Twenty years ago, there were only a handful of financial publications available to the masses. You had The Wall Street Journal, the Financial Times, the business section of The New York Times and Washington Post, Barron's, Money magazine, and a few other bit players.
It's totally different today. There are now thousands of financial websites, blogs, new aggregators, and commentary sites available to anyone with an Internet connection. That has changed the way financial journalism works, affecting both the economics of the industry and how it's consumed by readers.
Last week I sat down with Ron Suskind, a former Wall Street Journal journalist and Pulitzer Prize-winning author of five books. I asked him how financial journalism contributed to the financial crisis, which led into a conversation about how financial journalists view their career paths. Have a look (transcript follows):
Morgan Housel: How much did financial journalism contribute to the financial crisis in terms of cheerleading the bubble and perpetuating the slow recovery afterwards.
Rob Suskind: You know, financial journalism -- I don't think it's an oxymoron. I've seen some great financial journalism in my life. And I was at the Wall Street Journal through all the '90s, and I thought we did some pretty good stuff there. And The New York Times does some good stuff. I think Bloomberg offers some very strong reportage.
But it gets pretty tricky when you have revolving doors in the financial-journalism world -- which are not all that different from that of public service and lobbying -- or folks who go from a financial publication like The Wall Street Journal to become an analyst or an investment banker.
I grew up in a time when people chose public service as a career. They never left! "It's what I do. I work for the SEC, and I've got a nice middle-class life, and that's that." They weren't checking their watch for the moment they get to cash out by working for Goldman and unwinding everything they worked hard to do over the last decade. That is a problem!
And one of the problems, if you look at the '70s or the '60s or the '50s, the compensation between public sector and private sector was not that distinct. The gaps were not that great. So people could say, "Look, I may not make as much as I would in the private sector, but I'm doing OK," working for the Federal Communications Commission or the SEC or the FDIC. And I think we have trouble with that now.
I know it because I live in Washington, but it's also one for financial journalism. I tend to bend toward people who are lifers. They're in it because they love it, they're not going anywhere, they do a thing that they know is special in this society -- look, journalism is the only profession in the Bill of Rights; we have a special space -- and they're fine. They may not buy the summer house or vacation in the Caribbean (at least not every year), but they do a thing that they know every morning is a thing of worth. And the best stuff I think comes from those journalists."