In the debate over the future of journalism, there are some who argue that stodgy old news organizations aren’t necessary. Leaner and meaner ventures can take on the same burdens. Citizen journalists and bloggers are capable journalists.
But a victory for Bloomberg LP in a lawsuit against the United States Federal Reserve highlights the importance of having large news organizations.
Last November, Bloomberg filed a Freedom of Information Act lawsuit that sought to force the Federal Reserve to disclose the companies that took advantage of its emergency lending programs. The Federal Reserve had refused to disclose the names of these companies, claiming that such a disclosure could scare shareholders and potentially spark a run on deposits held at these institutions.
Bloomberg countered that the American people had a right to know the names of these companies. After all, the public had become an “involuntary investor” in these companies because by way of the Fed’s actions. Matthew Winkler, Bloomberg News’ editor-in-chief, put it this way:
When an unprecedented amount of taxpayer dollars were lent to financial institutions in unprecedented ways and the Federal Reserve refused to make public any of the details of its extraordinary lending, Bloomberg News asked the court why U.S. citizens don’t have the right to know.
Yesterday, the court answered: the public does have a right to know. Manhattan Chief U.S. District Judge Loretta Preska ruled that the Federal Reserve “improperly withheld agency records” and has ordered it to disclose the names of the companies that took part in emergency lending programs that were instituted as the financial markets in the United States collapsed.
The ruling, which one would suspect will be appealed, is a victory for journalism. Bloomberg’s interest in reporting on extremely important developments in the global financial markets was aligned with the interests of the American people. And in the process of using its financial resources to take the agency that prints America’s money to court, Bloomberg demonstrated what the Fourth Estate is really about.
Bloomberg, of course, is not your typical news organization. While it does publish financial news, it’s also a software and data company. It’s privately held and is reportedly worth over $20bn. So this ain’t the New York Times. But this precisely why large-scale, financially-sustainable news organizations are needed.
While new media ventures, citizen journalism and bloggers can make contributions of significant value, we didn’t see the Huffington Post, for instance, sue the Federal Reserve. “FED ORDERED TO COME CLEAN ON EMERGENCY LOANS” is the top headline on the HuffPo as I write this, so clearly someone there thinks it’s important news, but apparently the HuffPo never got the idea to go to court itself. As if to highlight existential divide here, it should be noted the HuffPo’s article about the Bloomberg lawsuit contains more words from Bloomberg and Reuters excepts than it does original copy. And it concludes, somewhat embarrassingly, by encouraging readers to look for “anything interesting” in the court ruling and to “let us know in the comments section“.
With potentially trillions of dollars of public money at stake here through lending programs that could impact individuals and businesses around the globe, one has to ask, “Can the world afford not to have strong journalistic institutions?” Can citizens rely on the HuffPo’s of the world to stand up to powerful government agencies? Apparently not if the HuffPo can’t even read a court ruling for itself.
There’s no doubt that the news media is evolving and some companies aren’t going to survive. But for those who argue that the world can get by without powerful news organizations, Bloomberg’s lawsuit against the Fed highlights why that’s folly.
Photo credit: cliff1066 via Flickr.