Earlier this month, Slate shuttered a spinoff news site. It wasn't the first time; its women's site XX quickly came and went, after failing to attract enough ad dollars. But the loss of The Big Money after less than two years feels bigger, because it offered something that really isn't available anywhere else: a space for serious business reporting that dared to question sacred assumptions about how the economy works.
A year and a half ago, TBM editor Jim Ledbetter published an article that I'd written with support of The Nation Institute's Investigative Fund, about the Obama administration's about-to-be-proposed Home Affordable Modification Program, or HAMP. At the time, Treasury officials predicted that it would save three to four million households from foreclosure.
I suggested that the promise was too good to be true.
The Obama plan (subject to last-minute changes) will focus on bringing monthly payments down significantly, to as little as 31 percent of household income. If it can accomplish that without plunging borrowers more deeply into debt, it won't just have succeeded in preventing needless foreclosures; it will have defied gravity. The basic math of mortgages is quite impervious to change. On a 30-year mortgage, a lender can either make loans cheaper to pay every month or cost less over their lifetimes. It's not possible to do both without significantly reducing the principal owed, and $50 billion is far from enough to accomplish that feat.
Today, HAMP is widely acknowledged to be a failure — successful in many instances at forestalling foreclosures, but ultimately not in preventing them. One could look back and say that my words of warning had little impact, and indeed in its brief life The Big Money never reached the level of visibility or influence it should have. But it's nonetheless vital to have forums dedicated to stories like these, that investigate unspoken questions or expose new corruptions, like Michael Hudson's TBM two-parter (also sponsored by The Investigative Fund) on subprime lenders' silencing of whistleblowers. Another story I did, looking at the link between Texas' legal prohibitions on home equity borrowing and the state's immunity from the mortgage crisis, provoked vigorous debate in the blogosphere and filtered its way intoPaul Krugman's New York Times column — and, I hope, into a national conversation about the need to set limits on the debt industry.
Ryan Chittum of Columbia Journalism Review's The Audit tweeted upon hearing the news of TBM's demise: “not surprising. it just wasn't very good.” But I think it was easy to underestimate The Big Money, where freelancers had to somehow compete with the Wall Street Journal and Bloomberg News for paychecks in the mid three figures. Slate found out the hard way that journalism probing the heart of capitalism has trouble attracting advertisers. The problem wasn't the politics themselves — as Rolling Stone and Matt Taibbi have proved, going at bankers guns blazing attracts plenty of eyeballs. It was that it was a site that investigated business thoughtfully, aimed at the general public — leaving a big hole behind.