Why was the JOBS Act so hard to cover?
Bloomberg, yesterday, and the NYT, today, have come out with big news articles about the dangers and complications inherent in the JOBS Act. The NYT has found a Davis Polk note to clients saying that the JOBS Act represents “the most significant legislative loosening in memory of restrictions around the IPO process and public company reporting obligations”. As Ben Walsh documents, this is something which was well known to the opinion side of most news organizations weeks ago, but only seems to be dawning on the news side right now, after it’s too late.
The obvious conclusion to draw here is that lobbyists are better at influencing journalists than journalists are. When a bill is contested by powerful lobbyists, you can be quite sure that there will be a lot of coverage, in the press, of what the bill does and who opposes it and why. On the other hand, when a bill like the JOBS Act is opposed merely by regulators and op-ed journalists and a handful of politicians, its inherent problems can end up being ignored by the “straight” side of the news media until it’s already comfortably passed both houses of Congress.
Ben makes a geographical point, too, about the divide between New York journalists, who cover financial issues, and Washington journalists, who cover legislative issues; the former were probably more qualified to cover the JOBS Act than the latter, but they seem to have let Washington take care of things until now. I’d add that a lot of the impetus for the act actually came from Silicon Valley rather than anywhere on the east coast at all, and that journalists in San Francisco generally have very little experience of covering legislative issues, and even less ability to effectively insert themselves into such coverage. And that’s assuming that they would have the cynicism necessary to cover the act skeptically.
More generally, I think that there are certain stories which are simply easier to tell if the journalist writing them is allowed to have an opinion. Today’s NYT story is quite hard on the JOBS Act, if you read the whole thing, but you first need to get past five paragraphs of introductory scene-setting and a headline (“Wall Street Examines Fine Print in a Bill for Start-Ups”) which betrays nothing about how generous the act is or the degree to which it dismantles longstanding investor protections.
And of course, being impartial journalism, it has to be larded with on-the-other-hand quotes from people like the former head of the NASD, including this classic:
One Wall Street executive familiar with the JOBS Act but who declined to be named said the law would give firms “more flexibility” in covering emerging companies.
Is it now NYT policy to grant anonymity to sources who are simply asserting what seems to be a simple checkable fact?
Opinion journalists don’t need to worry about this kind of thing, and can come out and say what they mean, without having to ensure that any opinions in the piece are attributed to named or anonymous sources. And I fear that when opinion journalists are covering a story quite closely, as they did in this case, the news side sometimes feels that they don’t need to duplicate what the opinion side has already done. Until they can find some kind of new angle, even if it’s just the fact that Wall Street banks get lawyers to read a new law before they change their ways.