“You forgot commemorative plates and coins,” said Washington editor Matt Cooper. Eisinger suggested they could be melted down for gold.
As to whether the panic has been worsened by access to 24-hour media, Eisinger said: “I don’t think the panic is irrational….I think the media did a good job warning about the housing bubble, and everyone ignored it. They did a terrible job on the fragility of financial services, but if we’d written that story, I’m not sure if anyone would’ve listened. We were just overwhelmed by the complexity. I think journalists were overmatched.” (Moderator and editor in chief Joanne Lipman and publisher William Li had repeatedly pointed to Eisinger’s own warnings in Portfolio’s first issue about derivatives — a quote from his story even adorned the back of the invitation.)
Cassidy said the media horde mentality had gone back to the adulation of Federal Reserve chairman Alan Greenspan, whose “great market call was getting out right at the top.”
On a possible government bailout of the auto industry, Eisinger said he favors it to avoid massive job loss. “We should pour a lot of money down that rat hole,” he said grimly.
Cooper agreed: “We’re in a Xanax economy. If you don’t give everyone some kind of sedative….”
And Cassidy conceded that he “hated the idea,” but pointed out (perhaps only semifacetiously) that, since General Motors is one of the nation’s top advertisers, media had better get behind it.
— Irin Carmon