ProPublica’s Pulitzer winners: Media did not understand the banking crisis

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Eisinger (far right) as his newsroom learns of their Pulitzer. (ProPublica)
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Following the Tenement Museum talk Eliot Spitzer moderated last night with Pulitzer-winning ProPublica reporters Jesse Eisinger and Jake Bernstein about the shady Wall Street practices that brought on the financial crisis, one audacious audience member held the journalists' feet to the fire.

"Mazel Tov on the Pulitzer," said a woman standing near the cash register of the gift shop, "but where was the media? … I would appreciate if you guys could give some analysis about your colleagues in covering the buildup to this."

"Sure, I’d love to trash my colleagues," Eisinger joked, before getting serious.

"My view is that the press did a very good job on the housing bubble. They warned and warned and warned about the housing bubble. I was at The Wall Street Journal, we wrote about the housing bubble. The Economist had the housing bubble on the cover. Every other week, Businessweek had stories on the housing bubble, and it didn't do a damn thing."

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But Eisinger didn't offer a blanket exoneration.

"The great failure of the press was to completely miss the rise of the shadow banking system," he said. "All the unregulated lending and leverage that was in the system. That was a terrible failure of my colleagues at The Journal, me. I was getting a little bit of a glimmer of it as a reporter, and some others were, but we just didn't understand it. It was way too sophisticated for us. We weren’t asking the right questions. We weren’t examining the banks enough to understand how they were really making money, and that was a big problem."

Bernstein chimed in with a subtle indictment of the cable-news business networks.

"I agree with Jesse that there was some really good reporting during this period," he said. "But I also think it was drowned out by a sort-of rah, rah! cheerleading thing that you saw on certain television channels and a lot of the press. It’s much easier to trumpet quarterly earnings and write glowing profiles of C.E.O.s than it is to really dig into company financials, and talk to people, and really figure out what’s going on. I’d like to think that ProPublica and institutions like that are trying to correct that."

Spitzer described ProPublica, the nonprofit investigative news outfit headed up by former Journal managing editor Paul Steiger, as "the single best media outlet that's emerged over the last decade."

The former governor did however acknowledge that he and ProPublica general manager Richard Tofel, who was also present, had been friends since they were boys of 6 and 8, respectively.