Media Complicit In Financial Collapse

[Policing Wall Street]

While The New York Times is basking in the glow of the five Pulitzer Prizes, which it has received, there is one telling Pulitzer Prize that it did not receive.

Actually, no newspaper received the Pulitzer Prize for coverage of the most important event of 2008; the near collapse of the world financial condition. 
And there are important reasons for this.

No newspaper received a Pulitzer Prize for coverage of the financial crisis, not because the newspapers were not aware of the financial crisis, but because in large part the newspapers were responsible for the financial crisis.

There were two main reasons for this lack of critical coverage.

The publishers of the top newspapers,  Arthur Sulzberger, of The New York Times or  and Peter Kahn, formerly of The Wall Street Journal, like to think of themselves in terms of wealth; their country clubs, their Manhattan clubs, their Hamptons clubs, and so forth.

They do not wish to disturb and upset the denizens of these clubs with stories exposing Wall Street corruption.  The publishers like to think of themselves as influential. Yet in a world ruled by the rapacious nature of high finance, the publishers know that their influence is restricted to exposing scandal and criminal activity.

To expose the criminal nature of high finance would necessarily exclude them from the pleasant banter in their clubs and resorts. So who will police Wall Street if major media are compromised?

The second reason is money. 

The New York Times and The Wall Street Journal are fueled by newspaper advertising.  Publishing articles about the illegal trading, the willful collusion of investment banks and rating agencies in passing off subprime mortgages as AAA investment, the payments by hedge funds to obtain pension business, and so forth would cost the newspapers advertising dollars.  That is to say that The New York Times and The Wall Street Journal would suffer. 

If they had done their job and exposed Wall Street Shenanigans early –they must have known with all their reporting staffs— many of the calamitous effects of the market slide might have been prevented or ameliorated. The newspaper would have been poorer but the publishers could proudly proclaim that they had done their best to save the world. 

The newspapers ignore or kill stories all the time. Here’s one instance I’m familiar with that occurred many years ago when I was a trader.

Circa 2002, there was an options conference in Phoenix, Arizona.  A high-ranking executive at the American Stock Exchange who had imbibed illegal drugs and alcohol, decided to visit the pool.

This executive was a few years older than I, so he was approximately 60 years old at the time.  The hotel where the conference was being held had a bar at the pool. 
So here he was a Mister of the Universe, not significant enough to be a Master of the Universe; drunk and in a bathing suit.  Suddenly he spotted young lady, maybe 22-or-so, in a bikini.  No, this gentleman was not like me.  When I see a young lady in a bikini, I think of my niece, whose diapers I changed when she was a toddler.  (That is true. And my niece is currently 38 years old with two daughters, whose diapers I thankfully do not have to change.)

No this Drunk of the Universe looked at the young lady and noticed that she had a tattoo on her stomach that was partly hidden by her bikini.  So, what did this drunken gallant do?  Well, he offered to pull down her bikini bottom so that he could view her tattoo in its entire splendor.

The young lady quickly notified security.  Security then took the Mister of the Universe aside and banned him from the pool area.  In other words the Mister of the Universe could continue his drunken escapades at the bar in the hotel instead of attending the conference.

Even the jaded members of the American Stock Exchange were appalled.  They called the press; The New York Times, The Wall Street Journal, Bloomberg. 
One member, who had been leaking information about the American Stock Exchange to The New York Post, called his source at the Post and asked that the reporter write about this incident.  The article never appeared.

At this time of this incident this same member on several occasions had leaked information about a true Master of the Universe to The New York Post; and his information had been published on several occasions.  Not this time.  I myself contacted several members of the press.

Some of the reporters said their editors had killed the story. The Mister of the Universe later bragged to me that Arthur Levitt was responsible for having the story killed. 

That is why the world is suffering a financial crisis. The newspapers knew about the financial crisis and refused to print stories.  The Wall Street Journal refused to print stories about Bernard Madoff. 

It is all in the country club business.