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Re: The Problem With Financial Commentary

Derek Thompson has a nice post on why financial journalism tends to be a bit boring. In particular, he's right that it's hard to write accessibly about a topic that comes complete with its own language. "Collateralized debt obligations" do not exactly invite the reader in for a warm cup of cocoa.

But I think the bigger piece is that it's hard for generalists to write accessibly about a complicated topic that they don't know particularly well. Most policy issues are recurrent on the national stage, and so a certain group of writers holds substantial expertise. There are large fleets of off-year generalists who reactivate when issues like health-care reform or climate change come around. Jon Cohn, for instance, is a general political writer who has also been studying health-care policy for a decade, as it's one of those major topic areas where you might specialize a bit. Dave Roberts spent a lot of time on the energy beat even before Barack Obama boosted cap-and-trade to the national agenda. When their issues jumped to the front of the agenda, they were ready to translate between the experts, the policymakers, and their readers.

But none of that was true when the financial crisis hit. No generalist writers were idly studying up in preparation for a catastrophe generated by the correlated tail risk of structured financial products. Meanwhile, most of the financial writers who were ready for the fall were used to writing for a specialist audience and had to recalibrate for people who didn't know what structured finance was.

There were a couple counterexamples to this. Michael Lewis, for instance, had been hanging out in sports writing for awhile, but his 1980s book Liar's Poker was fundamentally about the mortgage market. Roger Lowenstein, who chronicled the collapse of Long-Term Capital Management in "When Genius Failed." They were the first out of the gate with excellent stories on the meltdown. They were ready. There were also a couple of financial specialists who beautifully adapted to the rush of general interest, like Felix Salmon and Justin Fox. And some lab somewhere grew the astonishing talent that is Mike Rorty. But fundamentally, the media was unprepared. It's not just that they didn't know the issue. It's that they didn't really know anyone who did.

By Ezra Klein  |  July 9, 2009; 4:37 PM ET
Categories:  Financial Crisis  
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Comments

I think your friend Paul Krugman does a pretty great job of explaining esoteric financial jargon in a very accessible way.

ex: The Return of Depression Economics


Posted by: wldowning | July 9, 2009 5:53 PM | Report abuse

and what about the very lucid writers at baselinescenario.com?

Posted by: robinshuster | July 9, 2009 10:44 PM | Report abuse

Thanks for the kind words. But Roger Lowenstein "first out of the gate"? Um, did I miss that story?

Posted by: felixsalmon | July 10, 2009 1:08 AM | Report abuse

A similar dynamic seems to be occurring with climate change. When y'all in the liberal commentariat speak about it, you say it's really important, but mostly you'd rather discuss other subjects.

Posted by: SamPenrose | July 10, 2009 1:43 AM | Report abuse

Dean Baker. Doris Dungey ("Tanta"). Brad DeLong. Duncan Black. Angry Bear.

How can it be that for years now, I've known people who "knew the issue" but the Washington Post didn't? Just because your current employers refuse to print anyone who actually knows what they're talking about doesn't mean they don't exist.

Posted by: Bloix | July 10, 2009 2:34 AM | Report abuse

While I appreciate the point, this was such a big story that it seems like the news could have made a bigger effort to try. As a good example, This American Life has done a heck of a job. Why would their folks be able to pull this off, while other media outlets can't?

Posted by: rpy1 | July 10, 2009 10:29 AM | Report abuse

Isn't this the key problem with the demise of big dailies? When you've got a business desk, as well as a health desk, and an international desk, you've got lost of space for people to take up niche subjects and foster that knowledge base. So what happens when all of those niche environments are gone?

Posted by: dganchor2002 | July 10, 2009 1:18 PM | Report abuse

I see amnesia has set in. You've lost all memory of your former co-blogger Dean Baker. Well, the Post does seem to make people stupid, as Dr Baker points out today:

http://www.prospect.org/csnc/blogs/beat_the_press

Posted by: Bloix | July 10, 2009 2:36 PM | Report abuse

Did you miss "Meltdown", by Tom Woods?

Posted by: ChristopherGeorge | July 11, 2009 11:40 AM | Report abuse

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