Network reporters should have been reading The Wall Street Journal, which had been sounding alarms about the corruption and financial danger of the lenders' practices for more than six years. The Journal has run at least 29 editorials or op-eds exposing the two businesses for political connections, preferential regulation, and Enron-like "cooking" of the books.
"The Washington political class has nurtured and subsidized these financial beasts for decades in return for their campaign cash and lobbying support," said one Journal editorial on July 12. That editorial also pointed out the lack of reporting on the issue saying, "Maybe the press corps will even start reporting how this vast confidence game could happen."
The Journal wasn't alone. The Washington Post said on July 14, "Though the implosion of investor confidence in Fannie Mae and Freddie Mac last week was sudden, the worries driving it have been the subject of countless warnings over many years."
That Post article explained that the two entities had too much debt and not enough capital, operating "with financial cushions that were too thin to support their far-reaching financial risks." This was something former Federal Reserve Chairman Alan Greenspan told lawmakers in 2004, according to the Post. Greenspan argued for "preventive action" "sooner rather than later."
After Fannie and Freddie failed some in the media blamed free markets, but both Investor's Business Daily and The Journal explained that it was socialism that created the problem: "We haven't suddenly become socialists. What taxpayers need to understand is that Fannie and Freddie already practice socialism, albeit of the dishonest kind. Their profit is privatized but their risk is socialized," said a July 12 Journal editorial.
In truth, the law of supply and demand mostly determines the price of a commodity like oil. The rapidly growing economies of China and India demanded ever-increasing amounts of oil, jacking up prices. When demand contracted because of the economic slowdown and high prices the bubble burst and prices collapsed.
But if the media must have villains, it could have looked to someone who actually does manipulate prices: OPEC. Western oil companies must rely on OPEC nations for much of their product. When OPEC meets and decides to curtail oil production, the price of oil to all those companies – and everyone else – goes up.
The Business & Media Institute found that the networks ran 14 times more stories about oil companies' profits than OPEC profits. Reporters also overlooked the anti-American hostility of some OPEC nations.