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In the wake of the financial crisis of 2008, Damian Tambini, a professor at the London School of Economics, wrote a paper that asked a pretty basic question: “What Is Financial Journalism For?”
As it happens, Tambini found that no one could really agree what business and financial journalism is for, or even who it’s for: Is it for investors? Markets? Or is it for everybody, the public?
We believe we know the answer: Yes.
Welcome to Best Business Writing 2012, the first in an annual series that will collect the best English-language writing on business, finance, and economics. For the past several months, the editors have conducted a thorough, and thoroughly unscientific, search for what we believe is “the best.” We start out with a good vantage point. I run “The Audit,” the business-press section of the Columbia Journalism Review, and part of our job is to read as much of the business press as we can and comment on the good, the bad, and the ugly (hey, it’s a living). Beyond that, our fearless panel scoured the Internet, approached traditional and nontraditional news organizations for what they thought was their best, and asked people in our network what they had read and liked. We also asked Twitter and received some of our strongest entries. We didn’t care about medium. This book has newspapers, magazines, blogs, radio, even a movie. I’m sure some great business writing has gotten by us, but not much.
The result is a collection of nonfiction writing of the highest caliber. Never mind the subject, these are fantastic stories. You will find a riveting yarn of executive-suite intrigue at a major multinational corporation (psst, it’s Pfizer); fascinating behind-the-scenes profiles of business behaving badly (Countrywide, Massey), business behaving brilliantly (Ford), and business behaving weirdly (Ikea). You’ll read trenchant critiques of failed policy makers (yes, Greenspan is there) and business boners (Netflix, Hewlett Packard). You’ll find penetrating looks at a distorted market (psychotropic drugs) and searing investigations. We have insightful think pieces on subjects including the rise of the new elite, Steve Jobs’s genius, and Google’s omnipresence.
And authors? We’ve got the incomparable James Stewart, Gretchen Morgenson, Paul Krugman, John Gapper, Marcia Angell, Martin Wolf, Chrystia Freeland, David Cay Johnston, not to mention noted business reporters Hugh Grant and Warren Buffett. Rolling Stone’s Matt Taibbi? Of course. (If not all of those names are familiar to you, that’s okay; that’s what we’re here for.) But so, too, are people less well known but probably not for long: Michael Hudson, Raquel Rutledge and Rick Barrett, Max Chafkin, and Nick Davies, who for several years has been driving the story about phone hacking and other misdeeds at Rupert Murdoch’s News Corp.
For us, the value of a collection of great business and financial writing is self-evident. But we think this book is more than a good idea, more even than a collection of great reading.
In some ways, our times demand it.
The Great Crash of 2008 was, of course, a watershed event—in financial history but also in the history of the United States and the whole world. The financial crisis rocked great financial institutions, drained public treasuries, fomented political upheaval, triggered a crisis in Europe, and plunged much of the world into a long economic winter. Its total economic and human cost is beyond measure. While historians will be debating the causes for decades, a consensus has formed around one thing: the degree to which the collapse took “everyone”—financial professionals, regulators, journalists, and, certainly, the public—by surprise.
I put “everyone” in quotes because a disparate group of professionals—an economist here, a handful of Wall Street traders there, a couple of hedge funds, even a journalist or two—has been identified as having duly warned of, or at least profited from, the great crash centered on the U.S. mortgage market. Indeed, a minidebate has emerged in business-news circles (in which I played some role via a lengthy critical review of precrash reporting, [“Power Problem,” CJR, May/June 2009]) over the performance of the business press in its watchdog role over financial institutions that it purports to cover.
But beyond who-wrote-what-story-when, the crash and ongoing crisis remind us that, in a democracy, it’s not enough to understand only political events and actors, but economic and financial ones as well. The debate can’t be left to experts and cognoscenti (clearly) and must be opened to as wide a swath of society as possible, even people who don’t normally think of business news as their bag. Put another way: hopeful ignorance about matters business and financial is no longer an option, if it ever was.
In assessing the early-twentieth-century Muckrakers, the historian Richard Hofstadter said their importance lay in the fact that their sweeping, investigative style of journalism allowed “any literate citizen to know what barkeepers, district attorneys, ward heelers, prostitutes, police court magistrates, reporters and corporation lawyers had always come to know in the course of their business.” That certainly describes Ida Tarbell’s sober, fact-laden nineteen-part expose of Standard Oil, which became a national phenomenon and changed the national discussion about industrial consolidation, the great economic issue of that era. What insiders already knew, Muckrakers revealed to the general public. They were the great connectors.
That role is now played, more or less, by the business press, supplemented by the general press when it ventures into business, economics, and finance (e.g. The Atlantic, Rolling Stone, This American Life). The definition of the business press has changed radically in the last decade or so. It has exploded with the rise of new media and has also shrunk as industrial-era news-gathering institutions—particularly great metropolitan dailies including the Los Angeles Times and the Washington Post—have seen once-formidable business desks hollowed out. For now, the public still relies to a great extent on what are known as “legacy” news organizations for news gathering and investigations, supplemented by a gusher of economic, financial, and business commentary and analysis from new players, some of it quite fantastic (examples of which are included here).
So for those who read the business press regularly, this book is for you. Skim the table of contents and marvel at how much great stuff you missed in the last year or so. But for those who don’t read it regularly, this book is for you, too.
It’s true, business news has an image problem. Many believe it’s too technical or geared to insiders and people already in the know. There’s some truth to the perception. Business news began as form of elite communications, a pragmatic messaging tool to aid investors and markets, and, until not so long ago, that’s all it was. Indeed, the book you are holding is a result of business news’s long, tortured fight from the cultural margins to the mainstream.
Business news as we understand it arose in the late seventeenth century and gained traction in the early eighteenth century, accompanying the rise of capitalism and early publicly traded companies, like the notorious South Seas Trading Company, which flourished—until it crashed. The economist Robert J. Shiller pointedly notes that the history of financial bubbles coincided with the advent of financial media (you can insert your own CNBC joke here).
The business press expanded to chronicle the Industrial Revolution, notably including The Economist, founded in 1843 and edited by businessman and essayist Walter Bagehot, considered the granddaddy of modern business news. In the United States, many early American newspapers, in fact, were commercial papers until technological improvements made it cheap enough to provide general news for a broader audience in the penny press. And while the early commercial press is credited with helping propel the growth of markets and industry and with providing the very language of capitalism, no one would mistake it for James B. Stewart. For most of its history, extending well into the twentieth century, business news was a dreary, incoherent jumble of earnings, prices, and government data. Put it this way: there is a reason there is no book called Best Business Writing 1912.
The great broadening of business news came incrementally, then suddenly. Publications conceived during the go-go 1920s (poorly timed, as it turned out: BusinessWeek started in 1929) were aimed at a growing managerial and entrepreneurial class. Henry Luce staffed his new magazine, Fortune (launched 1930), with poets and novelists, including Archibald MacLeish, James Agee, and Dwight MacDonald, on the theory that it was “easier to turn poets into business journalists than it was to turn bookkeepers into writers” (and isn’t that the truth?). Fortune in the early and mid-1930s produced a spate of business writing so radical—including a scathing series on U.S. Steel by MacDonald, then a Trotskyite sympathizer—that Luce by the mid-1930s had to retake control and install a new editor. Still, the mainstreamed Fortune helped to pioneer in-depth business reporting with the “corporation story,” the classic corporate profile that became a minor art form, a tradition represented in this volume (see: “Inside Pfizer’s Palace Coup,” by Peter Elkind and Jennifer Reingold, with Doris Burke).
The real breakthrough in American business news came in 1941. That’s when the Wall Street Journal, undistinguished editorially and in desperate shape financially, elevated to managing editor a thirty-two-year-old DePauw graduate with a deft writing touch, an easygoing manner, and a clear vision of what business news could be. Bernard S. Kilgore was a midcentury, middle-American executive out of a Frank Capra movie. A devoted family man, he rode the commuter train from Princeton, marking up that morning’s Journal, and for relaxation changed the engine of the family Ford.
But he took business-news convention and basically tore it up. He ignored the inverted pyramid. He expanded story length, installed a new narrative writing style, and threw out hide-bound definitions of what was and wasn’t a “business story.” He created a system that would be able to produce two long-form stories a day that would take readers into corners of the economy they had never before seen: a salad-oil swindle in New Jersey, Lyndon Johnson’s wife’s broadcasting empire, slave-labor camps in Houston. Eventually, Journal reporters transcended business reporting—or one could argue, expanded it—to broach almost any subject of interest. The Journal found relevant to business readers the secret shame of illiterates, the Cabrini Green housing projects, the Falun Gong, you name it. Business news was now about a lot more than just what General Electric said yesterday.
After a tense few years waiting for the new format to take hold, success and acclaim followed. By the late 1950s, Harper’s would pronounce the Journal’s rise the “outstanding phenomenon in American daily journalism in the past two decades,” adding that “whether the (journalistic) broadening brought success or vice verse is an open question.” When Kilgore took over the paper in 1941, its circulation was 35,000. By the time he died in 1967, it was more than a million; by the late 1970s, it would top 1.7 million, passing the New York Daily News to become the largest-circulation paper in the United States, a place it has held off and on ever since.
Kilgore’s expansive journalistic vision, copied elsewhere, created a permanent argument in business newsrooms over the very purpose of business news and its intended audience—hence the disagreements Dr. Tambini found in his study. These tensions are, for the most part, healthy.
Much is made about the need to improve Americans’ “financial literacy”—nuts-and-bolts tools such as knowing which mutual fund to buy, how to avoid banking fees, and so on. But the Kilgore revolution was concerned with a more important pedagogical job: nothing less than the democratization of financial and economic knowledge. While it’s nice to know about financial and consumer products and services, it’s much more important to know about financial and corporate institutions and actors because they shape the world we live in. That’s the kind of “financial literacy” that counts.
Much of the business press today is built on a foundation laid by Kilgore. In a way, this book is another of his legacies.
Of course, business news, like the rest of the media, has continued to evolve. The mid-1990s saw an explosion of business news to accompany Americans’ stampede into the stock market (much later than many imagine). In 1996, by one count, twenty-two new business publications were launched. CNBC rose from cable TV afterthought to cultural icon. The 2000s brought even more dramatic changes—the tech wreck, a severe advertising recession, and the rise of the Internet started a great unraveling of institutional media and triggered the emergence of new journalism forms. We are now in a transitional moment: weakened legacy institutions bobbing in a vibrant, conversational, chaotic, and atomized digital sea. The degree to which what was lost from mainstream media is offset by gains in new media is a debate for another day.
The important thing is that great business journalism is going strong in both new and old forms and media. In this volume, the point is forcefully driven home by Zach Carter and Ryan Grim’s X ray of the Washington debate on bankcard swipe fees for Huffington Post and by Jesse Eisinger and Jake Bernstein’s expose of crimes and misdemeanors at Merrill Lynch for ProPublica, which won the first Pulitzer Prize awarded to a piece that never appeared in print. Morgan Housel’s deconstruction of bubble-era policymakers “Greenspan, Rubin, and a Roomful of Hypocrites,” The Motley Fool) obviously represents the tip of a huge iceberg of amazing online economic commentary and analysis.
It’s not going overboard to say that great business writing is the vital link between the public and the institutions that shape our economic lives. That’s why we’re proud to present Best Business Writing 2012 and even prouder to do it now when the economic currents are so complex and the stakes are so high.
And besides, these are just such great reads. Thanks for picking us up.
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