Issue #25/50, October 22 - November 5, 1998  

by Abram Kalashnikov

Here's some good news for journalists. Recent data show that the average American reader is now so completely stupid that he will be surprised to learn his own name if he sees it in print. These same studies show that in approximately 7.7 years, the American media will finally produce a front page headline that reads, "Yesterday Happened!" It all points to one thing: D-Day is coming for the American mind, which means less work and easier promotions for the growing contingent of lazy international journalists.

The New York Times, always an industry leader, has already broken new ground in the field of dumbly obvious reporting with its coverage of the Russian financial crisis. Like many American news outlets, it spent much of Russia's latest socio-economic collapse quietly renouncing all of its earlier reporting (an early- October article blasting banker Boris Jordan, whom it had previously praised for his participation in the loans-for-shares auctions, is a good example) and cranking out cautious editorials replete with meaningless moral posturing.

Take, for instance, this October 11 article by Paul Lewis entitled "World Bank Emphasizes Role of Free Media in Fighting Graft," a classic of nose-on-your-face obvious reporting:

"Washington, Oct. 8-After surveying the Asian financial crisis, the World Bank has concluded that a strong and independent news media could be an important protection against economic mismanagement and government malfeasance in developing nations."

Well no shit, Paul. The rest of the civilized world came to the same conclusion sometime in the early 18th century. That the Times didn't headline this piece "Two Centuries On, World Bank Reluctantly Joins Enlightened Society" or, even better, "Duh!" is already prejudicial. When the World Bank made that announcement, it was essentially admitting that, until now, it did not consider a free and independent news media necessary for socio-economic growth and prosperity-which says an awful lot about its vision for the global economy.

Lewis, though, passes up the chance to make that point, instead sinking into unpaid p.r. conduit by letting the Bank get away with one of the oldest tricks in the business, the so-called Promise to Do Good Works:

"The World Bank is already financing training for journalists from the developing world. And officials say it will encourage charities and foundations to do more to strengthen fledgling news media."

This is a textbook case of a reporter being fed a line at a press conference and putting it straight into print without checking it out. What kind of training is the World Bank financing? What kind of results are they getting? Is there any kind of training even going on at all?

Who knows? Lewis sure doesn't. The impression he gives to Times readers is that the Bank has suddenly taken the initiative to do the right and moral thing, when in fact it should be being held accountable now for a lot of what went wrong in Russia and Asia.

What Lewis fails to remind readers is that the Bank is one of the most notorious stonewallers in the public arena, routinely refusing interviews and access to its leaders. At one point during the press conference, the Bank praised Denmark, Finland and Sweden for having strong Freedom of Information Laws. Lewis fails to point out that the Bank is exempt from the American Freedom of Information Law, even though its loans are backed by public money. Earlier, in a piece entitled "How Goldman, Sachs Escaped the Russian Economic Bloodbath," The New York Times stunned disbelieving readers with yet another shocking scoop: investment bankers are greedy and like to make money.

Written by Joseph Kahn and Timothy O'Brien, the piece was an attempt to show how greedy Western investment banks helped Russian industrialists raise easy money through bond issues, only to wash their hands of the country when it fell into ruin and default. The duo quoted a heavyweight condemning the deal:

"'What the Russian problem reflects is that today's bankers often don't have long-lasting concerns about customer-client relations,' said Paul Volcker, the former chairman of the Federal Reserve and an occasional adviser to Russian government officials. 'You just do the deal and get out.' [...] 'Greed prevails over prudence,' he said."

This all sounds great, but there aren't many people out there who need 4,000 words to be convinced that investment bankers are greedy. The Times draws the obvious conclusion from its material, but leaves two other equally obvious but more controversial conclusions undiscussed.

The first is that the free and instantaneous flow of capital across borders may not be a good thing for the global economy, and may in fact be enormously destructive to emerging markets. The Times obliquely touches on this when it compares Russia's experience to that of China, yet, afraid of offending, leaves the reader to contemplate the issue between the paper's cautious lines.

The second, more obvious point missing from the Times expose is that U.S. Treasury Secretary Richard Rubin is the former president of Goldman, Sachs, a fact that certainly warrants being mentioned, if you're to believe the Times's own assertion:

"Others say they were lulled into complacence by a presumption of international backing for the Russian experiment with markets."

Goldman, Sachs certainly had every reason to presume international backing; one of its own was leading the charge for Russia's international bailouts. But by far the grossest offense of the Times article was its scene-setting opening in an opulent palace:

"The House of Unions, like so many buildings in Russia, has served many different masters. In the 18th century, a Crimean prince commissioned its construction in Moscow. Russian nobles later converted it to a private club. Lenin, Stalin and Brezhnev lay in state behind its bright green facade.

"And in June, as Russia lurched toward a financial crisis that set off global shock waves, the House of Unions was rented for a glittering celebration of capitalism, with one of the country's most ardent bankers, Goldman, Sachs & Co., as its host. Goldman flew in former President George Bush, paying him more than $100,000, and entertained Russia's former prime minister. But between toasts to U.S.-Russian ties, the talk was about what really mattered to Goldman and many Wall Street brethren: deals."

So The New York Times, the paper that lands on the desk of every C.E.O. in the world first thing in the morning, frowns on opulence? Give me a break. The Times knows very well that the easiest way in the world to score moral points in public is to show a bunch of rich people acting like themselves, and then feign shock and disgust. This is the newsprint version of a soundbite, where anyone can say he represents the common people just by showing film footage of cornfields and assembly lines. And just as intelligent voters should look at the candidate's record instead of the commercial, intelligent readers should look between the lines. Like most hacks, the Times writers aren't sorry about the Russian financial crisis. They just don't want to look guilty.