In 1979, Businessweek published "The Death of Equities." Including dividends, equities increased fivefold over the following decade.
In 1999, the New York Times published "Imagining the Dow at 36,000." A decade later, the Dow was at 6,600.
In 2005, the Milwaukee Journal Sentinel published "Bankers Group Debunks Housing Bubble." You know what happened next.
Financial journalism has always been an imperfect industry. But now it's changing like never before. The big guns -- the New York Times (NYSE: NYT ) and News Corp.'s (NASDAQ: FOX ) Wall Street Journal -- now have to compete with thousands of blogs, online-only publications, and commentary sites. That changes the economics of the industry, which changes the way journalists go about their work. There's less room for boots-on-the-ground, in-depth reporting and more demand for headline-driven sensationalism than ever before.
Last week I sat down with Ron Suskind, a former Wall Street Journal reporter and Pulitzer Prize-winning author of five books. I asked him what the last decade has done to financial journalism. Here's what he had to say (transcript follows):
Morgan Housel: Financial journalism has changed a lot in the last decade -- old players dying and new ones coming up. Is it changing for the better, or the worse?
Ron Suskind: I think what's interesting is that moments when Wall Street collapses -- or there's a real hiccup or explosion, and we have bubble to bubble, boom to bust to bust, again and again -- is often a good time for financial journalism. Because the opportunity for the alternative career is a little more distant, and the fact is, people have a hunger for news. And it often comes after a disaster. I thought journalism was very strong after the '87 crash; that was some of the best time. It was very strong after the 2000 crash, and I thought there was some very strong journalism after the 2008 crash.
But it took the crash, and that's one of the problems. To produce the stuff that is smart and predictive -- saying, "It's gonna blow!" -- we are always short on that. And we really were short this time. And some of the journalists who stepped up and said "I don't know, this doesn't make sense," you know, a lot of them were shut down. You know, one story, two stories, but then a bunch of other reporters are sitting around with the guys from public relations [saying]: "No, no, no. We have this covered. Let me tell you what we're doing now." Boom -- it's in the paper; it's online. And that noise overwhelms -- crushes -- what is often the counterpoint that ends up being what really happened."
Morgan Housel: Have editors and journalists learned from that, or is this the same story over and over again throughout the decades?
Ron Suskind: No, no. ... We're just human, and we're flawed, and I think they do learn and have these moments of clarity after moments like 2008. You know, some self-searching: "What did we do or, mostly, not do? Who were our sources? What were we open wide and swallowing every day? Why didn't we check that out? And even when we did, why were we so ready to take some counterpoint that was clearly an interested position by Goldman or JPMorgan or Merrill Lynch?"