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Bipartisan Senators Indict Wall Street, Media Yawns. Six Guys Push Stale Deficit Hype, Media Goes Wild

It should have been the lead story from coast to coast: A bipartisan panel of senators released a damning report that slammed bankers, regulators and ratings agencies. Yet the media responded with a collective yawn.
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It should have been the lead story from coast to coast: A bipartisan panel of senators, including some of that body's most conservative members, released a damning report that slammed bankers, regulators and ratings agencies -- and they made it clear that they'd like to see warrants issued against the CEO of Goldman Sachs and other financial executives.

This report was endorsed by all of its Republican members, including conservative co-chair Tom Coburn and Tea Party Senator Rand Paul. Hey, editors, how's this for a headline? "Libs and Tea Party Senators demand: 'Bring me the head of Goldman Sachs.'"

Now that's what I call news!

The media responded with a collective yawn.

Last week also saw yet more coverage of the relentlessly publicity-grubbing "Gang of Six." It's hard to imagine a more stale story. The Gang's just the latest in a series of right-leaning groups that throw a few persuadable Democrats in with Republicans, label them 'bipartisan' or even 'centrist,' then start issuing calls for a conservative agenda that cuts entitlements and keeps taxes low for the wealthy. We've seen that story a thousand times, both in general and specifically about these six Senators. What's more, the Democratic Gang members have been bypassed by the president and Harry Reid, so a few more interviews with this over-exposed crowd aren't exactly "man bites dog" stuff.

Guess which story got more coverage? A Google News search on "Gang of Six" yielded 4,600 hits this morning, while a search on "Levin Coburn" came up with only 180 hits. And coverage of the Gang of Six continues to be overwhelmingly (and falsely) flattering. Reporters continue to cite the Gang's inaccurate talking points, which were generated in think tanks and crafted by marketers, as if they were Holy Writ. But the exhaustively researched Levin/Coburn Report was treated as if it were empty Senatorial bluster.

The coverage of these two stories tells us all we need to know about the media's negative effect on the political process. Sloppy journalism doesn't just cheapen our discourse. It changes the way that politicians govern, too.

Senators, like all politicians, thrive on favorable publicity. When a self-seeking initiative like the "Gang of Six" receives twenty-five times as much coverage -- and much more positive coverage -- than a detailed and comprehensive study like the Levin/Coburn Report, it affects Senatorial behavior. And when truly bipartisan initiatives like Levin's and Coburn's are dismissed, while the phony bipartisanship of the Gang is celebrated, that sends a message to politicians who rely on independent voters.

The Levin/Coburn report really is newsworthy. These senators -- Democrats and Republicans, liberals and die-hard conservatives -- laid the blame for the financial crisis directly at the feet of Wall Street's executives, and they document a pattern of risky lending and fraudulent marketing by U.S. banks. They also placed the blame with regulators, who displayed both incompetence and a(sometimes embarrassing) subservience to Wall Street. The Senators slammed the morally compromised, incompetent ratings agencies. The panel even called for more regulations.

That's right. Senators like Tom Coburn, John McCain, Rand Paul, and Scott Brown signed a report that includes recommendations like "Narrow Proprietary Trading Exceptions" and "Design Strong Conflict of Interest Prohibitions." When four of the Senate's most prominent Republicans, including Tea Party Senators, endorse more regulation, that's news.

And the panel didn't mince words. "Our investigation found a financial snake pit rife with greed, conflicts of interest, and wrongdoing," said Democrat Levin. Republican Senator Coburn said: "Blame for this mess lies everywhere from federal regulators who cast a blind eye, Wall Street bankers who let greed run wild, and members of Congress who failed to provide oversight."

The panel made it clear they felt laws had been broken. Sen. Levin stated that they were referring several reports regarding Goldman Sachs executives, including CEO Lloyd Blankfein, to the Justice Department for criminal prosecution on perjury and other charges. And the panel report includes a number of sentences like this one: "Federal regulators should review the (investment banking) activities described in this Report to identify any violations of law."

That's incendiary stuff. But, as the Columbia Journalism Review reports, the story was downplayed by major media outlets and its major findings were softened. The Wall Street Journal placed the story in section C1, and falsely claimed that the report "lacked evidence of outright fraud." Sen. Levin's call to investigate Goldman executives was described this way: "Sen. Levin said Wednesday that he believed some Goldman executives may have misled Congress during a committee hearing in April 2010. He didn't specify how."

Actually, he did specify how. And how did the New York Times, the nation's "paper of record," handle this story? An otherwise excellent story failed to mention it altogether.

Other outlets either didn't cover the story at all or, like the Journal, buried it deep in the bowels of their back sections. Contrast that with some of the recent headlines about the Gang of Six and their mediocre work:

Senators Boast New Deficit Reduction Plan Will 'Make Everybody Mad'‎ - Fox News
Alan Simpson: 'Pray for Gang of Six'‎ - Wall Street Journal
'Gang of Six' hopes to spur bipartisan action on deficit‎ - USA Today
Gang of Six plan in demand -
Who They Are and Why They Matter: Senators Work Behind Closed Doors On Bipartisan Debt Reduction Deal - ABC News

Coverage like that explains a lot. Sen. Dick Durbin has been heroic on banking reform issues, especially debit card reform. Last week he laid a mighty smackdown on overrated bank CEO Jamie Dimon of JPMorgan Chase, who has led the charge to roll back bank regulations and return us to the pre-2008 days of uncontrolled misbehavior by too-big-to-fail banks. That confrontation brought Durbin almost no publicity. But his Gang membership has provided him with fawning coverage from coast to coast.

Is it any wonder that Sen. Durbin's reluctant to leave the Gang and devote more time to combating Wall Street?

The Times story on the Levin/Coburn report -- co-written by Gretchen Morgenson -- created a stir last week by asking the burning and critical question: Where are the prosecutions for Wall Street crime? That's the same question that senators like Levin and Coburn are asking, along with committee members like Rand Paul, John McCain, and Scott Brown. Their report should increase the pressure on the Justice Department to reverse its shameful refusal to enforce the law when rich bankers are the perps.

But with coverage like this, it's more likely that we'll see unnecessary cuts to Social Security and Medicare instead.


Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America's Future. This post was produced as part of the Curbing Wall Street project and the Strengthen Social Security campaign. Richard also blogs at A Night Light.

He can be reached at ""