Flashback to 2001

As newspapers go, so do countries? From July 2001. 

Yes, I misspelled "embarrass." Sigh. 

Days of Yesteryear: Newspaper Edition

In high school, I eagerly awaited Sunday's newspaper so I could read syndicated columns by Dave Barry, Mike Royko, Thomas Sowell, and Charles Krauthammer, as well as the Calvin & Hobbes comic strip. I didn't care about anyone's political affiliation. Most writers who made it into the Sunday paper were undeniably authentic and had in-depth personal knowledge. I was interested because each of them cared about the topic discussed and provided relevant research, even if only anecdotal. If any journalist had a chip on his or her shoulder, I couldn't feel it on my ink-stained fingers. I would save articles I loved in my cabinet, a shrine to the many words of wisdom I felt lucky to read. 

A few days ago, when a newspaper--from the same publisher--unexpectedly arrived on my parents' porch, I went to throw it in the recycling bin, asking my mom along the way whether she wanted it. She demurred, and off to the bin it went, unopened. How times have changed. But why? 

Despite more information publicly available than ever before, I learn more about a scientific topic by speaking to my sister, a PhD scientist, for 5 minutes than anything online. Writers can fit only so much context in a short article, but they don't have much competition--the number of experts able to provide "big picture" context is extremely limited. As the always interesting Nassim Taleb might say, oftentimes, it's not what you say, but what you leave out. 

A lawyer/analyst recently published an article arguing record consumer debt wasn't a cataclysmic problem but missed an issue: are his numbers and data based on organic, sustainable growth--such as steady, predictable tax receipts--or artificial, unsustainable catalysts, such as government borrowing at ever-increasing interest rates? Without knowing the answer to the aforementioned question, the entire article as well as its research is useless. This author, the editor of the blog, The Big Picture, somehow missed the big picture--despite doing considerable research and using diverse data sets. 

I emailed him, saying, "You... failed to list overall liabilities, such as pension and other local gov obligations. If local and state govs borrow more and transfer their debt/revenue to local residents, of course the overall picture will appear better." 

He responded, "These are current, not future liabilities." 

This expert accepts an analytical approach where if 100 people owe 1 million dollars now and have jobs that can reasonably cover the interest on their debts now, it doesn't matter if their government--local, state, and federal--or their private sector employer owes 100 billion in bond or other payments due tomorrow. 

But without knowing present and future liabilities, one cannot determine whether last year's tax receipts and accompanying job growth are sustainable. If governments or private employers owe 100 billion tomorrow, they might require higher taxes, fewer new hires, and more debt (presumably at different interest rates, impacting present-day revenue). 

If the debt is pension-related, then more revenue would be needed to replace the retired workers as well as to pay ongoing pensions unless the pension fund was 100% funded. In short, future liabilities can dramatically change the assumed rates of job growth, tax revenue, consumer demand and inflation, rendering prior data almost useless. It's as if there's a Black Swan event we can actually predict, but no one wants to do the additional math because it's too complicated. 

So I wrote Barry Ritholtz back: "[I]f we have a bill due tomorrow, analyzing only today's liabilities and GDP makes no sense if the entire structure depends on rolling over massive debt and other financial engineering." 

That's when it got interesting--and slightly snippy: 

My response: 

The value you were trying to provide was context, not knocking down a strawman, I hope. 

If since 2007, govs have borrowed more money and transferred that money to their residents on local, state, and fed levels while doing little to resolve systemic issues such as lowering pension obligation interest rates, etc., then the result won't be the same. It'll be different, of course, but serious problems will remain, meaning your article promotes complacency rather than true context.  You want the "big picture"? So do I. 

Barry: "See how it's totally not the same because of a lack of defaults and overall population and other changes that I'm going to examine without trying to see if the growth is merely because govs borrowed more money?" 

Skeptical Guy: "Dude, analyzing only today's data makes no sense if you're unable to determine that consumer/mortgage borrowing wasn't merely replaced by gov borrowing, which then was transferred to residents, leaving systemic issues alive and well, but with a larger fuse and more dependence on low interest rates."  

Barry: "Dude, I was just analyzing why it ain't exactly the same." 

Guy: "What value is that if your goal is to analyze the big picture?"

And that's where the conversation ended.  

When I opened my newspaper in the 1990s, I never once suspected Mike Royko wasn't an expert on everything Chicago. When Peggy Noonan taught me politics is all about "Whose ox is being gored," I knew she was speaking from a reservoir of personal experience. Today, in contrast, when I click on content, I sense people consider themselves experts after one-hit wonders or because they know the "right" people. Worse, I sense journalists and experts no longer have power behind their pen. Even if they manage to capture eyeballs, the public's threshold for outrage has risen so high, nothing will be done unless an army of paid meme creators and politically-connected groups manufacture simplistic slogans that fail to capture any complexity. 

Maybe that should be the modern journalist's motto (and epitaph): "So simple, you'll be outraged and demand change without really understanding a damn thing." 

Why is Media Dead? It's the Deadline.

By now, some of you have read my recap of Disney's 2017 shareholder meeting.  As I was leaving the meeting, I noticed an L.A. Times reporter taking one short interview while recording with his mobile phone.  I said I was from California, too, and asked him what he thought of Iger's half-arsed response to my question about unpaid student-athletes.  He brushed me off, saying he had a deadline to meet and could only interview one person.

I later looked at his "reporting" of the event.  Not a single thought-provoking sentence existed.  Even where the CEO had whiffed, the reporter complimented Disney's CEO for taking an array of diverse questions. Most of his "work" included tweets during the event and a few short articles published later serving as indirect advertising for Disney's upcoming movies.

I should have known better--the L.A. Times is in Disney's backyard, and it's doubtful Disney would advertise with it if the Times published any criticism.  As for the reporter himself, his prior work involved the seedy underbelly of becoming "famous" in La La Land.  His significant contributions to the annals of knowledge were revelations that 1) talent agencies require photoshoots and other expensive portfolio work, often steering clients to favored vendors; and 2) when paid from modeling or other shoots, the money is sent to the agent in escrow rather than the actor directly, allowing opportunities for fraud.  In other words, no real expertise in economics; media programming; and the stock market.  Throw in immediate deadlines with a lack of expertise on the topics being covered, and you can see the problem: reporters regurgitate content in ways that promote advertising opportunities, eyeballs, or consumer demand rather than substance.

People wonder why American democracy is in decline or no longer working.  It's not that hard to figure out.  Why read anything in mainstream media when it's almost all pablum and when the mainstream "opposition" is comedy that mocks rather than provide substantive knowledge?  It's as if we never really left good ol' England.  The media, government, and multinationals are still holding court over the peasants, and the jesters are the only ones able to tell the truth.

Bonus: "40% of the people in the U.S. read one book or less last year." -- Steve Jobs in 2008.

And yet, almost every kid has read Harry Potter.  It's not that people don't like to read--they just don't like reading crap.  

Why Newspapers Are Dead

Barry Ritholtz beautifully sums up the declining newspaper business:

I would argue that mainstream newspapers haven’t just lost readers because of the Internet as an abstract new medium, but that they lost readers because they became – with some exceptions – nothing but official stenographers for the powers-that-be. No wonder people have lost all faith in them.

Years from now, anyone who wants to know why newspapers died need only review the paragraph above. Also, I'm not sure why Barry used the plural form of "exceptions"--he probably meant the New York Times.

Note to Rupert Murdoch and the Newspaper Barons

Newspapers must have idiots running their business department. Newspapers price their product in ways that no other retailer would even consider. The current system penalizes long-term subscribers and rewards new ones. For example, the WSJ offers a $119 annual rate to new subscribers and then tries to charge existing customers a $398 renewal rate. That's like Macy's charging its best customers more money for a dress while offering a new, unproven customer a discount. Either give everyone the same price, or offer a discount to the proven subscribers.

If I ran the show, I'd charge a higher initial subscription, say, $200 to $400 a year. Then, each year, the rate would become progressively lower until reaching a minimum of say, $50 a year. However, to get the discounted rate, subscribers would have to agree to disclose some basic personal information useful to advertisers, like gender, age, education, and marital status (not political affiliation or financial information) and to return one advertising survey a year (either online or regular mail). My system would benefit everyone: advertisers, who usually look to target a particular audience, would have better information; newspapers, which are begging for ad dollars, would be able to effectively market to specific advertisers; and subscribers would pay less money for the same product.

Also, newspapers wouldn't have to hire those annoying marketers who call at 9:01AM trying to forcefeed their product to someone who's already received six renewal offers by mail and two by email. Entire telemarketing teams would disappear, as well as the waste that occurs from multiple renewal offers. Newspapers would only have to send one renewal notice with the following message: either subscribe and pay within three weeks, or lose the discounted rate.

Isn't it shocking no one has tried this yet? What am I missing?