I have now been a paid blogger (not here -- there) for over four years.
While my former colleagues in daily journalism are dropping like flies I'm hanging in -- thanks largely to my wife.
I have learned a lot.
Readers genuinely prefer style over substance. I could spend all day researching and interviewing about a new tool and draw no audience. I could spend five minutes writing, in effect, "Microsoft sucks" and people rush to the rail.
Brands matter. By that I mean a publisher brand can define your audience based on the advertisers and readers it targets. Most individuals can't do this. A few did by getting in early and staying both persistent and consistent. But publishers have proven their worth in the online world.
Incentives need to match expectations. I am proud to say that ZDNet has a business model, one that apparently works. But that model is entirely geared toward page views, not editorial quality. It could be tweaked and, over time, I expect it to be tweaked. Tweak yours regularly.
All this said those who claim the "daily newspaper is dead" are only talking about newspapers that were dead long ago. Let me tell you a few things that can turn your daily paper into an online money-maker.
Amid all the hilarity and Pulitzer-level journalism involved in Jon Stewart's takedown of Jim Cramer yesterday is this key takeaway.
It was a feature, not a bug.
I chose this, the third part of the interview, because here Stewart gets to the heart of the matter. He mentions his 75 year old mother. She believed in what CNBC was covering up, what Wall Street was selling, what the Republican Party largely created. She lost a lot of money, and then a-wipes like Rick Santelli call these people "losers" while the guys around them are getting bailed out with trillions in taxpayer money and cheering him on.
What happened? Phil Gramm got a law changed allowing the creation of Confederate Money. He and other Republicans destroyed the wall between the casino of investment banking and the government-protected world of commercial banking. Hank Paulson and others leveraged 35-1 on this Madoff Money, and when they were finally caught last year they bailed themselves out on our dime.
I am trapped in a hotel where the only entertainment option is Fox News.
I didn't know how bad it is. They were talking about the Employee Free Choice Act, and even their headline lied. I'm not talking about spin, I'm taking about blatant falsehood.
The EFCA will give employees who seek union representation a choice between a card check and an election. If the employer does not want the union, this is the only way organizing is possible. An election "campaign" is just an opportunity for employer intimidation. Intimidation in this case means firing those leading the campaign on the other side, and their sympathizers.
There are ways to spin this, to claim the effect is something different. You can, at minimum, offer the other side's arguments, even while disparaging them.
None of this was allowed on the Fox air. Instead, worker freedom was said to be entirely on the side of fighting the act, and no one in their right mind felt any different, except a few "union activists" and the "Obama Administration," which need to "pay off" the activists.
This was not journalism. If no facts contrary to what your boss says to conclude are allowed into what you're doing then you are not a journalist. You're a propagandist.
Think of this as Volume 12, Number 10 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.
A quiet economic war is now being fought and the future of Europe hangs in the balance.
As with much of the Cold War this struggle is mostly happening in secret. Unlike the Cold War (until, as my son would note, the end) this war is economic, not military.
At the center of the struggle is AIG. Reporters here are desperate to find out "who are the AIG counter parties?" That is, who holds the other end of the trade on the phony insurance AIG gave to Big Shitpile, without collateral -- the black sinkhole into which the world economy is rapidly falling.
In his testimony to the Senate this week, Treasury Secretary Tim Geithner refused to answer the question. Some facts are leaking out, but these are mainly the names of American banks that are already getting government aid.
Here is what Geithner can't say. Europe. Banks in both Eastern and Western Europe were heavy buyers of Big Shitpile, lured into thinking they were getting AAA paper rather than junk by the AIG insurance.
Why was this done? My guess is that the Bush Administration was covering up the real costs of Iraq by creating a housing bubble, and that the bonds were also meant to create a "co-dependence" in Europe tieing those governments to U.S. policies. Pushing these bonds overseas helped increase the supply of free capital here for housing, and the AIG "insurance" made these deals look safe.
In fact, AIG was running a Ponzi scheme that made Bernie Madoff look like a two-bit grifter. Instead of putting up capital against its "insurance" AIG just pocketed the proceeds. Rather than price this insurance against the real risk of default AIG ignored its own underwriting rules. Was it done out of greed or under political pressure? I don't know. My guess is a little of both, along with "honest" patriotism -- your government asks and you act.
Why can't Geithner admit to this? Because, as we saw with Citicorp, which crashed as the government pumped its books with capital, the market will act on knowledge by running away from the counter-parties. So we keep Estonia, Hungary and the rest afloat on the sly, and we're forced by circumstances to bail everyone else out as well.
The danger is that this is a hole that can't be filled. Estimates of the value of mortgages at risk on this crap range from $2.5-7 trillion. At its height Credit Default Swaps were a $70 trillion business.
That's the real reason the President is going to Europe. All this springtime in Paris talk is a cover.
I have always been a sucker for The Grinch That Stole Christmas. Not the Jim Carrey live-action version, but the Chuck Jones cartoon, which uses all of Dr. Seuss' original artwork and concepts.
A version of that story may be playing out right in front of us. I did not want to write this without proof, but proof came yesterday, so here it is.
Clarence Thomas has been a very Grinchy Justice. He was nominated for his ideology and color to replace Thurgood Marshall. His confirmation hearings made him a laughingstock, filled as they were with images of pubic hairs on Coke cans. And so he vowed to spend the rest of his life giving nothing but pain to liberals, to "show them" the price of making the political personal.
He has been at it for nearly 20 years, an ideological clone of the slimy, smarmy Antonin Scalia, a reliable vote for any business interest. He is never seen to smile and, on the bench, never appears to speak. His opinions, when he writes them, speak to an antebellum conservatism, a pre-Marbury vs. Madison conservatism, the conservatism that kept his ancestors in chains, in south Georgia, in the small town where he later grew up.. He's like that KKK guy Dave Chappelle played once, the one who didn't know he was black because he was blind.
Thomas was famously asleep at the Inauguration, but he came down the aisle in his black robe for the President's speech on the economy. He sat down as he always did, and then the First Lady entered the gallery above the chamber.
Michelle Obama, a beautiful, strong, brilliant black woman, arms-bared, in complete command of herself, drew a standing ovation from the Congress and the gallery, then sat down next to a young black girl and hugged her tight.
Clarence Thomas smiled. No, that's not right. He grinned. No, that's not right either. His face broke into the light of day, a tremendous gleam of satisfaction spread over him, something I had never seen before. I watched the TV transfixed as he transformed before me, a light shining inside his heart, his anger gone, his eyes watering. It looked, to me, like the scene where the Grinch pulls the sled back from the mountain, that moment where "they say the Grinch's heart grew three sizes that day."
The camera left him when the President entered, as he walked down the aisle signing autographs and shaking hands. It was all a dream, or it seemed like one. Then Speaker Nancy Pelosi said the magic words, "Ladies and Gentlemen, the President of the United States." And it wasn't a dream. It was all true.
I can't speak to what Mr. Justice Thomas thought of the President's remarks. To me, he hit it out of the park with the nonchalance of Nat King Cole doing a turn on his old variety show. Every note perfect, every move sheer class. And then, at the end, the President turned toward the girl next to Michelle. He told her story, that she went to a poor school in a poor town in South Carolina, a school that would shake each time a train rattled by. He told of how she wrote him a letter, asking for help but saying in part "Americans don't quit."
For a few moments I thought Mr. Justice Thomas was going to cry. Because he had come from the identical town, in south Georgia. And here he was, in his long black robe, a senior justice of the Supreme Court, forgiven and forgiving, belonging.
Lost in this clip from the 1958 movie "Teacher's Pet" is the class war embedded in the plot.
Clark Gable (right) plays a newspaper editor who considers journalism a trade, Doris Day a journalism professor who considers it a profession.
In the end Gable's boss is flattered and the two sides compromise. This is a shame because something like this class war is going on right now.
Today Reese Witherspoon would be playing a TV bureau chief with Jack Black as a blogger. She still thinks of the work as a profession, but he knows that if you don't serve the market you don't eat -- and you don't deserve to.
The print industry has ignored the hard-won lessons of Gable's day and deserves to die. If you can't serve the market, if the market won't support your business model, you deserve nothing less, and I'm certain if he (or his character) were still around they would agree with me.
For the trade to go on strike or seek to extort money from unwilling consumers is to turn journalism into a welfare case, and thus destroy it. For journalism to be useful it must serve the marketplace. Don't give us what you think we need to know, give us what we want.
Many blog sites do that. Talkingpointsmemo and DailyKos have actually hired employees -- Kos bragged that he even gave his health coverage. HuffingtonPost had one of its employees recognized at a White House press conference. ZDNet, where I work, seems to have a working business model. All this is more tenuous than I might like. We do it out of passion, not for the money.
Point is there's gold in them thar' bits and if newspapers can't find them, tough. Someone else will.
Whenever some Republican yahoo complains about raising marginal tax rates, or about "class warfare," just say that one word. (Picture from Bluemooncandles.)
Customers.
No business can make money without customers. Luxury goods don't have many customers. Middle class goods have a lot more. When you have something the whole market can buy, that's when you make the big money. Wal-Mart will always be bigger than Tiffany's.
Customers.
The Obama plan is aimed at creating more customers for what the rich are investing in, and what everyone in that class makes. Customers are what sales, earnings and tiny little dividends are made of.
AIG may be the most unpopular bailout ever. With Wall Street. With Main Street. With the people. Probably even with the President.
Yet it is absolutely essential. Here is why.
AIG created a ton of what I call Confederate Money. They insured crap that was then called gold. When the gold turned back into crap AIG, the world's largest insurance company, was effectively destroyed.
But AIG was an American company, which did all this under cover of American law. The Bush Administration allowed our national credibility to be placed on the line by AIG. And everyone came to the feast, including a whole bunch of countries we can't afford to see fail. Eastern European countries, which placed big bets on big shitpile and will go belly-up unless those bets are at least made whole.
Would you like to see Estonia, Romania and Hungary back at the mercy of Mother Russia? That's what the bailout of AIG is preventing.
Back in the 1980s, when I was terribly intrigued over the history of money, I made an in-depth study of Samuel Insull.
Insull's main contribution to history was as a scapegoat for the Great Depression. He was tried for a variety of charges during the 1930s after his own holding company, which controlled most Midwest utilities in the 1920s, collapsed.
He was found not guilty, and in fact his actions had not been criminal. After arguing back-and-forth concerning the justice of his case, I have come to the conclusion that does not matter.
What does matter is that his case was cathartic. Insull gave those suffering from the Great Depression someone on whom to vent their frustrations whose actions were related to the cause of that frustration. They gave generations an object lesson to avoid.
What Insull did was use leverage to build his empire. Leverage, the manipulation of vast sums through the application of small amounts of capital, caused the Great Depression. Leverage is also the cause of our present distress.
Unfortunately, the scapegoats we have created so far had nothing to do with leverage. Bernie Madoff and Allen Stanford ran nothing but garden variety ponzi schemes, only with more zeroes than others. At worst, you can say they profited from a lack of regulation, a shortage of cops on the beat, which categorized the whole decade now ended.
What we need are better scapegoats.
We need scapegoats who teach the real lesson of our time, that leverage can be overdone, and that it must be restrained in order for the financial system to grow in an orderly way.
Recent Comments