Deal Me Out
A stacked deck at the New York Times
[from The Baffler No. 24, 2014]
The New York Times, as everybody knows, is the premier source of authoritative journalism in the world’s most powerful formal democracy. Among the paper’s storied achievements are its courageous, pathbreaking coverage of the civil rights movement in the 1960s, the release of the Pentagon Papers in defiance of a prior restraint order in 1971, and investigative coups on everything from the abuses of money in politics to the disastrous course of the war in Afghanistan. It has also, along the way, committed travesties like Judith Miller’s misreporting of WMDs allegedly in the possession of Saddam Hussein prior to the 2003 invasion of Iraq, the long run of stories plucked out of thin air by serial fabricator Jayson Blair, and the paper’s bafflingly exhaustive coverage of the consumption habits of would-be bohemians in certain East River–adjacent neighborhoods. But the Times mostly takes its self-assigned mission to be the nation’s “newspaper of record” seriously.
How, then, to account for the Times’ reliably market-prostrate, counter-informative—and immensely profitable—online clearinghouse of financial news and commentary, DealBook? This stand-alone digital product, which launched as a branded blog in 2006, is the brainchild—and, in unprecedented ways, the meal ticket—of the paper’s longtime financial reporter Andrew Ross Sorkin.
Sorkin is something of a prototype of how industry reporters have evolved into digital entrepreneurs. In the industrial age, robber barons leveraged their way into journalism via the mogul-vanity career path of yellow press lords. But where your William Randolph Hearsts and Colonel Robert McCormicks dragooned the mass-circulation daily press largely to ornament mythologies of their own self-made, earth-hewing genius, today’s niche-minded media entrepreneurs in the Sorkin mold are trafficking in a more tenuous and ambitious confidence game: the fiction that the superstructure of our investment sector serves any useful economic purpose.
Given the scope of this cognitive challenge, and Sorkin’s unique role as the project’s founder, mascot, and reporter, DealBook is unusually attuned to the sensitive task of vetting the public image of Wall Street—almost certainly the most spectacularly failed complex of institutions in American life today. To observe how this demanding task plays out in DealBook’s pages, take a close look at two of Sorkin’s columns on Goldman Sachs back in 2011, when it appeared that some culpability might finally attach to the bank’s shady activities in the run-up to the mortgage meltdown.
In the first column, dated April 18, 2011, Sorkin accused Goldman of lying. Sorkin—sounding wounded, maybe even betrayed—wondered why Goldman had misrepresented its brilliant-but-double-dealing bet against the housing market in 2007. The Senate Permanent Subcommittee on Investigations found copious evidence that Goldman was “shorting” the residential mortgage market as it had begun to fall apart that year. The investment bank had anchored its shorting strategy in its analysis that the complex securities that Wall Street had built around residential mortgages and then proceeded to produce, sell, and hoard for years would soon plummet in value. In Senate testimony, Goldman CEO Lloyd Blankfein insisted that the firm hadn’t sold short. But the Goldman emails the subcommittee obtained and summarized in its report told a different story.
“The findings of the Congressional report are straightforward and damning,” Sorkin wrote in that first column, citing a certain embarrassing discrepancy in the quotational record. In 2007, Goldman officials had told the Securities and Exchange Commission that “during most of 2007, we maintained a net short subprime position and therefore stood to benefit from declining prices in the mortgage market.” In 2010, though, the company released a statement saying that “Goldman Sachs did not take a large directional ‘bet’ against the U.S. housing market.”
“Reading those quotes back-to-back is the equivalent of hearing someone declaring it is raining when it is a sunny day with clear blue skies,” Sorkin wrote. “It just doesn’t make sense.”
But when Sorkin returned to the same subject a couple of months later in a second column, he was able to see ample evidence of precipitation. In his June 6, 2011, column, he told his readers that Goldman’s wildly inconsistent accounts were all just the result of a terrible misunderstanding. Because, you see, Goldman told him there had been a misunderstanding. When you saw the matter in the proper light—i.e., the way that Goldman wanted you to—why, then, you had to admit that Lloyd Blankfein hadn’t perjured himself at all.
This second column didn’t call into question the facts that had left Sorkin feeling so sad in the first. It was still not in dispute that the Goldman Sachs “structured products” division had made $3.7 billion in large part from its 2007 bets that mortgage-backed securities—which the firm was selling to investors at the time that its now-infamous Abacus fund was riding high—would soon be worthless. It was also still not in dispute that the trader who ran that division had said in an internal company report that “the shorts were not a hedge.” (This language made it as plain as possible that Goldman hadn’t been pursuing the common tertiary ploy of plowing some of its earnings into a countervailing investment stratagem as a means of insuring the larger sums invested by its big-ticket clients on the premise that housing prices would continue to ratchet their way skyward.)
Yet Sorkin now had smoking-gun proof that Goldman’s aims were not as dishonest or self-seeking as they’d seemed to him and, well, everyone else at first blush. He found this proof by retreading the same statement of denial released by Goldman in 2010, which, on second glance, clearly showed that the short couldn’t have been a big deal. “If Goldman made only $500 million in net revenue from its residential mortgages when Mr. Birnbaum’s [structured products group] unit made $3.7 billion from shorts, it is clear that it also had huge long positions,” Sorkin wrote. “Had it been ‘massively short,’ the firm should have made much more than $500 million.” The $500 million figure was not confirmed by any additional evidence or outside sources. On the contrary, the Senate’s lead investigator presented Sorkin with a document saying the firm had made more than twice that amount.
Lloyd Blankfein had said Goldman was “not consistently or significantly net ‘short the market’ in residential mortgage-related products in 2007 and 2008” and that the firm therefore “didn’t have a massive short against the housing market.” In April, Sorkin had dismissed such gnat-straining arguments based on comparisons of overall fund performance as a “Clintonian approach to parsing . . . words.” Now, in his June 6 reboot, Sorkin declared Goldman right and its critics wrong by insisting that the short didn’t qualify as “consistently,” “significantly” “massive.” It was just a pretty big net short!
Of course, even back in April, Sorkin was confused as to why Goldman would even bother to hide its big short. It had, after all, been a canny move—one that had made the firm a good deal of money (whether one billion plus, or merely hundreds of millions) just before most of its competitors nearly collapsed:
But semantics should not be the issue. Goldman should be proud of its prescient call about housing. It was better for its shareholders, and frankly better for the taxpayers, that the firm was smart enough to short the mortgage market. After all, Goldman didn’t require a big bailout like Citigroup or the American International Group.
In the end, the columnist muffled his outré outburst of conscience and righted his attitude in the scheme of things, so he could get on with treating the public to the same cynical distortions Boss Blankfein feigned before the U.S. Senate. Goldman Sachs, in point of fact, “required” the same bailout the rest of the financial industry did; it would have collapsed if everyone else (and most particularly, the toxically overleveraged AIG colossus) had been allowed to collapse. Sorkin’s pretend objectivity made him affect not to understand why a firm like Goldman—which thrives on its close relationships with its ultra-rich client base—perhaps wouldn’t want to brag about betting against the worthless churned-up packages of failing mortgages that it was also enthusiastically telling its clients to buy. The widespread outrage over Goldman’s making itself a fortune on the short wasn’t based on the professional jealousy other investment banks might have felt for not hitting on the same strategy themselves. Rather, the pertinently damning fact was that Goldman Sachs purposefully, willingly, and knowingly screwed its own clients.
Sorkin is one of a few journalists and columnists (or hybrids) at the Times who are, at least by the standards of his profession, superstars. They have carved out lucrative niches and have symbiotic promotional relationships with their employer. This cult of mutual enabling is just as important to the Times as it is to Sorkin, since the Paper of Record is in much the same position that most high-profile beat reporters now find themselves in: badly pinched by the media industry’s downturn in advertising revenue but, conversely, ever more powerful as rival newspapers shrink and disappear.
This sliding scale from Paper of Record to Paper of Last Resort accounts for the stunning rise of the brand known as DealBook. The Times, which for much of its post-war history edited the personality out of its reporters, except for certain political beat stars like R. W. Apple Jr., has changed course as the media have concluded that readers are coming to put more trust in individual voices than in institutions. The face of Times gadget coverage until recently was David Pogue (whose relationship with technology corporations is about as adversarial—which is to say not at all—as Sorkin’s with the finance industry), a genial one-person focus group tasked with determining which smartphones well-off middle-aged men will be able to figure out how to use. (Pogue, who last fall defected to Yahoo after thirteen years at the paper of record, declared his uselessness as a reporter by marrying a prominent PR flack in the tech industry—a union that promises to produce all sorts of synergistic new copy, and perhaps a whole new family of algorithmically self-promoting children.) Sorkin’s former business-section colleague Brian Stelter, over on the television beat, recently produced his own Woodwardian behind-the-curtain book, on some utterly boring machinations involving which celebrity persons were chosen to host NBC’s morning happy-talk show. And Sorkin is the face of financial reporting.
Sorkin’s compensation is tied to the financial performance of his financial blog, which is underwritten by the finance industry.
Indeed, when future historians explain how frenetic brand synergy came to overtake the stodgy business models of once-prestigious news organizations, Sorkin will likely be recorded as the revolution’s great pioneering prophet. Sorkin joined the Times on a full-time basis in 1999 (though his association with the paper extends all the way back to a high school internship). After making a name for himself as a dedicated source of scoops on the mergers and acquisitions beat, he pushed his bosses to allow him to create a daily email newsletter collecting the most important business stories of the day. This was way back in 2001. As it turned out, email lists—usually a bunch of stale links to day-old stories with just a smidgen of analysis—are a great way to reach very powerful people, who appreciate having obvious things pointed out to them while being reminded just how important and insidery they are. The viral appeal of such email blasts also makes them great revenue sources, because many firms and industries will pay a premium to reach such an elite audience. (DealBook’s initial sponsor was Brooks Brothers, which seems positively low-rent at this point.)
In short, Sorkin saw where journalism as he practiced it was heading, envisioning the newsletter as just one part of an entire ecosystem of content, built around the brand of him. As Gabriel Sherman reported in a 2009 New York magazine profile, Sorkin thought DealBook should eventually include “special DealBook sections in the print paper, a blog, conferences, even a $5,000-per-year premium subscription.” (The inaugural DealBook conference was held in 2012, with BlackBerry producer RIM as the primary sponsor. The week of the conference, RIM produced what Advertising Age referred to as a “print spadia wrap on a special print edition of DealBook.”) The newsletter became a blog in 2006, and as the Times entered the exploding market for online commentary, DealBook was a hit. As Sherman reported, Sorkin became among the most highly paid staffers at the New York Times, thanks in part to the remarkable deal he struck when he first launched DealBook. Sorkin was to receive “a bonus that is based, in part, on the financial performance of the various DealBook properties.” For the deal to stick, Sorkin had to leapfrog into management in order to avoid the Times union salary scale rules. (Just a few years later, the paper announced it would introduce sweeping pay cuts, and eliminated one hundred rank-and-file jobs.)
In 2010, DealBook expanded again, adding staff (including some well-respected reporters from competing papers), videos, and a page in the paper four days a week. A Times press release captured the excitement, and the intended audience, of the venture:
DealBook caters to a high-level audience of C-Suite executives and decision-makers and will continue its focus on key beats—M&A, private equity, hedge funds, regulation, law—delivering more scoops, insights and breaking news throughout the day and across platforms.
The use of the common PR term “caters to” in the context of an ostensibly journalistic venture was apt. The release went on to thank the people who made the expansion possible:
Barclays Capital, Goldman Sachs, Sotheby’s and Tata Consultancy Services are charter advertisers for the relaunch of DealBook.
So Sorkin is close to his sources, who are also his sponsors. His compensation is tied to the financial performance of his financial news blog empire, which is underwritten by the finance industry. This is a fine example of exactly the sort of twisted incentive structures that led Wall Street firms to produce and sell a lot of toxic debt. In this one limited sense, you might say, DealBook does shed inadvertent light on the inner workings of finance.
Too Sycophantic to Succeed
Which is, alas, more than one can say about Sorkin’s book-length efforts to chronicle the 2008 financial collapse. Sorkin went from Wall Street’s favorite reporter to America’s semi-official financial journalist of record thanks mostly to his 2009 book, Too Big to Fail, which narrates the dismal events of the preceding year from the point of view of Wall Street executives and Bush administration officials. Sorkin was reportedly paid $700,000 for it.
The book debuted at number four on the Times bestseller list, naturally. It was then adapted into an HBO TV movie, starring far-too-attractive all-star actors as the men who stage-managed the response to the great 2008 meltdown. Too Big to Fail was hailed by some reviewers as a definitive account of the financial crisis, but it isn’t that at all. It’s the story of how the people who caused the financial crisis desperately tried to clean up their mess or cashed out and left someone else to clean it up. Sorkin obviously doesn’t do outrage; he barely does context.
Too Big to Fail is written in the omniscient Bob Woodward style, offering impossible accounts of meetings the author didn’t attend and multiple instances of mind reading. (“This is what saving the financial industry is really about,” Tim Geithner thinks to himself as he watches office workers ride a ferry one morning. “Protecting ordinary people with ordinary jobs.”) If you want to know who sat where at a meeting, or what an executive was wearing when he took an important phone call, you’ll find it here. But if you want an explanation of how the entire 2008 financial meltdown came to be, what its roots were, and who, in short, was responsible, you’d best look elsewhere. Sorkin always attributes the best of intentions to his characters. Scarcely anyone in this oddly prim chronicle is driven by greed. Self-preservation, yes, but greed is nonexistent in the book’s narrative—a tic that’s roughly akin to Jules Verne writing Twenty Thousand Leagues Under the Sea without bothering to note that his protagonists are surrounded by ocean water.
One of the book’s heroes is former treasury secretary Hank Paulson, who managed to save . . . the banking industry, as the American economy collapsed into a stupor that it still has not recovered from. Another is JPMorgan Chase CEO Jamie Dimon, who is hailed for not losing as much money as everyone else. The closest thing the book has to a villain is the comically inept former Lehman Brothers’ head Dick Fuld, and even he gets a dollop of sympathy: “He had known for years that Lehman Brothers’ day of reckoning could come,” and so on.* (Charles Gasparino’s structurally similar book on the crisis, The Sellout, is much more brutal toward Fuld, and is therefore more fun, if also not much more enlightening.)
You may finish Too Big to Fail impressed that the enormous Wall Street boondoggle known as the Troubled Asset Relief Program (TARP) passed, but you won’t have gained much insight into the decades of financial and political revolutions and campaigns that led inexorably to the moment when TARP was presented as a world-saving necessity.
What’s more, if you’d been reading Sorkin’s Times reporting in the run-up to the 2008 fiasco, you wouldn’t have had much of a clue that the world financial order was fundamentally unstable. As Gabriel Sherman reported, the word “subprime” appeared exactly twice in Sorkin’s columns prior to the implosion of Bear Stearns. Tim O’Brien, then the Times’ Sunday business section editor, even told Sherman—on the record!—that Sorkin regularly turned in “thinly reported or loosely written” pieces.
This malignant neglect of the financial sector’s impact on the world at large has only accelerated in Sorkin’s DealBook reporting in the aftermath of the ’08 meltdown. Indeed, Sorkin has lately ascended to acrobatic new heights in his double-gainer contrarian efforts to justify the investment class’s true social prerogatives. In a January column, he wrote about a newly announced weakening of and delay in implementing stricter new regulations that would stipulate how much cash or cash-equivalent assets banks must keep on hand in order to prevent highly leveraged firms from once again tanking the entire world economy. “The conventional wisdom is that the banks are the big winners and the regulators are, once again, patsies, capitulating under pressure to the all-powerful financial industry,” Sorkin wrote. But guess what! The conventional wisdom is wrong. Whatever the banks want is the most prudent course of action. Simply put, Sorkin writes, any suspicion of bankers making out under the revised rules “is a knee-jerk response. While there is no question that the original rules would do a better job preventing the next 100-year flood in the banking system, their quick adoption most likely would have created their own drag on the economy because bank lending would most likely have been curtailed.”
This has been the argument for not addressing the systemic causes of the financial crisis since day one: if we hamper the banks in any way, they’ll punish our ingratitude by destroying the economy (again)! Sorkin quotes John Berlau, a right-wing economist attached to an industry-funded “free market” think tank, the Competitive Enterprise Institute, on the slowdown of new international banking regulations: “Basel III has been delayed, and for Main Street growth and financial stability, that is all to the good,” said Berlau, CEI’s “senior fellow for finance and access to capital.” “Mr. Berlau is right,” said Sorkin. Sure enough, Main Street’s inspiring growth has continued apace.
Too Big to Fail was hailed by some reviewers as a definitive account of the financial crisis, but it wasn’t that, at all.
Meanwhile, on Wall Street, Sorkin insists that individual merit is reassuringly ascendant—all evidence to the contrary notwithstanding. In one August column on the news that the SEC was investigating JPMorgan for bribery for hiring Chinese “princelings”—the offspring of prominent officials—DealBook’s lead brand ambassador doesn’t even bother to try to disguise his total adoption of the worldview of the super-wealthy. The headline: “Hiring the Well-Connected Isn’t Always a Scandal.” Sorkin’s defense of nepotism endorses the cynical argument—these kids are being hired for access to “Rolodexes”—because, after all, these firms wouldn’t do this if it weren’t profitable, and profit is its own justification. But he also, touchingly, endorses the meritocratic argument. Take the case of Sorkin’s friend, Jamie Rubin, son of the former treasury secretary Robert Rubin:
I’ve known Jamie for years and he, too, probably would have landed prominent posts even without his name. In some cases, some of these children will tell you that they try to work harder than others at their jobs, just to prove that they earned the position.
Well, let’s just take their word for it, I guess, and trust the self-assessments of the inheritors of merit. (The next week, Bloomberg reported that the Justice Department had joined the SEC in its investigation, following the uncovering of a spreadsheet linking specific hires to specific deals. Just how business is done!)
Such labored justifications of a corrupt status quo fit a common Sorkin column theme, which is, essentially, This may sound outrageous, but don’t worry your little head about it. In March of this year, after quoting attorney general Eric Holder saying that financial institutions were too crucial to the world economy to pursue criminal cases against them, Sorkin went to work: “As you can imagine, both the left and the right made hay of Mr. Holder’s statement, using it as a damning explanation for the lack of prosecutions of Wall Street,” he wrote. When a Times columnist trots out “both the left and the right,” you can safely bet—without hedging—that you are in for a dose of centrist apologetics:
Putting aside the important matter of whether our banks are too big to fail, there is a more pressing and difficult question that needs to be answered here and now: Do we want to indict corporations? And is it effective?
Sorkin clearly holds the “no” position on both questions, and in support of his view he cites the prosecution of the accounting firm Arthur Andersen, which put thousands of people out of work. Andersen, before the Supreme Court reversed the conviction, had been convicted of obstruction of justice for going on an evidence-shredding spree during the investigation of the Enron scandal. The conviction forced the company to give up its CPA licenses, effectively putting the firm out of business. Sorkin sees the reversal of the conviction (the Court thought the jury instructions too vague and broad) as proof that those accountants were thrust out on the street unnecessarily.
Another interpretation is that Arthur Andersen went out of business not just because it was prosecuted, but because the company had undeniably engaged in widespread fraud and corruption on a breathtaking scale. Before Enron went to trial, Andersen had already been fined millions by the government for fraud related to its audits of Waste Management Inc. and Sunbeam Corp. As for Sorkin’s second question—Is it effective?—well, Arthur Andersen is no longer abetting massive fraud, which would suggest that the prosecution achieved at least one of its desired goals. Still, for Sorkin, the central point remains: we mustn’t punish the banks, or their accounting and credit-rating enablers.
As is often the case in a Sorkin column, what should be a sensible response to malfeasance—disgust with the banks and a desire to have them punished and reined in—is shown to be hasty and misguided. It usually turns out that, like Lloyd Blankfein testifying to the Senate, those crazy banks were right after all.
The Haves Mind
The conservative perception of the New York Times as a liberal newspaper isn’t totally inaccurate. It’s a newspaper by and for the Northeastern elite, and the Northeastern elite is a pretty liberal bunch, at least about most social issues. But it is by no means a left-wing paper, and while it may editorialize in favor of modest economic redistribution, its coverage and its editorial choices are plainly crafted for the Haves. The paper’s audience is a certain kind of rich New York liberal—the hackneyed shorthand is “Upper West Side”—and the paper’s content naturally reflects this outlook (especially since this demographic also encompasses most of the people who edit and publish the paper). When Rupert Murdoch bought the Wall Street Journal and launched that paper’s first real metro section, the Times responded with an ad campaign promising “Not Just Wall Street. Every Street.” But the Times, in truth, doesn’t bother to cover most New York streets, unless those streets contain either luxury apartments, new restaurants by acclaimed chefs, or at least a decent number of fashionable young people.
Recently, the online news startup BKLYNR created a graphic charting the New York Times coverage of Brooklyn—the city’s most populous borough, with nearly as many residents as all of Chicago—from 1981 to the present. In 2012, it turns out, just 4.7 percent of Times articles contained the word “Brooklyn”—and that was up from 1.4 percent in 1981. The jump is not due to increased coverage of poverty in Brownsville. It’s driven by a staggering influx of money into a few Brooklyn neighborhoods. The Times found Brooklyn once Times people started moving there. The two Brooklyn neighborhoods cited most in 2012 were, naturally, Williamsburg (home of the exotic “hipster”) and Park Slope (home of the rich liberal starter family). Williamsburg and Park Slope have been the two Brooklyn neighborhoods mentioned most often in the Times every year since 2001. The New York Times: Not Just Wall Street, Also Sometimes Bedford Avenue.
In 2012, Red Hook, a working-class Brooklyn neighborhood, saw coverage skyrocket after it was hit hard by Hurricane Sandy. But as BKLYNR notes, before the storm, most of the Red Hook coverage was about food and real estate. And afterwards, “a sizable subset of the Hurricane Sandy stories that mention Red Hook are about food.” Neighborhoods become suitable for coverage once good restaurants open up. Before then, the Times might send a stringer to cover a particularly brutal crime. A regular Times reader unfamiliar with the city could be forgiven for thinking that the entirety of the Bronx consists of Yankee Stadium. (Even its lightweight, whimsical coverage of greater New York fell to the budget axe, when the paper killed its “Talk of the Town”–aping section, “The City,” in 2009.)
Widespread, systemic poverty in the city is the subject of an occasional special project. And the Times does have a reporter on the poverty beat—Jason DeParle, who regularly does great work—but there’s no daily email blast for the working poor or the long-term unemployed.
Until a decade or so ago, the Times had flattered and entertained its audience with generous coverage of culture, arts, food, real estate, and travel (rich people interests) but had essentially abandoned the world of finance to its (formerly) downtown competitor, the Wall Street Journal. This is the opportunity Sorkin saw when he first pitched DealBook back in 2001, and it’s worked phenomenally well for him and the paper. After all, finance coverage in the mainstream press is intended for an audience of financial professionals, not the consumers of financial products—in much the same way that, say, the paper’s real estate coverage isn’t exactly intended for people who find housing arrangements on Craigslist. (This is the only possible explanation for something like DealBook’s lovingly detailed “Vows”-style account of the March 2013 wedding of Lloyd Blankfein’s son: by treating the investment bank scion as a bold-faced name-cum-nuptial-tastemaker, Sorkin’s shop was reminding the members of the financial elite, yet once more, that they were an invaluable breed apart.)
There is a slight tension, though, between the (ideal) rich, liberal Times reader and the Wall Street titan who religiously refreshes DealBook. The Times reader, while rich, is more likely to accept the notion that Wall Street is corrupt, destructive, and far too powerful. But finance professionals could not function without the delusion that their jobs are beneficial, indeed essential, to society as a whole.
This tension has colored the Times’ coverage of business and economics for years, and it has expressed itself in some weird hiring choices. Some of those hires seemed almost designed to repel the paper’s natural longtime audience. A partnership with the Freakonomics guys—University of Chicago economist Steven D. Levitt and his journalist/amanuensis Stephen Dubner—made a certain kind of sense. But having arch-libertarian John Tierney write a sort of science column for years (with a two-year stint on the op-ed page) seemed like high-level trolling. Or sometimes very low-level trolling—as when the Times sent Tierney to Zabar’s during the 2004 Republican National Convention to badger rich liberals about their “consciences.” Tierney concluded that Republicans, while perhaps zealots, were “less smug than the Upper West Siders.”
When Too Big to Fail was released, Vanity Fair threw Sorkin a party. In an unsurprising display of obliviousness to the pitfalls of access journalism, attendees included many of the subjects of (and sources for) the book, like Jamie Dimon and Morgan Stanley’s John Mack. Also on hand was Steven Rattner.
Rattner was once a New York Times reporter, covering business and economics, until he decided that he was smarter than the very rich people he covered. He set out to make himself very rich, which he did. He quit the Times in 1982 to join Lehman Brothers. Rattner did fantastically well for himself in finance, eventually founding a private equity fund in 2000 that further lofted his earnings into the stratosphere (even after it was revealed that he’d paid kickbacks to a corrupt official for a greater cut of New York state’s pension fund). Sorkin had just talked to Rattner for a DealBook column in February, detailing his impressive comeback from an equity investor who’d briefly been mildly embarrassed by evidence of corruption to someone who could once again be reverently described as a New York “power magnate.”
Rattner had the ambition, and his
Sorkin isn’t explaining finance to the people—he’s justifying it.
In another arrangement that would have given an ombudsman fits a generation (or perhaps a decade) ago, Sorkin cohosts Squawk Box, an investor-gossip program on CNBC—the cable news equivalent of DealBook in everything from its relentless cheerleading for the titans of Wall Street to its soiling of a once-respected news brand. One recent autumn morning, Sorkin was reporting live on “The Word From the Docks,” by which I mean that he was literally standing on a dock in Nantucket, where the network had dispatched him to cover a self-flattering corporate confab. Sorkin, with an expensive-looking boat lolling just behind him, gave viewers an update on the condition of Larry Summers, who had recently been forced to withdraw his name from consideration for the Fed chairmanship, because no one likes him. Or rather, no one besides his friends on the docks, who, Sorkin reported, regretted not pushing harder and earlier for Summers: “They all look at Larry Summers as a casualty, if you will, of the Syria situation.” The U.N., as of this writing, has not yet sent its inspectors to Nantucket.
One great problem with financial journalism, especially in the decades leading up to the crash, has been that it’s often written in an argot understandable only to the already highly financially literate. Sorkin doesn’t usually employ such specialized language. This has led to the mistaken belief that he’s explaining the industry to regular people. In fact, he is a dutiful Wall Street court reporter, telling important people what other important people are thinking and saying. At the same time, he is Wall Street’s most valuable flack. He isn’t explaining finance to the people—you’d be better served reading John Kenneth Galbraith to understand how finance works—he’s justifying it.
The modern finance industry is at a loss when it comes to justifying its own existence. Its finest minds can’t explain why we wouldn’t be better off with a much simpler and more heavily circumscribed model of capital formation. Sorkin likewise can’t make his readers fully grasp why the current system—which turns large amounts of other people’s money and even more people’s debt into huge paper fortunes for a small super-elite, and in such a way as to regularly imperil the entire worldwide economic order—is beneficial or necessary. But the New York Times and Wall Street each need him to try. Like a bloated and overleveraged global financial company, he’s far too crucial to be held to a regular standard of conduct. Our subprime lenders proved, in the final analysis, too big too fail; and now, certain of our name-brand financial writers are too big to practice journalism.
* (Dick Fuld returns home to his wife after the bankruptcy of Lehman Brothers:
“‘It’s over,’ he said mournfully. ‘It’s really over.’
Looking on solemnly, she said nothing as she watched his eyes well up. ‘The Fed turned against us.’
‘You did everything you could,’ she assured him, rubbing his hand.
‘It’s over,’ he repeated. ‘It’s really over.’”)
Alex Pareene is a politics writer for Salon and the author of the ebook The Rude Guide to Mitt Romney.
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