Covering The Watchdogs

Dean Starkman writes:

The business press has written about the mortgage crisis as a predatory-lender problem, a naïve borrower problem, a compromised rating-agency problem, an irresponsible debt-buyer problem, and, first and foremost, a problem manufactured on Wall Street, which fueled the subprime expansion with loans to front-line borrowers, sold the bad paper into the global markets—and, to keep the fee-engine going, bought much of its own product.

If the business press has a blind spot, it is that it failed to understand the crisis for what I think it really is: a regulatory failure of mammoth proportions.

Now comes The New York Times this week with a devastating account of regulatory failure, under the headline: “Fed Shrugged as Subprime Crisis Spread”

The piece is strong. It effectively pulls together material that had been in the public record and advances an equally strong piece from last May, and other work over the summer, by The Wall Street Journal.