What really bothers me is when “respected” media start out with the greatest of intentions and end up sending the wrong message.  Who am I kidding, what media outlet has good intentions?  They only aim to incite fear and anger.

I can’t think of many media outlets more well respected than the NY Times.  Though known for their liberal bias, I generally respect their reporting.  That is why I’m always disappointed when someone caves to the pressure of breaking stories and creates news and anger when none should have existed.

Joe Nocera of the NY Times Talking Business column has successfully diluted the integrity and respect of the NY Times brand.  This crack-journalist listened in on an employee-only conference call with Chase (the lending arm of JP Morgan).  An employee asked an unnamed executive about what the bank plans to do with the $25 billion it expects from the government.  The executive responded in a manner that indicates they do not intend to use it to loan out money.  Instead they see an opportunity to buy up more banks.  Duh!  But there is a problem here.  The executive is unnamed.  Was he Chief Executive or Assistant Vice President in charge of processing car payments?  My boss is an executive, but he doesn’t exactly decide or know for sure the entire strategic position of my bank.  Joe needs to tell us who said that, or otherwise it’s no better than “I heard from a guy that this dude said that his sister thinks you’re cute.”

But Joe doesn’t stop there.  Citing this one executive he goes on to tell us all the banks are planning buyouts instead of offering new loans.  I prefer proof from the public relations folks at each bank, not an unnamed executive.  No citations + No sources = a good opinion piece in Joe’s eyes.  We can assume Joe’s hypotheory is right though, despite his lack of journalistic integrity.  The banks don’t care about you and your house, they care about growing profit.  In the end they will pursue the path that generates the most profit.  In this case it appears buying other banks is a more profitable exercise.  I don’t hold that against the banks, and you shouldn’t either because they are operating within the rules they were given.  Imagine giving your 4-year old $100 and sending to the store to pick up their food for the week.  You suggest, but don’t require, he gets healthy stuff.  Should you really be surprised when he comes home with candy and cookies?  Not shame on him, he was operating within the rules you gave him.  Shame on you for not giving more rules and setting your expectations so high.

These are the same banks that screwed you in the first place, do you really think they’re going to fix it without being required to?  Give me your license and right to vote, you’re an idiot.

Back to Joe.  I’m a blogger, I don’t hold a degree in journalism (next to communications, the most useless of degrees) and I am not paid by a media company to write quality stuff.  My readers barely expect me to write full sentences (I’ve let them down before).  However please let me show you how do more than listen to a phone call to get enough juice for an article:

Actual Research:
The banks aren’t to blame for using the money from the Treasury as they please, your Congress is.  While our elected officials were busy adding pork to the bill, they forgot to tell the banks what the money must be used for.  The UK Bailout requires funds must be used to lend to small business and customers.  Our bailout does not.  Remember it’s not the banks’ fault Congress can’t write rules.

Secondly, the original intent for the bailout was not to take equity stakes (buy shares) in banks.  Bush, Paulson & Co. approached Congress for a bill giving the treasury money to buy bad loans from the banks.  This would make the Treasury the holder of loans bad loans.  But people like Paul Krugman thought it would be better for the Treasury to buy preferred stock in the banks, and let the banks use their new cash to lend to the people.  So that’s what we did.  Remember we forgot to tell the banks they HAD to do this.  Here’s my favorite part:  Paul Krugman is another NY Times pawn.

So Joe, if you want to get mad at someone, get mad at your colleague Paul Krugman for suggesting such an awesome half-socialized bailout plan, get mad at your Congress for once again failing to bring what they promised, get mad at the NY Times for printing your garbage.

Do not draw conclusions without citing your sources when you work for such a prestigious company.  Do not create hypotheories based on a statement from one unnamed executive.  Do not blame our banks for playing by the rules we wrote for them.  Do not write pieces that vilify companies for doing exactly what capitalism expects them to do.  I’m sure you upcoming book on the subject will also be stupendous.

This is what your column should have said:
A NY Times journalist listened in on an employee only conference call with Chase (the lending arm of JP Morgan).  An unnamed executive spoke of using their $25 billion from the treasury to purchase competing banks instead of lending to consumers and businesses as previously intended, though not required in the bailout fine print.  Calls to the Chase public relations team have not been returned.

I fully acknowledge my opinions can carry somewhat of a bias considering I work for a bank.  But keep in mind Joe Nocera is probably right about the banks, and I am not denying that.  My beef is the use of the NY Times brand to create truths from insignificant and unnamed sources.

Oh and Consumerist is no better.  The cream of the crop blog linked to Joe’s piece and also misinterpreted the message.  Consumerist you let me down, as I often look up to you for blogosphere integrity.

NY Times via Consumerist

By The Weakonomist

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categories: banking, economics, government, media