Journalism and the CNBC effect: before 2007, the press failed to see the growing rot in the U.S. financial system and warn the public. Why?

• Author: Waldman, Steven
• Position: The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism - Book review

The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism

by Dean Starkman

Columbia University Press, 368 pp.

Recessions are, to a great extent, inevitable. But it is not inevitable that they be on the scale of the most recent one, the worst since the 1930s, costing the economy somewhere between $6 trillion and $12 trillion. Nearly 8.7 million jobs were lost, with each of those having untold ripple effects in terms of family life decisions, social mobility, divorces, alcoholism, kids not going to college, depression, and who knows what else on the misery index. The historic scale and devastation resulted from an unusual brew of fraud, regulatory laxity, and deliberate and misguided corporate decisions--much of which was preventable.

That the press did not understand and aggressively convey this early enough to stop it must therefore rank as one of the great journalistic failures of recent decades. That good accountability journalism matters may seem obvious, but the dirty little truth is that many people believe we aren't particularly worse off when the ranks of reporters shrink. As newspapers collapsed, a surprising alliance arose to say, Calm down, it's not such a big deal. Conservatives rejoiced that the liberal media was shrinking while the conservative media commentariat was growing. Progressives shrugged that all this corporate-owned media was useless anyway in, for instance, stopping the Iraq War--Judith Miller, Judith Miller, Judith Miller--so who cares? And digital evangelists said the dead-wood newspaper industry would be replaced by an even better digital news apparatus, flush with iPhone-wielding citizen reporters and freelance blogger networks.

And it turns out that the difficulty of proving a negative makes it challenging to illustrate how accountability reporting matters. If we have no news about a scandal at city hall this week, is it because there is no corruption, or because the rot just hasn't been uncovered?

Media critic Dean Starkman grapples with these and other questions in his new must-read book The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism. Interestingly, Starkman does not argue that the press ignored the scandal entirely but instead describes something more nuanced: that it did pretty well covering the economy in the early stages (2000-2003) but then dropped the ball during the crucial years of 2004-2006, when the...