Aaron Brown had September 11th. Anderson Cooper had Hurricane Katrina. And it appears that during this financial crisis, CNN has minted another star: senior business correspondent Ali Velshi.
Velshi has seen increased air time as credit has dried up and the markets have collapsed, and his face is now recognizable even to people who don't happen to be watching "Your $$$$$" on CNN Saturday afternoons. This past Sunday, on "Reliable Sources," Velshi went (bald) head to (bald) head with one of his major critics, the Baltimore Sun's David Zurawik, who described Velshi's coverage of the bailout as "egregious" and accused him of being "relentless in his unbridled advocacy for passage of a bailout bill."
On Thursday, I talked to Velshi and asked him about his exchange with Zurawik, his thoughts on the coverage of the financial crisis, and which candidate he thought was stronger on the economy. He said that it's "absolutely true" that Barack Obama is stronger on the economy than John McCain and criticized McCain's inability to "come out with a cohesive message about how it is he's going to fix the economy":
Huffington Post: Can you evaluate the candidates' job creation proposals? Is one candidate stronger on the economy than the other? I know people seem to think that Obama is, but I'm not sure if that's necessarily objective.
Ali Velshi: Oh, it's absolutely true. It was sort of true the whole way along.
I'm completely stymied by how it is that John McCain continues to drop crumbs - and some of them are very smart crumbs - about what he plans to do. He did this with respect to what he wants to do with mortgages, he sort of dropped a crumb in the second debate and then somewhere along the line in a speech he said something about not penalizing people for having to withdraw money from their IRAs because they turned 70-and a half. It cannot come together as a total plan. It is quite remarkable. He's not been able to adjust in particular his health care stance.
At this point, his representation of Obama's tax cuts just don't turn out as accurate. I've been reporting this for weeks and weeks and weeks, about the actual effect both their tax cuts are gonna have on the average American.
That said, the one weakness in both campaigns is that their economic policies are gonna add some $200 billion to the debt, and neither of them has effectively described what is going to have to be cut in order to keep the tax cuts in place.
They sort of danced around it again in the last debate, but there's no question that John McCain is having a great problem in trying to come out with a cohesive message about how it is he's going to fix the economy.
Velshi would also explain the differences between his coverage and that on CNBC, his thoughts on people like Hank Paulson and Neel Kashkari, and which media outlets he thinks are doing a great job in covering the financial crisis. Our full conversation appears below.
What was the discussion with David Zurawik really about? Was it about the role of the business correspondent?
I think there's been some good criticism of the way the media's handled this whole financial crisis, and I thought David had initially...not represented how we'd done it, so I wanted to have a discussion with him. And I thought we had a really good discussion on "Reliable Sources."
What we agree on is that it is important for people who cover this sort of news, cover the economy, to be able to convey the urgency of the matter but not contribute to any of the panic that may be out there. And some of the panic is built in by virtue of the fact that we're talking about people's money. And some of the panic is there because we tend to watch the Dow, that tends to be the scoreboard even though it's not really the accurate scoreboard of the economy. It gets people panicked when they see these major, major drops. David was suggesting that we need to be balanced in tone - I don't think that we have been imbalanced in tone. I think there is some valid criticism that out there in the media, there has been some sense of panic, but I think we manage that very well at CNN. And I think that David and I are in agreement that the media should manage that well.
How would you describe the tone of CNN's business coverage? What tone do you aim for?
The tone that we aim for at CNN is one that addresses the urgency of the matter - that conveys to people who maybe don't think about money all the time, other than in their personal finances, don't think of the economy - we're trying to convey an urgency to them but at the same time not contribute to the panic that they're feeling because they're watching their 401(k)s dwindle.
It's a very interesting road that we have to travel and we try to check that tone on a daily basis. And we really do, I'm not just saying that. We have discussions amongst a lot of our staff: "How do we think that worked, this tone?" "How do we feel we did in terms of conveying the message as accurately and informatively as we could have?"
I know last night you were busy because the Asian markets were plunging, and that made me realize that you sort of have to work around the clock these days. What sort of hours do you keep?
Yeah, it's been a lot of around the clock. There have been a lot of 20-hour days for most of this month. In the last week or so, because this has gone on for so many weeks, we sort of tried to limit it to about a 16-hour day, and we've been having some success with that. But yeah, I'm sort of in the loop no matter what happens, 24 hours a day, and we have to try and cover that. But that's the reality of markets these days - they are 25, you know, 24 hours a day, I feel like it's 25! But it's actually just 24.
What is your role in the CNN business team/what is the CNN Business structure like?
It's a big team - I'm the senior business correspondent, and I am responsible starting from the morning for input into, guiding the network's business coverage. So we take all the stuff that's going on in business, and there's always lots of it. And getting some sense of how to prioritize the issues that we're going to cover that day and determining how we're gonna cover them. So there's two issues: one is the priority that we give it in programming, and the second one is the resources that we allocate to each of these stories.
So that's my initial role. And then my role is in actually forming it for TV. We have a very big group here, we've got a business team that works on television. We've got a business team that works on CNN International, which has people in Atlanta, in London, and Hong Kong - we work in concert with them. And we have CNNMoney.com, which not only has its own editorial staff but also ties in with the editorial staff at Money magazine and Fortune.
CNBC obviously has to worry about whether they're moving the markets too much, about whether they brought down Bear or Lehman. Is that a function you worry about? Is that worry/influence more or less present at CNN, because you're bigger but more general?
Our bigger concern - the same way they might be worried about moving markets and damaging companies - we're worried about moving people's personal finances, their 401(k)s, and ensuring that we can help them not make rash decisions, but give them all the context they need to make those decisions. We're more concerned about that.
That's why our bigger concern is in not inciting panic, not causing bad news about a bank to cause people to run and somehow liquidate their assets and keep it at home. That's what we try to do. We're more worried about the impact that our coverage is going to have on the individual than on corporate America.
Some people might say we were asleep at the switch in the run-up to this financial crisis? Would you agree with that, and is there anything you think the media is missing now that might be major?
It's actually an interesting question. I feel very strongly that the credit freeze - that we really only learned about upon the collapse of Lehman Brothers - there was no way for most of us to have any sense of how bad it had become out there. We had been reporting for well over a year about the effect of oil prices on the economy, the effect of inflation, of higher commodity costs, of increasing foreclosures on the weakness of the consumer on the economy.
So we were able to put together the fact that we were headed for a recession and that things need to be done about that. The specifics of this financial crisis and the credit freeze came upon us all very quickly, and I don't know that anybody was asleep at the switch about that one. We had been reporting for months the difficulties that these financial companies were having in raising money. I don't think any one of us would've guessed that one day you couldn't even sell Lehman Brothers at a remarkable discount.
I think we're all pretty vigilant about what's going on right now, I think the attention of the entire country is on this in terms of money and in terms of politics so I think there will be no stone unturned at this point.
Now, we won't have another unemployment report until after the election, it'll be November 7. But there's no one who expect our employment situation to improve dramatically for months, so it does remain - and this is a drum I've been beating for a long time - it does remain an issue of jobs, and the seriousness of the job situation. We saw layoffs again today. We're gonna see a lot of them. Because that is fundamentally the long term effect of this.
So for the average person, and I keep trying to hammer this home, this financial crisis and the stock market crisis are isolated events. Markets do come back over time, we don't know when they'll start to come back but they will come back. The issue here is that we still have a very sour economy.
Can you evaluate the candidates' job creation proposals? Is one candidate stronger on the economy than the other? I know people seem to think that Obama is, but I'm not sure if that's necessarily objective.
Oh, it's absolutely true. It was sort of true the whole way along.
I'm completely stymied by how it is that John McCain continues to drop crumbs - and some of them are very smart crumbs - about what he plans to do. He did this with respect to what he wants to do with mortgages, he sort of dropped a crumb in the second debate and then somewhere along the line in a speech he said something about not penalizing people for having to withdraw money from their IRAs because they turned 70-and a half. It cannot come together as a total plan. It is quite remarkable. He's not been able to adjust in particular his health care stance.
At this point, his representation of Obama's tax cuts just don't turn out as accurate. I've been reporting this for weeks and weeks and weeks, about the actual effect both their tax cuts are gonna have on the average American.
That said, the one weakness in both campaigns is that their economic policies are gonna add some $200 billion to the debt, and neither of them has effectively described what is going to have to be cut in order to keep the tax cuts in place.
They sort of danced around it again in the last debate, but there's no question that John McCain is having a great problem in trying to come out with a cohesive message about how it is he's going to fix the economy.
The other thing is that on the topic of jobs, both of them have what sound like good plans to create jobs but again, the specifics are lacking. I'm hoping that in the next few weeks they'll become more accurate on those.
Do you think that Hank Paulson should stay on as Treasury Secretary regardless of who wins for the sake of continuity? What would you be looking for in a Treasury Secretary?
It all depends on how the new President wants to convey the message that it's a break with the previous administration. This administration is going to go down in history as having mismanaged this economy quite seriously. Hank Paulson, like it or not, is still associated with this administration. Probably a little less so than some have been, but I don't know that it makes political sense.
Does it make sense for the country to have someone like Hank Paulson? I think history will probably judge him quite fairly. I think he's had some of the right ideas. The way that they proposed this bailout plan initially didn't quite take into account the negative political reaction it was gonna get, so one might say that he didn't understand the politics of the situation all that well. But he certainly understands finance. And whoever the new Treasury Secretary is gonna be is going to have to understand finance as well as or better than Hank Paulson. He's qualified to be Treasury Secretary, I think it's entirely a political discussion as to whether the new President will want him to be the Treasury Secretary.
Speaking of new appointees, or even Goldman people, what do you think about Neel Kashkari?
I think it was strangely tone deaf of Washington to suggest that there should be another Goldman Sachs person. The biggest challenge the next President is gonna have is to not make it look like Wall Street is running Washington.
I think there's a bit of a bad taste in Americans' mouths about Wall Street and there does seem to be some association to Goldman Sachs here with Hank Paulson. So I kinda thought that was a weird move, that they would pick a guy from Goldman to run the operation.
I don't think they've been out enough in front of the public, in front of the media, explaining exactly what they're doing, and that's creating a lot of confusion and uncertainty in the markets. So I have to reserve judgment as to whether Kashkari is doing a good job, or will do a good job.
I do think it was strange that they chose somebody from Goldman. I don't know that there's anything in Kashkari's background that says that he is somehow better qualified than many other people to do this job. This wasn't his area of specialty, he doesn't have decades of experience behind him, but once again, it could be that he does do the right job. It's probably too early to tell.
Did you think it was odd to hear the candidates float names like Warren Buffett and Meg Whitman as Treasury Secretary possibilities in the second debate?
I think they suggested names they thought people might know. I think that's exactly what it was. I can't see Meg Whitman or Warren Buffett as the Treasury Secretary. I don't know why Warren Buffett would bother wanting to do it, and Meg Whitman's in another category. I think that's because it was a name of a company that Americans knew and he thought that would work. I think that might've been one of the low moments of that debate. That's what they could think of.
There are a lot of bright names out there that both of them know about, and I suppose there are real good political reasons for not floating real names. I think it was entirely floated because neither of those is a real possibility.
Finally, where do you look for your business news? Anyone you think is doing a particularly good job covering this crisis?
The kudos go to people who explain what is going on to average Americans - actually, average people around the world. I think the Financial Times has done an excellent job of explaining this crisis, I think the Economist has done an excellent job, I think BusinessWeek has done an excellent job of doing these things.
I don't mean this with any disrespect to any of my colleagues in financial news, but this has spilled over into being not just a financial story. It's a story for everybody in the world at this point. And the ability to explain it, and to not say things like credit default swaps or collateralized debt obligations, it's challenging. But to stop and break it down, I think, is the big challenge, and those that have succeeded are those that have taken the time to do it and not worry too much that they might be dumbing it down. I don't know if you could dumb this down enough. You kind of need to have a Ph.D. in economics to have a real understanding of this.
So hats off to those who have gone the extra mile to really explain this. And by the way, I've seen a lot of it in local newspapers around the United States, and national newspapers. The New York Times has done a great job. I've read good articles that describe this situation in newspapers across the country.
Watch Velshi battle Zurawik: