Why the news media failed the public before the financial crisis—and why it will fail again

Dean Starkman, resident fellow and visiting faculty at the CEU School of Public Policy, also an award-winning journalist and media critic, is a big believer in the power of journalism to correct market failures, hold regulators and political leaders to account, and, even keep Wall Street itself in check. But, he argues, in the years leading up to the financial calamity of 2008, it didn’t, with catastrophic consequences.  Why not?

The professional press provided reams of information about Wall Street and the financial system in the years before the crash — just the wrong kind, he says.  For his book, the Watchdog that Didn’t Bark: the Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, 2014), Starkman sifted through an ocean of reporting on Wall Street and the financial system to discover the great paradox of the crisis: namely that while the press’s usual sources — insiders and elites — didn’t have the story, plenty of outsiders did. He reflects on the meaning of the crisis and its aftermath for journalism and explores how when it can live up to its irreplaceable role of providing oxygen to the public sphere and safeguarding the public interest against private externalities. Those expecting cheap and easy solutions will be disappointed.  Journalism’s fact-gathering resources fell dramatically during and after the crisis, and its future is murky at best.  But Starkman believes that while the crisis shook democracy both in the U.S. and around the world, it offers valuable lessons for journalism and the public that relies on it.