Making Sense of the Credit Debacle

I do think the financial press has contributed to the current crisis. The media, collectively, should hang its head in shame. Yes, some of us spotted some elements of what was going on: At the FT, for example, my little team started wading through alphabet soup back in 2005, warning of the dangers of collateralized debt obligations/credit default swaps, etc. But we could have done much better in terms of pointing out the scale of problems and dangers. And many other mainstream media outlets totally ignored the story! That is not a good track record. In fact, to go back to my anthropology again, it is a classic area of "social silence" that served to keep elites in power, as an academic such as Pierre Bourdieu might say.

Journalists were not exclusively responsible for that social silence—the bankers and regulators did not want to talk, and the bankers often made it very hard to get information. I know: When my team started writing about this stuff, we had a huge challenge to get data and we were constantly criticized in 2005 and 2006 by senior bankers for our "unnecessarily negative" stance on the credit world. The financiers who were benefiting from the lack of scrutiny did not exactly invite questions.

Notwithstanding all that, I could have and should have rung alarm bells more loudly. So could have and should have the rest of the media. A situation in which most business journalists missed the biggest story for decades is not a good situation. I feel strongly that journalists need to recognize that collectively, or we too will lack credibility.

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Jesse Eisinger is a columnist at Portfolio. Daniel Gross is the Moneybox columnist for Slate and the business columnist for Newsweek. You can e-mail him at and follow him on Twitter. His latest book, Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation, has just been published in paperback. Duff McDonald is a contributing editor at New York and Portfolio and is completing a biography of Jamie Dimon of JPMorgan Chase. Barry Ritholtz is a money manager, proprietor of The Big Picture blog, and author of the forthcoming Bailout Nation. Gillian Tett is an assistant editor at the Financial Times, and author of the forthcoming book on how financial innovation went so wrong: Fools Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe.

Photograph of falling Dow chart on Slate's home page by Mario Tama/Getty Images.

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