“I feel like the voice of business journalism is sort of, it’s an authoritative voice of God,” says Adam Davidson, international business and economics correspondent for National Public Radio, toward the end of our interview in the video above. “But there is no authority. It’s a process.”
We were talking about “The Giant Pool of Money,” the masterful and widely acclaimed explanation of the housing crisis that Davidson produced with Alex Blumberg for This American Life. If you haven’t heard it — or any of their subsequent work for the Planet Money podcast — then consider carving out an hour of your life to rectify that problem.
“The Giant Pool of Money” was such a success because it upended the traditional news model, in which coverage of incremental developments is supposed to lend greater understanding of the broader issue at hand. Jay Rosen, a journalism professor at NYU, put it best when he wrote, “There are some stories—and the mortgage crisis is a great example—where until I grasp the whole I am unable to make sense of any part.”
As you’ll see in the video, Davidson thinks that journalists are too reluctant to acknowledge their own ignorance when approaching complex stories. “The Giant Pool of Money,” on the other hand, felt like a learning process for Davidson and Blumberg as much as their listeners. (Rosen wrote, “The journalists doing the explaining started with zero distance between themselves and the users; they were clueless!”)
I recorded this interview with Davidson at the Nieman Conference on Narrative Journalism, where he was a speaker. On one panel, Davidson pointed to the first time he broke the mold and tried this explanatory model of business journalism. It was a four-minute segment in 2006 for All Things Considered on a deadly boring speech by Hank Paulson, then the Treasury secretary. Give that a listen, and consider it an artifact in the evolution of journalism. (It’s also an artifact in the sense that Paulson was complaining about “excessive regulation,” a not-yet entirely derided notion.)
A full transcript of the video is after the jump. [A quick correction, reflected below: The first voice on the video is of Blumberg, not Ira Glass.]
[Clip from "The Giant Pool of Money" on This American Life]
Alex Blumberg: So I guess the first thing we have to do is talk about the global pool of money, right?
Adam Davidson: Right, the global pool of money, that’s where our story begins.
[End of clip]
Davidson: In this crisis in particular, its so confusing. There’s just this blizzard of information coming out everyday, and it’s all about terms and phrases that you’ve never heard of before, and its very, very hard to understand. I mean, some strange financial instruments that no one’s ever heard of had problems in institutions that no one understands, and suddenly I’m going to lose my job or my cousin just got laid off or we might go into a depression. So the stakes couldn’t be higher, but there couldn’t be less clarity, less of an ability to understand.
Davidson: Right, I mean in all the coverage of this we haven’t heard any of this from people all along the chain. We wanted to know, what were they thinking when they were doing all this? And why did they think it would work? And simply, how did it all work?
[End of clip]
Davidson: I mean, I’ve done a fair amount of daily coverage where something explodes. I mean, I have done war coverage, but I’m talking about financial things explode. You know, suddenly there’s some company you never heard of just collapsed this morning, and the whole world is a danger apparently. And it is very, very hard in typical journalistic constraints of time — just how long you have to report the story, and the amount of time or the amount of space you get to explain the story.
I mean, take mortgage-backed securities, which are probably the simplest of the complicated financial products. You know, I feel like I need at least a minute just to explain what they are. And so, if im going to report on mortgage back securities and I have three minutes, and there’s some development, something happened, do I take one of my three minutes just to do the basic explainer every time? I probably won’t. I mean, maybe I should, but I probably won’t. And as a result, I do a story that the average person who hasn’t quite understood what a mortgage-backed security is is left a little like, “Wait, what just happened? I don’t quite get what just happened.”
Alex Blumberg: To all the investment managers in the global pool of money who bought them, AAA meant safe as government bonds. AAA was called a cash equivalent, money in the bank. It’s as if the global pool of money put trillions of dollars in a savings account, came back one year later, and found out that half the money was gone.
[End of clip]
Davidson: I think we did do a good job of explaining the crisis, you know, the information was solid. But if that’s all we did, I don’t think it would’ve been as strong. I think we gave people kind of a way to sit with the information, likke a perspective. Not saying you have to do it the way we do it, but we kind of showed this is how we do it. You know, we’re kind of shocked or sometimes angry. We’re often confused, but we can figure it out. We can understand it. And we can have a reasonable conversation about the crisis.
Alan Greenspan: The FOMC stands prepared to maintain a highly accomadative stance of policy for as long as needed to promote satisfactory economic performance.
Davidson: Alright, you might not believe me. But that little statement? That is central banker speak for “Hey, global pool of money. Screw you.”
[End of clip]
Davidson: I’d say there’s two things that were really satifying. I have never had any response like this. It was unbelievable, and that certainly was thrilling. But the two things that really stand out was one, was the number of people who said, “I just stopped reading the stories. I couldn’t, I just didn’t know what was going on. It made me mad, but I didnt understand where to focus my anger. And I just stopped reading the stories. And since I heard your story, not only do I read the front-page stories, I read the business page stories.” And that to me was really satifying. That made me feel like we were really providing — ’cause that’s, it’s not just that — we were empowering our audience, our listeners, to engage this issue in an ongoing way. And that made me very happy.
The other thing that surprised me: I was really targeting the finance and business illiterate, but the number of people, very sophisticated people, who said they got a lot out of the story because, one thing this crisis teaches you is the financial world is made up of people who know one thin slice of the financial world. And you might spend your entire career as a trader or an analyst or whatever, knowing everything there is to know about government bonds, but you don’t know anything about mortgage-backed securities. Or if you do know about mortgage-backed securities, you don’t know about the central banks of Thailand and their investment goals. So nobody knows the whole crisis. Nobody knows the whole chain of causation. And so a lot of people who knew their thin slice said they really enjoyed seeing how their thin slice fits into the whole picture.
Davidson: Wait, Alex, I wanna step in here ’cause this is a very important piece of tape. A big part of this whole story, the whole crisis, is that a lot of really smart people, people who knew better, fooled themselves with this data. It was the triumph of data over common sense.
[End of clip]
Davidson: I mean, I’ve been thinking, I wanna do like a story or something. I feel like the voice of business journalism, in particular, needs to change. I mean, probably the voice of all journalism, maybe. ‘Cause it’s very similar — I was in Iraq for a long time, and it was very similar there, where the more certain someone was, the more you knew they were wrong. My wife used to joke — she was in Iraq with me — and she used to joke that you can tell how long someone has been in Iraq, a reporter, by how certain they are about things. The more certain they are, the less time they’ve been in Iraq. And the same with this financial crisis. Nobody saw it coming. Even the people who saw bits and pieces of it, did not see the whole thing. And nobody, I don’t think a single person, had the background to understand all the financial instruments, all the interconnections. The world just doesn’t work that way. These were, you know, very specialized areas of finance that suddenly became linked by this global chain.
So, the voice — I feel like the voice of business journalism is sort of, it’s an authoritative voice of God. “Today, the stock market rose 3.8% on news of unemployment rising and anticipation of the Fed cutting its interest rates.” And, you know, I know before I was a business journalist, as a consumer, I didn’t know much about business, and there’s a guy in a suit, who seems like he knows what he’s talking about, and he’s saying things with a very strong, authoritative voice, and what this crisis taught us is all those people were missing the most fundamental things. Those people — Like, it’s almost absurd! Like you could do like a skit about how silly it was. And there is no voice anymore. There is no authority. I mean, there are better ideas and worse ideas; there are people who are closer to the truth and further away from the truth. But there is — I don’t wanna say it’s all up in the air, everyone believe whatever you want. I think people can believe some dangerous and stupid things. But there is no authority. It’s a process. It’s a constant process. I change my mind hourly on this crisis, and I fundamentally revise my thinking all of the time. And everybody does. I mean, the smart academics I talk to, the smart business people I talk to — everyone is trying to figure this out, to begin with. And I would like to find a way — I think we’re starting to find a way to represent that.
I mean, I think it’s a more trustworthy journalism if the journalist reveals their process of discovery. I don’t think it weakens our authority. I think it strengthens our authority ’cause it’s closer to the actual truth, and it’s closer to the world that our audience experiences on a day-to-day basis. They know we don’t, we’re not experts in that sense, and frankly, the expert we quote isn’t an expert in that sense — that he’s definitely right, or he can speak with objective truth about things.
Blumberg: Anyone under, say, 45 probably doesn’t remember that 1970s malaise too well. Anyone under 30 has barely known a U.S. economy that wasn’t growing. Now, there’s a decent chance we’ll all get to see what life felt like in the 70s. Which isn’t great. It’s pretty bad, actually. Unless you’re comparing it to the 1930’s.
[End of clip]