The power of the trade press revealed in new book by UA professor
Back before the Great Recession of 2008, there was the savings and loan crisis of the 1980s and 1990s that saw the failure of 1,043 out of the 3,234 S&Ls in the U.S. One of the most egregious examples was Lincoln Savings operated by Charles Keating.
One little known fact now coming to light is the role of a small trade publication called National Thrift News that broke the news about Keating’s unprecedented political-influence scheme two years before major newspapers began reporting on Keating’s actions that later led to criminal convictions. In November 2019, the back story to the S&L crisis was revealed in a book, The Enforcers, authored by Dr. Rob Wells, a long-time financial reporter who now teaches journalism at the University of Arkansas.
Wells tells Arkansas Money & Politics that Americans owe a big debt of gratitude to this little-known trade publication.
“This was an extraordinary publication that really hasn’t received the full credit it deserves for exposing the S&L crisis,” Wells says. “There was a failure of mainstream media to see the forces that were building leading to the crisis. Mainstream media did not do its job, without a doubt. This little paper did its job and stood up to some of the most powerful people in the industry. It is just such an extraordinary story, especially coming on the 30th anniversary of the peak of S&L crisis.”
The introduction to the book, published by the University of Illinois Press, says National Thrift News, despite being lightly capitalized and very specialized with only 12,000 subscribers at the time, revealed investigations of federal banking regulators into Keating’s use of political influence.
“Keating used piles of cash, easy credit and jobs to corrupt higher-level federal regulators to keep his swindle going,” wrote David Cay Johnson in the foreword to the book. “He employed big law firms to threaten ruinous litigation to anyone who dared even look for the truth. He even lured into his cause a bipartisan collection of U.S. senators, who became known as the Keating Five, and whose reputations were deservedly tarnished for their months-long involvement in the Lincoln S&L during which many more people lost their life savings.”
The lessons learned from the S&L crisis are particularly important considering the major bloodletting in newsrooms in recent years. The decline in print journalism as a result of more people getting their news online means there are fewer than half as many newspaper reporters as 15 years ago.
“Some of the big players are stabilizing, but it is still pretty rough, especially for smaller players,” Wells says. “Newspapers still haven’t figured out the model for paying for digital online delivery. The thing about the trade press is, it is a different revenue model than a general newsroom. You have a smaller audience and high level of engagement between reporters and sources — the advertisers. Small journals can demand high subscription prices because the information is so important. These businesses can afford higher salaries than a general-interest news organization and can weather storms a little better.
Wells continues, “It is nice to know innovative and public service reporting can take place in a small newsroom. Many people are surprised to learn the investigative work done with the trade press because they have written off these publications as a patsy for their industries.”
The decline in newspapers has led to concern that the traditional watchdog role of journalists has greatly diminished. Some small digital publications across the country are trying to make up the gap. However, there are concerns that the wall between advertising and editorial has worn down in a lot of different ways. Wells finds sponsored content, ads that looks like news, integrated into websites to be problematic, he says.
“There are a number of quasi-journalism outlets that don’t adhere to strong editorial guidelines,” Well says. “I see this book as an opportunity to call attention to professional standards respected in this industry. National Thrift News did its homework, wrote about their friends and wrote about their advertisers. In interviews with award-winning trade journalists, all describe some problems with advertisers. But even if those advertisers left, they usually would come back in a period of weeks or months because they needed the integrity that comes from being part of advertising in a credible journal.”
Top-tier trade journals are willing to write critically about advertisers as a way to enforce business ethics. But new online publications have brought in new players who are not necessarily ethical. “It is time to bring them up to speed on how to do the job,” Wells says.