Jon Stewart, Jim Cramer, and the future of Journalism

What a week.  The build up to the Daily Show's interview with Jim Cramer was almost unbearable.  With that being said, I think there were some very interesting details revealed in the interview that I think may people may overlook, and implications for journalism as a whole  In all fairness these are ideas that I have had for a while, but given the recent confirmation of my assumptions I decided it was time to give voice to thought.  

Journalism has had a rough decade.  The advent of the internet damaged the business model of most news organizations and many haven't figured out a new one.  Evidence of this comes from practically every large news outlet.  They have closed most of their foreign bureaus, leaving readers with nothing more than clipped and edited releases from the AP and Reuters newswire. Print ad revenues have gone through the floor, leaving many newspapers questioning how they will survive.  Even television news is having a difficult time in a world where their entire program can be condensed into 25 minutes and downloaded as a podcast from iTunes.  At the same time we have experienced eight years of no governmental oversight of industry or finance, trusting consumers to hold producers accountable based upon information which should have been readily available.  These factors combined into a perfect storm which was able to destroy our nation's economic, foreign, environmental, and domestic policies; potentially undoing the growth and progress which has been made following the end of the Second World War.  

News agencies doing their own reporting has become a thing of the past.  In many ways this makes sense.  Why send out a reporter to collect statements from witnesses when many are more than happy to post their account complete with images or video to their blog?  In an era of surplus of fact investigative reporters have become a rare need.  Most news agencies have realized this truth and have eliminated the majority of their reporting staff, opting instead to parrot the facts as described by the Associated Press or Thompson Reuters.  CNN has begun to incorporate blog-style reporting of events, hosting accounts of people who were witness to events, but who may not understand the need for journalistic rigor.  This begs the question, if two agencies are doing the reporting for the major news outlets, what is their purpose for existence?

This is an issue that the news industry is still struggling with.  The television outlets have coped by adding commentary, incorporating shows which blur the line between reporting of fact and preaching of opinion.  This was made shockingly clear in Jon Stewart's interview with Jim Cramer when the "economic expert" frequently professed that he was a commentator or pundit as opposed to a reporter.  The information is presented as if it is news, when in reality it provides fact so wrapped in opinion and ideology that it drafts the viewer's response for them.  Furthurmore when confronted on the subject Cramer responded that this type of programming is what there is a market for, implying that during this transformation the best way to maintain viewership is to give viewers what they want instead of the facts they need.  CEO interviews were taken as gospel without comparisson to public records, government reasonings were taken as absolute truths and never confirmed, and the complacency continued through a terrorist attack, two wars, and one of the worst responses to a hurricane in the history of having the government respond to hurricanes.  In struggling to survive the development of the internet, the media forgot what it was trying to survive to do.  

Media outlets are considered good when they reveal something that another outlets didn't reveal. Divulging hard to get information or drawing complicated connections which media consumers then use to make what they feel are better decisions expands an outlet's market.  News organizations seem to have overlooked this important point.  Print media is dying because they aren't providing their readers with information which couldn't be easily retrived in a google news search.  Television media is degrading because, in order to maintain ratings and advertising revenue, the decision has been made to trade information quality for entertainment value.   The unfortunate detail is if any business in either of these mediums had been able to use actual journalism to break either the Bernard Madhoff story or the subprime mortgage story three years ago they would have secured their market at worst and saved the economy at best.  In choosing to concede their independence and power to generate change, old media sources have chosen to become irrelevant.  

This irrelevance, however, does not have to be a permanent one.  There are aspects to old media sources which print and television news have chosen not to use to their advantage.  One of these qualities is credibily.  No matter what anyone may say, an article in a newspaper or a television expose will always carry more weight than a similar story posted by an unaffiliated blogger on the internet.  Despite how complacent these organizations have become, they still have some of their reputations behind them, which they can use to push the really tough and complex stories.  If the New York Times had published the evidence of the Madhoff whistleblower the man would have been investigated right then and there.  Instead SEC, who had the evidence in their hands twice over the last decade, determined that an investigation wasn't worth their time.  Some of this can be accounted for as sloth, some as a lack of faith in the source of the evidence, but both would have been overcome with the pressure a large, reputable newspaper and its readership can provide.  Beyond being able to throw around their credibilty these information conduits have the advantage of focus.  The internet is full of information spread across more pages than an individual can read from more sources than an individual can put through a polygraph.  Old media styles have the ability to mine this data, combine it together, refine it, and present it in an accessible way.  This focus can give old media the ability to produce better quality news instead of competing with the internet's greater content of news.  By combining credibility and focus print and television media can generate stories which actually hold people to account for facts and events, not opinions and rumors, and in holding these people standards they can regain their relavance.  

The death of the newspaper makes me unbelievably sad.  The ironic part of this is I have never been a consistent patron of the newspaper.  Despite my lack of fiscal support I understand that print media has an important role in our society, as does television media.  Their downfall comes because they have not provided a unique product, but that is not to say that they cannot.  Returning their focus on important stories, being the first and the most correct, and revealing more in depth details than the copy and paste internet media sources would lead to a resurgence in the industry.  By returning to their roots these formats can provide a service that is more complex and powerful than any newsblogger.  In choosing to compete with the internet and the newswires these formats can reclaim their importance.  The alternative is the continued reporter firings and growing corruption these employees would have been able to uproot.

Recent events have lead to a somewhat constant discussion of the economy and how it will either be the necessary catalyst to end the sloth and excess in the western service economy or it will be the end of modern civilization as we know it.  While these results are the obviously the two extremes, it seems reasonable that a once in a century event will have once in a century results.  With that being said, it is also important to truely understand what caused this situation in the first place in order to effectively find a solution.  Furthermore, it is also important to establish a long term goal for the state of the economy in order to draft solution that not only gets our economy out of the state that its in, but rather takes it somewhere we want it to be.  Only that sort of thought and planning will make the economy sound again and prevent the continuing formation of economic bubbles and bursts.  

No matter what the solution, our starting place in our search must be the root cause.  In many things throughout government, economics, and foreign policy this step is overlooked.  This is usually because finding the root cause is usually mistaken as trying to place blame.  The unfortunate aspect to this is that we exchange our more complete understanding of events for the unoffended sensibilities of what is usually a small group.  With that being said the troubles are too severe, and as a result people need to be offended.  

In this root of the problem finding endeavor, many have been quick to place blame.  Frequently you can find a pundit on a cable news network blaming the regulators, or the bank CEOs, or even in a few cases the people who have lost their homes.  No matter who is being blamed, however, the arguement is the same; you don't deserve our help because you made bad decisions.  Banks don't deserve our help because they loaned money to people who they knew wouldn't be able to pay it back.  People who took out loans shouldn't be helped because they should have known they wouldn't be able to make payments in the long run.  Regulators should be fired because they weren't paying attention.  Among this list, there are some that are more culpable than others (I find it hard to think that a bank could reasonably assume they could forclose on more than 5% of homes in a given area without driving down the value of the collateral they were taking...but being stupid is their perrogative), but none of these people are the root of the problem.  The root of the problem is that our economy has been running on credit since the end of World War Two and as a nation we finally defaulted.  

2008 was the first year since the Great Depression that debt held by households in the United States equaled our GDP.  Put in cleaner terms this means that if you took everything produced in the United States and sold it, you would only be able to pay off the debt on things we previously consumed but couldn't afford at the time. None of last year's GDP was able to pay for new consumption to drive the economy, meaning the only thing keeping the economy going was credit.  When the credit dried up it all ground to a halt and we sit where we are now.  Many economists argue that we need to free up credit by giving banks money to loan out, thus lubricating the economy and solving the problem.  I would argue that such an approach is exactly what brought to economy to the state that it is in, and more bad loans to more people who already have to much debt to pay off will not solve the problem.  The root of the problem is that too many consumers are so laden with debt that they can't buy anything else, their income goes to pay the debt they have and pay for living expenses. 

This debt is what is weighing down the economy.  Without this consumer debt, everything would be fine, people would have money to consume things, banks would be able to loan consumers to start businesses without fear of default, the gears keep turning and people start feeling good again.  In fact, given the amount of money we have already spent on the bailout could conceivably be applied to the mortgages of the people of the United States and the root of the economic problem would be solved, and if all we wanted to do is solve the economic problem we would be done.

The truth is there is a greater problem that no one wants to talk about.  There is a problem about how we have grown to see the "American Dream" and its place in each of our lives.  A clear, universal statement of this cultural phenomenon is hard to define, but the basic concept is that America is a place with such great class mobility that your economic class is determined only by your skils and tenacity.  This is not, however, the actuality of the "American Dream" in our daily lives.  In a real sense, the way we treat this phenomenon is more like "Keepin' up with the Jonses" than it is an exhaltation of working your way up.  Your neighbor gets a flat screen TV, so you want one too, you put it on the credit card, and pay it off over three years until its time to get a new one.  The consumption competition pervades our society so completely that it seems that many have forgot that there is a finite limit on what you can consume.  As a result people would push their means to the point that going a bit under for luxury was okay, because you could pay it off later when the raise was going to come or as the house appreciates.    This is the cultural root of the problem, and the solution is simply living within our means.

The complication comes when you attempt to solve the cultural and economic problems at the same time.  If you solve the cultural problem and reduce consumption the recession will worsen.  If you solve the economic problem without the cultural one you give money to people who weren't particularly responsible in the first place, and we will revisit this problem when they overextend their credit lines again.  How do you end the recession and promote smart decision making at the same time?  To what extent are we willing to let people suffer to punish irresponsiblity?  There is an answer, and I think some would call it a bit socialist, but it will work.  

Imagine a situation where the government took on these toxic assets from the bank.  Each bank is paid the remaining principle on the loan, relinquishes all claims to profit to be gained on those loans, and has their balance sheets restored to their former glory.  The banks gain the benefit of removing the toxic assets, but lose their profits and gain nothing from their poor behavior.  These loans are separated and attached to annual taxes of the individual loan recipient, allowing the government to take their mortgage payment or credit card payment directly from the individual's paycheck after a default.  A change to the loan structure may be considered to reduce the profit taken, but a government loan seizure would be added to the person's credit score, reducing the chances they take a loan they can't afford.  The modest profit (interest) taken by the government would be used to pay down the federal debt, improving the strength of the dollar, giving all Americans more purchasing power in a gobal economy.  

This is a complex solution, and the difficulty in breaking up various motgage backed securities would be difficult, but it is the only thing that could conceivably end the recession by stabilizing banks, allowing money to flow, and holding people accountable for the debts they have incurred. 

Obviously this wouldn't necessarily stimulate more consumption,  but I'm not sure that it should.  Perhaps taking some time as a nation to clear our debts is a good thing, no matter how painful it is.

Politics, Politics, and more Politics

As many of my close friends know, I watch a significant amount of political news on MSNBC. I thoroughly enjoy Harball and Countdown even though I'm not always fond of the views espoused by their hosts, and Rachel Maddow is now my new favorite political news show host simply because she conducts the most civil and tough interviews concerning important topics that I have ever watched (I'm truely amazed at how she is able to express her disagreement or correct someone's inaccurate information without interrupting her guest or raising her voice... way to go Rachel). Today they had a very interesting segment on the earmarks in the appropriations bill which was just passed this week, and I thought I would share my thoughts.

First this should be prefaced with a bit of background. This appropriations bill was a funding request from this past December to provide funds for the continuing operation of certain government programs (I understand that I haven't done my due dilligence in not investigating the bill myself, but the legitimate parts of the bill were not what peaked my concern). Attached to this bill was approximately $7 billion in over 9,000 earmarks. Without this appropriations bill, the legitimate programs would have to be shut down. This leads us to the predicament, is it really worth causing that much disruption in a dispute that amounts to less than 3% of a given bill.

The current administration can either accept the $7 billion in earmarks or shut down those programs until another bill can be created and signed. Judging by how the Economic Recovery Act was "rushed" in 3 weeks, it is reasonable to assume that these programs, the people they help, and the people they employ would be left with nothing for over a month. With the dow dropping below 7,000 for the first time in 12 years, leaving a group of government employees without an income for an entire month would make the current economic situation much worse. At the same time, using the veto on this bill would allow the president to make a stand on legitimately wasteful spending, especially in light of criticism over the proposed budget and Economic Recovery Act. A potentially dangerous principled stand could be the last push over a cliff to the second great depression or a rallying point to encourage greater precision and responsibility in government.

The solution, I believe, depends upon what kind of leader the president is. If he has made the decision to be the type of leader that is a realist, focusing on actual problems and worst case scenarios he will pass the bill and leave it at that. If the president chooses to be the type of leader that puts his faith in the better parts of our democracy he will veto the bill and trust to congress to give him an acceptable bill in a reasonable time frame. For the second option to work he will have to take on a role greater than just managing a crisis. He will have to work to inspire congress to do the right thing for the country, to quickly produce a clean appropriations bill, a task our legislative bodies hasn't been able to do in quite some time. It is time for the president to take his leadership role in the government, tell congress they did this wrong, make them fix it, and remind our legislators where their responsibilities lie.

Water Surcharge

I never appreciated not having to pay for water. Now I dread the day when the water bill gets posted. EBMUD has been adding a drought surcharge since August of last year, coincidentally around the same time I moved into my current apartment. Having never paid a water bill before, I thought the amount was high, but not unbearable, so I simply wrote the check and thought nothing more of it. Now that money is tighter, I decided to take a closer examination into how the water bill is broken down.

Each residence is given a limit on water usage, based upon usage at that residence for the previous three years. The obvious flaw in this plan is that, particularly around a university, apartments change hands on a yearly basis. Suppose the previous occupants of your residence didn't bathe on a regular basis. Your quota would be based upon levels far below what any person with reasonable hygine would actually need. Also suppose you move into a residence formerly occupied by someone who had a small marijuana plantation in their closet. If this were the case you could run the water for half the day and it wouldn't make a difference. Because of the wide range of previous tenants, basing usage quotas on residential predecessors indiscriminately gives some people fiscal breaks while causing others to pay through the nose for behavior which may conform to reasonable drought behavior.

Furthurmore, the utility district attempts to make amens for this by giving every account that uses less than 100 gallons/day an $0.18/unit discount on their bill. The folly with this plan should also be obvious . A studio apartment with only one resident would have an easy time meeting the criterion for the discount, while a group of people living in a multi-bedroom residence would be practically inelligible for this discount. As a result, this discount is an incentive to live alone rather than to use less water.

I understand the need to address water allocation in a drought. It makes sense to charge people more money for water when its scarce and reward those who are making sacrifices to ensure that the resevoirs do not go dry, which is exactly why any sort of water allocation or rationing program should take into account the type and expected occupancy of the residence in question.

As usual, any and all comments are welcome.

Restarting the nonexistent habit

My goal is to make the update of this blog a regular occurrence. Obviously that hasn't happened, but I've had some interesting thoughts as of late and few people to bounce them off of. as a result I thought I could share them here, and if I update this small section of cyberspace often enough, people will respond and I will have those well informed conversations I have missed ever since I became a loner in Berkeley.

So without further ado, some thoughts:

1) Our scientific expansion and ingenuity is currently in a state where we are looking at attempting to do the same things in a better way. This may not seem novel to anyone and its not a particularly bad thing, but I think its an important distinction to make. There are a few fields which are expanding due to basic research such as photon trapping for various purposes, but in general, the idea is to do more of the same thing better.

Our current path of energy storage research is an attempt to improve the cathode in Lithium Ion batteries. This is done by increasing the reactive surface area, allowing the battery to charge faster, discharge faster, and store more energy in general. While the technology is still developing, and it will be helpful for a myriad of electronics beyond just electric vehicles, this approach is much like trying to burn coal more efficiently instead of investing in solar panels. You may be saving money in the short term, but in the long run you would do better to switch to something better. Now I don't have a brilliant idea to store or generate energy, I wish I did. I have seen things which I believe are promising, but nothing incredibly novel. So I would like to open this question to the forum, which I believe will grow someday. If you were to pick a direction for energy storage research, what would you pick and what makes you think that the method you chose is the preferable one?

First Post!!!

So I'm finally making my foray into the blogosphere. For a long time there has been discussion about how much of an impact user defined content would actually make. With so many people creating so many pages every minute, how can one actually get information from it all? How do I know if anyone is reading this or if I'm writing for my own self-edification? I guess my best gauge is the comments that other people make here, and therefore I'm asking my future readers to respond to me often and with zeal. One of my major goals with this blog is to generate intelligent discussion, and that is not possible if people are afraid to actually discuss (not that I expect any of you to be...I mean come on, this is anonymous after all.) I do however, request that whatever you post, you do it with thought. Very often I see responses to people's posts which are simply, "that's dumb." I've been around long enough to know that I may actually be dumb, but the discussion goes better if you tell me why. Now that I've laid all the groundwork, I should probably get to my first post.

I've been thinking about how amazing it is what we, as a society, find important. Now, I understand that I'm on the west coast of the United States, and not everyone will be from this area, but I think I watch enough national television to get a feeling for the populace of the United States. Am I the only one disturbed by how much of our national news is dedicated to entertainment? Or how much of our news is repetitive? Its either Paris Hilton and Lindsay Lohan or the same clip of the same collapsed bridge with the same information over and over again for three hours. Are those people really important to us? Is the collapsed bridge story so important that we should pester the rescuers for information instead of letting them do their job? What has happened to the way information is disseminated in this country?

On a similar topic, is disturbing to anyone else that major network news is able to have so much control over what we know about our world. The one that really gets to me is the current presidential election season. We have 8 democratic candidates and 10 republican ones. The disgusting thing to me is not the number of candidates, but what we know about them. The news focuses on what they say and what people our candidates shake hands with and what babies they kiss. Where is the reporting on their governing record? Where is the quality control? Why don't I know from the national news how much money each of the candidates has accepted from major corporations? Why don't I know about each of their voting records if they are/were in congress, or what has happened in their state if they are/were governors? Why is it that I know more about Hillary Clinton and Barak Obama than I do about Bill Richardson or Joe Biden or even Mike Gravel? Why is it that I know very little about any of the Republican candidates? Is it possible that our current media establishment will be able to select our next president for us simply by who they pay attention to?

These are all questions I don't have actual answers to, but I have a lot of thoughts. I thing that controversy sells more than fact, and that as a result fact is reported less often than opinion or strife. On that note, I would also like to comment on how much the internet can change that. I saw this article when I searched the results of the recent presidential debate (that's supposed to be a link, I'm not sure if this blog will accept html commands). Who has ever heard of Ron Paul? I have, but that's because I watch a lot of youtube. But in all seriousness, who has heard of this guy? When he gets this much attention he polls really well, and a lot of the things that he says makes a lot more sense than what the other candiades he's running with are saying, so why don't we know about him? I think its because he was a nobody going into this election season. Hillary Clinton, Rudy Guilliani, Barak Obama, and John McCain were all well known, and as a result we all started talking about them right after the last miderm election cycle. Also, Mitt Romney polls well because he got into the race really early and we've had a lot of time to talk about him. I'm beginning to think that between this phenomenon of watching the same subset of candidates and the early primaries that so many states are having, we won't be able to get to know all the candidates and make an informed decision. Am I the only one with this concern?

Like I said, any responses to this post are eagerly encouraged. I'd really like to know what everyone has to say about these topics.