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The Watchdog That Didn’t Bark

Posted on Mar 16, 2014

Image by Columbia University Press

By Peter Richardson

To see long excerpts from “The Watchdog That Didn’t Bark” at Google Books, click here.

“The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism”
A book by Dean Starkman

Most American news organizations missed the two biggest stories of the previous decade: the unwarranted invasion of Iraq and the Wall Street depredations that crashed the global economy. Each caper immiserated millions, neither was especially difficult to detect, and both could have been prevented with a combination of critical reporting and basic governmental oversight. Dean Starkman’s new book, “The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism,” tackles the business press’ failure to warn of the most catastrophic financial crisis in 80 years. His analysis leaves little doubt that beat reporters were focusing on the wrong things, responding to the wrong incentives and writing the wrong kind of stories for their work to perform its watchdog role. 

Starkman is no Monday-morning quarterback. Now an editor at the Columbia Journalism Review, he worked for The Wall Street Journal from 1996 to 2004, when the financial crisis was brewing. Before that, he was an investigative reporter for the Providence Journal, where he shared a Pulitzer Prize for a series on judicial corruption. For this book, Starkman reviewed the entire corpus of relevant stories from nine top business publications between 2000 and 2007. He found that the most useful investigative stories appeared in the first half of this period. After that, the major outlets churned out investor-friendly pieces while Wall Street took the global economy over a cliff. 

Starkman stages his analysis deliberately. Almost half the book is a history of American business reporting and capsule biographies of its most notable practitioners, including Charles Dow, Edward Jones, Clarence Barron and B.C. Forbes. Starkman also traces the history of investigative reporting, giving pride of place to Ida Tarbell’s muckraking stories on Standard Oil during the Progressive Era. He touches lightly on other periods of intense investigative reporting, letting a few examples (e.g., The Washington Post’s Watergate stories) stand for the whole. He mentions but does not explain the fact that small outfits rake a disproportionate share of the muck. To break their stories, they often play large news organizations off one another. Glenn Greenwald’s handling of the NSA whistle-blowing story is a recent but by no means isolated example.

Along the way, Starkman introduces and historicizes a distinction between what he calls access and accountability journalism. Access reporting, which is relatively quick and easy to produce, focuses on business stories that help investors reach their financial goals. Orthodox in its assumptions about markets, it relies heavily on scoops from major players and tends to portray them positively. Accountability reporting, in contrast, may target those movers and shakers in an effort to expose mischief. Its audience isn’t investors but the public at large, and its sources are more likely to be disgruntled employees, customers or competitors. Accountability reporting is slow, expensive and risky. It often embarrasses important people and makes continued access to them difficult. Occasionally, it creates legal challenges for the news organizations that produce it. For all these reasons, accountability journalism is the first to be cut, but it’s the only kind of reporting that could have prevented the corruption and negligence that cratered the global economy.

Starkman also puts faces on these two modes of journalism. He offers Andrew Ross Sorkin, who edits the DealBook section of The New York Times, as a chief practitioner of access reporting. Sorkin, who wrote a best-selling postmortem of the financial meltdown, was delighted that so many Wall Street honchos came to his book party. One looks in vain, however, for a Sorkin piece warning about improprieties in progress. Starkman notes that Rupert Murdoch is allergic to accountability reporting, which he considers self-important and elitist. After purchasing The Wall Street Journal in 2007, Murdoch pushed for shorter pieces and more scoops based on the paper’s privileged access to newsmakers. A few years later, however, Murdoch himself was the target of investigative reporting. When The Guardian broke the phone-hacking scandal at Murdoch’s London-based tabloid, he was forced to grovel before a parliamentary committee. It concluded that he was “not a fit person to exercise the stewardship of a major international company,” and Murdoch resigned as director of News International. 

Starkman credits accountability reporting by Michael Hudson, Gretchen Morgenson, Susan Faludi, Matt Taibbi and Lowell Bergman, the former “60 Minutes” producer whose work now appears on PBS’ “Frontline.” Bergman isn’t a business reporter as such, but he collaborated with New York Times reporter Diana B. Henriques to expose predatory subprime lending in 2000. Within weeks of that story’s publication, the federal government acted to curb some abuses. Starkman doesn’t attribute that response entirely to the Times story, which he writes was “part of a wider network of consumer activism and legislative and regulatory action.” Yet Starkman continually underscores the vital role such journalism plays in a healthy democracy.

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