are telling their readers that even videotapes of Republicans lying about financial reform are not enough. They give us the bland and falsely "balanced" idea that they simply cannot check for themselves who is lying and who is telling the truth. This article is a very bad sign because it shows that even among the "paper of record" the press is determined to carry water for the richest, most powerful interests on Wall Street. Even the title of their piece, "Obama Chastises Wall Street . . ." is demeaning to the importance of what the President is trying to do. Shouldn't Baker and Herszenhorn explain whether or not the current legislation really is a "permanent bailout bill" as the Republicans have been claiming?

Now, apparently even video tapes of politicians lying are not enough evidence for journalists to draw a conclusion. I suppose all of those surveillance videos of guys robbing liquor stores also have no weight as evidence.

Maybe Baker and Herszenhorn should take a look at some very recent history of what went on at Enron when its "traders" were bilking California's energy market to refresh their memories and help them learn how to discern truth from falsehood. Here's but one exchange between two Enron energy traders who by today's standards on Wall Street would be considered boy scouts:

"He just fucks California. He steals money from California to the tune of about a million."

"Will you rephrase that?"

"OK, he, um, he arbitrages the California market to the tune of a million bucks or two a day."

"If you took down the steamer, how long would it take to get it back up?"

"Oh, it's not something you want to just be turning on and off every hour. Let's put it that way."

"Well, why don't you just go ahead and shut her down."

"They're fucking taking all the money back from you guys?"

"All the money you guys stole from those poor grandmothers in California?"

"Yeah, grandma Millie, man"

"Yeah, now she wants her fucking money back for all the power you've charged right up, jammed right up her asshole for fucking $250 a megawatt hour."

"Burn baby, burn, it's a beautiful thing."

After all the country has been through in recent years, the lost productivity and the taxpayer bailouts of the biggest investment banks; and after all the suffering caused by the massive layoffs and home foreclosures that have devastated communities and destroyed families, the best our elite journalists can do is tell us that they have no way to discern who is lying and who is telling the truth? The truth is that Wall Street, and those on Capitol Hill defending the practices that brought down the economy and now oppose any new regulations, are worthy of nothing but our contempt. The old standard of fake journalistic "balance" just doesn't apply in this circumstance.