Journalist and media critic Dean Starkman, author of The Watchdog That Didn’t Bark, speaks about capture in business media and explains how journalists missed the financial crisis, and why they are almost certain to miss the next one as well.

In 2008, when the subprime mortgage market imploded and financial institutions began to fail, no one seemed more surprised than the journalists who covered the financial industry. Their sources, mostly industry insiders, had told them that everything was fine. In his 2014 book, The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, 2014), Dean Starkman writes: “The press published its hardest-hitting investigations of lenders and Wall Street between 2000 and 2003, even if there were only a few of them. Then…it lapsed into useful but not sufficient consumer and investor-oriented stories during the critical years of 2004 through 2006.”

Starkman’s book, a comprehensive study on the shortcomings of business journalism in the years before the crash, aims to answer the question that many within the media industry were asking themselves on the eve of the financial crisis: “How could we have missed this?” A number of high-profile investigations into corrupt financial practices in the mortgage market had been published in the years prior to the crash, but they were too few and far between for people to really connect the dots, or for regulators to take action. A gradual erosion of journalistic tools and skills, he explains, had left journalists not equipped to investigate the systemic fraud that energized the crisis, or even to imagine the possibility of its existence.

The irony was that the crisis journalists had missed was characterized by a type of behavior they had already covered. In the early 1990s, reporters from the Boston Globe exposed the predatory lending practices of a powerful regional bank called Fleet Finance (an Atlanta-based subsidiary of Rhode Island’s Fleet Financial Group), which had talked low-income homeowners into taking dubious home equity loans with interest rates above 20 percent. Years later, the same behavior (albeit on a much larger scale) had been the basis of the subprime boom.

This time, however, financial journalists ignored signs that the entire subprime market was based on widespread fraud and—short of a few exposés that only hinted at the underlying systemic problems—failed to investigate the questionable practices of financial institutions. Business journalism, in fact, became complicit in perpetuating the illusion that the housing and mortgage markets were sound. “There was a bubble all right, and the business press was in it,” Starkman writes.

What changed between these early investigations of proto-subprime practices and the failure of financial media to spot similar frauds that took place on Wall Street and across America in the years prior to the crash? The answer Starkman offers is complex. It consists of a toxic mix between regulatory failure, a complete collapse of the business model of journalism, and the enormous growth of financial institutions. A lot of it, though, has to do with the conflict between two different strains of journalism—access reporting and accountability reporting—and the latter’s growing prevalence in recent years. “Access reporting tells readers what powerful actors say, while accountability reporting tells readers what they do,” Starkman explains in his book.

Business journalism, at its root, emphasizes access. In the years prior to the financial crisis, according to Starkman, access became its be-all and end-all. Since then, he adds, little has changed.

All of this might have been less troubling had media not played such an important role in shaping corporate policy and regulatory outcomes. In their 2002 paper, The Corporate Governance Role of Media, the University of Toronto’s Alexander Dyck and Chicago Booth’s Luigi Zingales (who is also the director of the Stigler Center) argued that the media plays an important role in shaping corporate policies and has the power to pressure managers, who fear their public reputation might be hurt, into behaving within societal norms. In their 2008 paper, Media Versus Special Interests, Dyck, Zingales and Harvard’s David Moss argued that the media can provide a “counterbalance to special interests” and make regulatory capture less likely.

Starkman is a longtime investigative journalist and media critic. For nearly a decade he edited The Audit, the Columbia Journalism Review’s financial journalism section. Before that, he was a reporter for the Wall Street Journal and the Washington Post. Currently, he is a fellow at the Center for Media, Data and Society at the Central European University in Budapest.

In an interview with ProMarket, Starkman explained the structural and cultural reasons that led to the failure of business journalists to bring Wall Street executives to account. He also reflected on the role of outsiders in uncovering major financial stories, elaborated on the role of cognitive capture in the media industry, and explained why business journalists today are even less equipped to spot future financial crises.

Q: I want to start with a personal question. After nearly ten years as a media critic, you went back to being a reporter in 2014, working for the Los Angeles Times. How was the experience of being reintroduced to the newspaper industry?

Incredibly instructive and informative. When I left, journalism was still at its historic postwar strength. Revenues were still relatively high, and the Internet had not had the devastating effect it would have a couple of years later. I left at a time of media prominence and power, and returned almost 10 years later to a completely transformed landscape. The Los Angeles Times had upwards of 1200 reporters in the mid 2000s, and when I came in, it had less than half that, and it was shrinking. The Web had become a much more important factor in the life of reporters, and productivity requirements became an overwhelming focus. That, to me, is a critically important factor in trying to figure out why the news looks the way it does.

I divide issues in journalism into cultural and structural. By the time I arrived, cultural issues almost became a luxury. Structural issues were overwhelming the news system. What I mean is, if you are a fairly-flush organization with adequate resources, then you can engage questions like what you will and won’t cover and what kind of attitude you’ll adopt vis-à-vis institutions. Whe

n productivity becomes the number one priority, everything else becomes a secondary issue.

Q: Can you elaborate on the structural/cultural issues, and how they might influence each other?

One example of structural issues is this dichotomy, or tension, between access and accountability. Access reporting has a default advantage, for a lot of reasons: it’s relatively faster, easier to do, and provokes less conflict. All those things militate against accountability reporting, and make access reporting the default style and practice in the field.

I think the digital environment meshes with the access style with uncanny exactness. When you’re in a hurry, you’re not trying to provoke confrontations, or cause trouble, or upend the paradigm. You’re reliant on institutions.

The culture and structure are tied together inextricably. You can’t separate them.

Q: When it comes to structural issues, though, it’s not just print vs. digital, is it? There’s also the market structure: the concentration of media, the dominance of few conglomerates that control the vast majority of news outlets.

On the surface, it looks like the media landscape has atomized and become a disintegrated, disaggregated ocean of choice. Behind the scenes, you’re seeing these giant entities locking up the infrastructure. You can think about the cable industry, or Internet search, or digital advertising companies, Google and Facebook. These giant content providers. If you look at the top 20 online news sources, everything is giant. The only purely digital companies to crack the top 10 are BuzzFeed and the Huffington Post, if that.

Q: And the Huffington Post is now owned by Verizon.

There you go. That brings to mind Noam Chomsky’s critique as to what degree reporters have agency when a handful of companies control the entire ecosystem. That’s a fair and subtle critique, usually resisted by reporters that say ‘we don’t have any restriction, we’re free to do as we want.’ Of course, we know that’s not true. Is it significant that Amazon’s chairman owns the Washington Post in the Post’s coverage of antitrust and technology? The answer has to be “yes.”

Q: The Internet was supposed to stop this trend, but seems to have exacerbated it. In recent years, we have seen a wave of consolidation among digital content providers. Google and Facebook, the chief arbiters of what news stories are being read and viewed online, are tremendously powerful monopolies. Media seems to have become more monopolized, not less so.

One of the defining features of the Internet is the winner-take-all structure: if there’s a market, one player would win. There’s only one giant retailer, only one giant search company, only one giant social media company, only one giant room-sharing company. If you look at the VC world, that’s the way it’s framed. It’s not about mid-size companies, but about one company dominating each space.

Q: Eight years after the financial crisis, do you think business media is now better positioned to recognize systemic risks?

No, no, absolutely not. Media has been willfully ignoring people outside of elite circles since there was media, but what was interesting about the financial crisis is that we all paid for that kind of ignorance. It’s a rich irony that mortgages made a subway ride away from major media outlets — in places like East New York, Canarsie and Bedford Stuyvesant, as well as places like Cleveland, Newark, the south side of Chicago — blew apart the entire global financial system and rocked the world economy.

Has that lesson been learned? Hell no. Not at all. Are we better set up to cast the net more widely? To find dissenting voices and listen to them? Are we more open to seek out convincing whistleblowers and protect them? Do we have resources to knock on doors and climb stairs of tenement apartments? The answer is “no.” It’s the opposite.

The water crisis in Flint, Michigan is an example of that. This was not a state secret. People in Flint were jumping up and down for months. If people had learned the lesson of the financial crisis, there would have been intensive media coverage before the government eventually admitted there’s a problem.

Another example would be the Trump phenomenon. The white working class is enraged. Why? It’s a shock to us. Same thing with Bernie Sanders. You had to look no further than the student loan figures to understand why young people are angry, but how well have we covered their predicament? How well have we covered the predicament of the middle class in general? To me, that these things surprise us is a commentary on our media system. It wasn’t a secret that these very big groups were suffering.

Q: In your book, you tell the stories of outsider journalists who identified and did early reporting on the financial crisis, long before established media outlets noticed problems in the mortgage market. Can you elaborate on the role of outsiders in recognizing these kinds of systemic threats?

When you go back to all the major stories and revelations over the years, they all had to filter from the outside in, and from the bottom up. It happened with the tobacco industry too. That is one of the reasons that Glenn Greenwald is one of the most important journalists of his generation, because he understands the whole dynamic of whistleblowing.

At the risk of sounding like a nostalgist, I miss the system of working your way up through small papers around the country. The system that we’re in now has everyone concentrated in Manhattan.

Q: When it comes to access versus accountability reporting, is it possible that incentives play a big part in determining the outcome of this debate? There’s little incentive for accountability journalism: there are very few jobs, it takes too long, and with the ongoing concentration of media, it’s likely that you’ll anger your current boss, or your next boss.

That was another reason I wrote this book: it’s important to define the field. Access reporters are in this environment, and at some point you don’t know better. The Glenn Greenwalds of the world get marginalized as freaks and kooks, as people who don’t represent a legitimate part of the field. Accountability reporters have been marginalized since they began, and often contributed to their own marginalization by being strange people.

Q: You characterize the question of access versus accountability as a debate, but it feels like that debate has been resolved. While we do see some great accountability reporting, wouldn’t you say that the vast majority of business journalism today is based on access?

That’s a fair point, and if you did a content analysis you’d probably be right. But these things ebb and flow, and they have to do with larger social forces. The Progressive Era was a bright light of accountability journalism that suddenly went out during the jingoism of World War I, then went quiet for 30-40 years. It’s not a coincidence that during the 1960s, when society was in upheaval and people were questioning institutions, that newspapers responded by setting up investigative teams that became embedded in journalistic practice for the next 30-40 years.

I am an optimist, because I believe accountability journalism may be diminished, but will never be extinguished. Once journalism fixes its business model, we’ll see public attitudes change. The public is ready for it.

Q: You say that business media missed the financial crisis, and other stories that caught it by surprise, partly because it relied largely on insider sources. Some might argue that the reason for this isn’t incompetence, but a deliberate choice of how to frame certain stories and who to listen to. You mentioned for instance the Chomsky critique, that media is a part of the establishment and disseminates establishment views. Can it be used to partly explain why business journalists were not skeptical enough before the crisis, or even now?

On this, it’s instructive to look back: there was always a hierarchy in news organizations, but in the sixties and seventies reporters were much more empowered. There’s a famous anecdote about the Wall Street Journal: in the seventies, its Page One Editor at the time decided he just wasn’t interested in economic and financial news. The Wall Street Journal went for days at a time without an economic or financial story on page one, until the publisher stepped in.

This just goes to show how these things can change over time. The Chomsky argument is interesting and useful, but it doesn’t account for the dynamism that things change over time, and that news professionals themselves have agency.

We are part of the system, and have to pay the mortgage and everything, but there’s a degree of agency that can also be decisive.

Q: Is agency enough, though? Just recently, we saw an example of what happens to journalists who are not beholden to interests, when Sheldon Adelson purchased the Las Vegas Review Journal and the staff tried to fight him, but ultimately failed.

The Adelson thing is a very telling moment. When Jeff Bezos and John W. Henry bought the Washington Post and the Boston Globe, respectively, people were asking ‘well, what’s the difference between today and the early 20th century, when William Randolph Hearst and other moguls owned newspaper companies?’ There’s a huge difference, and the Adelson example is illustrative of that. Adelson made his money on things outside of media, as did Bezos, as did Henry. In the case of Hearst, or the Sulzbergers, or the Grahams, their power came from, and only from, owning successful media companies that listed readers’ trust as one of their core values. Whereas Adelson, to use the most extreme example, the paper adds nothing to him from a financial standpoint and is clearly a tool to advance his other interests.

Bezos is a more complex example, but no one would argue that the Washington Post is important to him from a financial perspective. It’s either completely neutral to his life, or in some way a check on overly aggressive coverage of antitrust for all we know.

The hope is, of course, that media develops independent sources of revenue. Period. If you have your own revenues, dependent on your content, and you can scale it, then Adelson can buy all the small town papers he wants; there will at least be another presence there with an army of reporters to do the work.

Q: In your book, you write: “There was a bubble all right, and the business press was in it.” Would you say business media acted as an enabler of the fraud that allowed the crisis to happen?

Let’s assume that everyone is competent and well intentioned, according to their own frame.

People respond to incentives: if you’re working for CNBC, and you know that the most coveted thing the network wants is an interview with Stephen Schwarzman or Lloyd Blankfein, that’s what you do. Does that make you competent? Yeah. Does that make you ill-intentioned? No. You’re responding to the incentives that are present in the field.

Without this reminder that accountability journalism is not just a legitimately higher form of reporting, media will be firmly a part of the establishment, embedded in the status quo, entirely about promoting orthodox opinion. If it forgets its role, we will always be living in a state of perpetual surprise. We’ll be surprised by financial crises, by Donald Trump, by Bernie Sanders, by the fact that life in Flint is a calamity. If we forget this function of our journalism system, we will be perpetually shocked and amazed.