The Audit's Dean Starkman, writing the cover story in the most recent Columbia Journalism Review, has produced a longish essay that attempts to advance a critique he's been making for awhile now. Starkman several years ago argued that business journalism, in its failure to predict the real estate bubble, demonstrated the same sort of insider corruption and myopia of, say, Wall Street and the regulators. Business and financial journalism, in short, has been captured by malign forces mostly on Wall Street and, like those dastardly political reporters, seduced by the siren song of insider access, free food and PR careers. In this new essay, Starkman takes that thesis as gospel -- and in certain circles it undoubtedly is quite popular -- while dismissing arguments against it as the bleating of "insiders," who, he implies, have no interest in the public welfare. Starkman wields broad strokes like a house painter and sums it all up with sweeping certainty in the cover line of the piece: "How the business press forgot the rest of us."
Let's come clean before we start. First, by Starkman's definition, I am technically an "insider." So be forewarned: Don't believe a word I say. The Deal is a "trade" (and Starkman cannot help but use that word as if it were a disease) that reports on wholesale finance, meaning, in part, Wall Street. I worked nearly a decade at another "trade," Institutional Investor, and learned the business at Forbes and Financial World. (I also spent some years working on two books, a long way from the calls of commerce I promise you.) Nonetheless, I will forge on. In this essay, Starkman lays out an historical schema, which suggests that business journalism struggled up a long ascent from parochial, insider concerns to the high plain of public service, only to descend again to a ditch full of grasping investors. Starkman's evidence for all this is scanty to arguable to nonexistent; most of this historical ascent involves only The Wall Street Journal, where Starkman once worked, and which comes across as the only journalistic organ that matters -- at least until things go to hell and he can blame it all on television and, bizarrely, M&A reporting.
Second, a confession. I'm not absolutely sure what Starkman is getting at here. Or rather, I understand that cover line, but how all the pieces of this wandering argument, with its qualifications and asides, fit together is baffling.
Starkman's argument does mirror many of the single-cause critiques of the financial crisis: It harkens back to a purer, better time, when the public was better served, the middle class was large, factories hummed, and investigative journalism thrived. The resulting nostalgia is shin high, if unsurprising: For most of my career, journalism has been said to be in decline from vaguely better days, with the temporary exception of Watergate. In his view, this Eden appears to be the '50s and is embodied in a single man: WSJ editor Barney Kilgore, who effectively reinvented the paper. What is remarkable here is how little Starkman has to say about this era where he believes business journalism reached out to serve the public, as opposed to insiders and investors.
"Much of the business-press history since Kilgore has been one long struggle -- sometimes successful -- to transcend its roots as a servant to markets, and to become, in addition, a watchdog over them. The list of misbehaving industries exposed in investigations and analysis over the years by the business press -- tobacco; auto; liquor; chicken plants; medical devices; even, once in a while, sort of, Wall Street -- is long and impressive. Nonbusiness institutions, too, like government and unions, have come under business-press scrutiny." What's remarkable about this recitation is that nearly every one of these exposés could well be written for both investors and the public. Indeed, the WSJ as much as any press vehicle convinced readers that investors were the public.
Eden, of course, implies the Fall. The Fall, in an historical scheme like this, suggests a conspiracy: snake, apple, woman, man -- and soon you're sweating behind a plow. (Starkman at one point cites the late Columbia University historian Richard Hofstadter on the notion of a "literate" public. Hofstadter, of course, is best known for his studies of paranoia in American political and intellectual life; he would recognize the roots of Starkman's populist historical morality play.) What's strangest about Starkman's argument is his depiction of this fall, which seems to occur in the late '90s (Kilgore died in 1967). He begins with Steve Lipin, the fine Wall Street Journal M&A reporter who established the paper as the go-to vehicle for M&A announcements in the late '90s ("established," because the WSJ had long had a powerful franchise in that area). Under Lipin, who, Starkman sniffs, toiled in the "trades" before somehow arriving at the WSJ, the paper dominated in deal scoops, particularly on Mondays. Lipin did excellent reporting, and the beat was a pressure cooker. But a number of these scoops were, as our own Yvette Kantrow reported over a decade ago, pretty clearly "placements," leaked by the merging parties to get their case before an investing public. Starkman characterizes the rise of Lipin as a "divide," as a "watershed moment" when the WSJ abandoned its interest in reporting for the public to reporting for "insiders" -- who he later inflates into "investors." Others, he adds, traveled the same path: Will Lewis, who broke some deals for the Financial Times around that time in New York (but whose real contribution was to use the Web to publish scoops in real time, thus undercutting the WSJ, which chose to wait for the paper), and The New York Times' Andrew Ross Sorkin, who built his career on M&A.
What he doesn't mention is that as important as M&A scoops were to the WSJ, they were just one part of an increasingly complex and varied paper -- and one reaching out with some desperation to a more diverse readership. What he also doesn't say is that era of frenzied competition for deal scoops ended somewhere in the early-2000s, when the market no longer reflexively rewarded M&A deals. It hasn't returned. Lipin left the WSJ for deal PR at Brunswick before then. M&A plays a relatively minor role at the Murdoch-era WSJ, which in Starkman's logic of descent, would represent a new low.
Starkman leaves out much of the context around that late '90s period. Lipin seems to come from nowhere. In fact, Lipin was riding a powerful bull market, driven in part by expanding M&A activity that had been growing since the late '60s, most spectacularly in the '80s. By the late '90s, M&A was a big business -- big enough for our founder, Bruce Wasserstein, to start a paper, The Daily Deal, dedicated to it in 1998. (Starkman believes all M&A is bad, but that's another matter.) But it wasn't just the growth of the business. It was the fact that equity markets were exploding, in large measure not because of M&A, but because of the high-tech and Internet boom. Starkman makes a lot of the "insider" (meaning Wall Street) connotations of new-media vehicles like Jim Cramer's "The Street," "Fast Company" and "MarketWatch." But he ignores the larger trend: They were all tossed up not by Wall Street but by tech mania, joining the big three business magazines and an entire business magazine segment in California ("Upside," "Red Herring," "Business 2.0" and "Industry Standard") in the unseemly, and ultimately destructive, stampede to embrace tech. These magazines were stuffed with tech advertising and catered to a huge readership enamored of dot-coms, IPOs and the Internet. They could care less about M&A scoops.
This brings us to Starkman's second snake in the grass. If Lipin was a sign of decline, CNBC comes off as the veritable Great Satan. Starkman takes the fact that CNBC used the daily drama of the stock market and turned it into a sporting event (creating "stars" like Maria Bartiromo who in Starkman's scheme is analogous to Lipin and represents "something changing in the culture") and decides it poisoned -- corrupted -- business journalism. It was all CNBCs fault! CNBC is responsible for the short, fragmentary, "granular" dispatches shorn of context that Starkman now sees taking over the business and driving out what little reporting and explanatory journalism for the "public" that existed. CNBC was the death knell of long-form feature writing and investigative reporting. By extension, CNBCification was responsible for missing everything from the dot-com bubble to subprime. CNBC was the thread to an even later villain, Cramer, and to the famous Jon Stewart evisceration, which Starkman interprets as fingering "the fundamental tension of the age" between investors and the public. Did I miss something in the famous episode of "The Daily Show"?
All this is remarkably simplistic and wrong. True, CNBC was built (by evil Republican Roger Ailes, now a Murdochian) for an investing audience -- and its 200,000 or so daily viewership is decent for cable, though hardly mass. It wasn't the first market show on cable or the first show for investors; hello Lou Rukeyser on, of all places, PBS. Yes, it tends to be discursive, fragmentary and episodic, occasionally shallow or myopic (after all, it's just stocks). It's television! Besides, business and financial journalism has been shaped by investors, as even Starkman admits, not just for decades but for centuries. Starkman's potted history of relations between the early press and business and finance may be generally true, but he makes the 17th century resemble today as he searches for the original sin. Most early papers (they were really newsletters, he says: trade again) were designed not to inform markets but to report on maritime matters. This makes sense, since most of their readers lived in ports. Publications, which are commercial vehicles after all, usually have a defined audience in mind, though they vary. Henry Luce aimed Fortune at senior corporate executives; BusinessWeek traditionally targeted managers; Forbes and Barron's sought investors. Before, during and after Kilgore, the WSJ had a strong investor tilt. Kilgore's leaders might have been longer, more sophisticated and better, but its readers remained mostly investors, not some broad "literate" public. Local newspapers had little business coverage that mattered, and increasingly embraced personal finance. And The New York Times and Washington Post business sections shared the investor tilt, as did, before that, the old Herald Tribune. And why not? Sports stories are not written for foodies. The largest population of people interested in business and finance tend to be investors. Local business pages don't focus on personal investors because Bartiromo is sexy but because that's what they think folks want. This is surprising or a sin?
Moreover, Starkman blithely skips across what's by far the most powerfully destructive (and yes: creative as well) trend to traditional narrative journalism: the Internet. Business and finance journalists don't sit around and say: I must be fragmentary and fast to compete with David Faber on CNBC. No, the advent of the Internet, with its explosion of choices and its tyranny of real time, has eroded long-form and rewarded the quick hit, the 24-hour news cycle, the fact or factoid over the considered analysis. It has hollowed out mainstream publications, including the WSJ. It has disrupted everything. This is reality. Television, with its own narrow-casting pressures, sits over there, another world. Right in front of most of us, every single moment, is the pressure of competing in a digital world where information is a commodity and you're only as good as your last scoop or last insight. That's not all that's out there, but it's a predominant theme. (So is opinion, fast and loose, not unlike The Audit or this blog.) This, not CNBC, has destroyed vast swaths of traditional business coverage, particularly in those general-interest vehicles that once spoke, for good or ill, to a general public. This is like paying attention to a case of the sniffles when the bubonic plague is racing through town. But even that metaphor mischaracterizes -- demonizes -- what's going on. It's different. But it's way too soon to tell if it's a disaster.
Starkman is right about one thing: "Investors" are not the same as the "public" (just as, by the way, Wall Street is not the same as money management or private equity or commercial banking), although as Kilgore recognized -- and it has since greatly increased -- there's a sizable overlap. The notion that investors are a proxy for the public stems from two great periods of financial reform: the New Deal in the '30s, when the Securities and Exchange Commission was set up expressly to make markets safe for investors, and the mid-'70s deregulation of Wall Street, which liberated brokerage commissions and saw the passage of Erisa. Starkman manages to write this entire essay, citing Joe Nocera's book on the rise of personal finance, without mentioning the shift from defined benefit to defined contribution retirement plans, which drove millions of Americans into equity markets in the '80s and '90s. This is like missing the Internet. Given that tidal shift, he never bothers to examine exactly how much "investors" have come to make up of the "public." He is quite right that there are stories that can be investigated about issues of import to the broader public and not investors. But that gap has shrunk. Who exactly is the rest of us? Do they consume journalism at all? How can they be reached? And, as the business and financial world has grown more complex and global, can we effectively bridge that chasm between the complex realities at play and potential readers who know little, have lost the habit of consuming "serious" journalism and have a million other distractions as near as their cellphones.
We can all agree that business journalism can be improved. I have my own kit bag of concerns and fears. But Starkman seems to suggest that reforming journalism shouldn't be all that hard -- that it's really a matter of realizing what's gone awry and doing good, of reviving an imagined past. It's infinitely more difficult than that -- and it always has been. The notion of a "public good" is hazy and subjective and the province of demagogues and ideologues. Journalism is inevitably a commercial product and must be sold to an audience to survive -- never more than today. You cannot force people to read or to understand. These subjects are complex and dynamic. It is exactly like not only recognizing a bubble (no trivial task) but also then managing to convince the world of it: easy in hindsight, fiendishly difficult in real time. But perhaps that's just the insider in me talking. Cleanse the soul and Eden beckons again.
Robert Teitelman is editor in chief of The Deal magazine.
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