Merrill Lynch's Disgrace

You'll not be surprised to learn that Merrill Lynch used its research division to generate business for the firm's investment banking unit. Or that it pumped and dumped stocks that its analysts privately referred to as "dogs" and "pieces of shit." New York State Attorney General Eliot Spitzer lays out the case in compelling detail. Those seeking the quick summary can click here. Those who think that this problem is confined to Merrill Lynch should have their heads examined.

The corruption of Wall Street begs a major news media investigation. But with the notable exception of The Wall Street Journal, no one seems willing to really tackle the story. Weeks ago, I argued that the regular and reliable flow of advertising dollars from Wall Street to major media (like The New York Times) had dampened the news media's investigative zeal. A few weeks after that, I argued that the regular and reliable flow of campaign contributions to the Democratic Party and "individual attention" to Democratic Party bigwigs diminished the ability of the Democrats to capitalize on their best class warfare issue.

Spitzer's brief makes plain the opportunity cost of that regular and reliable revenue.