There is a tactic akin to gaslighting that’s harmful not only for personal wellbeing, but also for local and national wellbeing. It takes the form of pushing back fast and furiously when investigations by credible journalists scrutinize policies and practices that further a few to the detriment of many.
“When (journalists) do come around, the opposition is so enormous,” said Gretchen Morgenson, Pulitzer Prize-winning financial reporter and author. “The ratio of what we’re up against has changed. I don’t shy away from it.”
Morgenson returns to Chautauqua to speak at the Chautauqua Women’s Club’s Contemporary Issues Forum at 3 p.m. Saturday in the Hall of Philosophy. She delivered a CWC virtual address through CHQ Assembly on July 15, 2021.
Morgenson’s lecture is titled “Plunder in Plain Sight: How America is Being Savaged by Financial Elites.” It will be followed by an opportunity for deeper dialogue during a reception beginning at 5 p.m. at the CWC House (registration required).
Her most recent book, These Are the Plunderers: How Private Equity Runs – and Wrecks – America, provides the basis for her remarks. Co-authored by Wall Street and financial policy analyst Joshua Rosner, it was published by Simon & Schuster in late April.
“The biggest private equity firms are Apollo, Blackstone, the Carlyle Group, and Kohlberg Kravis Roberts,” according to These Are the Plunderers. “They buy companies and load them with debt while bleeding them of assets and profits. A few years later, they sell these same companies off to new owners, perhaps in an initial public offering of stock, ideally at a substantial gain for themselves and their partners. Often the companies they buy collapse in bankruptcy.”
As these firms have steadily and stealthily wreaked havoc on formerly profitable corporations, they have also been undermining the U.S. economy.
“Their reach extends from cradle to grave,” wrote Morgenson and Rosner in Plunderers. “That coffee and donut you picked up on your way to work this morning. The pre-K learning center where you dropped off your kids and the nursing home where your mom lives. The dentist’s or dermatologist’s office, the emergency room you visited and the ambulance that took you there.”
With COVID-19, a menacing presence for over three years, it is easy to recall the first 18 to 24 months when many elderly were left to fend for themselves in assisted living and nursing facilities staffed by some of America’s most poorly paid and overworked caregivers, and the dearth of ambulances available for speeding the critically ill to under-resourced emergency departments.
“For healthcare, the product is care, and life and death,” Morgenson said. “Yet (these private equity firms) cut costs. That’s a bad outcome for people in nursing homes and hospitals.”
The reach of pillaging financiers, Morgenson and Rosner wrote, is extensive — podcasts, time-shares, supermarkets — “All may well be owned and overseen by private equity firms that maximize for profit while slashing workers, cutting necessary costs, and harming local, state, and federal taxpayers when their companies fail.” That the founders, C-suite officers and board members of the four firms named, and perhaps other elite Wall Street financiers, feel compelled to manipulate the livelihoods of Americans and the productivity of the U.S. economy through corporate takeovers is an existential problem. Yet some are sought after and celebrated for their largesse – their “philanthropic” donations to the select nonprofits and causes they care about.
“Nowadays these billionaires who take over companies and supposedly improve them – but they don’t – make a ton of money, especially under COVID,” Morgenson said. “They don’t seem to know the concept of ‘enough.’ ”
It has been important to Morgenson to understand who these wealth-obsessed financiers are and how extensive their “circle of pain” is. “When it starts to hurt workers, pensioners, taxpayers and also customers, that’s when it gets my ire up,” she said.
According to Morgenson, “People feel like the system is rigged and the playing field isn’t level, but they don’t really know what’s going on. They say, ‘It’s the system.’ But it is people manning the levers of the system. … You have to name names.”
She continued: “We know a lot about these very fabulously wealthy and powerful people,” she said. “They’re on museum boards and on the news, but we don’t hear about the people hurt by them. (These Are the Plunderers) humanizes what their tactics are.”
Among Morgenson’s realizations over time is that “the big wheels and powerful people with a lot of money at their disposal have very thin skins when you don’t buy what they’re pedaling. And when you ask questions and raise criticisms, they get their backs up.”
This means that for younger journalists, it’s harder than it was for Morgenson. “Over the last 10 years there’s been a more aggressive stance taken by my adversaries. … (There’s) more pushback. There are so many more of them, and their supporters and law firms are their assistors.”
Journalists “have to have editors who support them,” Morgenson said. “The information is so important. … I think that the constant refrain (from the previous presidential administration) of the press being the enemy of the people has had an impact.”
Morgenson’s journalism journey has never been an easy one. Born in State College, Pennsylvania, she moved when she was young to cities with universities: Kitchener-Waterloo in Ontario, Canada; London, England; Oxford, Ohio. Her grandfather had taught at Saint Olaf College in Northfield, Minnesota, and both parents had gone there, so she did too. Majoring in English, Morgenson graduated at age 20 during America’s bicentennial year.
Although she knew then that she wanted to be a journalist, there was no journalism program at Saint Olaf’s.
“Of course I wanted to move to New York – media central,” she said. “I’d done some work for the town and school newspapers, and the silence was deafening. My first job was at Vogue, as a secretary (‘editorial assistant’). I should have written The Devil Wears Prada. I stayed there five years. By the time I left, I was writing a personal finance column.”
Since pensions were on the way out and people were beginning to care about the stock market, Morgenson said she felt finance was important and of interest to everyone.
Harmony Books published The Women’s Guide to the Stock Market: How to Make Your Own Investment Plan by Morgenson and Barbara Lee in 1982. Leaving Vogue magazine for Wall Street, where she spent three years as a stockbroker at Dean Witter Reynolds, she said she learned how the world really works.
At Dean Witter, “I had a great boss,” Morgenson said. “He didn’t make me sell what I didn’t want to. But it just wasn’t for me. … If you have any capacity for guilt, it’s not the job for you.” She said she had a hard time sleeping when the market went down, even though it wasn’t her fault. Having learned a lot about finance and markets, Morgenson went back to being a reporter in January 1984 – this time as a staff writer at Money magazine for two years.
“I could ask the tough questions,” she said, “because I knew the answers.”
In 1986, she moved to Forbes magazine, where she worked as an editor and investigative business writer until 1993 when she became Worth magazine’s executive editor. Persuaded by Steve Forbes to join his 1996 presidential campaign, Morgenson served as his press secretary during the Republican presidential primary. Thereafter, Forbes hired her as its assistant managing editor. In 1997, John Wiley published Forbes Great Minds of Business, with Morgenson, which introduced “five extraordinary people” (men) via “five fascinating dialogues.”
“Forbes celebrated, but really took apart people if they weren’t doing the right thing,” Morgenson said. “I believe the system is good, but we need to protect (it) from ‘Me Firsters’ – operators who really want to take advantage of it. … (When I was at Forbes) we were not at the point of ‘profits for me no matter how it hurts everyone else.’ ”
Leaving Forbes in May 1998 to become the assistant business and financial editor of The New York Times, Morgenson began covering world financial markets. For nearly 20 years, she wrote the “Market Watch” column in the Money & Business section of the Sunday Times.
“I had a front row seat for scandals, market volatility, the dot-com explosion,” she said. “I would see what was going on, dig into it, and explain it, because Wall Street likes to obfuscate, to hide things, to keep things under wraps so we miss what’s going on.”
In 2002, having revealed “deep conflicts of interest among powerful and respected brokerage firm analysts,” she was honored with a Pulitzer Prize for Beat Reporting for her “trenchant and incisive” coverage of Wall Street. She also received her first of three Gerald Loeb Awards – this one for excellence in financial commentary. Five years later, HarperCollins published a book she edited, The Capitalist’s Bible: The Essential Guide to Free Markets and Why They Matter to You. Morgenson won her second and third Gerald Loeb Awards the same year – for Large Newspapers (as part of a group of New York Times reporters), and for Beat Writing for “Wall Street.” In July 2009, Dean Starkman of The Nation called her “The Most Important Financial Journalist of Her Generation.” For her “significant long-term contribution to the profession of financial journalism,” the New York Financial Writers’ Association awarded Morgenson its Elliott V. Bell Award in 2010.
With Rosner as co-author, she wrote the New York Times bestseller Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon, published in May 2011 by Times Books. It hones in on the origins of the financial crisis 15 years ago. On Aug. 4, 2012, Morgenson gave a Contemporary Issues Forum lecture titled, “Why the Financial Crisis Isn’t Over.”
Having always wanted to work at The Wall Street Journal, she left the Times to become senior special writer in the Journal’s investigations unit. For her “outstanding contribution to business journalism,” the Society of American Business Editors and Writers gave her its 2018 Distinguished Achievement Award. In December 2019, shortly before the COVID-19 emerged, NBC News hired Morgenson as the senior financial reporter in its investigations unit. With stories appearing on NBCNews.com and as segments on NBC News network, and on cable and streaming television shows, she has gone from print to digital to TV, and her audience is “exponentially larger.” Because financial issues are so integral to people’s lives, Morgenson said it is very important to not be afraid of them.
“Wall Street tries to make it hard to understand what’s happening to the economy, your world, your place in it, and your future prosperity and stability – and not just you, but also the community at large,” she said.
She continued, “If (there’s) a group of people taking advantage of the system … and making it hard for you to feed your family, you should know about that. The impact they have is substantial. I’m out there working on (your) behalf, shining the light on dark corners and helping (you) understand the world (you’re) in. … I’m trying to pull back the curtain on the hidden forces affecting your life … so people understand how they’re being harmed.”
The role of financial reporting is an important one. Because of Morgenson’s scrutiny of the savage behavior of ultra-greedy and powerful financiers in the private equity industry before and during COVID-19, their gaslighting-like tactics are less likely to succeed.