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by Paul B Farrell, JD, PhD
| Print | 5/4/2010One of Wall Street’s central goals is the accumulation of more assets under management … and “more is never enough.” The greater the assets under management, the more fees and commissions Wall Street can charge for relative little management, and the richer insiders get. When they do (reluctantly) sponsor “investor education” programs, they are in fact marketing and sales tools to get new business. As former SEC Chairman Arthur Levitt once put it:
“Most of the players in this highly profitable industry are reluctant to spend more than a pittance on educating fund investors because funds know they can make more money off uninformed investors.”
Just as the Pentagon knows psych-ops disinformation strategies work, Wall Street knows these so-called “Investor Literacy” and “Investor Education” programs are tools to indirectly manipulate investors. These programs don’t help investors, they hurt: America’s national saving rate dropped from more than 11% in the early Eighties to below zero in recent years even as these programs grew. They are designed to control Main Street investors by broadcasting Wall Street’s slanted messages and neutralizing counterattacks.
Remember “The Planet of the Apes” with its fascinating sci-fi role-reversal: In that world, humanoids are the dumb beasts. Apes and their relatives are the intelligent beings: That’s right, Apes, Gorillas, Orangutans and Chimpanzees were running the world! That sci-fi fantasy is in danger of becoming reality, not just in the Wall Street jungle, but throughout America. In the world of economics and investing, evolution is rapidly reversing itself. Humanoids are being overpowered. Street Apes are rapidly spinning us back along the food chain. In that brilliant sci-fi drama, the cast of characters is divided very simply: Humanoids are America’s 95 million naïve and passive investors. They are enslaved to the elite special interest Apes and their clansmen dominating the Wall Street-Washington-Corporate-America Jungle.
Mixing metaphors and using radical new “intelligent design” theories from behavioral finance, the Apes tell us that hurricanes are opportunities for “economic stimulus.” They also want humanoid investors to believe that other faith-based theories are good for America: Such wizardry as pork barrel spending, deficits-don’t-matter logic, tax cuts for the super-rich, preemptory wars, no-bid drug contracts, medieval science curricula, and outsourcing trade policies that are building China and India into super-power competitors. Moreover, this evolutionary reversal of evolution is being accelerated by a steady stream of clever “investor education” initiatives. Yes, they are “clever” because the Apes want us to believe that “investor education” will help humanoids build million dollar retirement nest eggs.
“Investor education” is a dangerous fairytale
But the Wall Street Apes initiatives are creating the exact opposite, America’s savings rate has dropped below zero in two decades. And as bizarre and contradictory as it sounds, that is exactly what the Apes secretly want! They do not want humanoids to be independent thinkers. They want Americans to indulge, spend, borrow and spend more.
Consider the facts: Two years after the fact, the SEC still hadn’t figured out how to spend the investor education money included in the $1.4 billion Wall Street settlement fine from the 2002-2004 scandals. Plus, the states-run Investor Protection Trust is wasting millions on television programs that would never go prime-time and probably end up competing with Saturday cartoons. For example, the Mutual Fund Reform Act of 2004: Congress killed a bill which had a provision to stamp out “investor illiteracy,” proof that Washington’s Apes believed America’s 95 million Humanoids are still unevolved “illiterate investors.” And they wanted to keep it that way.
The real truth is that we already have too many useless “investor education” programs! Some have been around a long time, like the Mutual Fund Education Alliance, formed in 1971. Check them out: Notice how they all echo the same dull, ineffective messages: Alliance For Investor Education, American Association of Individual Investors, National Association of Investor Corporations, and lately the Investment Company Institute has chimed in with a new program, “Funding Your Future.” So the bottom line is that the fund industry has had extensive “investor education” programs for years.
Unfortunately, “investor education” is a dismal failure
They’re not helping. In fact, things just keep getting worse! Mounting consumer and national debt. Zero savings. Bankruptcies. Increasing poverty. On one hand, tons of “investor education” programs. On the other, Humanoid investors are regressing backward along the economic evolutionary chain.
The nineties mania proved how “illiterate” American investors are. We followed the Apes like sheep buying silly dotcoms with no earnings histories. We weren’t evolved enough to avoid the big bad bear and the recession. Nest eggs vanished. Even though we lost $8 trillion in their markets, the clever Apes managing our mutual funds continued making their average $436,500 annual salaries—and we continue cheering for them, even though the stock markets have barely averaged one percent return annually since the peak in early 2000.
Step out of the fantasy folks: “Investor education” gets a big fat failing grade. Since the early eighties America’s zero-savings rate has collapsed from 11% to zero today as we drown in debt sipping $3.50 Starbucks lattes, filling up our gas-guzzlers, disassociating from reality while buying the latest iPod, XBox or plasma TV. Human evolution is in fact being reverse-engineered by the Apes in the real world of money, investing and economics. Yes, they are making monkeys out of us, but we’re willing victims.
The big secret? Save 10%! But we can’t even do that
Folks, investor education can be summarized in one simple formula that would make anyone a millionaire. This one formula is all you ever need to know about investing. And it’s not really a secret, it’s emphasized in every one of the programs above: “Save 10%!” It’s that simple. Here’s the corollary to the formula: “Nothing saved … equals nothing invested … equals nothing compounding … equals nothing for retirement!”
So why is America’s savings rate zero? Why are “investor education” programs such a miserable failure, a misleading, total waste of money? Listen closely, here are the two big, interconnected reasons that both humanoids and Apes prefer illiteracy, yet will continue denying reality while sliding back along the evolutionary regression trail!
First: 10 reasons investors stay “illiterate” by choice
The shocking truth is: Most humanoids do not want to be ‘educated investors!’ We’ve got priorities, better things to do. Seriously, we have full-time jobs, kids, parents and grandparents to worry about, and a helluva lot more. Yes, we want to retire as millionaires, but getting “educated” about investing takes too much time, effort and brain cells. So we have become unconsciously vulnerable to the Apes brainwashing PR advertising spin. In fact, by choice, many investors choose to remain illiterate about investing for these ten “reasons:”
1. After paying bills there’s no money left for saving and planning
2. Or they simple enjoy satisfying immediate needs and fun stuff
3. For many, planning for the future just isn’t how their brains work
4. Others are novices, naïve newbies, easy prey for Street hustlers
5. Many people have no interest in financial and economic matters
6. Others are too confused by the money math, and block it out
7. Some are dependent people and can’t make money decisions
8. Others say money is the root of all evil, reject the devil’s work
9. Many are too busy making money to become savvy investors
10. Lastly, our brains are our worst enemy, not created for investing
Humanoid investors are being steadily programmed to think short-term, focusing on the “now” – getting kids to little league, filling the tank, running errands, enjoying a daily latte … and buying whatever cable TV’s talking heads are pushing today. Behavioral science is proving our “long-term investing gene” is being erased from the humanoid brain. The Apes replaced it with an “immediate-gratification gene,” creating zero-saving consumer mutants.
Two: Primates fear “educated investors” will revolt
And that gets me to the second really big reason “investor education” programs are total failures. As much as the Apes rule is a fiction, so is Wall Street’s pretense of caring, they secretly hate the idea of having truly “educated investors” around. The reason is obvious: The Apes know that if the humanoids ever did get educated and were financial literate, there’d be a widespread violent rebellion against the jungle’s ruling Apes!
If iumanoid investors knew how Apes keep their greed machine secretly hidden … How much the Apes are skimming off the top … How much effort the Apes put into keeping humanoid investors enslaved to their stupid “faith-based” investing theories … a grassroots rebellion would sweep those Primates back to their jungle. That’s right: If humanoids ever realize the truth, they’d overthrow the Primates and their “faith-based” economics and take back the planet.
The truth is, my dear fellow humanoid investors, our self-appointed masters (all those Apes populating the upper echelons of Wall Street, Washington and Corporate America) are too intelligent, too self-interested, too arrogant, and too greedy for their own good. But stay tuned! Soon, we can safely and scientifically predict, this evolutionary reversal will slam headlong into the law of unintended consequences. Then, something beautifully unpredictable with happen (perhaps the reappearance of a new “Missing Link”) and the balance will again shift. In short, the Apes are destined to self-destruct, that’s the inevitability of history.
FirstPubDate: Oct’05
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I'm of two minds about taking up this theme, since stating what ought to be obvious but is nevertheless unpleasant and inconvenient is apt to get one branded as lunatic fringe.
Access journalism has created what is in many respects a controlled press. And that matters because people are far more suggestible than most of us wants to admit to ourselves.
Let us start with the cheerleading in the media over Wall Street, and in particular, Goldman earnings. Matt Taibbi, in "Good News on Wall Street Means… What Exactly?," tells us why this is so distorted:
It's literally amazing to me that our press corps hasn't yet managed to draw a distinction between good news on Wall Street for companies like Goldman, and good news in reality.
I watched carefully the reporting of the Dow breaking 10,000 the other day and not anywhere did I see a major news organization include a paragraph of the "On the other hand, so fucking what?" sort, one that might point out that unemployment is still at a staggering high, foreclosures are racing along at a terrifying clip, and real people are struggling more than ever. In fact the dichotomy between the economic health of ordinary people and the traditional "market indicators" is not merely a non-story, it is a sort of taboo - unmentionable in major news coverage.
The press has been on a downslope for at least a decade, as a result of strained budgets and vastly more effective government and business spin control (and it was already pretty good at that, see the BBC series, The Century of the Self, via Google video, for a real eye-opener). I met a reporter who had been overseas for six years, opening an important foreign office for the Wall Street Journal. He was stunned when he came back in 1999 to see how much reporting had changed in his absence. He said it was impossible to get to the bottom of most stories in a normal news cycle because companies had become very sophisticated in controlling their message and access.
I couldn't tell immediately, but one of my friends remarked in 2000 that the reporting was increasingly reminiscent of what she had grown up with in communist Poland. The state of the US media became evident to me when I lived in Australia during the run-up and the first two years of the Gulf War. I would regularly e-mail people in the States about stories I thought were important and I suspected might not be getting much play in the US. My correspondents were media junkies. 85% of the time, a story that had gotten widespread coverage in Australia appeared not to have been released in the US. And the other 15%, it didn't get much attention (for instance, buried in the middle of the first section of the New York Times). And remember, Australia was an ally and sent troops to the Iraq.
Why does this matter? Because influence via the adept packaging of information and images is very effective. The creator of the public relations industry, Edward Bernays, was the nephew of Freud and set about to use the subconscious to shape public opinion. His books included This Business of Propaganda and Manipulating Public Opinion. But it doesn't fit our self image of being masters of our own view to recognize that we might be swayed.
In his classic, Influence: The Art of Persuasion, Robert Cialdini describes how salesmen can adeptly use social conditioning and norms to elicit favorable responses. Cialdini, a social psychologist, notes that even though he is aware of these techniques, he is unable to resist them.
One experiment from cognitive bias research assembles a number of people in a room together, but all save one are actors. Everyone in the room is shown a series of lines and asked to say out loud which is the shortest (the background design makes it a bit difficult to discern without concentrating a bit). For the first five or six rounds, the actors (and the lone experiment subject) pick the shortest one. Then, the actors start calling the LONGEST line the shortest one. After a few round s of this (and inevitably, the one not in on the game looks puzzled) about one-third of the experiment subjects start agreeing with the crowd, even though that answer is clearly incorrect. And there is boatloads of other evidence of suggestibility. For instance, numerous studies have found that if a number of people tell an individual he looks tired or sick, he will start feeling tired or sick, as the case may be.
Back to the main theme: the media dares not say anything too negative about financial services firms or their government operatives lest they lose access. The private sector has learned the lesson of the Bush Administration, that the threat of freezing a reporter out is a powerful weapon. I have had some well connected readers tell of story ideas that they served up in some detail that the media would not touch out of fear of alienating their sources. This is the sort of thing that one associates with banana republics, but we have been operating on that level for quite some time.
Not surprisingly, the government and large corporations were firmly in charge of the message during the crisis (remember the gap between the MSM reporting and the anger in the populace over the TARP, which was finally noted ONLY when Congress responded to a barrage of calls and e-mails and voted down TARP v. 1.0?) and perhaps more important, in pushing the, "move past that car wreck, things are really better" message. From the Pew Research Center:
Three storylines have dominated: efforts to help revive the banking sector, the battle over the stimulus package and the struggles of the U.S. auto industry. Together they accounted for nearly 40% of the economic coverage from February 1 through August 31. Other topics related to the crisis have been covered much less. As an example, all the reporting of retail sales, food prices, the impact of the crisis on Social Security and Medicare, its effect on education and the implications for health care combined accounted for just over 2% of all the economic coverage.
Actions by government officials and business leaders drove much of the coverage. The White House and federal agencies alone initiated nearly a third (32%) of economic stories studied through July 3. Business triggered another 21%. About a quarter of the stories (23%) was initiated by the press itself and did not rely on an external news trigger. Ordinary citizens and union workers combined to act as the catalyst for only 2% of the stories about the economy.
Fully 76% of the datelines on economic stories studied during the first five months of the Obama presidency were New York (44%) or metro Washington D.C. (32%). Only about one-fifth (21%) of the stories originated in any other city in the U.S., and about a quarter of those emanated from two other major media centers: Atlanta and Los Angeles…
Once the economic situation showed some signs of improvement-and the political fights over legislative action subsided-media coverage began to diminish. After accounting for 46% of the overall news coverage in February and March, for instance, coverage of the economic crisis dropped by more than half (to 21% of the newshole studied) from April through June. And in July and August, it fell even further (to 16%). The clearest example came in cable news. Once the political battles subsided, coverage fell by about two-thirds from March to April.
Notice even Pew has fallen for the party line a bit. The stock market rally started in March. That is not a sign of economic improvement (Krugman has said something along the lines of "The stock market has predicted 20 of the past 9 recoveries.").
So what do we have? A media that predominantly bases its stories on what it is fed because it has to. Ever-leaner staffing, compressed news cycles, and access journalism all conspire to drive reporters to focus on the "must cover" news, which is to a large degree influenced by the parties that initiate the story. And that means they are increasingly in an echo chamber, spending so much time with the influential sources they feel they must cover that they start to be swayed by them. It is less intense, but not dissimilar to the effect achieved when reporters are embedded in military units. The journalists often wind up adopting the views of the people they associate with frequently (I am sure readers will add more nefarious theories in comments, but the point here is a simple: an up the center description of what has happened to the media shows it has fallen under the sway of powerful interests).
Now how do we get to the propaganda part? Not only, per Taibbi, are we getting the view of the economy from the vantage of the bankers, as opposed to a broad swathe of the population, but we now we have the media (well, this example is that odd hybrid, an MSM blog) telling us there is no outrage. From the Los Angeles Times (hat tip JohnD):
Except for Michael Moore, whose new movie posits that capitalism is one big Ponzi scheme, the news Wednesday that banks are thriving and that Wall Street analysts are in line for big bonuses this year seemed to land with all the political weight of a dull thud.
Oh sure, the chairman of the House Oversight and Government Reform Committee said he'll soon hold hearings on executive pay at firms that got taxpayer bailout money, like AIG and Bank of America….
But with the Dow Jones hitting 10,000 and the economy stepping back from the precipice of last fall's collapse, there was little of that tea-party outrage that might have been expected.
Have we moved on? Arguing that the country is now more concerned with Afghanistan and healthcare, the Wall Street Journal said of bonus outrage: "That's so last March."
Maybe taxpayers have simply given up on Washington's efforts to corral Wall Street.
Now why is this sort of thing (and the media was full of more subtle versions, of happy talk re Dow 10,000 and Goldman earnings) more pernicious than it might appear?
The message, quite overly, is: if you are pissed, you are in a minority. The country has moved on. Things are getting better, get with the program. Now I saw the polar opposite today. There is a group of varying sizes, depending on the topic, that e-mails among itself, mainly professional investors, analysts, economists (I'm usually on the periphery but sometimes chime in). I never saw such an angry, active, and large thread about the Goldman BS fest today. Now if people who have not suffered much, and are presumably benefitting from the market recovery are furious, it isn't hard to imagine that what looks like complacency in the heartlands may simply be contained rage looking for an outlet.
But per the social psychology research, this "you are in a minority, you are wrong" message DOES dissuade a lot of people. It is remarkably poisonous. And it discourages people from taking concrete action. I was surprised that some people bothered to comment on a post I put up yesterday, calling on people in the Chicago area to attend some peaceful demonstrations against the banking industry during the American Bankers Association national meeting, October 25 through 27. Some people weighed in, saying (basically) "don't bother".
I suppose it makes a difference whether one is old enough to remember the 1960s. Because people in large numbers got out and protested, two sets of changes that seemed impossible came about: civil rights for blacks and an end to the US involvement in Vietnam (if you read the histories, the military and intelligence experts were on the whole persuaded it was an unwinnable war, but it was seen as too costly to US prestige for America to withdraw).
And even if the effort you make narrowly is not successful (does any one person's effort have much impact?) it breeds apathy and cynicism to suggest that doing nothing is the best course of action. If nothing else, it is better for one's psyche to do what one can, however small, to make a difference.
Now America does not have a tradition of taking to the streets; demonstrations and rallies historically are working class affairs. But the middle class is on a path of downward mobility while the elites continue to take the cream. The widening gap might waken some impulses that have been dormant in the American psyche.
- pwm76:
Well done again.
I studied communications at one of the top universities and your various contentions are broadly correct. Good for you for being brave enough to say it.
- Peterpaul says:
It is easy to say it; are we brave enough to act on it?
That said, however cynical you are, you will be a bit more cynical and jaded after watching The Century of the Self…
- IF says:
Good article. After Buiter got the Eastern Europeans out of the closet, you are going half a step yourself. (http://blogs.ft.com/maverecon/2009/10/kornai-on-soft-budget-constraints-bail-outs-and-the-financial-crisis/)
But then again, from an Eastern European perspective it is still 10 or 20 years to demonstrations. The crisis affects too few people in the US (or in Europe) in a hard enough way. Things are moving in slow motion.
The role of the media is indeed interesting. Everybody knows, well should know, that the US media is shallow, introverted and cheer leading. But they do tell plausible (or distracting?) stories. So does, from slightly different perspectives, the UK and German media that I am following. Even the Russian media tells plausible, intelligent stories from a completely different angle. Whom to trust? (And why?) And if not trust, how to reason? One can probably catch all of them with little lies, but how about the big ones?
- Hal says:
The US is a mature plutocracy. How could you think the plutocrats would be unseated by a short lived setback? The idea that what happened is going to alter their ways is silly wishful thinking. They have the public so well duped that it is powerless, which is just what the plutocrats want. The status quo ante will be up and running in no time.
- K Ackermann says:
The public is not powerless. It is just unwilling. There is a huge difference, and I hope people like yourself start taking up the meme.
- Head says:
Unfortunately the "public" is dead, replaced by the mass society, described by C. Wright Mills and others long ago. I agree with you that the onus is on the people, but the people no longer comprise a public.
- cougar_w says:
I have instinctively known this to be true for a number of years. My wife (an olde-style hippy) argues with me about the importance of activism. I don't have the heart to stop her being involved in trying to rally people - and it's good for our children to see it, regardless - but I fear greatly that activism now is like shouting into the storm.
Without the ability to move people counter to their comfortable daily patters… we are toast. Simply we will not turn this ship around.
cougar
- biofuel says:
The problem may be that people consume too much media. People drive to work – a controlled environment, then drive home, turn on TV and watch it and go to sleep. Weekend – a mall, a restaurant, a game on TV. In this suburb of over 20,000 people, the last town hall meeting was attended by over a 100. The burning issues on the agenda: what to do with all the empty foreclosed houses, levying fines on those who take garbage out for pick up too early. A few people lose jobs, lose a house, a car and are knocked out of this cycle, but the rest go on. People are disengaged from one another and from larger issues.
Aside that, people trust their leadership and are naturally patriotic about their country. Furthermore, in a culture of individual responsibility, it is the fault of the individual when bad things happen to him or her. Revolts and disobedience are not an American thing, that's what happens in the developing countries ,and they are poorer for it.
- Jojo says:
Yves said "Back to the main theme: the media dares not say anything too negative about financial services firms or their government operatives lest they lose access."
Don't forget advertising also! MSM, like Congress is owned and paid for by the plutocracy.
This is why the news industry is dying and not coincidentally, why thinking people have turned to independent blogs, like yours, the real news and analysis.
However, the fact that the DJI has pushed past 10k, despite all the obvious economic negatives, shows clearly WHO is in control. This is what Wall Street and the government wanted and this is what happened. The price of gold is the only element out of synch that the power brokers haven't been able to control.
I've also scratched my head about the pervasive "don't bother" attitude, the mass acceptance by the majority of whatever explanations and news the government/MSM chooses to put out. With so many people, especially younger people out of work and idle, one would think that their should be a lot more protests and civil disobedience. But no. Perhaps there really is something being added to the food or water? Or maybe everyone is just too busy twittering, playing with their Iphones, listening to MP3's and watching Youtube videos all day long….
- trexbean says:
O, well said! I work for a daily newspaper - the biggest in its state - and I tell you that, at every level, it has betrayed its duty to serve as a watchdog of government and big business. The people are sheep and the newspapers are Judas goats.
- cougar_w says:
We applaud your openness. But how do you do it every day? Aside from the obvious economic realities of needing to keep a job (and you should)… how do you keep your spirit from being crushed?
- Daniel de Paris says:
The widening gap might waken some impulses that have been dormant in the American psyche.
As a reader of Tocqueville and a complete parochial Frenchy, I believe that the effective American way – politically speaking – is local and grass-root.
There is practically no political action possible at Washington-level except for external affairs. Wars started in Washington can and have to be stopped in Washington.
The chances of the US are at grass-root level. Grass-root movements à la sixties to stop these crazy military budgets and grass-roots justice action for financial crime.
Concerning the latest, I am stumped. Why so few actions in New York jurisdictions!!
- Jojo says:
While this guy focus is more political than economics, he writes a bi-weekly column of outrage that fits in well with some of the elements in this blog entry.
===================
The gang rape and the Republicans
Behold, 30 U.S. senators who don't give a damn about battered womenBy Mark Morford, SF Gate Columnist
Friday, October 16, 2009….
It is with this wonky filter in mind we turn our gaze to the gaping hellmouth that is the U.S. Senate, that drab cauldron of grumpy old men, defeminized women and tiny handful of rebellious dissenters, all of whom claim to have your best interests at heart but mostly only really give a damn about which lobbyist will help them best make their next boat payment.
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2009/10/16/notes101609.DTL&feed=rss.mmorford
- Anon says:
Middle classes are unimportant in a service economy and neither is intelligent life forms.Pass me a Big Mac and the Simpsons are starting now.
- Constantnormal says:
And (some) people wonder why the newspapers are dying, and why The Daily Show is where most of the younger set get their news.
Thank God for Jon Stewart.
- skippy says:
MSM I dub thee *Psirens* See link: http://www.youtube.com/watch?v=_QuaP732yb4&feature=related
Skippy…watch out for that straw now.
- MSM Reporting as Propaganda (No One Minds Our New Financial Masters Edition) " In These New Times says:
[...] NakedCapitalism [...]
- Skippy says:
And if you have not seen it yet, we have come full circle see: Stormtroopers' 9/11
Link: http://www.youtube.com/watch?v=xV7Ha3VDbzE&feature=popular
Skippy…Hay its all good as long as we think America is #1 EH.
- fresno dan says:
"And that matters because people are far more suggestible than most of us wants to admit to ourselves."
I tend to agree, but being contrarian (or more accurately curmudgenly) I would point out that we are not sheep being LED to the slaughter, we are sheep STAMPEDING to the slaughter – we believe in hope. I believe Churchhill once said the best arguement against democracy was speaking to a voter for 5 minutes (I would amend that to 1 minute).
- cougar_w says:
The US public education system was originally founded with the main purpose of creating… an informed, literate electorate to act as the foundation of our democracy.
'Nuf said.
- Bruce P. says:
1. After years in politics, I learned, well before the recent contraction in the "news" business, that many, many reporters essentially chased press releases. Plus, having known many press secretaries on the Hill, it became apparent that these folks, no matter how wonderful as individuals, were essentially channels for someone else's thoughts; most press secretaries know how to convey information without really understanding it. The same might be said for many reporters.
2. Read Neil Postman's classic "Amusing Ourselves to Death." Published in 1985, Postman probed deeply into the role of media, particularly television, and accurately dissected it for the dangerous farce it was becoming.
3. Finally, although Postman wrote that many folks might see Orwell's "1984″ echoing in his book, he insisted that the more appropriate and salient reference would be Huxley's "Brave New World", with its somatized civilization, needing its fix of pleasure and amusement to remain content.
- frolix22 says:
Good article and I agree with it. In fact, the shaping of public opinion, and what qualifies as "mainstream" or "reasonable", by the media has become almost an obsession of mine.
That said, this is all very familiar. The basic ideas you present here are similar to those found in Chomsky and Herman's book "Manufacturing Consent", probably the single most important book ever written about the media. Of course, that book is invisible in the mainstream, as the media model it posits actually predicts it would be.
- Richard Kline says:
Pew: "Ordinary citizens and union workers combined to act as the catalyst for only 2% of the stories about the economy." This is plain fact, and says everything about the agenda of those who produce or published putative 'news' for the MSM. Real people with real lives in a typical world _never_ make it into the media. Freaks and shriekers, yes; people who live a life, no. The viewpoint of the media is aimed only at the top 5% of earners: only issues that they might deem 'important' make the 'news,' and even then only from the perspective of that income strata. Try finding a genuine working class or ethnic minority viewpoint, not filtered through newspeak to an acceptable tenor for 'polite society.'
This has been true for at least 20 years, not that the media was healthy or direct before then. I remember when we had in close sequence: a President caught redhanded breaking the Constitution thumb his nose at Congress while spewing pablum-and the MSM just couldn't bear to call him out; a massive speculative bubble in equities and real estate, 1980s version, which the MSM thought was the best thing since bear bonds; a totally unnecessary war-Bomb the Ragheads 1.0, with 2.0, 3.0, and now 4.0 (Pakistan) following-which the MSM found was just the right stuff for ratings so long as they waved a big flag. Truth in reporting was stone dead by the back part of '91. Since then, we've only had Yellow Press Lite, Grande, and Capsicum.
And that thing called access journalish, ooiiiiiiyyyy! It is plain fact that anyone in officialdom would lie to you, a journalist, with dry palms and straight gazes if they thought for a second it advanced their agenda a hair. The function of journalism is not to report what is accessible but to find what is inaccessible. The official version is only the specimen on a slide to be subjected to tests against other information. Access journalism is just armslength public relations. At best.
So the function of a citizen is first, to understand that the official view is certain to be a spun-sugar bouffant of lies, and then second, to gather information which tests its accuracy. This is not, actually, that hard to do, because real information about the world and its venal, sad, hilarious ways lies everywhere by the roadside for the taking. -But even that is too much of an effort for homo Americanus. The fact that most Americans get their 'news' from television, a substantiall fact-free action video, tells the story in words few enough to fit on a postcard. "La-La Land, wish you were here. XOXOXO, the Family." *hmmphh*
So one shouldn't be surprised that the MSM has declared the 'recession' to be 'over.' For the 1$, it is, and that is the entirety of their intended audience. And those who might make a difference are too busy shopping at Walmart thinking what a deal they're getting to stop for a minute and think. 'Thinking': now _there's_ something TRULY un-American.
- Toby says:
Excellent, thank you for this.
I turned off my TV almost a year ago, and follow freer sites such as this one. I am a happier man for it, although angry too at the things you describe above. My faith in The System was broken a long time ago. Only radical change can restore it.
- Jerry says:
After trying to get PBS to cover the "real economic story", I too turned off t.v and get my news from the internet.
- cougar_w says:
I turned off my TV 20 years ago. We don't have one in the house. My children have virtually zero exposure to MSM, and read a lot.
Their friends come over, find no TV to watch, and accuse us of being retrograde freaks.
The pressure to just take the drug is intense and unrelenting.
cougar
- K Ackermann says:
I see fnord everywhere.
Look, people!
- But What do I Know? says:
Just a corollary to that thought, Yves–last night the financial MSM was falling all over itself to describe what a great growth company Google was. As far as I can tell–Yahoo Finance is my source–their revenue for the last five quarters has been between 5 and 6 billion. Does that sound like runaway growth to you?
I know this is trivial compared to the larger picture problem that you are talking about. Just call if Exhibit Z.
I'm not a disgruntled short, either–in fact, I stand to benefit if GOOG rises. But when I started reading your piece it seemed like this is the kind of thing you were talking about. Just thought you'd like to know.
- mechanic says:
Do ya think that allowing the media to concentrate with the likes of Rupert Murdoch, GE, Disney (oh the irony), etc. had anything to do wid it ?
- RueTheDay says:
We are a month or two away from a 10% U3 unemployment number. It will be interesting to see how the media portrays the return of double-digit unemployment. I was in middle school during the early 1980's and distinctly remember the unemployment rate (and the inflation rate) being front page news on a regular basis at the time.
It will also be interesting to see what happens when U3 crosses the 10.8% post-Great Depression record set in 1982, which I suspect will happen early Q2 2010. Will anyone in the MSM acknowledge the existence of a depression at that point?
- craazyman says:
The primary problem, I think, is a lack of a clear and convincing alternative economic approach to the one we now have.
The issues of central banking, credit, regulation and capital ratios are so esoteric and so remote that few Americans can really build a world view around them. Not out of lack of intelligence but simply because it's a completely foreign language.
In Vietnam the body bags and grainy video from the jungle were so emotionally brutal that they had the force needed for change. Waterhosing the children of Alabama, the ugly angry mobs of hatefilled faces, they shocked anyone of good conscience. And the ideological foundation of the American political system was the rocket fuel for social equality.
But when it comes to money and wealth, there's a strong historical sense that "our system" - loosely defined as government-supported and managed free market free trade capitalism - has proven itself better than all the alternatives. This is quite subjective in the particulars and details, but the big picture - compared to communist Russia, China, the third world, Africa and even the slightly sclerotic "old Europe" or the sort of strange and rough post-communist Europe. None compete in the popular mind as an attractive alternative.
"If a few executives in New York make millions pulling the levers of our way of life, then, well, it's a shame and they're a bunch of assholes, but at the end of the day, what can we do about it?" This, I think, is sort of a distillation of the communal mind's point of view at a subliminal level.
The Goldman CFO, Mr. Viniar, recently channeled that vibe - I think unconciously - when he credit his firm for doing a lot of social good. And no doubt it does in many cases, supplying capital to many worthy businesses that provide valuable goods and services and jobs. The dual reality of these firms' impact on soceity is an endless source of moral fog.
There is nothing in this crisis to grab on to - intellectually and ideologically - for most people. Just a stewing frustrated rage that something isn't right with the big picture. And so we have a bewildering range of targets for rage including too much government, too little government, taxes too low, taxes too high, not enough bank lending, too much bank lending.
There's no center, no point of communal traction that could be sloganeered into a reference point to rally around.
"We want capital ratios and we want them now!" won't bring out the marchers.
"Bring Back Glass Steagal! Bring Back Glass Steagal!" won't do it either.
"Audit the Fed before we're all Dead!" may bring out a crowd of cranks and intellectuals, but not mass demonstrations in the streets.
And so people acquiesce to a state of affairs that they know is messed up, but they don't know quite why or what to do about it– other than tune out the morons on TV and try to survive the night in the jungle. And they don't want to risk a wholesale upheaval that might make things worse.
It's truly a policy wonk's crisis. A crisis that requires some real statesmen and women who have political power, to step up and steer. Sadly, they seem few and far between.
- maynardGkeynes says:
A very thoughtful and cogent analysis that is not nearly hysterical enough to have any impact. But I get it. Well said.
- Unemployed Saver says:
It might sound quaint but how about..
"We the People, By the People, For the People!"
- Michael says:
Thank you, You summed it up beautifully, "policy wonks crisis".
I think for the layman the key is:
The fact that equities are up 30+% since the march lows on practically no volume, signals to me that most people of a certain age (late 40s to 60s) are praying there will be one more chance to get out before they retire or are forced to retire early. Since the volumes are low and no one is really buying, it also means no one is selling yet either. Once that pent up anxiety is released and equity mutual fund (401k) liquidations begin in earnest it'll be a rapid ride down and people will start screaming as they watch stock prices plummet at a 1929 rate. Until then the whistling past the graveyard will continue. Once this current equities baloon is punctured, the last vestige of middle class hope will evaporate. Then MSM coverage will finally catch up with the mood of despair and we'll start seeing early 80s type gloom coverage 24/7. Until then, the real reporting stays in the blogosphere.
- cougar_w says:
My fear is the MSM will begin the search for a scapegoat. In part of divert attention from their own titanic failure, but also in large part to ingratiate themselves to the soon-to-be-active political movement to cleanse the American spirit of corrupting elements in society.
That's not MY idea, I'm just predicting how it's going to be spun.
I don't know who will be our own Heinrich Himmler, but our Joseph Goebbels has already rolled out the red carpet. All that's needed is for someone to recognize the opportunity and seize the day.
cougar
- cougar_w says:
All your points are correct. Nicely done.
There is a term for this that you did not use, so I will roll it in:
Complexity.
When you can't get at the root cause of something, and you feel stupid and impotent as a result, you are probably operating in an environment of extreme, manageable complexity.
Complex systems have not only their own subterranean, Stygian interconnections, but also utterly unanticipated emergent properties. They are too complex for even their makers to understand how they work anymore and as such are almost completely autonomous.
Know that complex systems cannot but fully understood, cannot be predicted, and are impossible to manage. They operate outside the human scale and are not bound within the normal operational parameters of human interactions.
We are trapped in a complex system.
We are trapped in a massive, complex machine of our own manufacture that became too vast for us to manage either as individuals or as groups.
The machine is now grinding us into dog food and we cannot turn it off and we cannot escape and we don't know what to do. None of us will emerge unchanged. Not even the elites.
Welcome to the actual end of the Middle Ages. I don't know what comes next, but not one of us is likely to recognize it from where we stand now.
cougar
- Friday Morning News and Views " The Confluence says:
[...] Naked Capitalism, Yves Smith: MSM Reporting as Propaganda The press has been on a downslope for at least a decade, as a result of strained budgets and vastly [...]
- geof gray says:
Quelle horreur! Financial news is now becoming as befouled and propagandistic as is world news. Foreign correspondents of the NY Times always write their dispatches on the assumption that the US is more ideal moralistic than all the countries that they cover. Look at this dispatch by Adam Nossiter: "China has been determined in its pursuit of minerals in Africa, often without consideration of how countries are governed." Hm, does the US ever cares about how oil-rich countries are governed? Let me re-write this sentence: The US has been determined in its pursuit of oil in the Middle East, often without consideration of how countries are governed." The only word I would change is often: I would replace it with always.
- Yakkis says:
They left out the part about how China is coveting "our minerals" in Africa in countries, where we don't consider either how they are governed.
- Yakkis says:
It's ludicrous that you have to qualify your post with saying that it sounds like the lunatic fringe. If anything, the MSM has become the lunatic fringe.
I cringe whenever I accidentally have to listen to TV or radio these days, or accidentally glance at a newspaper.
All I can say Yves is that you've become the de facto econ/finance journalist (along with some other bloggers) and as far as journalists go, you aren't even in the same league as the propagandists.- Andrew Kaplan says:
Great post, yves.
Same trend, unfortunately, has infected sell side investment research. As u say, corporate America watched & learned from the Bush administration's successful efforts to get fawning coverage thru the use of "freeze outs" of non-compliant reporters. Today, sell side analysts who have negative ratings or write critical things about the companies they cover (or even non-critical things that are not "pre-approved" by the companies themselves) are denied the opportunity to speak to senior management, or to host road shows for buy side investors, or even to ask questions on public quarterly conference calls. Individual analysts are forced to choose between doing real research or getting access to management (and, with it, the ability to provide the services such as conference calls & company visits that institutional investors will pay for)…and it's no surprise which one generally wins out.
- wally says:
Very sad; very true.
This country is not just a little bit bought, it is bought inside and out. We do not own our government or our media. I don't know where it leads eventually.
One prediction: lots more troops to Afghanistan. Why? Because you never bring an army home to conditions like this.- BuckyDent says:
I feel much better now. I was a reporter a LONG time ago, and began to wonder if the press has always been a Tool, but I was too stupid to notice. The notion that it's been a steady decline and we're now bordering on MiniTru is dead-on.
- craazyman says:
A reporter? I thought you were a shortstop for the Yankees.
- gatopeich says:
Thanks Yves, you're my heroine, _and_ my heroine!
Regarding the state of journalism, yesterday we had a bitter example, when many so-called "news" channels interrupted whatever was going on to show 'live' images of a flying balloon. Is that barely an adult's choice of news?
I was myself amazed as I watched it happened on my country's public TV. Gosh, I live in Spain, the fucking balloon was flying over Denver, obviously empty! They even paid with our public money for such 'hot news'.
Seriously, what's going on with journalism, globally? Makes me so angry… And it is like this every day (were it not for NC, John Steward, and very small local initiatives).
- John says:
Great article and some great responses.
I can only speak for myself, but there are a few things that have caused me to go from angry and yelling about it to anyone who would listen (as well as letting my elected representatives know how I feel) to a sort of pissed-off-apathy. By the way, I'm not in finance but have a job (still) that pays well and that I enjoy.
(1) We beat TARP! Yay! - I was one of the people that read Mish every day and followed his advice in order to defeat TARP v1.0. That was a great feeling. Then the market kept going down and TARP v2.0 ended up passing. Mish said he thought it was a better bill than TARP v1.0, but I thought it was actually worse. I felt pretty dispirited after TARP v2.0 ended up passing.
(2) A 'change' president was voted in - I actually voted for a third party, but I thought Obama would be a radical change from Bush. Instead, he's been Bush II. I now think that McCain would actually have been better than Obama because McCain is not nearly as charismatic as Obama is and I don't think there is any way that the public would have let McCain get away with doing nothing in the financial reform area as it has with Obama. In summary, McCain would have tried to be Bush II, but the public would not have let him.
(3) A local 'bubble' message board that I used to participate in was taken over by some realtor shills and some people with close connections to the investment banking world. Maybe 'taken over' is too strong of a word, but there was definitely a shift in the vibe of the board from anti-bailout to pro-bailout.
(4) This blog only allowed comments from other bloggers for a while. When that happened, I felt like I didn't really have much of an outlet for my rage against all of the financial shenanigans. I'm glad that this blog now allows comments from all comers.
At this point, I feel that the MSM, the Executive Branch, and the Legislative Branch have all failed the people. Our last remaining hope is the judicial branch. Luckily, there appear to be some intelligent folks with working consciences in this branch of government who are still trying to do what is right. Maybe in the end, someone in the Executive Branch who isn't bought and paid for will bring an antitrust action against all these too-big-to-failers and that's how we'll get these bastards.
- Jerry says:
We need more than democrats and republicans…I read an artcle last year that predicted a new party would spring up in California as a result of this crisis…I hope so and maybe even 3 or 4
- gruntled says:
All this whining amounts to nothing more than mental masturbation unless the public takes concrete steps to stop the nonsense we've been witnessing.
What can you do?
You can write to your congressman or senator, who will politely ignore you. You can "fire the bums" and elect new ones that promise you "change." Unfortunately, it may be your vote but it's actually Wall Street's and drug/insurance companies' money that gets them elected. So the new ones are no less beholden to special interests than the old ones, and public's interests are screwed again, without hesitation.
So again what do we do?
- rd says:
We just keep voting them out until we get significant change.
It took until 1932 to get a major voting change in the Great Depression. The legislative changes didn't start happening until mid-1933, almost four years after the 1929 crash. It was six years from the 1974 bottom before Reagan was elected. We are only starting our second year from the 2008 collapse – this is still the early innings for the banks and politicians.
Obama came in with the clout to make real change happen, especially with an atmosphere ripe for real change and a four year window before his next election. Instead, he has largely opted for the status quo and it would not surprise me if he is on his way to becoming a Jimmy Carter-like one term president.
FDR got re-elected in the Depression becasue he was at least trying to make change happen and succeeded in a number of key areas, including banking/securities regulation and programs to help unemployment – he really did generate hope. They may have made technical monetary and policy errors in the late 1930s but that was also at a time when there were essentially no sophisticated economics models that could be readily applied – in the end they did reasonably well given the tools that they had at the time.
- rd says:
I thnk part of it is the conditioning that people and the media have undergone since the early '80s that the stock market is THE leading indicator and when it goes up that always means that good times are 6 to 12 months ahead. The same conditioning dictates that unemployment is always THE lagging indicator so it doesn't really matter.
That mantra is being repeated over and over again, so the level of worry is dropping. It was generally true in the 80s and 90s. However, we saw it start to break down in the 2000s with the largely good jobless recovery from the dot.com bust.
Most of the people and the media cannot remember either the grinding of the '70s or further back the '30s where those leading and lagging indicator mantras did not really work. Unfortunately, there is a good chance that we are in the middle of one of those periods now so the framework that the people, media, and politicians are using is probably the wrong one.
Since Wall Street lives and dies on a quarter-by-quarter basis with annual reports the extent of their long-term thinking, they actually have a very good model to take advantage of the next 5 to 10 years since they live in the moment. As a result, they are positioned to take advantage of those grinding ups and downs, especially if the population, media and politicians are conditioned to make sure they don't go out of business if they happen to screw up big time.
As a result, we are in a giant Monopoly game where one player has an endless supply of "Get Out of Jail Free" cards and can elect to pass "Go" or get a free loan from the bank whenever he is in danger of going bankrupt.
- OrganicGeorge says:
The advent of "Happy Talk" local news, putting an emphasis on good looks and a pleasing on air personality, created a farm league of journalist who were uneducated and concerned primarily about their appearance on set.
Like to many other short sited quick buck schemes; the bean counters at news divisions discovered they could increase Ad revenues by acting as cheerleaders for corporations, who returned the favor with gracious Ad buys.
Real news was not important, in fact it hurt revenues. News bureaus culled out the reporters who actually try to bring some truth to the public, remember Ashley Banfield?
Today incompetence rules the news rooms. From editors to headline writers. 40% of all news content comes from pre-packaged PR from corporations, advocacy groups and political operatives. It's not news, it's gossip.
Let's sum up all the basic foundations of the US democracy.
1. Broken Financial system
2. Broken Press
3. Broken Government
4. Broken Ag policiey
5. Broken Tax System
6. Broken Health Care
7. Broken Educational system
8. Broken Military
9. Broken Social Safety NetThe only person who could be encouraged by this list is Grover Norquist.
- cougar_w says:
A very similar list was like manna from heaven to a certain former Corporal from the German Army in the run up to the Second World War.
Watch for it.
cougar
- wethepeeple says:
Walter Lippman's "Public Opinion" and Jacques Ellul's "Propaganda: The Forming of Men's Attitudes" are great reads. I became interested in this topic over the last 18 months, but my knowledge has led me to feel 'demoralized' (i.e. powerless) as I see no changes being made. Remember strategies for propagandists include preventing action and preventing the formation of sensible conclusions. Hence the frustration of so many in the face of their own inaction. It leads me to conclude that we all must 'politicize' the issues of the day. Don't fall for the propaganda of 'depoliticizing' anything, because it remains the only mechanism for change…our votes! Voting is the only way to throw the bastards out! VOTE, VOTE, VOTE!
- EmilianoZ says:
Vote, really?
I remember Obama's victory speech last November: "Change has come to America!" That's why we voted for him, right? Change.
What has he changed? Has he tackled TBTF? He tried to introduce the CFPA, but it's losing all its teeth under the punches of the financial lobby.
Republicans and Democrats alike have done the bidding of the financial "industry". It was Clinton who repealed Glass-Steagall and signed the Commodity Futures Modernization Act.
Voting is a waste of time.
- C. Casper says:
The lead story on NBC Nightly News Wednesday night did exactly what Matt Taibbi says no one did, essentially asking "so fucking what?"
http://www.msnbc.msn.com/id/3032619/ns/nightly_news_with_brian_williams#33318298
- andrelee says:
"SFW", the movie, check it out. Everything matters. Everyone matters.
- rich says:
The very term "Banks" is propaganda.
Imagine if instead of 3 hours of "balloon boy" yesterday, CNN spent 15 minutes explaining "Savings bank" vs. "commercial bank" vs. "investment bank", why they were required to be separate after the depression and funds could not be intermingled, and how ideology engendered deregulation, thus leading to increased leverage and risk.
It's pretty simple.
But how many people hear "bank" and think of their local branch ?
How many people do not understand how the 80-00's mimicked the 1920's … with the same result.Or another "15 minute" topic … reporting on the creation and expansion of corporate personhood … and its impact on democracy.
More broadly, though I think tribalism is a basic human instinct, I think American Exceptionalism is highly reinforced by our media - with disastrous impacts for our wellbeing (health care, wars, debt etc).
- rich says:
What a great post & thread.
Seems like as long as humans are "amusing ourselves to death" in relative comfort within "the society of the spectacle" and "manufactured consent" we will (in the aggregate) always be manipulated, misinformed and exploited. Makes me think there is little hope for the US.
- Move Along " The Baseline Scenario says:
[...] a comment " Yves Smith has a very good post on how hard much of the mainstream media has fallen for the "everything [...]
- bakunin says:
Nah. If voting could change anything it would be illegal. Absent a radical third party, the alternatives will be circumscribed to make choice meaningless. Collective bargaining for debtors, targeting the weakest consumer lenders with renegotiation or repudiation of debt, picking them off one at a time, that would be some fun. Encroaching on consumer credit markets with self-help associations modeled on kiva, that would be fun. Meantime mass brainwashing gives the few remaining skeptics lots of money-making opportunities. I can't say I regret the chance to surf the ridiculous phony manias that crested in 2000 and again in 2007, or to bet against the currency and assets of "the world's most productive economy," and to watch the housing fetishists knock themselves out on the treadmill and pick off their liquid assets on the cheap. I'll be happy to join the revolt, but it's too soon because we haven't hit bottom yet. We've got a long way to go.
- Eagle says:
Actually, if they're on a list you're on, most likely they're short the market, have predicted an utter collapse of social and economic systems, and are getting increasingly frustrated as their savings and credibility wash away. I'm not surprised they're angry.
- Blurtman says:
The Depression Will Not Be Televised
You will not be able to stay home, brother.
You will not be able to plug in, turn on and cop out.
You will not be able to lose yourself on skag and skip,
Skip out for beer during commercials,
Because the depression will not be televised.The depression will not be televised.
The depression will not be brought to you by Xerox
In 4 parts without commercial interruptions.
The depression will not show you pictures of Nixon
blowing a bugle and leading a charge by John
Mitchell, General Abrams and Spiro Agnew to eat
hog maws confiscated from a Harlem sanctuary.
The depression will not be televised.- David Patrick Columbia says:
Edward Bernays' book "Crystallizing Public Opinion" was Goebbels' bible and the inspiration for the term "Kristallnacht" - ultimately the beginning of the end (but not before the complete destruction) of Germany under Hitler's Nazi regime.
- Irrational Doomsday Blog says:
I love this post, great job.
- Paul Handover says:
This is such a revealing and important Post supported by some very sage comments. The way that Governments are 'insulting' their peoples is going to backfire. As a good friend of mine said recently, "What's really galling is that all of us have done all the right things: Worked hard, invested our money in Wall Street, bought and paid for our homes and paid our taxes. Year after year, decade after decade."
- DownSouth says:
Ah, the sewing of hopelessness and disillusionment so that the people turn to defeatism or nihilism: It's a method of social control as old as the hills, the ruling classes having deployed some of their finest thinkers to its engenderment and perpetuation, as elaborated on here by Reinhold Niebuhr:
Nevertheless the tendency of religion to obscure the shades and shadows of moral life, by painting only the contrast between the white radiance of divine holiness and the darkness of the world, remains a permanent characteristic of the religious life.
This tendency has more than one dubious effect. It certainly tends very readily to a moral, social and political indifferentism. The individual, and more particularly society, are regarded as too involved in the sins of the earth to be capable of salvation in any moral sense.
Usually the individual is saved by the grace of God, while society is consigned to the devil; that is, the social problem is declared to be insoluble on any ethical basis. Thus Augustine concludes that the city of this world is "compact of injustice," that its ruler is the devil, that it was built by Cain and that its peace is secured by strife. That is a very realistic interpretation of the realities of social life. It would stand in wholesome contrast to the sentimentalities and superficial analyses, current in modern religion, were it not marred by a note of defeatism. That note creeps easily into all rigorous religion, with its drift toward dualism. The injustices of society are placed into such sharp contrast with the absolute moral ideal, conceived by the individual conscience, that the religiously sensitized soul is tempted to despair of society. Religion thus degenerates into an asocial quest for the absolute. The soul seeks the perfection of God in either quietistic absorption or ascetic withdrawal from the world; and in each perfection is defined and experienced in purely individual terms.
–Reinhold Niebuhr, Moral Man & Immoral SocietyThe secular equivalent of the defeatism Niehbuhr describes is known as libertarianism. Libertarians have given up on the public realm and believe they can withdraw into a private realm that somehow, as if by magic, is perpetuated with no further engagement in the public-political realm. Hannah Arendt describes the phenomenon as follows:
The extent to which the ambiguous character of the revolutions derived from an equivocality in the minds of the men who made them is perhaps best illustrated by the oddly self-contradicting formulations which Robespierre enunciated as the 'Principles of Revolutionary Government'. He started by defining the aim of constitutional government as the preservation of the republic which revolutionary government had founded for the purpose of establishing public freedom. Yet, no sooner had he defined the chief aim of constitutional government as the 'preservation of public freedom' than he turned about, as it were, and corrected himself: 'Under constitutional rule it is almost enough to protect the individuals against the abuses of public power.' With this second sentence, power is still public and in the hands of the government, but the individual has become powerless and must be protected against it. Freedom, on the other hand, has shifted places; it resides no longer in the public realm but in the private life of the citizens and so must be defended against the public, and its power. Freedom and power have parted company, and the fateful equating of power with violence, of the political with government, and of government with necessary evil has begun…
The conversion of the citizen of the revolution into the private individual of nineteenth-century society has often been described, usually in terms of the French Revolution, which spoke of citoyens and bourgeois. On a more sophisticated level, we may consider this disappearance of the 'taste for political freedom' as the withdrawal of the individual into an 'inward domain of consciousness' where it finds the only 'appropriate region of human liberty'; from this region, as though from a crumbling fortress, the individual, having got the better of the citizen, will then defend himself against a society which in its turn gets 'the better of the individuality'.
–Hannah Arendt, On RevolutionIt is a testament to the intelligence and thoroughness of the ruling elite that the ancient tactics of social control, long used in religion, have now been extended to the world of "science," infusing the academe with pseudo-scientific dogmas such as the "finding" that nothing possibly can be done to correct the problem of free-riding in society. Jonathan Haidt testifies here as to the juggernaut that existed in academe that destroyed the academic career of anyone so bold as to challenge that doctrine:
http://thesciencenetwork.org/programs/beyond-belief-candles-in-the-dark/jonathan-haidt-1
"Rage is by no means an automatic reaction to misery and suffering as such;" Arendt observes in Crises of the Republic, "no one reacts with rage to an incurable disease or to an earthquake or, for that matter, to social conditions that seem to be unchangeable."
Arendt thus gives us the reason why, first through religion and then later through "science," the ruling elite hoped to persuade us that the city of this world is a "compact of injustice," that "society is consigned to the devil" and that the social problem is "insoluble on any ethical basis".
- DownSouth says:
The above comment should have been hung on this passage from Yves' post:
"I suppose it makes a difference whether one is old enough to remember the 1960s. Because people in large numbers got out and protested, two sets of changes that seemed impossible came about: civil rights for blacks and an end to the US involvement in Vietnam…"
- donna says:
DownSouth, you need to have a blog. ;^)
- DownSouth says:
David Sloan Wilson also talks about those in academia who refused to bow down to the paladins of greed and selfishness were branded as "freaks":
http://thesciencenetwork.org/programs/beyond-belief-enlightenment-2-0/david-sloan-wilson
There seems to be a growing rebellion in academe. Let's hope a similar revolution takes place in evangelical Christianity.
- bakunin says:
Hey Eagle, stalwart patriot though you clearly are, your reductive long/short dichotomy has always been a lame trite means of attacking market skeptics. It's one more dishonest straw man. While you do see canned-goods and ammo manifestos on the left, everybody with a grain of sense knows that terminally-corrupt kelptocracies provide terrific opportunities. Lots o' juicy market distortions, you know. Corruption is easy to exploit. The best way to wreck a system like this is not to fight it but to work it, feast like squirmy maggots on the pus while it decomposes.
- kevin de bruxelles says:
Great post, it made my day.
Seen from the point of view of the elites, the question is: how to best manage the decline. The answer is a mix of the old and the new: create a pacifying matrix of bread and circuses and deliver it with the efficiency that only a highly advanced technological society can manage. And as the pestilence of economic decline continues its relentless creep forward while at the same time wealth retreats into well-protected bastions; the matrix must be intensified to provide the masses with more and more of the soothing blue pills needed to dull the increasing pain of reality.
This blog and most of its commentators have chosen the red pill and with it the despair that comes with knowing there are no easy solutions, only questions. For example our economic plague, what is the agent, what is causing it, what is playing the role of the rats and fleas from the earlier Black Death? My view is that its comes from the East, as it always does. The rat was the policy of a one-way opening of US markets to Japanese goods. This rat was immediately fed upon by the flea of resulting one-way flow of well-paid American jobs to Japan. No doubt in the immediate aftermath of WW2 this was a logical policy to help the Japanese get back on their feet. The first few victims in the resulting pestilence in the US were hardly noticed in the rising post-WW2 sea of prosperity. And then the policy was extended to Korea; but surely it was wise to help the South rebuild after their devastating war against the Communists? And anyway the sea of prosperity continued to rise, helping obscure the few resulting victims. From there the one-way trade spread to Taiwan and then Hong Kong and some of the victims in the US started to be noticed. Later one-way trade was granted to the tigers in South East Asian. By then the impact was well known; the stench of the rotting corpse of American manufacturing was easy to smell but impossible to stop. Finally China was given the same deal and we can no longer deny the economic pandemic.
But taking the red pill also means knowing that my attempt at an answer may be as wrong as blaming the Jews for poisoning the wells was so long ago.
Two events convinced me two throw my television away back in 1994. I read William L. Shirer's Rise and Fall of the Third Reich where he discussed how he had to take a leave of absence from Nazi Germany, where he was serving as a journalist, because even though he was a well-grounded intelligent person, the non-stop propaganda was starting to take a toll on him and it was starting to deeply affect the way he thought. A couple days later I felt complete disgust after I wasted several hours watching a celebrity involved in a low-speed chase on the California freeways and the decision was made. Once made, I started noticing other who were already doing the same thing. I am glad to see that many more are starting to take the same plunge. It is the first step towards finding a solution.
- donna says:
Kevin, I agree - I started fighting with friends over OJ and the trial, and it just never stopped. Some of them were so sucked up by the mainstream media's obsessions and I couldn't relate to their mindset anymore. it got worse when I noticed some friends cared more about characters on TV than those in their own lives, when friends told me they didn't want to get together because they had to go watch Dancing with the Stars and other such nonsense. I try to talk politics or finance with people and their eyes just glaze over.
I love Google Reader share and facebook since I can actually point people in the right direction. But all we can do is point the way, we can't make them see the stars….
- Lee says:
On the Dow hitting 10,000 and Matt Taibbi saying "'On the other hand, so fucking what?' sort, one that might point out that unemployment is still at a staggering high, foreclosures are racing along at a terrifying clip, and real people are struggling more than ever," it is even more basic than what Matt suggests. Yes, that people are struggling is awful, but the news media does not even tell us what is the significance of 10,000! Not even a mention that it was at 14,000 just two years ago. Is this story news simply because 10,000 is a round easily identifiable number? How can the media have even a pretense of credibility when it is pushing numerology?
- skippy says:
Or that 10,000 today adjusted is 25% down on the last time muhahhaha.
Skippy….yay 7500!!!!!
- Brooks says:
http://vodpod.com/watch/699879-snl-conspiracy-theory-rock
Your follow up report should focus on the media's connections to the economic firms that it is suppose to report. The cartoon above hits at this very subject.
- sharonsj says:
I still watch TV. I just don't watch TV news (there's an oxymoron). Nor do I buy newspapers either. And I'm slowly giving up on radio because even the progressive stations pander to attention-deficit listeners. It isn't possible to find real news unless you troll dozens of internet websites and piece together what's really happening. How many people have time for that?
- tom powell says:
Excellent post and comments. One of the latter that rings particularly true with me is Ben S (12:57pm). I agree we are moving toward an era when Americans will not have time or energy for the relative frivolity of today. Many are already there of course but apparently not yet a cricital mass. Well said, Ben.
- Ben S says:
Here's another point of view: The media is also a product of it's consumers and obviously enough of them haven't been paying attention so the media can get away with this and America gets the journalism it deserves. America can't expect a great media establishment to last forever when really the whole country is more interested in hollywood gossip. And this may be self-correcting once most Americans have to return their attention back to what many in the rest of the world have to: making ends meet. Then democracy, an independent press, justice–we'll come back to why all these things matter.
- Elliot says:
All the cheerleaders continue to ignore the continued deterioration of the economy for average people. There is a growing disconnect between the economic health of America's companies and America's citizens. Companies benefit from bailouts, legal protection, and the deteriorating buying power of the American dollar. Just think, any corporation with a stable overseas source of profit automatically increases their bottom in converting foreign currency to U.S. dollars. These dollars make their way to shareholders, not to employees. Meanwhile, people continue to lose jobs at a rapid rate, wages continue to decline and foreclosures continue to rise. Whatever happened to government "of the people, by the people?" The pressure is building, the anger is growing. At some point it will explode. The question is where will it be directed, and more importantly, what change will ultimately come out of it?
- Cullpepper says:
Ho ho ho.
Look out Yves, you just became the new face of the neo-populist movement.
I've been reading your blog for two years now, and you usually contain the rage to strictly quantitative arguments.
Why the flag waving? I wonder if you're getting irritated watching The Powers That Be set the system up for collapse, not knowing (or caring) what they do?
- rex says:
Good post, as usual, Yves. Contrary to Taibbi, some of us in the media do push back against the constant cheer leading.
Here's what I wrote on Wednesday:
The Dow doesn't represent the economy
Wall Street may be celebrating, but Main Street can't afford to.
http://www.marketwatch.com/story/the-dow-doesnt-represent-the-economy-2009-10-14
- cougar_w says:
Keep banging the drum.
It won't matter of course. Bang it anyway.
After it all comes down we'll be looking backward for some evidence that humanity is not completely, entirely, irredeemably and self-destructively stupid. And then, we will thank you for trying.
Keep banging the drum!
cougar
- Rickstersherpa says:
Yves, thank you for this blog. Thanks to you, Dean Baker, Barry Ritholz, Paul Krugman, Mark Thoma, Bob Somerby (The Daily Howler) and all the great talents on Calculated Risk and Angry Bear I have had second chance at enlightenent. Your analysis in today was exceptional.
Why have we not seen the mass demonstrations (which actually were quite common in American History up to the early 1970s)? I speculate that there might be four causes. First, suburbanization has spread out and atomized people. It has also lengthen the work day with the time added for commuting and it is more difficult for people to take time off of work. Second, TV and the passiveness it induces in those who watch it (Scientific American actually had an article summarizing the pscychological effects of TV and of coures there was the great movie by the late Peter Sellers, "Being There."). Third, the decline of unions and their ability to bring people togeter for a mass movement. Finally, the movement of women into the work force eliminated a huge supply of potential volunteers and protestors who were heart of the anti-Vietnam and Civil Rights movement in the 1960s.
Again, thanks for a great blog.
- Robert S. Robbins says:
I canceled my newspaper subscription and cable TV a long time ago to save money. I was also disgusted by their torture advocacy. The mainstream media no longer deserves the privilege of providing me with the news.
- EmilianoZ says:
The Economist now charges for its tainted content. I'm replacing them with Yves Smith.
- Yves Smith: "The message, quite overly, is: if you are pissed, you are in a minority. The country has moved on. Things are getting better, get with the program." " Economics Info says:
[...] Source [...]
- Frank Balzer says:
Very well reasoned and written article.
From anectdotal evidence, I would observe that there are two reasons the US people isn't organizing and protesting.
1. Many citizens are fully engaged in the corporate electronic cocoon. Thus they are usually not allowed an autonomous space allowing them to metamorphasize into "butterflies."
2. The huge and regular antiwar protests that occured during the first W Bush presidency were totally ignored by the media, and political elite. As a result, people gave up.
Something similar occured after the period of intense political activism of the late '60s and early '70s.
- paul akers says:
i agree with crazy mans view that their is no cogent new populist politician to make the myriad issues simple enough for the masses to understand and to cause real anger and change.Another problem is made reality or living in illusion.If most people do not think or feel their is a problem with government backstopping our entire economy and moral hazard being the new norm then does it really matter .Or put another way ,does this perceived reality only change when their is a catastrophe that produces another reality and this could be months or years away.Maybe its only in looking back do the majority begin to agree that the reality of the time was in fact only in our dreams and was a silly, tragic illusion.
- AvgJohn says:
Oh! what a web we weave, when first we practice to deceive!
- bwedin says:
A Ray of Hope
The way that the financial and political elites go about manufacturing consent is indeed depressing. And it grieves me to say that many of my psychologist colleagues have used our science to make the manipulation of the public ever more clever and elusive. The one real ray of hope I see is what's going on over at Firedoglake around health care reform–where Jane Hamsher has mounted a very smart campaign to get progressive members of Congress to pledge to vote against any bill that does not contain a public option–which she's combined with a grassroots fundraising drive (through Act Blue) to support the reelection campaigns of those who sign the pledge (thus immunizing them from retaliation from the insurance industry). If the Reps she's signed up stick to their guns (and that's a very big if), the Democrats will be forced to include a public option in the final bill. And that, in turn, may serve as a model for how to force through reform in other areas–including and especially financial-industry reforms. Naked Capitalism is a natural place for such initiatives to get underway. And Yves Smith has both the smarts and the spunk to make it happen.
- Advocatus Diaboli says:
Seriously?
___________Goldman-Backed, Ayn Rand-Inspired Fund to Invest Record Amount
http://www.bloomberg.com/apps/news?pid=20601109&sid=aXnnkUJjQC9A
By Duane D. Stanford
Oct. 16 (Bloomberg) - Roark Capital Group, the Atlanta- based owner of brands including Carvel ice cream, plans to invest the most in its eight-year history next year as the private-equity industry thaws.
Roark, named for Ayn Rand's protagonist in "The Fountainhead," invested $180 million last month in a pet retailer and a garbage hauler, managing partner Neal Aronson said. That's almost triple the $65 million the fund committed in the previous 20 months, he said in an interview this month.
- George Washington says:
Fantastic post. I basically can't say enough about how good this is.
- not again says:
have you ever watched "Manufacturing Consent" about the media and Noam Chomsky. check it out, it is on google video here:
http://video.google.com/videoplay?docid=-5631882395226827730adam curtis' documentaries (like Century of the Self) are also really good, i agree!
- weinerdog43 says:
Thanks Yves.
I think there are 2 things that are critical regarding this situation that we face:
1.) A free and open internet where the big providers cannot choke off intelligent discourse. In other words, net neutrality. Without it, we are subject to what our corporate masters want us to read. &
2.) Finding a way to restrict/eliminate/manage corporate money in our government. You and I can never hope to compete with corporate donations to our congresscritters. Our government responds to them, not us.A great example is the current Grayson/Paul effort to reign in the Fed. Anything on the traditional media? Nope. Without the internet, no one would ever have heard about it, and Congressional action is where we leash these bastards.
- George Washington says:
If you like Yves' article, vote it up so that it gets more exposure: http://www.reddit.com/r/reddit.com/comments/9utls/financial_insider_yves_smith_on_propaganda_the/
- George Washington says:
By the way, "financial insider" is an idiotic way of describing Yves. But how much can you fit into a headline?
- bill w says:
Matt Taibi accidentally got it right when he noted that a friend of his stated that the news media in the USA was like communist Poland when he lived there. The whole slant of all MSM is far left biased; very similar to what we had in the 1920s and 1930s. The US media actually loved Mussolini and Hitler. Only World War II got the media back to reporting in a non-biased manner. If we had a real non-biased MSM in the USA none of this would have happened. The only reason that the facts have come out is due to the blogger community. They have done an excellent job of shedding light where the liberals and their bankster buds do not want us to go.
- Advocatus Diaboli says:
Goldman-Sachs at it again..
___________________________Adam Storch: SEC Hires 29-Year-Old Ex-Goldman Sachs Exec For Key Role
http://www.huffingtonpost.com/2009/10/16/adam-storch-sec-hires-exg_n_323526.html
- Citi On A Hill " Volatility says:
[...] bailout. To justify this policy they launched an all-consuming propaganda offensive. With the avid collaboration of the MSM, the official corporate line became that the banks ARE America; by saving them Obama had saved the [...]
- Hugh says:
"It is difficult to get a man to understand something when his salary depends upon his not understanding it"
–Upton SinclairThis quote is a must for these kinds of discusions. The blogosphere came into being in reaction to the mixture of propaganda and infotainment the MSM have become. It has always seemed very funny to me that the MSM has decried the blogosphere for its lack of objectivity and then proceeded to churn out vats of Conventional Wisdom and stenography and called that professional and the way news should be done.
I trace the root of the problem back 30 years and to media consolidation. News organizations moved further and further away from their audiences and readerships. They became more and more responsive to their corporate headquarters whose connection to or interest in news was tangential at best. And so a death spiral began. The holding companies wanted cut backs in costs to maximize profits and make sure no one rocked any boats. This produced a steadily crappier product. I can only suppose they thought they had a captive market but the internet and blogosphere created an alternative. Sure you have to pick and choose with them, but nowadays you have to do that and more with the traditional media. The bottomline is that consumers of news don't have to accept crap reporting anymore. And it is killing the MSM and those whom Upton Sinclair described who are its stars, and well it should.
- Eogen says:
I've been thinking a lot lately about the issues raised by Yves. She and the commenters capture a lot of what has neutered the press - cognitive capture, access, the need for happy advertisers - and I worry who will fund and publish investigative journalism as newspaper after newspaper heads for the boneyard (and we should remember that the force driving print to extinction is the internet,which set information free - free doesn't fund a year long investigation).
Still, all attempts to control or spin information ultimately fail: despite decades of living under ruthless suppression of a free press, it was amazing for visitors to discover, once communism fell, that average Russians were relatively well informed. That said, the censors in Russia were crude and blunt; in our case the masters of spin are much more subtle, the press cynical, and the citizenry compliant and uninterested.
Would You Buy a Newspaper From This Man
aletheia33:
the not blinking is remarkable. how does one do that?
There's a time and a place for everything--it's called college
from my experience, certain pills would do the trick ;)
ambrit:
Friends; I remember seeing an interview with the sainted Baghwan Rajneesh, (from the aptly named Poona India,) in which I don't believe he blinked once in five minutes. Indeed, certain 'medicinal' compounds will do that trick. The Baghwans folks used to say, "Sex solves everything." Young Murdoch seems to be saying, "Money solves everything."
I know that Murdock the Elder is fond of saying, "F- everyone!" Of the three, I like the Baghwan the best.
Moopheus:
It's not quite perfectly blink-free. And it's cut in a few spots. So he wouldn't have had to "hold it" for a really unusual amount of time. But the overall effect is still pretty weird.
Psychoanalystus:
The guy projects like a psychopath. In his case it must be genetic…
Psychoanalystus
Yves Smith:
I'm glad to hear you say that. I had a similar reaction but thought it was just prejudice on my part. But if you had cast for that type, I don't see how you could have gotten a better performance, both the choice of words and the affect.
rps:
Another graduate from the Majesty School Of Etiquette and Mastery of Subliminal Communication. He's an elitist novitiate versed in the art of speech deliverance with (effective pause)…..the practiced deliberation, pauses, gestures, appearance of concern,…..consistently reiterating – ad nauseum Rebekah Brooks as solely responsible…….
Supporting her as he wears a Hazmet Suit to prevent her hazardous waste contaminating him.
Watching Murdoch gave me…ahem….pause to consider another graduate of the subliminal school of speechifers; Rahm Emmanuel with the practiced pauses, charm-snake indulgent smiles…..sorta like watching a cat playing with its food.
I always have the same reaction watching these guys (Rahm, Murdoch, Obama…)…..wear garlic around neck and sleep with cross.
Psychoanalystus:
I was actually thinking about the bad genes he got from his father. But Skippy makes a nice point about Australian history below.
psychohistorian:
I have seriously not watched TV in 20+ years but am now watching a few things like this online…..slick propaganda
James believes that what he is doing is good for society. James is a very good example of the reason why we need to take social and economic policy making out of these peoples hands and IMO we need to remove inherited wealth from all of society so that equality of opportunity is closer to a reality.
May the purge begin.
Yves Smith:
Now I can put my finger on what bothers me…..the utter lack of any contrition (which really means faking contrition) or taking responsibility (as in sounding as if you are taking responsibility).
The usual formula is to sound apologetic without admitting to much of anything, characterize what happened as mistakes, and promise to Investigate and Do Better In The Future. He doesn't even make a real stab at it. The one bad decision he admits to he says (basically) was based on bad information, but he comes off sounding more unhappy at being caught out than disturbed or distressed having authorized something that didn't pass the smell test.
He can't even be bothered to work himself up to a plausible act, even with the BSkyB deal and his future at stake.
Psychoanalystus:
You have described the essence of psychopathic behavior and thinking. They never show remorse (and when they do it is faked in order to obtain something), and it is never their fault.
Parvaneh Ferhadi:
Sounds like Tony Blair, George W. Bush, Obama and a bunch of others.
Doug Terpstra:
Although Tony was very, very good, Barack takes the basilisk phenomenon to high art. But the hypnosis was two-way: the narcissistic snake charmed itself in a mirror. In doing God's work, I suspect the messiah complex takes possession of one's soul, like a great scAmway convention in which cult leaders drink their own Kool-Aid, their own venomous snake oil. They can then commit hideous crimes without the interference of conscience.
wunsacon:[Jul 09, 2011] Sounds like Eric Cartman.
ambrit:
Dear wunsacon; Oh, come on now! Cartman is capable of introspection, and he's a much more nuanced, (dare I say multi-dimensional?) character than Murdoch the Younger.
F. Beard:
Agreed! Cartman has several redeeming features. He is a natural leader for one.
jeff:
The headline should be rewritten:
"Would you buy an advertised product from this man's newspaper?"
All good people should look up who advertises on Fox and the other Murdoch rags, list the advertisers and begin a selective boycott of those product classes that they buy. Also, most important, call or email the advertisers and tell they what you are doing and why you are doing and refer them to some locally owned independent media if any exists where you live.
Reply rps says: July 9, 2011 at 6:51 pm Psychohistorian in my humble opinion, I think you give Murdoch too much credence in the assumption that he cares and acts upon ideology. He cares neither for society much less the individual. to him we are sheep to be shorn and penned cattle awaiting our turn. Murdoch serves and obeys one god, one cause; himself. However you are absolutely correct and perhaps a Thomas Paineophilia as myself as you rightly state, "we need to take social and economic policy making out of these peoples hands and IMO we need to remove inherited wealth from all of society so that equality of opportunity is closer to a reality" Hammer meet nail….BAM
"Men who look upon themselves born to reign, and others to obey, soon grow insolent. Selected from the rest of mankind, their minds are early poisoned by importance; and the world they act in differs so materially from the world at large, that they have but little opportunity of knowing its true interests, and when they succeed in the government are frequently the most ignorant and unfit of any throughout the dominions." Thomas Paine, Common Sense
Skippy:
All one has to do is look into Rupert's up bringing, late 17th / 18th century ethos in the 2Oth, breed, born, educated and from the first day on the rag floor, made to understand the history and power of the printing press and to weld it ( he held the late John Howard in contempt, to socialist for his liking[s).
Sons first years, apple, tree, thingy.
Skippy…we had a rash of bettering fathers gone wrong of late…eh…towers do narrow at the top…pin head?
ambrit:
Dear skippy; The same applies to Georgia, here in the Deep South. Oglethorpe and all that. Then the buggers started moving to the west. People here in Mississippi, when asked about the whereabouts of a person 'wanted by the law' will say, with a straight face mind you, "Gone to Texas." We all know what evil later arose from that region! (There's an old joke to the effect that the Devil himself wouldn't live in Texas. That, unfortunately, lets Dubwa off the hook as regards the Antichrist Stakes. Drat.)
Reply Psychoanalystus says: July 9, 2011 at 3:02 pm I'm sure the Australians are grateful to England for shipping them out of that hell hole called Britain. Even today the brits are emigrating to places like Australia like theee's no tomorrow.
VA work is with elderly vets from America's Greatest Generation. Very special and honorable people. But I'm not much into this career thing, so in a few weeks I'm going back to my life of frappe and souflaki on the beach far from this crazyness around here. The American ratrace is a waste of time at this point.
wunsacon:
Murdoch = Hearst
Fair statement?
jeff :
Hearst build San Simeon and employed Julia Morgan.
Murdoch has built?
Foppe: Fox News. ;)
MIWill:
Reminds me of Geithner, not as smart though.
I wonder what Rebekah Brooks has on these players.
Psychoanalystus: Honestly, it kind of reminds me of Michelle Bachmann.
Reply /L:
Some psychologists say that when people wrinkle their forehead they lie. When little Timmy was tested on his homework by maestro Elizabeth Warren one sometimes wondered how there could be any skin left to the rest of little Timmy's honest face with so much forehead wrinkling.
Psychoanalystus:
True. I noticed that the more mentally impaired some of my patients are, the more prominent the "omega" sign on their foreheads becomes.
Dave of Maryland:
Wrinkled foreheads while lying is interesting.
In acting, that's one of the major things to overcome. Actors do it the hard way. Actresses grow bangs. Next time you're in front of the idiot tube, look for it.
blunt:
I think what she "has on these players" is every evil-sounding plot they've made over the past 15 years. She's the "daughter" Rupert never had. She's been doted on and promoted and taught the same psychopathic mannerisms and thoughts that James has been imbued with.
If she's betrayed she'll bring the others down with her. One of the interesting things about the clip yesterday on Guardian was her reaction when she was treated like a woman is treated by Andy Coulson during the questioning.
The look was enough; he was meat and she was the predator. James and Rupert will not wish to see that look from her. They will protect her with their lives. For to do otherwise would be to risk their entire empire coming down on their heads.
bob : Are his pupils completely blown(dilated), or it bad light?
Psychoanalystus: I was wondering about that too. Maybe he's high on cocaine.
Reply RDE says: July 9, 2011 at 9:33 am Hunter Thompson's years of research got it right. Ibogane!
appointmetotheboard:
Its a nicely framed title!
I did have one thought that troubles me. Big 'if' but *if* the UK Govt does decide that the purchase of BskyB can go ahead, this episode will have worked well for NewsCorp – tens if not hundreds of millions has been wiped off the share price of BskyB making it something of a bargain for Murdoch.
notabanker:
http://www.guardian.co.uk/media/2011/jul/08/message-rebekah-brooks-news-international-staff
How would you like to be a staffer busting your hump 12 hours a day for 40K GBP and come into work reading this on your BB?
These people are so out of touch with reality. No remorse, no accountability, certainly no empathy towards their employees. Ethics? puhleeze…..
Under her leadership, a scandal grew so out of control they had to close the largest UK newspaper in one week. The message to the staff is; sorry for the actions of a few unscrupulous people, I knew nothing, look at all the other great things we have done and I'll do my best to get you another job or a nice check for a few months.
Reply wunsacon says: July 9, 2011 at 10:36 am Yeah, maybe Rupert's strategy is "hit them with the stick first and make them beg for a carrot".
We'll soon learn whether anyone wants to break ranks and make a name for themselves.
jake chase:
Although they can be quite useful for stuffing wet shoes, lining bird cages, keeping warm in a pinch, etc., I often wonder these days why anyone ever reads a newspaper.
Of course, the other day I actually watched a man wearing a tie deposit $1 into a USA Today vending machine. What do you suppose he was hoping to learn?
Does anyone with an IQ above 100 really read this drek?
sadness:
you just have to look at these people and listen, i suppose if you can, for a few seconds –
no doubt he's morally bankrupt, but wonderfully rich and comfortable within the wonderfully rich and comfortable set –
and they are the press, broadcasting and programming that is subtly suggesting to us all what to do – how can everyone be so blind for all these years – unbelievable – but then maybe it's easy to be a sheep when you're programmed to believe –
so no, never have never will buy their line, sorry rup/james/lachlan and family please go away
aletheia33:
failure to educate people, probably deliberate, is my best guess why people are so addicted to the propaganda. thom hartmann has pointed out that civics stopped being taught in u.s. public high schools at the beginning of the reagan era under william bennett.
also, the propaganda is intentionally addictive. smart people are as prone as other humans to the psychological weaknesses that allow compulsions to take hold like internet pornography, overeating, smoking, and watching mindless cute propaganda between dinner and bed every night.
also, uneducated people are overworked, underemployed with suffocating brains from their work, exhausted while raising kids and/or doing heavy manual work, apathetic due to despair, overweight due to stress eating and hence physically sluggish and inclined to prefer couch potatoship in the evenings, etc.
how about some more nuanced and careful attention to why people are so "taken in." what do we really know about this phenomenon? not as much as we need to.
some guesses/stabs: the liberal middle-class people who may have had private school educations, follow npr, read the nyt and the like are not hurting enough yet as a group to fully recognize the threats coming to the basic security they have always felt entitled to. the concept of denial seems useful here. (psychoanalystus, can you expound on it?) also they simply haven't noticed the relatively subtle corruption over recent years of these information sources. this is human nature, not to see what's going down. they will have to be deprived of a lot more before they wake up en masse to the reality of their situation. and there's nothing like the belief that if one tries hard enough, sacrifices enough of one's dignity and income, and behaves sufficiently soldierly, one might get a job again like the one one has lost, or at least still retain some of what one considers a decent lifestyle after age 65, to make a person afraid to step out and take action. one is still in the mindset that the neighbors must not know one is going into default on one's mortgage. not enough people have crossed the line where they stop feeling any shame over bankruptcy, default, being unemployed, having to work at the supermarket etc. to make a difference yet. for now, once they cross that line, they become badly dressed, angry victims who can be made to look crazy on a tv screen without even trying.
most of the people who lost their gumption for living due to the Great Depression have passed on, and many of their children as well. i imagine we still have a long way to go now before we regain our collective dignity (if we ever do) to the point where being unemployed and destitute does not deprive one of basic respect in our society.
aletheia33:
for "compulsion" above please substitute "habits".
also this post was meant to as joining in the general discussion up to this point, not just a reply to the preceding post from reader "sadness."
SD : Wow. He's wasted. Seriously wasted. My guess is pharmaceuticals.
craazyman:
I think he's OD'd on Piety.
Despite all today's deeply felt and well intended comments, I have to be honest. Yes. I would still buy a newspaper from him . . .
. . . if I need something to read at lunch or on the subway and especially if there's a good scandal with photos of the woman in question, in a bikini. I do not approve of topless pics in a newspaper. I'm actually quite prude in real life.
And there is a talent for writing front page headlines. The immortal "Headless Body in Topless Bar" reaches back to the days of my youth. But until Junior tops that, he's got nothing on his Dad.
Schofield:
I like this excellent bit of British black humor from one of their newspapers. "Have you heard that Rupert Murdoch turned down a knighthood because he already had a KGB."
scraping_by:
I notice one of the 'regrets' he has is the earlier settlement. 100K to a starlet, who needed the publicity anyway.
However, from a business perspective, News has done a great thing. The number has established a relatively low price point for all future settlements. That is, if someone demands enough money to make them seriously reconsider their lawbreaking newsgathering policy, their it will be a groan and eye roll moment.
I've often wondered who finances News Inc. I've heard rumors about Arabs and Russians, but no one seems to give it a good investigation. Curious.
readerOfTeaLeaves:
What?! Now that's a mighty tasty morsel you've gone and tossed into the thread.
Because we do have information that Murdock is a TaxHavenMaven. And if one wanted to underwrite a 'newz' outfit that was full of global warming deniers, and forever keeping US politics in a nasty, shouty, sneering catfight, then what better way for an oiligarch of Russian origin, or an Arab relying on oil wealth to underwrite global warming denial propaganda to the biggest oil consumers on the planet: the US gas guzzling public.
My, oh, my….what a can of worms, snakes, and vipers you to point out…
Then your question, 'Why does this not get investigated?" takes on a whole new resonance. My goodness.
ScottW:
Having represented a newspaper company for 25 years I can guarantee you that everyone in the newsroom knew the wiretapping was taking place–especially the executives and managing editors. Reporters internally brag about their sources, and are constantly asked by those reading their articles (i.e., editors, lawyers, etc.), "how did you get that information?" "What is your source for that information?" The transparent cover provided in Murdoch's comments for Rebekah Brooks indicates she has the ability to assign culpability for these criminal actions to people in very high places. It is unbelievable to think executives with a journalistic background would remain in the dark about the criminal behavior their employees are engaging in. Unless there is a massive cover up, Ms. Brooks will come tumbling down with the rest.
Dan Duncan:
A hypothetical:
Would DSK, The Rogue, get to be DSK, The Head of IMF and Presidential Hopeful, in a culture that reveled in the tabloid "sensibility", like the U.K. (or U.S.), as opposed to the hush-hush sensibility of France?
And no, this isn't a backdoor defense of the scumbags at NOTW. They deserve prosecution. Vigorously.
It's just that over the past few weeks we've witnessed media failings (a redundancy, I know) in both cultures. [The UK/US failure is more repugnant, so I'm not implying equivalence.]
In the future (because it will happen again), should the government step in and shut down an outfit like NOTW?
If so, there is obviously great potential for the government to over-reach and kill free speech. How do we guard against this?
If not and these Scumbag Gossip Rags are simply left to the free market…will the market actually impose discipline the next go-round?
This time, we are shocked by the NOTW actions. Next time, not as much. Will the market simply "get used" to these deplorable actions? Are you comfortable with the Lack of Standard…ie the Relatavistic Sensibility of an ever-changing Market?
And what about Wikileaks? Any overlap here? Again, I am not implying equivalence. The point is…How far is too far? When is "private", not really private?
What if someone sets up WikiGossip? Remember, in the NOTW case, it's easy: We are talking about the invasion of the privacy of fallen heroes. What if, instead, the invasion occurred on the private correspondence of the Casey Anthony jurors? A WikiGossip site would do just fine…even though the transgression of hacking jurors emails is also very troubling.
Yeah, yeah, yeah…I know. Waaayyy too many questions. But at this point I'm desperate. Maybe…just maybe…it will elicit something more interesting the self-congratulatory tripe of fools announcing their TV viewing habits while theorizing about the inverse relationship between the number of blinks and the tendency toward psychopathic behavior.
And as I await further commentary…I'll be slamming my refresh button, blinking with the intense, twitchy furiosity of Charlie Sheen on a seven day coke-bender.
Anonymous Jones:
OK, this will be somewhat fun:
Q1, DSK: A bit like "when did you stop beating your wife?" Premise underlying question is somewhat questionable. This is from all your long experience in France reading French newspapers?
Q2, gov't shutdown: When was this suggested (other than in your comment)? I don't even know where this comes from. When has a gov't from a developed country just "shut down" a major newspaper? This is an immediate concern?
Q3, free speech, overreach: How about continuing to enforce the first amendment? Without vigilance, all our "rights" would disappear, regardless of what a piece of paper says. Paraphrasing the NRA, contracts don't force people to do things, people do.
Q4, market discipline: Surely, you jest? IBGYBG. Market constraints have continued to diminish rapidly as global and sector mobility has grown over the last few centuries, especially with the massive conglomerates and agency problems. These "constraint fairies" are not coming back.
Q5, "comfortability": There is a choice? No one has control of the world. We can choose to try to shape it in small ways; sometimes people succeed far beyond what is normal, but that is rare. Again, I question the presumption that there is no "shock." They had to shut down the f'ing paper there was so much shock. We're talking about this shutdown in the US…enough said.
Q6, privacy: It depends on what your definition of "is" is. I love how everyone went after Clinton for this. Hey, it *was* weeny-like, but he was *right*. "Is" can mean a number of things, including descriptions of recent past, "present" and future. Trust me, "privacy" is far more complicated than "is" and as much as you decry relativism, the semantics of any complicated concept is *always* relative to one's own place in, and perspective on, the world.
Q7, Wikigossip: Please tell me the name Casey Anthony didn't show up on this site. I'm going to be ill, but first…
I'M GOING TO CONGRATULATE MYSELF!!!
ScottS:
He shrugs at 00:30 when he says that Rebekah Brooks' ethics "are very good."
I think this is all James' doing. He's trying to get her out of the way. Why else would he bother with this half-hearted defense? He's damning her with faint praise.
Is it fratricide when the one being killed is your father's daughter he never had?
LJR:
I somehow doubt that one's "ethics being very good" gains a seat at Murdoch's table. It's not the sort of phrase they would privately use to praise each other, au contraire. Such noxious words probably caught in his throat – hence the uneasy shrug. He'll apologize to her later for having said them, I'm sure, and assure her that there's not a shred of evidence that damns her so.
ambrit:
Friends; Has anyone considered that the behaviour 'alleged' (clearing the message box on the girls cell phone, in the middle of a criminal investigation,) can be charged to someone as "obstruction of justice?" A felony charge in every jurisdiction. Knowing about and enabling such behaviour is "acessory to the fact." Keeping quiet about it is "acessory after the fact." If the UK governmant is pushed hard enough, someone is going to Dartmoor, not just Wormwood Scrubs.
readerOfTeaLeaves:
Precisely. And just to clarify: Murdock clan to family of girl viciously murdered, "You know, if this horror drags out a few more days, we can eke out a bit more drama, emotion, and maybe profit from the sale of a few extra issues – or web updates." The worse it was for that family, arguably the more profitable it was for the Murdock group of 'assets' that were 'deployed' so surreptitiously.
And I'm not even going to touch on widows of the war dead (!).
If my profits were built on the emotional agonies of people that I didn't even know, perhaps I'd be disassociated as young James.
Meanwhile, the Guardian.uk and Financial Times are sure looking like adults, and remind me never to play poker with Guardian editor Alan Rusbridger…nor with their reporter Nick Hayes. http://www.guardian.co.uk/media/video/2011/jul/09/phone-hacking-alan-rusbridger-video
readerOfTeaLeaves:
Whoops. Not Nick 'Hayes'. Should have been Nick *Davies.*
dearieme:
As a writer in The Times (also Murdoch-owned) remarked, the Telegraph has made great play of this story, but its own best scoop in years came from buying a stolen CD.
The Guardian's best story in years had come from forging a letter on House of Commons writing paper. The Independent's star columnist has recently been exposed as being, shall we say, cavalier with the truth. All the rags are a bit crooked.
What's unforgiveable with this story is not that the misbehaviour was illegal, it's that it recognised no bounds of decency. If you hack the voicemail of celebs or politicians – the public's not much bothered.
But the murdered girl's – intolerable. These people make their living by entertaining the great unwashed with smut; for them to fail to foresee this sentiment was not just a crime, it was a blunder. Another blunder was the failure to see that when they swapped their political support from Labour to Conservative for the last election, they would no longer be protected by the same clannishness in the media.
I weep no tears for the Murdochs and their lackeys: the public may be being too excitable for my tastes, but I too would draw the line (I hope) at what these people did to Milly Dowler's phone. Sod 'em; let 'em retreat to the US or back to Oz after a spell in chokey. I only hope before they go they can release some good dirt on some more media figures: a good clear-out at the Guardian and the Beeb is probably overdue too. I only hope that we don't get lumbered with political action that makes it harder for journalists to investigate politicians.
readerOfTeaLeaves:
Well, I wondered when 'Paddy Pantsdown' would speak up. And it appears there are more ghastly threads emerging; one person leads to another, who leads to…. a murderer… looks like shutting NoTW was probably something that seemed like 'strategic decisiveness' to James, but the leakage is spreading.
It has also emerged that Nick Clegg, the deputy prime minister, received similar briefings to those given to Ashdown before the election, which he raised with Cameron only to be rebuffed by the prime minister who insisted it was right to give Coulson a "second chance". Senior Whitehall sources say that Clegg was stunned by what he was told but concluded, after the coalition deal was struck, that he was powerless to change Cameron's mind. "Clegg said: 'It is not up to me to tell the prime minister who to appoint as his director of communications'," said a source.
http://www.guardian.co.uk/media/2011/jul/09/phone-hacking-andy-coulson-paddy-ashdown
(I actually happen to agree with what appears to be Clegg's assessment that he could not go to the mat on Coulson, but what I find more than interesting is that Cameron wooed Murdock so aptly, then Murdock shifted his support to the Conservatives. Clegg came on like gangbusters out of nowhere, and topsy-turvy went Cameron's plans, no doubt. Since Clegg is one of the few potentially 'green' PM or Vice PM leaders on the globe, I'm quite intrigued in what happens here. And since he's a bit 'green', no doubt all the Murdock allies thought they could keep him completely powerless and tied up. This shifts that box of cards.)
dearieme:
It's just occurred to me: a friend would dearly like to see a few journalists from the Mail disgraced too. So I'll add them to my list.
Psychoanalystus:
According to Huffington Post, looks like "James Murdoch Could Face Criminal Charges In Phone Hacking Scandal":
http://www.huffingtonpost.com/2011/07/09/phone-hacking-james-murdoch-criminal-charges_n_893800.html
Reply and i:
"It looks almost like a shampoo commercial. He makes me want to take care of myself."
http://www.youtube.com/watch?v=46-WNPlCYsg
Anon:
James Murdoch is a little Christian Bale-y, it has to be said. His eyes are kind of black (which may be the lighting, of course), suggestive of enormous reserves of anger.
But what fun is to be had, watching Hugh Grant and Steve Coogan shred News Corpse journos on telly!
1) http://www.youtube.com/watch?v=vYunTPBWqgw
At 4:04, watch the loathsome Jon Gaunt of the Sun taunt the lovely Hugh re: BSkyB with "Who are you to say what people should and shouldn't watch?", while Hugh, with studied insouciance, replies, "Who is Murdoch to say who we should and shouldn't vote for through news?", which gets a big round of applause.
2) Then there's Steve Coogan on BBC Newsnight, talking about how he's delighted the "mysognist, xenophobic" NoTW is closing (at 2:34).
http://www.youtube.com/watch?v=bhQ3MJfBwuo&feature=related
3) Later, in the same segment, Coogan de-bollocks Paul McMullen, ex-NoTW, repeating several times, "You're morally bankrupt."
http://www.youtube.com/watch?v=nUjrIn6OzJA&NR=1
Steve and Hugh are much smarter, prettier, and richer than the jealous, preening thickos who pass for journalists chez Murdoch. And much more importantly, they're in the right. I'm glad they've come out swinging.
(I wonder if the Guardian helped Hugh at all with his undercover work? He was at school with two senior Guardian journalists, Edward Pilkington and Julian Borger.)
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Investigative journalist Dean Starkman explains why the mainstream press is so soft on Wall Street.January 9, 2013 |
From revelations about this week's hasty, multibillion-dollar bank settlements to AIG's brief threat to sue the federal government for its own $128-billion bailout (which the company contends wasn't as generous as other bailouts), 2013 is already shaping up to be another year of government-backed wins for Wall Street.
As the New York Times' Gretchen Morgenson wrote, "If you were hoping that things might be different in 2013 - you know, that bankers would be held responsible for bad behavior or that the government might actually assist troubled homeowners - you can forget it. A settlement reportedly in the works with big banks will soon end a review into foreclosure abuses, and it means more of the same: no accountability for financial institutions and little help for borrowers."
This type of clear condemnation of Wall Street and its lack of accountability remains a rare voice in mainstream media, with few willing to join Morgenson and Rolling Stone's Matt Taibbi on their crusades against banking abuses.
The lack of outrage or investigation by mainstream media comes in stark contrast to the public response to the settlement announcements. The comments sections of settlement-related articles are bursting with scathing comments--including demands for both criminal prosecution for bankers and more investigative journalism in the U.S. In an LA Times poll, 94 percent of respondents said that this latest settlement agreement lacked appropriate transparency.
So if readers are hungering for more information and outrage, why is the mainstream press so soft on Wall Street? Is it the last three decades' rampant media consolidation, which has put 90 percent of the nation's media in the hands of only six major corporations? (That's down from 50 companies in 1983.) What about the increasing magazine and newspaper ad revenue coming directly from Wall Street? Or perhaps it's even due to a redefinition of what constititues financial journalism?
Pulitzer Prize-winning investigative journalist Dean Starkman, whose 2009 Columbia Journalism Review article "Power Problem" outlined just how badly the financial press failed in the lead-up to 2006, has some ideas.
Laura Gottesdiener: Thanks, Dean, for taking the time to talk. To start simple: In your mind, what's the role of the press--if it's doing its job?
Dean Starkman: To me, journalism is particularly important because it is the oxygen of democracy. At its best, it is the main thing that is capable of explaining complex problems to a mass audience.That's its most critical role--and its most difficult task.
Looking back over the 20th century, the great stories are the ones that pull the curtain back on things that are truly complex, baffling and dangerous problems. I'm thinking particularly of an iconic story that journalists stand up and salute: the Standard Oil series from 1902-1904. This knowledge allowed the public to participate in the question of trusts, and the rest is literally history. The government filed an anti-trust case, and Standard Oil was broken up in 1911. That's the gold standard, the benchmark for journalism.
LG: So how does this relate to today's financial press?
DS: The financial system is almost deliberately complex; there's that famous quote by the head of Morgan Stanley, when he said something along the lines of, "We create things that people don't understand on purpose."
To me the business press is put on earth to help the public understand complex problems, and certainly the mortgage frenzy was one of them. And that's where I have a bone to pick with the financial press.
LG: That's a nice way of putting it. In your piece you call the lead-up to 2006 a "general system failure" for the media, and wrote that the post-crash reporting gave the "short shrift to the breathtaking corruption that overran the mortgage business." You also diagnosed the financial press today with Stockholm Syndrome.
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I was passing through the Mojave Desert and by chance stopped by a local thrift store in Joshua Tree. I'm glad I did, because I spotted a book that I just had to own. At $0.50, it was priced to sell. And as you can tell from the title above, the book's a classic. It's bound to remain fresh and relevant through the ages-not as a useful guide to homeownership, but as a fossil record of the biggest real estate scam in the history of the United States.
A lot of people still wonder how and why so many millions of people bought such ridiculously overpriced homes and took out mortgages and loans they clearly could not afford?
Extra! Extra! Yasha Levine makes frontpage news in Victorville!
That's what I kept wondering when I moved out to Victorville back in the Spring of 2009 to do immersion reporting from the front line of the real estate meltdown. Located about 100 miles east of Los Angeles on the edge of the Mojave Desert, Victorville got higher and crashed harder, in terms of real estate, than almost any other place in California. It doubled its size to 100,000 in just eight short years, growing from an isolated hick outpost into a booming commuter suburb filled with the cheapest McTractHomes south of Fresno. By the time I got there, Victorville was a ruined city filled with empty master-planned communities, some of them half-built and abandoned, rotting in the sun. I spent nearly two years reporting on the real estate swindle out there, and I never could stop thinking about the central question: How the hell were people coerced into moving out here? Why would anyone think that buying a $500,000 house in a desert 100 miles away from Los Angeles be a good idea, no matter what kind of loan deal you got or how booming the market. What kind of propaganda were these people subjected to?
Well, this book provides a part of the answer: people were explicitly instructed to do so.
The Automatic Millionaire Homeowner hit the front bookcase displays at Barnes and Noble in March 2006, at the very top of the real estate market and just a few months before the whole thing crashed and burned. Its main message was simple: If you take out a mortgage to buy a home, you will always make money. There is no way you can lose-no matter when you buy, how much you pay or what type of loan you get. And the kicker is, both the book and the financial expert who wrote it were bankrolled by Wells Fargo and Bank of America.
This book is just one of dozens-if not hundreds-of similar self-help snake oil guides promising a sure bet system to get rich in real estate. But it's a good example of the massive propaganda effort financed by Wall Street that was designed to funnel as many people as possible into the mortgage meat grinder. The book was packed with blatant lies that seem so obvious and even comic in retrospect. The book was not put out by some shady fly-by-night operation, but by a supposedly credible financial expert who had the backing of the most well-known and respected banks, TV networks and newspapers.
But the whole thing was a fraud, shamelessly boosted by some of the biggest names in news media-none of whom have been held accountable for their role in defrauding millions of Americans.
So let's take a look...Crack open the book and turn to the introduction, it begins like this:
What if I told you the smartest investment you would ever make during your lifetime would be a home!
What if I told you that in just an hour or two I could share with you a simple system that would help you become rich through homeownership?
What if I told you that this system was called the Automatic Millionaire Homeowner-and that if you spent an hour or two with me, you could learn how to become one? [emphasis mine]
Would you be interested? Would you be willing to spend a few hours with me? Would you like to become an Automatic Millionaire Homeowner?
Interested? Intrigued? Want to know more? Well, turn a couple of pages and you get this:
As I sit here in August 2005, I have no idea when you will be reading what I'm writing. Maybe it's March 2006 (when this book is scheduled to be published)-by which time the real estate market could be slowing or cooling down to modest single-digit annual gains (or not). Perhaps this book was bought by a friend of yours who passed it along to you-and it's now 2007 and those once "certain" boom markets are going bust due to speculation. Or maybe the opposite has happened-interest rates have remained at historic lows, and home prices have continued their march upward.
In fact, it doesn't really matter when you happen to be reading this or what's going on right now in the markets. This book is not about the boom . . . or the busts. . . . What this book is about is the truth. And the truth is this:
Nothing you will ever do in your lifetime
is likely to make you as much money as
buying a home and living in it. [emphasis in the original]What's this sure-fire system? Well, it's so simple it fits on the inside flap! Here's how you do it:
What Makes The Automatic Millionaire Homeowner Essential:
■ You don't need a big down payment to buy a home.
■ You don't need great credit.
■ You should buy even if you have credit-card debt.
■ You can buy a second home even if you're still paying off the first.
■ You can get started in any market-boom or bust.
■ It's easier to be a landlord than you think.
Just a few months after the book came out, the real estate market went into a death-spiral. Victorville and other Mojave Desert exurbs like Palmdale and Lancaster were packed to the brim with people who followed this book's advice to the letter. They took out no down payment adjustable rate mortgages, bought at the peak of bubble, had horrible credit scores, were struggling to make ends meet and were probably up the hilt in credit card debt. Over the next year and a half, home prices collapsed by 30% and just kept falling. By the time that I packed my bags and fled West towards the Pacific Ocean in 2010, homes that had sold for nearly $400,000 at the top of the market in 2006 couldn't find a buyer at $50,000 or $75,000. People were kicked out of their homes, lost all the "investment" payments they had made on their loans and had to find other places to live-rental homes if they were lucky; cars or tents at the hobo camp down on the banks of the Mojave River if they weren't.
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Yesterday, I took John Carney of CNBC to task for his headline "Have Consumers Gone on Strike?" That represented a particularly myopic worldview in the financial press which is all too common. CNBC has long been criticized for such a perspective. But you also see in other parts of the financial press what amounts to basic corruption.One such example is Housing Wire. This magazine and website bills itself as "financial news for the mortgage market," and for the most part reports on related events. But Paul Jackson, the founder and publisher of Housing Wire, writes editorials, and of late he has been particularly concerned with telling his readers that there's nothing of consequence in the foreclosure fraud issue, in particular the possibility that banks messed up their securitization processes and created clouded title issues on millions of properties.
That's his opinion and his right to print. But Jackson took this a step too far. He's had a long-running feud with Naked Capitalism's Yves Smith on the subject, culminating in a post where he intimated that a case in Alabama, ultimately unsuccessful, where the plaintiff asserted that a faulty securitization meant that her servicer could not prove they owned the note on the home, had to have been bankrolled by some higher-up looking to hurt the banking industry. "If I've learned anything over the years, it's this: always follow the money," he writes.
Morality and the accompanying emotions to that noble love of justice are simply a varnish for the fires of greed. In other words, everything is about the money, and if you can find a viable angle to make more of it than someone else. And I mean everything.OK then, let's follow the money. What is Housing Wire, anyway? The principals of it and its parent company, the LTV Group, are Paul Jackson, and Richard Bitner. He used to be a subprime mortgage broker, and he wrote a book about it called Confessions of a Subprime Lender. Bitner has compared himself in interviews to a drug dealer for his career in the subprime industry.
The main shareholders in Housing Wire, and its publisher LTV Publishing, which is also an advertising/PR/marketing company, are:
Robert Jackson, Paul's father and a CEO at Jackson and Associates, an REO (real estate owned; it means a property owned by a bank or government entity after an unsuccessful foreclosure auction) lawyer; Berry Laws, a partner at Martin, Leigh, Laws & Fritzlen, a foreclosure mill law firm out of Kansas, linked to robo-signing, which also owns a title company; and Benny Nassiri, the owner of Asset Financial Network, which specializes in foreclosure properties. Basically, someone cashing in on the misery of others. She has also worked with IndyMac, the collapsed subprime lender.
(h/t bystander)
So this is the group around Housing Wire: foreclosure firms, an REO broker and an ex-subprime lender. If it is indeed "all about the money," there's a lot of guilt by association here. All of these people make money off the broken housing market and its constant stream of foreclosures.
But there's more. The leading advertiser for Housing Wire is, in fact, LPS (Lender Processing Services). You may have heard of them because they have been implicated in multiple criminal investigations for producing fake documents for foreclosure cases. LPS ran DocX, the company that sold "authentic" documents to foreclosure mill law firms at cut rates. And they continued this profit center even outside of DocX:
Questionable signing and notarization practices weren't limited to its subsidiary, called DocX, but occurred in at least one of LPS's own offices, mortgage assignments filed in county recorders' offices show. And rather than halt such practices after the federal investigation got underway, the company shifted the signing to firms with which it has close business ties. LPS provided personnel to work in the new signing operations, according to information from an LPS spokeswoman and court records including an October 21 ruling by a judge in Brooklyn, New York. Records in county recorders' offices, and in the judge's opinion, show that "robosigning" and preparation of apparently false documents went on at these sites on a large scale.In one instance, it helped set up a massive signing operation at the nearby office of a major client, a spokeswoman for the client, American Home Mortgage Servicing, confirmed. LPS-hired notaries who worked there said in interviews that troves of documents were improperly handled. They said that about 200 affidavits per day were robosigned during the two months the two notaries remained there.
See also here and here. Yet Jackson has repeatedly defended LPS, its leading advertiser, from these charges, minimizing their legal exposure. One of the principals of the company, Benny Nassiri, also lists herself as affiliated with LPS.
Here's the point. Jackson has a habit of throwing around statements like "it's all about the money," but his organization really fails under that standard. It's filled with people from the mortgage industry who obviously have an incentive to minimize the conduct of the mortgage industry. It also makes its money from the mortgage industry. This is part and parcel of the financial press in all its sleaze.
Tags: foreclosure fraud, housing, mortgages, traditional media, corruption, Housing Wire, Paul Jackson
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