If you take a tour through the pre-crisis world of the financial media, you will be greeted with eye-popping examples of journalism gone wrong. Over and over, the American public was told that the doomsayers were wrong about the economy, that the titans of Wall Street were national heroes, and that everything would be fine if we just let Mr. Market do his magical thing. (There were notable exceptions, and those bold journalists deserve our thanks). In that upside-down world, exotic financial products were the best thing since sliced bread and subprime mortgages were no biggie.
In the years leading up to 2008, the financial media was so far up the butt of Wall Street that not only was it unable to warn the public about the impending crisis, it arguably helped bring on the disaster.
Wall Street, we know, has learned almost nothing from the crisis, and continues its crime spree, from money laundering and market manipulation to reckless speculation and bogus fees.
But what about the financial media? Have they learned anything?
If you watch CNBC’s Maria Bartiromo, the answer is a resounding no. Bartiromo is the lively, fast-talking host of CNBC's "Closing Bell,” which covers the financial topics of the day. She is also a glaring example of what happens when the financial media talk from the confines of an airtight bubble of delusion.
Case in point: Last week, the talk of the hour was JPMorgan Chase, which, if you’ve been following the headlines, has managed to assemble a list of frauds and shady deals long enough to fill a phonebook. There was the $7.1 billion “London Whale” trading disaster, which JPMorgan executives lied to regulators about, and the manipulation of energy markets by one of its subsidiaries. Then there’s the SEC investigation into whether or not the bank committed bribery by hiring the children of Chinese officials. Right now, the bank is looking at a fine to the tune of $11 billion for issuing crap residential mortgage-backed securities between 2005 and 2007.
Watching Bartiromo’s show in the face of all these developments was like time-warping back to a pre-financial crisis world in which bankers could do no wrong and their CEOs were elevated to deities. Apparently Bartiromo and CNBC have not gotten the memo that horrible economic calamity has been inflicted on Americans by big banks, and polls show that said Americans are not only aware of it, but keen to see the hustlers pay for their crimes.
Bartiromo airily dismissed the idea that JPMorgan deserved any criticism by actually voicing the notion that as long as the corporation is making money, everything is just fine and the CEO is doing his job right. That’s what she told Salon’s Alex Pareene, who was invited on to discuss his view that CEO Jamie Dimon, once the golden boy of Wall Street, ought to be dismissed as head of the megabank for his failed management.
Pareene, as someone willing to criticize a too-big-to-fail bank and its honchos, was treated as an emissary from Crazy Town. Bartiromo pulled out just about every trick a media host will deploy to discredit a guest, including gotcha quizzes, scoffing at sources, and the old Bill O’Reilly “we stick with the facts on this show” routine in the face of, well, facts.
“Legal problems aside,” Bartiromo explained to Pareene, “JPMorgan remains one of the best, if not the best performing major bank in the world today.” (That's kind of like saying that nuclear disaster aside, Tokyo Electric Power is a great energy company.) Bartiromo emphasized that “the company continues to churn out tens of billions of dollars in earnings and hundreds of billions of dollars in revenue. How do you criticize that?”
In other words, shareholders are happy, so what the hell is your problem?
First of all, what? Enron was profitable. The Mafia, for that matter, is profitable. What kind of moral illiterate do you have to be to suggest that profitability precludes criticism?
Bartiromo’s argument was so noxious it got the attention of Felix Salmon over at Reuters, who pointed out the obvious fact that “there are licit and illicit ways of making money, and surely if your profits fall into the latter category, you should not be able to remain comfortably ensconced as a celebrated captain of industry.” Salmon also called out Bartiromo on her assumption that shareholders are the only constituency of a corporation that matters, a ridiculous position that has been pushed in business schools since the 1980s, but has been discredited by economists like William Lazonick who point out that taxpayers, for one example, and employees, for another, are clearly key corporate stakeholders. Activity that harms them actually matters. A lot.
Yet in the financial media bubble, being critical of Wall Street means that you are a wild-eyed radical from the far left, a view which is particularly surprising given the rush of even conservative Republicans like Sen. David Vitter to brandish their bank-taming credentials.
The official inquiries into JPMorgan’s activities may indicate a shift toward a more aggressive stance by the U.S. government in trying to prevent American banks from ripping off the public and their investors, and that’s a good thing. Of that $11 billion JPMorgan may have to pay for its mortgage shenanigans, $4 billion could go to consumer relief for struggling homeowners. That’s something, though clearly a fine that only adds up to two quarters of JPMorgan’s profits isn’t nearly enough.
But financial media personalities like Maria Bartiromo are standing in the way of this process by continuing to act as the marketing arm of Wall Street and apologists for people like Dimon. In her brain, Eliot Spitzer is a demon for going after AIG, public employees are responsible for state budget problems, and banks are being unfairly assaulted. And unicorns are producing her show.
If the Bartiromos have their way, we may never adequately prosecute fraud, hold executives accountable, or get giant banks like JPMorgan under control so they don’t go on to wreck the entire economy and cause even more damage than they did the last go-round. Wall Street cheerleading from the business press could help bring on yet another financial crisis when one of these banks implodes.
Maybe Bartiromo, like Jamie Dimon, should be looking for another job.