The normally thorough Howard Kurtz has a piece running entitled Press May Own a Share in Financial Mess. A flavour?

PBS’s David Brancaccio says that “we journalists have had a long history with accepting what the smart people hand down to us, especially on complicated stuff. . . . When I would cover these very issues about problems with regulation, problems with ‘is this a disaster waiting to happen?’ people would say: ‘Well, young man, you don’t have an MBA like I do. Trust us. We went to business school.’”

Well, duh! If instead of this type of fare you want a reasoned – albeit dry – explanation of business journalism’s role in boom and bust cycles, then please read The Bubble and the Media [pdf] by Alex Dyck and Luigi Zingales. Written back in 2002, the abstract tells it all:

We argue that corporate reporters have strong incentives to enter into a quid pro quo relationship with their sources, where they receive private information in exchange for a positive spin on companies’ news. Since the value of this relationship is higher during booms, so, too, will the pro-company bias.

Incidentally, you can read Zingales on the Paulson plan here.