BROOKE GLADSTONE: The banks owe more money than they have, so they can't lend any to the rest of us. Even worse, if we let them fail, they could take our money down with them. What to do? Wall Street and, for a while, Treasury Secretary Henry Paulson, thought that the government should buy the banks’ toxic assets, all those bad mortgages, for more than they're worth. But the government decided it was wiser to buy stock in the banks, preferred shares that are more like loans, since they're repaid with interest. Joining us are Adam Davidson, who reports on business and finance for NPR, and Joe Nocera, business columnist for The New York Times. They each talked to heaps of experts to determine which choice was better, and they each found a clear consensus. The trouble is, the consensus Nocera found was diametrically opposed to Davidson’s. In a report that aired last October on This American Life, Adam, what did your expert say?

ADAM DAVIDSON: That Treasury Secretary Henry Paulson was wrong, that the U.S. government should not buy toxic assets from banks. The U.S. government should just give the banks money, in return for stock, for ownership.

BROOKE GLADSTONE: Joe, recently you had a column in which you said the consensus was what?

JOE NOCERA: That Henry Paulson had been right, after all, that the stock thing did not cut to the root of the problem, which was, dah dah - the toxic assets.

BROOKE GLADSTONE: Is the discrepancy between your reporting due to the fact that you talked to different pools of experts, one in the academy, one on Wall Street?

JOE NOCERA: I think that is part of it. The thing that’s important to understand here is that even the people we're talking to don't know the answer. Everybody is guessing, you know? I think it’s one of the most important things about the whole crisis to understand when you read the journalism, which is the people we are talking to can feel certainty from an academic point of view about stock injections, they can feel certainty from a market point of view about the importance of getting toxic assets off the books. Guess what? They're both right, and yet neither one has worked so far. So now what do we do?

BROOKE GLADSTONE: Adam?

ADAM DAVIDSON: As a reporter, it is so nice to find the refuge of consensus. [LAUGHS] This stuff is so complicated. If I feel that I can find, oh gosh, everyone I'm talking to is saying the same thing, it makes me feel like I can provide a better service to my audience by saying to them, all right, here, I'm going to kind of help you focus on how to think about this issue, because here’s the consensus of what the smart people I talked to say. But, it turns out that that is not a real picture of [LAUGHS] what is going on.

BROOKE GLADSTONE: But here’s the problem. If I want the big picture on the banking crisis and, say, I listen to NPR and read The New York Times, and I've seen the demographics - there’s a huge amount [LAUGHS] of overlap - I'm going to be seriously confused. Now, I understand that the story itself is confusing, but your stories seem to convey both certainty and consensus. Should they? Joe?

JOE NOCERA: Well, [CHUCKLES] I'm a columnist so, you know, I’m going to express an opinion.

[OVERTALK/LAUGHTER]

BROOKE GLADSTONE: Ah, the last refuge of scoundrels. [LAUGHS]

JOE NOCERA: Well, it may well be, it may well be. Look, I'm not writing straight news stories, I am writing columns. And in the end of the day, I have to come up with my own idea, each week, about what is right and what context and information I should give to my readers. So, letting people who have completely different views just splat on my page doesn't help me or doesn't help my readers. So, you know, early in the week, yeah, I'm going broad and talking to a lot of people. By Thursday, you know, ‘cause my column comes out on Saturday, I'm going narrow, and I'm going with the guy who I'm going to agree with this week. Now, I may change my mind three weeks later, as I did with toxic assets and capital, but I try to explain to the reader at least why I changed my mind. And, again, if you hold an idea for too long, it - somehow it seems to evaporate a month later because it’s been exploded by some event. It’s really, really hard to stay consistent on this thing because the thing itself keeps changing.

BROOKE GLADSTONE: I understand that just last week you guys were told that a key to understanding the banking crisis was understanding something called “tangible common equity.”

JOE NOCERA: Right.

[LAUGHTER] This is a really – actually, this is a really good example of why this is so messy. The government put the stock into the banks through a form called preferred stock. That’s how they got the TARP money. Well, about a month later, as the banks continued to crumble, I called one of my really smart guys on Wall Street, and I said, you know, why isn't this working, what’s wrong with this preferred stock as capital? And he said, well, I mean, everybody knows, everybody knows they should have done it as common, because that, that boosts the tangible common equity. And preferred stock is pointless because you got to pay it back at some point, therefore, it’s actually a form of debt and it’s not really a form of stock, and it doesn't really count as capital. And I was, like, huh? So that –

[OVERLAPPING VOICES]

BROOKE GLADSTONE: Adam, did you – do you second that emotion?

[OVERTALK]

ADAM DAVIDSON: I had the - I second that emotion. [LAUGHS] I had the exact experience, where suddenly I'm talking to a guy who’s, like, I mean, if you’re not going to do tangible common equity as your main source of analysis, then you have to bring in intangible equity. And I had never heard of tangible common equity or intangible [LAUGHS] equity. And now that I'm chastened and know [LAUGHS] that my fantasy of consensus is a fantasy, I'm calling around, trying to make sure I'm hitting enough people that I'm getting a real random sample – does tangible common equity make sense - because it’s an incredibly crucial thing. And now the most technical aspects of finance are on the front page every day. So guys like me and Joe, who have to communicate it to an audience that might not know most of the terms we're using in an article -

BROOKE GLADSTONE: Because you just learned them yourself?

JOE NOCERA: Bingo, yeah bingo!

[OVERTALK]

ADAM DAVIDSON: Yeah, exactly because we learned them ourselves that morning. So I feel like every day of this crisis I have to learn the vocabulary. I have to learn the geography of the battles – who’s for this, who’s against that, what are the implications? And then somehow, by the end of the day, I should have some reasonable thing to say about it.

BROOKE GLADSTONE: Okay, so as people who produce the news, what would you say are good rules for readers and listeners? How do they navigate this torrent of arcana?

ADAM DAVIDSON: Judging by my inbox, there’s a hunger for a clear narrative, a clear, compelling [LAUGHS] narrative. I mean, one clear narrative is there’s a bunch of evil bankers and they messed the whole world up and it’s all their fault, and maybe it’s Ronald Reagan’s fault also. But it’s not that simple a narrative. Other people might have a narrative that a bunch of irresponsible homeowners, pushed by Democratic exuberance for, you know, community reinvestment - it’s all their fault. And that narrative is equally ridiculous. But then to say, well, here’s the narrative that you should take, here’s how to understand it, is where I get as tongue-tied as anybody. What I'm thinking a lot about right now is we haven't even started the really big stuff, which is rewriting our rules of finance. The congressional offices is going to start in the next month or two, and that’s the stuff that’s really going to affect how we live our lives for the rest of our lives.

BROOKE GLADSTONE: And you’re going to find a lot of consensus on that, aren't you?

[OVERTALK/LAUGHTER]

ADAM DAVIDSON: Oh, no consensus. And if this stuff’s overwhelmingly confusing and sometimes boring, I mean, imagine doing a series on banking regulatory reform.

[LAUGHTER]

JOE NOCERA: You know, I just want to say very quickly, in the 1930s, when financial journalism wasn't nearly as sophisticated as it is today, and there’s not - there wasn't as much of it, they had these things called the Pecora Hearings, and they were a series of congressional hearings that exposed the practices of the latter part of the Roaring ‘20s, leading up to the crash. People went to jail as a result of those hearings, and they were not, you know, two hours to excoriate eight top bankers. They were an actual attempt to get to the bottom of what had happened. And one of the things that’s missing today is some similarly high-minded set of public events that would lay out what happened. In a country that is hungry for an explanation, you know, it’s not just up to journalism to do that. I mean, it would be awfully helpful if Congress and other public institutions would engage on that really important subject.

ADAM DAVIDSON: I couldn't agree with that more. I think journalism –

[OVERTALK]

JOE NOCERA: See, now we have a consensus.

ADAM DAVIDSON: We have a consensus.

BROOKE GLADSTONE: Blame Congress.

ADAM DAVISON: Right. [LAUGHS]

BROOKE GLADSTONE: Adam, Joe, thank you both very much.

ADAM DAVIDSON: Thank you.

JOE NOCERA: Thank you.

BROOKE GLADSTONE: Joe Nocera is business columnist for The New York Times, and Adam Davidson is a business and economics reporter for NPR, as well as the editorial director of NPR’s multimedia project, Planet Money.