This story first appeared on the TomDispatch website.
Everyone knows this story, though fewer and fewer read it on paper. There are barely enough pages left to wrap fish. The second paper in town has shut down. Sometimes the daily delivers only three days a week. Advertising long ago started fleeing to Craigslist and Internet points south. Subscriptions are dwindling. Online versions don't bring in much ad revenue. Who can avoid the obvious, if little covered question: Is the press too big to fail? Or was it failing long before it began to falter financially?
In the previous century, there was a brief Golden Age of American journalism, though what glittered like gold leaf sometimes turned out to be tinsel. Then came regression to the mean. Since 2000, we have seen the titans of the news presuming that Bush was the victor over Gore, hustling us into war with Iraq, obscuring climate change, and turning blind eyes to derivatives, mortgage-based securities, collateralized debt obligations, and the other flimsy creations with which a vast, showy, ramshackle international financial house of cards was built. When you think about the crisis of journalism, including the loss of advertising and the shriveled newsrooms—there were fewer newsroom employees in 2010 than in 1978, when records were first kept—also think of anesthetized watchdogs snoring on Wall Street while the Arctic ice cap melts.
Deserting readers mean broken business models. Per household circulation of daily American newspapers has been declining steadily for 60 years, since long before the Internet arrived. It's gone from 1.24 papers per household in 1950 to 0.37 per household in 2010. To get the sports scores, your horoscope, or the crossword puzzle, the casual reader no longer needs even to glance at a whole paper, and so is less likely to brush up against actual—even superficial— news. Never mind that the small-r republican model on which the United States was founded presupposed that some critical mass of citizens would spend a critical mass of their time figuring out what's what and forming judgments accordingly.
Don't be fooled, though, by any inflated talk about the early days of American journalism. In the beginning, there was no Golden Age. To be sure, a remark Thomas Jefferson made in 1787 is often quoted admiringly (especially in newspapers): "If it were left to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate for a moment to prefer the latter."
Protected by the First Amendment, however, the press of the early republic was unbridled, scurrilous, vicious, and flagrantly partisan. In 1807, then-President Jefferson, with much more experience under his belt, wrote, "The man who never looks into a newspaper is better informed than he who reads them, inasmuch as he who knows nothing is nearer to truth than he whose mind is filled with falsehoods and errors."
Two Golden Decades
If there was a Golden Age for the American press, it came in a two-decade period during the Cold War, when total per capita daily newspaper circulation kept rising, even as television scooped up eyeballs and eardrums. Admittedly, most of the time, even then, elites in Washington or elsewhere enjoyed the journalistic glad hand. Still, from 1954 to 1974, some watchdogs did bark. Civil rights coverage, for example, did help bring down white supremacy, while Vietnam and Watergate reportage helped topple two sitting presidents, Lyndon B. Johnson and Richard Nixon.
Of course, press watchdogs also licked the hands of the perpetrators when Washington overthrew democratic governments in Iran in 1953, Guatemala in 1954, and when it helped out in Chile in 1973. As for Vietnam, it wasn't as simple a tale of journalistic triumph as we now imagine. For years, in manifold ways, reporters deferred to official positions on the war's "progress," so much so that today their reports read like sheaves of Pentagon press releases. Typically, all but one source quoted in New York Times coverage of the 1964 Tonkin Gulf incidents, which precipitated a major US escalation of the war, were White House, Pentagon, and State Department officials (and they were lying). In the war's early years, at least one network, NBC, even asked the Pentagon to institute censorship.
Nonetheless, the sense that the war was an unjustifiable grind grew, especially after the Vietnamese launched the Tet Offensive of January-February 1968, startling the US military, Washington officials, and journalists alike. When, in 1969, Seymour Hersh reported for the tiny Dispatch News Service that a unit from the Americal Division had slaughtered hundreds of Vietnamese civilians in a village named My Lai, his story went mainstream.
Still, the long bombing campaign that President Nixon ordered in Cambodia and Laos did not feature on television, and barely made the newspapers. And even when, in a remarkable feat of reporting, it finally did in a major way, there was no journalistic sequel. The "secret" bombing of Cambodia—secret from Americans, that is—was reported on page one of the New York Times on May 9, 1969, and 37 years later, the reporter, William Beecher, said this about his story: "We're not talking of some small covert operation here, but a massive saturation bombing campaign, with a false set of coordinates to mislead the Congress and the public… You would have thought that such a story would have caused a firestorm. It did not."
After Watergate, whatever hard-won, truth-bound independence the mainstream press had wrested from its own history failed to hold. In the run-up to George W. Bush's invasion of Iraq, for example, most Washington journalism once again collapsed into deference, and so, too, did the financial press on its own front. Washington's war-making might and Wall Street's financial maneuvers were both deemed too mighty, too smart, too hypermodern to fail.
Although the New York Times and the Washington Post later acknowledged flaws in their Iraq reporting, neither paper nor other major outlets have owned up to the negligence that led up to the great global economic meltdown of 2007-2008. We are far from grasping how fully business journalism played cheerleader and pedestal-builder for the titans of finance as they erected a fantastical Tower of Derivatives, which grew way too tall to fail without wrecking the global economy.
Start to finish, financial journalism was breathless about the market thrills that led to the 2007-2008 crash: the financialization of the global economy, the metastasis of derivatives, and especially the deregulation underway since the late 1970s that culminated in the 1999 congressional repeal of the 1933 Glass-Steagall Act (with President Bill Clinton blithely signing off on it). That repeal paved the way for commercial and investment banks, as well as insurance companies, to merge into "too-big-to-fail" corporations, unleashed with low capital requirements and soon enough piled high with the potential for collapse.
A Proquest database search of all American newspapers during the calendar year 1999 reveals a grand total of two pieces warning that the repeal of Glass-Steagall was a mistake. The first appeared in the Bangor Daily News of Maine, the second in the St. Petersburg Times of Florida. Count ‘em: two.
On February 24, 2002, as the scandal of the derivative-soaked Enron Corporation unfolded, the New York Times's Daniel Altman did distinguish himself with a page-one business section report headlined "Contracts So Complex They Imperil The System." He wrote: "The veil of complexity, whose weave is tightening as sophisticated derivatives evolve and proliferate, poses subtle risks to the financial system—risks that are impossible to quantify, sometimes even to identify." He stood almost alone in those years in such coverage. Most financial journalists preferred then to cite the grand Yoda of American quotables, Federal Reserve Chairman Alan Greenspan. And he was just the first and foremost among a range of giddy authorities on whom those reporters repeatedly relied for reassurance that derivatives were the great stabilizers of the economy.