1989 0501 – National Press Club – Where Was the Press During the S&L Crisis? – CSPAN

1989 0501 - National Press Club - Where Was the Press During the S&L Crisis?

1989 0501 - National Press Club - Where Was the Press During the S&L Crisis? --- [BonkNote] --- [VIDEO-CSPAN]

x- 00:24:00+ (00:18) - Carl P. Leubsdorf - Leubsdorf -
x - 00:31:06.734-00:34:46.388 () - Paulette Thomas, Wall Street Journal
- Sprawling Story, Difficult
x- - - Leach - Perspective, IF Stone
01:03:32.346-01:04:40.915 (01:10) - Sanford Unger, American University, Dean, School of Communications
- Who are these people?
x - 01:04:37.579-01:05:26.995 (00:53) - Sanford Unger, American University, Dean, School of Communications
- Can't Say, Run,
x - 01:05:54.255-01:06:35.329 (00:43) - Stan Strachan, National Thrift News, Editor
- Media Responsibility - First of all somewhere in the Federal Statutes there is a provision that if Publish or cause to be published information that leads to the failure of a financial institution you can get 10 years. And they usually Club to hit you in the head with. Most of us have ignored it.

36 - Leach -
- no perspective, IF Stone, Telling the Truth, but no perspective.
- Bigger Picture - Bailout, Perspective, Fraud Story, Cover up, Ollie North (Shredding of documents), S&L (Failure to product documents)
- FHLB - No Congress can obligate a future Congress. Is it constitution?
- State Perspective, Missed?
- legislative - loans -
- The story isn't about individuals, it's about the
- Press Responsibility - Paradigm Shift - International - Economics / Political,
  - Stan: We are not suppose to answer Constitutional questions, we have questions Congress, we wrote stories in 1983/1984, Congress focused very narrowly, FHLB, Things could have been very slow, things could have been stopped when the first article was written and that was _________. Congress, etc. Somebody got mad, so it didn't come up again. Dukakis said something, Bentsen people got irate and it never came up again.
    - Connect with: Bauchas / Spitzer
  - Hobart: Agree with Stan. Basic responsibility is not the press, we did the best we could, We all played a role, We didn't know the real dimensions, Stan may have suspected, but he couldn't prove it, didn't have the information, it was covered up on the hill and regulatory agencies, deceit, thievery, would do a better job if we had more informtion.
  - Brookes: Let me tell you how hard this story was to cover. American Diversified Bank Story (huge growth in short time, cost to taxpayer, "Inside Research," 11 million to 800 million in 18 months, 50% of money gone. - nobody knew about), how do you regulate when everything moves so fast. ... we better find a way.
  - 57 - Carl: Resources are needed to report stories. Conflicting demands, local vs national perspective.
  - 58 - Leach - Lincoln, half of Iowa's bailout, Coverup, Iran Contra vs Financial Stories, Perspectives (political, x, but not economic), Greatest Scandal of Modern Times, Press Counter Function has allowed it to becomes a scandal.
  - 01:00:00 - Brookes - It's been in my columns
  - 01:00:00 - Leach - Deposit Insurance hasn't been brought up as a discussion
  - 01:00:00 - Leach - Congress has let the people down, press has let the people down, Capital Levels
  - - Hobart - buy a toaster, give you a Savings and Loan for Free
  - 01:02:00 - How many Jim Leach's are there in Congress?

36 - Indignation
- 39 - Hobart - press on Congress
- Stan - Pack Journalism,
  - FHLB (Failures, San Francisco - New York Times (Little Coverage, Leader in the Industry)
- - three states responsible for this situation, Texas, California and Illinois
  - Ford Motor Company gets part of Bailout - Buying up S&L's
  - FHLB - Insolvent - Press Releases - Who's money were they spending?
  - Suffering - Consumers v Taxpayers
  - Linda Ricci - Press has not given it coverage because politicians aren't.
  - - Can the Reader be responsible?
    - What is the role of the Press? More than just the facts, but...
  - Brookes - I don't know that we can blame the reader.
    - Play the story vs bury it ... wish technical study
    - Bill Black, 1987 June - Big story confirmed by the FHLB
  - Story Compared to Watergate
    - Would it have resulted in the Fall of Government if it wasn't for Judge _____, the courts.

26 -
- Press Problems - Real Estate - Texas - Complaints from Real Estate people, ridiculous to suggest that this was a problem, crying wolf
- more than just overextended S&L, unsavory characters, looting
- Empire, Real Estate Development, Times Magazine,
- Why has nothing happened?
  - Influence of Lobbyists in Congress, Complicated Story, not simple, eyes glaze over, Sacriligious to mention - not a good newspaper story, better TV, perhaps MacNeil Lehrer (may be able to devote more time), political system not prepared to deal with it (Reagan, Iran Contra, Lame Duck), 1988 Election (in everybody's interest to sweep it under the run), expenditure of funds,
    - What's Changed? - Problem couldn't be avoided. Income administration was shocked when they came in. They believed some of their own rhetoric, unwilling to see.
    - Where was the Press?
      - The Press was there to a considerable degree.
      - Political system is slow to respond.

36 - Paulette Thomas -
- Newcomer to Story, difficult story to cover, Stakes are high / Interest is low. high journalist turnover, new person every year since 1981
- Brooks Jackson - Connections, Trade Groups / Congress, FHLB used to small.
- Large, Complex, Abstract, Can't take pictures, Can't interview one distraught victim, press does better job of talking of retired couple being bilked of their savings (Smaller Dollar Amount). Bank Board, Larry White, Bailout
  - Sprawling Story, Geography, politics, states, putting together a 1000 pieces of a jigsaw puzzle when you don't even know what the picture looks like. Tough Story
  - Woke people up
  - Computer Database - large amount of stories
    - much of it buried, we were out there, but
    - press needs to take some responsibility

43 - Bury the story, Bill Black (report, got even, story directly confirmed by FHLB)

46:00 - Leach -

01:28:00 - Hobart - Takes a Back Seat
Joe Laitin - Hobart should combine Finance and Sex
⇒ 01:31:00 - Stan: unnoticed legislation.
What didn't get covered?
01:34:00 - Leach -

01:18:00 - Rowan - have information, don't know how to display it in the right way. Stan said - run on the bank
- Alan Greenspan - Greenspans Problem:Time Bomb, inflation, Greenspans Solution: Deregulation
- Alarmists - Couldn't get attention, until it became a big issue
- 1981 - - S&L's Insolvent,
  - even when we have a real red flag, we bury it. Tend to protect the establishment and not the consumer
- Baltimore Sun - run - Old Court -
  - Blaming Pearl Harbot on the Associated Press
00:24:00 - Carl P. Leubsdorf
- 1984 - Texas - Real Estate
- unsavory characters, looting
- Empire Thrift
- Why hasn't anything Happened?
  - lobbyists
  - Complicated Story
  - Eyes glaze over
  - not a good television story
  - Macneil Lehrer may be able to devote more than 30 seconds to it
  - Political period not able to deal with it.
  - 1988 presidential election - sweep issues under the rug
  - What's changed? - issue became so big that it could't be avoided
  - incoming politicians were shocked at reality, believed their own rhetoric
  - The Press was there, political system slow to respond
Paulette Thomas -
- Newcomer to the story, difficult story, general interest is low
- reporter turnover, new reporter every year
- Connections - Trade Groups, Congress
- FHLB - was small, not anymore
- New Reporters - Hard to follow something this large, complex, abstract
  - Linda said - Can't take pictures
  - Can't interview one distract person to dramatize what's happening
  - easier to write about elderly couple scammed, gems,
  - Bailout, rescue - Bad words, what would be better words
  - Hard Story - Sprawls, geography, politics, state statues, federal bank board, a thousand pieces of a jigsaw puzzle and you don't know what it will look like in the end.
  - Wall Street database -
  - Press has to take some responsibility for the problem.

01:00:00 - indignation fatique
01:06:00 - Government Insurance, go to the S&L's that is in trouble
- Great Consumer Responsibility that we have not met
01:08:00 - The Consumers money is safe, but not the taxpays
- Insured Money has moved to uninsured money, we are not insuring deposits, we are insuring loans. Does FDIC insurance still make sense.
01:11:00
- last year we were told that there would be no taxpayer funds used
- Linda Ricci - Mortgages, other entities can give mortgages, not just the S&L's
- - good TV Story... what would happen if your S&L went bankrupt, still disruptive even though in the fine print it says....
01:14:00 - Carl P. Leubsdorf - fine line between, Tricky
01:15:00 - Ephie Kahn - What have we learnedFragile - Insurance Companies, Bond Dealers
01:16:00 - Hobart Rowan - Looking into other organizations - Insurance Companies, etc
01:18:00 - Hobart Rowan - stories not as sexy
01:19:00 - Stan Problems in the insurance industry
01:20:00 - First Insurance company to go belly up will get a lot of attention
01:21:00 - Linda Ricci - How do you make things interesting? - zero-coupon bonds
01:22:00 - Leach - Sex Appeal - no sexier thing than things that revolve around money. bailouts, outrage... and it can be talked about. you have the ability to keep your legislative members accountable. stories that have not been written. deregulation, special interests, mortgages, S&L, not individual loans - invest in big buildings, Banks, interstate Banking, spectacular change, Junk Bonds - Harvard Study (Decrease valuation), Deposit Insurance, Macroeconomics, Regulation (weaker vs stronger), bailouts, Press Story - Top Down, Bottom up. Critical. Big Issue - Sweep the story under the rug,
- Hobart - Editors, Sexy, Financial Business stories take a back seat.
- - isn't that what makes it a dull story - Insured funds <FDIC, State Guaranty Funds>,
- Things that didn't get covered, FSLIC Recap.. Jim Wright, Hall,
01:35:00 - Leach - Not Naming Names, Regulators, Banking, FHLB (Senators Letters - Scandal, not going forth with proper regulation), Jim Wright, Ed Gray (FHLB), Untold Stories
01:39:00 - Sanford Ungar: We were there, but nobody would pay attention.
- Editors don't come up from the Financial / Economics areas
- Why nobody pays attention.
- Stan - Resources, not a easy little package of stories, complicated, confusing, hard to follow, Institutional Memory goes away. just getting it sorted out.
  - That doesn't excuse it, but it does explain it.
  - Nobody gave a damn until.
01:42:00 - Hobart - All of the stuff was there and nobody could , change the course of history....cause the congress to really do something, we didn't have leadership on this issue, lack of resources, inattention impotence, frustration - nobody got into it in
- Collette - no one big event,
- Hobart - Continental - everybody was bailing it out,
- Carl - Not sustainable on televsion
- Ungar - Watergate story - Sam
- Brookes - Congress is complicit
01:49: 00 - paying out more than you are coming in
01:49:00 - Pat-? - What will we do tomorrow?
- Causes stir people
- Continental Bank, run, Consumer Confidence, Danger, auto companies bailouts
01:51:00 - Cullen (Crane Communications) - the Press didn't get the information out, Bentsen, Dukakis,
- 01:46:00 - Congress doesn't want to deal with it
01:52:00 - Danger
01:52:00 - wasn't that a more interesting story

Warren T. Brookes - Syndicated Columnist, Detroit News
Ephie Kahn -
Carl P. Leubsdorf, Bureau Chief, Dallas Morning News->Washington Bureau
Stan Strachan - Editor, National Thrift News

01:14:00 - Run on the Bank because of Stories, threatening to sue,