Now's the time for the press to admit its housing blind eye
The chief executive of one of America's biggest home builders claims to have fingered one of the responsible parties for the terrible times in the housing business.
His charge is laughable on its face and reeks of hypocrisy. Toll has a better reputation than many in that business, but the building industry was among the key partners in a daisy chain of sleaze and greed that led to the current debacle. The news stories we're reading now - with many shoes left to drop, no doubt - are essentially getting it right.
But Toll's blaming of the press had one element of truth, even if it wasn't the one he was claiming. As they've done in so many previous bubbles and economic calamities, journalists fell down on the job, failing to tell the truth when it might have done some good.
Newspapers and broadcasters were raking in billions in advertising from the real-estate and banking industries as this bubble inflated. I don't believe this represented any deliberate malfeasance. But the fact is you don't see lots of tough coverage in media of the people and companies paying the bills.
Sure, there were - until the past year or so - extremely infrequent stories containing warnings in a few publications and occasional quotes from skeptics in the prices-just-keep-rising stories that overwhelmingly dominated the coverage. But the dominant theme, especially in the weekly real-estate sections you find in many papers, was relentless optimism.
Those who challenged the conventional wisdom back then were ignored. Or they were insulted by wishful thinkers and (I suspect) people who stood to gain from the continuing bubble.
Where were the stories we should have been seeing? Where were the warnings about a market that fewer and fewer people could afford to enter except with no-interest or no-down-payment loans, where home prices were so historically out of whack with incomes? Calling these "buyers" - whether speculators or victims of con games, or both - "homeowners" then, much less now, was editorial malfeasance.
Where were the penetrating stories about the secondary (and far beyond) mortgage markets, which were salting hugely risky debt all through the US economy? Where was the reality, that all the suckers were being played by people who knew it couldn't last: brokers, bankers and, above all, Wall Street's ever-clever wizards who risk other people's money for gigantic fees.
The journalism craft should take a long, hard look at what it failed to do, yet again, in the housing bubble. It failed to warn - as loudly and incessantly as it did in promoting the housing bubble - that a financial crunch was on the way.
There's plenty of blame to go around in this mess. Finger-pointing has barely begun. But, like Toll, the journalists who do the pointing should first check their mirrors.
Dan Gillmor is the author of We the Media: Grassroots Journalism By the People, For the People and director of the Center for Citizen Media (www.citmedia.org).
