CRF Blog

How to Cover the One Percent

by Bill Hayes

In an essay How to Cover the One Percent for the New York Review of Books, Michael Massing looks at how to report on the influence of the richest people.

The whole subject of private equity has been woefully undercovered. Firms like Carlyle, Blackstone, and KKR have been the main force behind the flood of mergers and acquisitions of recent years. News accounts have focused far more on the market effects of these deals than on their implications for employment, the concentration of wealth, and community welfare. Back in 2012, such factors were closely analyzed in connection with Mitt Romney’s work at the private equity company Bain Capital, but since then interest in private equity has waned even as the field has boomed. Naked Capitalism, an influential financial blog, recently ran a long post about how private equity companies “are far more obviously connected to an undue concentration of wealth at the expense of workers and communities” than are CDOs (collaterized debt obligations) and the other finance instruments that once drew such attention. Though the top one percent of the one percent “consists disproportionately of private equity and hedge fund principals,” the blog ruefully lamented, few of its readers seem interested. The same could be said of the press. A website on the nation’s power elite would pay close attention to the reach and impact of both private equity and hedge funds.

Remarkably, the Wall Street institution that may be the most powerful of them all is also among the least known. BlackRock is the largest money management firm in the world. Its chairman, Laurence Fink, oversees more money (about $4.5 trillion) than Germany has GDP. Fink regularly takes calls from governments and businesses from around the world seeking his advice and, as Susanne Craig reported in the Times in 2012, the company has exerted “enormous influence as a behind-the-scenes adviser to troubled governments” in places like Greece and Ireland. When seeking to analyze the health of a bank, the US Treasury Department often turns to BlackRock, leading a senior bank executive to call it (in an article in Vanity Fair) “the Blackwater of finance, almost a shadow government.” Fink himself is worth more than $300 million and sits on the boards of many institutions, including NYU and the Museum of Modern Art. Nonetheless he and his company have managed to escape serious journalistic scrutiny. A website on money and power could provide it.

Wall Street is hardly the only powerful precinct in need of sharper reporting. Hollywood is another. Coverage of it tends to be thin, with a heavy emphasis on ticket sales, executive rivalries, celebrity interviews, and awards ceremonies. Back in 2005, Bernard Weinraub, in a confessional reflection on the fourteen years he spent covering Hollywood for the Times, described how eagerly journalists sought access to stars and executives and how easily they were “co-opted by the overtures of a Michael Ovitz or the charm of a Joe Roth.”

That’s no less true today. Zenia Mucha, the head of communications for Walt Disney and a top adviser to its chairman, Robert Iger, is known for her skill at cajoling and browbeating reporters. As one journalist who covers the industry told me about Disney, “Almost no one writes a bad word about them so as to have access to top officials.” (He was not, of course, referring to film reviews.) Given the vastness of Disney’s holdings — they include Walt Disney Studios, the Disney Channel, Disney Resorts, Pixar, Lucasfilm, Marvel, ABC TV and News, ESPN, A&E, and Lifetime — assessing Mucha’s alleged success at shaping the news about the company would itself seem a subject worth pursuing.

Silicon Valley is in need of similar probing. [more]