Explaining the Financial Crisis

September 17th, 2008

Continuously Updated News Aggregation in Action
by Josh Korr

Scott framed his previous challenge to news sites in general terms: like Drudge, any site could use continuously updated aggregation to become a “destination for links to news of what’s going in the world.” But this kind of aggregation can be just as powerful when applied to specific stories or topics.

For example, you might have noticed that the U.S. financial system seems to be — how to put this delicately? — collapsing. Most readers (and, um, journalists) probably have only the faintest idea of what the heck is going on. Yet this is one case where many people would love some broccoli news, if only it made sense to them.

News sites could help explain the crisis by putting up a continuously updated aggregation of links to the best reporting and commentary. Some sites may already have bloggers linking to these stories, but why not put the links right on the front page? With things as tense and confusing as they are, we shouldn’t make readers hunt for context.

Journalists could find these stories individually, or they could leverage the power of a network to find and share links with other journalists and newsrooms.

I’ve created a Financial Crisis Newsgroup on Publish2 to do just that. Any journalist on Publish2 can join the group (email me at josh dot korr [at] publish2 dot com if you’re interested), and any news organization can publish those links on its site.

Here are some links from the Newsgroup:

Where did the government get $85 billion to bail out AIG?
A Slate explainer answers a good question: “Does the government really have a spare $85 billion lying around just in case?”

Seven Deadly Sins of Deregulation — and Three Necessary Reforms. A comprehensive look at how a lack of regulation of the financial industry led to the current crisis.

Economic Scene - Perhaps, It’s Time to Play Offense
David Leonhardt offers a diagnosis of the crisis: “Regulators, starting with Alan Greenspan, assumed that a real estate bubble couldn’t happen and that Wall Street could largely police itself. And households, struggling with incomes that haven’t kept up with inflation in recent years, said yes when those lightly regulated banks offered them wishful-thinking loans. No bailout can solve either problem.” He also suggests some solutions.

Stock Market Meltdowns - Why they will happen again and again and again
Some smart thoughts from Mark Cuban on how the imbalance between risk and reward for CEOs helped precipitate the crisis. Cuban has a great suggestion for a new law: “If the government must step in and provide any sort of financing or guarantees for any part of a public company’s business, then all officers and directors lose all rights to severance pay and all outstanding vested or unvested options or warrants immediately become canceled.”

Americans confront economic reality
Andrew Sullivan’s take on the financial crisis: “To my mind, what is happening now in the economy is the same as what happened in Iraq after the invasion. The denial of the American people of the reality of the world they live in has finally caught up with them.”

This doesn’t require days of planning or hours of overtime. When Scott wrote about the pace of innovation in journalism earlier this year, he mentioned a 48-hour experiment. That’s horse-and-buggy speed by now.

You could set up a Newsgroup, seed it with some links, and publish the links on your site in 15 minutes (okay — maybe add an hour to get a few colleagues to join in). Adding subsequent links takes all of two mouse clicks.

News sites should of course experiment with more general-topic aggregation, a la Drudge. But when stories unfold as jarringly fast as the Wall Street meltdown, continuously updated aggregation could be a huge help for readers who are grasping for understanding.

And if you do this for a couple of major stories, the next time a big one breaks they’ll know where to turn for answers first.