« George Will: McCain Loses His Head | Main | Being "Uppity" and the destruction of black Wall Street »
Attention Journalists: Questions that Must be Asked
TPM pointed out this post by David Cay Johnston, "the former NYT reporter who won a Pulitzer for his reporting on tax policy". He addresses journalists but his points are equally applicable to any following what's going on in Congress and on Wall Street.
Mr. Johnston starts with this point:
In covering the proposed $700 billion bailout of Wall Street don't repeat the failed lapdog practices that so damaged our reputations in the rush to war in Iraq and the adoption of the Patriot Act. Don't assume that Congress must act instantly, as so many news stories state as if it was an immutable fact. Don't assume there is a case just because officials say there is.
The coverage of the Paulson plan focuses on the edges, on the details. The focus should be on the premise. And be skeptical of what gullible Congressional leaders, most of them up before the voters in a few weeks, say after being given a closed-door meeting on supposed horrors.
The Administration has scared the markets and some key legislative leaders, but it has not laid out a coherent, specific and compelling need for this enormous proposal, which is the equivalent of a one-time 55 percent income tax surcharge. (Instead the money will be borrowed, so ask from whom and how this much can be raised so quickly if the credit markets are nearly seized up with fear.)
Ask this question -- are the credit markets really about to seize up?
He goes onto to outline how available credit appears to be to business people of his acquaintance as well as the continued offers for credit that he's receiving personally. He asks a lot of good questions about why banks aren't renegotiating loans with people who can afford their current loan rates but not the new rates that they are about to balloon up to. He asks why ridiculous loan packages are still being offered on the internet. He asks why banks aren't working with landlords and small business owners.
Then he asks why journalists aren't asking these questions. He points out that the media appears to be going along with the administration's urging to rush through and do something.
As of now we are, as a group, behaving just as we did the last two times the administration sought to rush through a hastily thought out, ill-conceived plan. Why in the world are we being so gullible and naive? whatever happened to the core value of journalism -- check it out?
Then he provides what I think is the real core value of his post: questions that should be asked.
Do we need a bailout of American and foreign banks? Show us in detail the reasons for this, and the numbers: make the case.
Is there a market solution to this? If so, why impose a government solution? If not what does that tell us about our entire economic theory?
Is there a less expensive solution?
How do we know this will not just be a downpayment on a much bigger bailout?
Is there a solution that provides direct help to those who took out these loans, rather than those who sold them?
If AIG and others are too big to fail, what does that tell us about government anti-trust policy and regulatory policy and inaction?
Why have both Goldman Sachs and Morgan Stanley made clear that they want IN on this deal? Get skeptical and ask the basic questions -- who benefits, how much and what makes this plan so attractive that Goldman and MS want to participate? Ditto for GE. That they are others want to be included should prompt a great deal of skeptical questioning.
How does banning short selling of the stocks of 900 companies help the markets? (The markets are heavily biased toward the sell side, so why constrain the shorts, who often turn out to be right about stocks whose share prices has been artificially inflated.)
How is banning short selling of this growing list of companies show a commitment to "free markets," a stated goal of this and a long lost of previous administrations?
During this short selling ban, why are there no parallel controls on insiders getting out of their positions?
Reporters, hit the streets and telephones to ask business owners if their credit lines have been frozen. Look at swings in the stock market and put the recent swings in perspective.
Look on the Internet and see all of the ads for the very toxic mortgages that are supposedly at the core of this mess. Ask why are 1.9% loans (in which you pay that in cash and the rest of the interest is added to your mortgage balance) still being sold? Find out who continues to buy these loans.
Lets do our job -- be skeptical and ask the core questions, not the detailed ones around the edges.
Start looking for journalists who are asking these questions and acquiring answers. If you see them, talk about them.
And to the media, listen up.
Do not let this administration rush you into non-observant cheerleading for their actions again. Our country is counting on you. This is why you have that special phrase in the First Amendment. Do your job correctly, thoroughly. And don't stop because someone threatens to cut off your access.
