Throughout the phone hacking scandal, I've noted the parallels with the financial crisis in 2008. The concentration of market power in fewer and fewer hands; the negligence of regulators; the complicity of politicians; and the ultimate crisis of a conglomerate that was “too big to fail” - for Lehman Brothers read Rupert Murdoch's News International. The banks cut corners, out-sourced risk, relied on dubious practices conducted by third parties in the so called “shadow banking system”. Sound familiar?
Rupert Murdoch's people had followed the same path – explosive growth, moral abdication, using shadowy underworld figures to hack phones and blag information from official sources. Murdoch's halting appearance before the Commons select committee this week even reminded me a little of the octogenarian former head of the US Federal Reserve, Alan Greenspan, when he faced Congress in 2009 and admitted that he had been humbled by a crisis he failed to foresee.
No, I'm not apologising for Rupert Murdoch here, nor suggesting that he is to be equated to a central banker. His defence that he knew nothing about how his own newspapers acquired their greatest scoops, echoed by his son James and former Sun and News of the World editor, Rebekah Brooks, is patently ridiculous. As ridiculous as bankers like Fred Goodwin of RBS not knowing about sub-prime mortgage bonds. But I make the comparison because a number of commentators have been saying that the hacking scandal is trivial compared with other grown up issues, like the debt crisis sweeping Europe right now. I don't think it is trivial because it is a product of the same complex of lax regulation, political hypocrisy and naked self-interest.
And what worries me after this week's epic showdown between politics and the press is that the end result of this crisis might be the same as that of the financial crisis: the guilty will go unpunished and dysfunctional organisations will emerge largely unscathed and free to return to their old ways. Look at how the bankers have restored the bonus culture, worth £14bn in the last year, despite all the evidence that it encouraged risk and short-termism. For all the public inquiries and select committee investigations, and politicians' promises of an end to casino banking, the City of London remains unreformed. Politicians and regulators baulked at the implications of taking on the power of international finance. Hardly surprising since they had become so professionally and personally close to the 'masters of the universe' during the great credit bubble. Gordon Brown had paid homage to the City on the very eve of the Lehman Brothers' collapse. Tony Blair walked into a million pound sinecure with Morgan Stanley bank the moment he left Downing Street.
And the politicians who cheered on the bankers are the same ones who sought to curry favour with Murdoch's Sun. David Cameron's hiring of Andy Coulson as his communications director, even after he had resigned as editor of the News of the World over the phone hacking scandal, was a catastrophic political error. But it was a natural progression from Tony Blair flying out kiss Rupert Murdoch's ring on that Australian Island in 1995. Gordon Brown's fury at the behaviour of the Sun in revealing the condition of his son's health might have carried more conviction had it not been for the fact that his wife Sarah had helped organise the Rebekah Brooks' 40th birthday party and hosted slumber parties for her at Chequers.
After Westminster departs for holiday today, drunk on self-congratulation, what is to stop the red tops carrying on carrying on? News International were engaged in a race to the bottom with most of the rest of Fleet Street in the 80a and 90s and they won hands down. But we know that many other news organisations were involved in similar illegal practices because the 2006 Report by the UK Information Commissioner told us so. It revealed that just one private 'investigator' supplied illegal personal information to 305 named journalists from 21 national newspapers and 11 magazines. The information commissioner, Richard Thomas, called for a two year prison sentence for breaches of the data protection acts.
How do we call time on all this? How do we prize apart the press and politicians from their incestuous embrace? How do we stop organisations like News International getting too big to control? How do we remove fraud and deception from legitimate newsgathering? Clearly, there is going to have to be regulation, and the sooner we in the press realise this the better. It is time to replace the gutless Press Complaints Commission with an independent body with the power to fine newspapers that break its rules. Just like bankers, the press needs to be saved from itself.
The danger, of course, is that regulation might snuff out what remains of our tradition of investigative journalism and free and open comment. But that is a risk worth taking for restoring respect for the Fourth Estate – right now, no one believes anything they read in the papers. We need a proper law of privacy – one that codifies the implicit protections offered by the European Convention on Human Rights. There is nothing to fear here, provided right of privacy is balanced by an constitutional right to freedom of speech. In our ad hoc system we allow money to make up the law as it goes along: well-heeled lawyers use injunctions to protect their wealthy clients, take libel actions to stifle criticism, erect barriers of legal obfuscation to frustrate legitimate public inquiry. This should be blown away by a constitutional guarantee that power and privilege should not be able block the right to know, provided there is a legitimate public interest.
But this is not just about journalist ethics. We also need to prevent media organisations becoming so big that, like the banks, they can escape political control and public accountability. There should be restrictions on the number of national newspapers any one proprietor can own, and just as in any market, cross media ownership should be a matter for the monopolies and mergers commission, not politicians. It's time for humility all round. As David Cameron put it the day before Andy Coulson was finally put in bracelets: “The truth is, we have all been in this together – the press, politicians and leaders of all parties — and yes, that includes me.”