Greenberg v. AIG: the evidence and the truth

The difference between journalists and lawyers?  Journalists, at least as they practice their craft these days in this country, practice a pretended objectivity by giving voice to both sides of a dispute.  I presume the purpose is to leave the reader to be the judge.  It’s a way of going about thet job that gives the impression of being as fair as it is possible to be.  Fox News has grounded its entire image  in precisely this perception of what is most fair: “We report, you decide.”

I’ve bemoaned before the absence of critical thinking that goes into this style of reporting.  The New York Times is at it again today, this time on a subject far more important than whether a hot artist’s most valuable products infringe the copyrights of other creators — how AIG got our country into the financial mess it’s in and whether we ought to trust the people who brought us here to lead us out.  Hank Greenberg, the long-time head of AIG who was deposed in 2005, testified yesterday to Congress and claimed that the Obama administration should have let AIG go bankrupt, that the administration’s policies have deprived AIG of its most valuable assets by driving off the people who led AIG into its catastrophic state, and that Mr. Greenberg’s policies — which included the creation of the credit default swaps that “insured” the mortgage backed securities that were doomed to failure — had nothing to do with the eventual failure of AIG.  He might not have provided reserves to allow AIG to afford the liabilities it had assumed when it sold the credit default swaps (thereby earning itself enormous amounts of money, profits that of course contributed to the fortunes made by Mr. Greenberg and the other geniuses who our government has driven away), but, he says, he would have set aside reserves to meet those liabilities (thus averting the necessity of the bailout) had he been allowed to stick around.

The story does give the other side of the story, quoting a spokesperson for the current management of AIG contradicting Mr. Greenberg and asserting flat out that he lacks any credibility:

“Hank Greenberg continues to deny his role in allowing [AIG's Financial Products Division] to write the multisector credit-default swaps which sowed the seeds for AIG’s troubles,” the company said, referring to the financial products unit. It went on to denounce Mr. Greenberg as evading questions and lacking credibility as a business strategist.

“He refuses to acknowledge that he approved entry into the credit-default swap business, approved more than $40 billion of swaps written on C.D.O.’s containing subprime loans, and didn’t hedge or put up reserves against them,” the company said. Collateralized debt obligations are securities made from pools of loans and other forms of debt.

“We don’t understand how he can be viewed as having any credibility on any AIG issue.”

My problem with this type of journalism is that it doesn’t make judgments that can be made.  It often may be difficult to tell right from wrong with certainty, but there are often clear judgments to be made about which position is better and which worse.  Mr. Greenberg’s self-interest in these matters, his lifetime of self-promotion in the interests of building an immense personal fortune, and his rank hypocrisy are legendary.  A journalist is capable of giving both sides of an argument and of understanding context and making judgments.  To fail to do so leaves the reading public to do that work themselves, something that people simply don’t have the time to do.

Lawyers, on the other hand, do contend always with adversaries setting forth evidence that seems to contradict the evidence they are presenting on behalf of their own clients.  But setting forth the evidence is only part of a lawyer’s job.  The lawyer also structures that evidence into arguments on behalf of his client’s position, explaining specifically how that evidence should be viewed.  Then decision makers (juries, judges, arbitrators, etc.) decide.  The lawyer doesn’t rely on the decision-maker to figure out how to explain the evidence.  The lawyer gives the decision-maker the means of understanding it.

I don’t know why journalists don’t do so more often.