Category: Media

Open systems, open society

Apple’s attempt to ban a Pulitzer-winning cartoonist from its iTunes Store is an extension of the same mindset that led it to keep Adobe’s Flash software off its new generation of closed devices — the iPhone, the iPod touch and the iPad. And it shows that Steve Jobs and company are poorly cast in their role as a savior of the struggling news business. Or so I write in the Guardian.

Harvey Silverglate on the Goldman case

Harvey Silverglate checks in on the Goldman Sachs case:

I think you have it just right. The ideologues, especially some New York Times reporters and liberal columnists, would like to deem Goldman’s conduct “fraud” of either the civil and/or criminal variety. From time to time, a sane and informed voice peeks through the miasma and realizes what is really going on — the SEC is trying to salvage is reputation by blaming the economic melt-down on fraudsters, rather than on the incompetence of Congress, the SEC, the Treasury Department, the Fed (why did Alan Greenspan keep interest rates so low for so long? one might usefully ask) and other regulators or would-be regulators.

While there was doubtless some fraud (for example, in the writing or sub-prime mortgages to home purchasers without adequate income or even jobs), a large measure of the blame for the meltdown goes to our government, that allowed the casino to proceed and that even provided low-interest-rate money to help finance it. Those of us who took notice, as the price of houses on our respective blocks continued to escalate to the point where we never could have bought our homes had we not done so years earlier (and way beyond what we knew the houses to be worth), realized something was amiss. But the big boys on Wall Street, blinded by the huge paydays and bonuses, just kept betting more and more.

The creation of synthetic vehicles, the only purpose of which appears to have been to magnify the amount of the bet without requiring a huge amount of capital to make the bet, made the situation infinitely worse, for the vehicles were so non-transparent that they achieved higher ratings from the rating agencies (or the underlying securities did) than they intrinsically deserved.  And so the combination of incredible leverage, plus non-transparency of the underlying securities, was a formula for disaster. This is the great failure of government regulators (as well as the independent rating agencies, by the way, such as Standard & Poor, Moody’s, and so forth).

What bothers me is that the SEC is being allowed to get away with absolving its own grotesque errors and incompetence by shouting “fraud.” You can fool some of the people all of the time, and all of the people some of the time, but….there comes a time when the game is up. To prevent this from happening again, sane government regulation of these markets is required, period.

Watch Silverglate talk about Goldman its similarities to the case of Michael Milken, whom Silverglate represented.

Was Goldman’s sleazy behavior really illegal?

Goldman Sachs founder Marcus Goldman

Keep an eye on the Securities and Exchange Commission’s case against Goldman Sachs. It’s hard to imagine a less sympathetic defendant than Goldman. That may be the problem, because evidence is already emerging to suggest regulators are concocting violations in order to punish sleazy but legal behavior.

In today’s New York Times, Binyamin Appelbaum offers a useful analysis of the SEC’s civil suit against Goldman, which stands accused of defrauding investors. The story quotes experts who point out that those investors were fully informed about what they were buying. The only thing investors didn’t know was that a hedge-fund manager named John Paulson helped pick what went into the investment vehicles and then bet they would lose money, to the great benefit, as it turned out, of Goldman’s shareholders. [Note: The previous sentence has been corrected since this item was first posted.]

Elsewhere in the Times, Andrew Ross Sorkin asks, “Why was Goldman, or any regulated bank, allowed to create and sell a product like the synthetic collateralized debt obligation at the center of this case?” The key word in that sentence may be “allowed.”

The Goldman case seems similar to one investigated recently by ProPublica and the NPR program “This American Life” involving Magnetar, a hedge fund that created collateralized debt obligations (CDOs) that it then bet against. Magnetar has been accused of deliberately making those CDOs as risky as possible and then shorting them, running up many tens of millions in profits when they failed. (Magnetar denied the accusation.)

According to the report, Magnetar’s dealings may have single-handedly extended the housing bubble for at least a year, making the subsequent crash much deeper than it otherwise would have been. Yet not only has there been no hint that there was anything illegal going on, but Magnetar itself is still in business.

(And by the way, if you haven’t heard the report, you should download the podcast. It is a rare model of clarity about an exceedingly murky subject. You will come away, as I did, actually knowing something about what CDOs are and why they were so harmful to the economy.)

Although the charges Goldman faces are civil rather than criminal, the story calls to mind my friend and occasional collaborator Harvey Silverglate’s book “Three Felonies a Day,” which details the expansive reach of federal prosecutors who use vague laws (“conspiracy” is a favorite) in order to punish people and corporations they have targeted.

The news media ought to follow Appelbaum’s lead and be on alert against getting spun by tales of wrongdoing at Goldman. The real outrage may prove to be not what’s illegal but what’s legal. Perhaps a better story is whether the massive financial-regulation bill now being considered by Congress would outlaw the sort of behavior that made Goldman and Magnetar clients even richer than they already were — while leaving the economy in ruins.

Photo via Wikimedia Commons.

Is there more to Howie’s suspension?

Howie Carr

Sometimes a cigar is just a cigar. So maybe Howie Carr’s suspension from WRKO Radio (AM 680) is just a suspension. But let me inject some uninformed speculation into the matter. The once-great station has been running on fumes for some time. Maybe its corporate owner, Entercom, has decided to force an end game, let Carr out of his contract and turn ‘RKO into an outlet for, oh, let’s say Spanish-language infomercials.

The Boston Globe’s Erin Ailsworth reports that Carr was suspended for a week for badmouthing the station on the air — something he has done continuously since he was forced into staying in 2007. (Apparently it’s gotten worse lately.) Carr is said to be unhappy that Rush Limbaugh’s syndicated show recently moved to Clear Channel’s WXKS (AM 1200), part of a national “Rush Radio” network.

Funny, but I thought one of the reasons the station replaced Rush with Republican political consultant Charley Manning was that Howie and Manning are buddies, and that Charley might keep the petulant star more or less in line. I don’t have any numbers in front of me, but Boston radio observers have long noted that this is one of Limbaugh’s worst markets. The idea of not fighting to keep Limbaugh and going with a local show struck me as pretty smart, even if Manning’s show is a work in progress.

Carr does seem to be wallowing in bitterness lately. For instance, he recently wrote in his Boston Herald column that President Obama wouldn’t have made it through college and law school if he weren’t black:

Of course, no one expects Barack Obama to really know anything. We understand, all too well, exactly how he got through Columbia and Harvard Law. He had certain … intangibles, shall we say.

That’s pretty rancid even by Howie’s standards. No, I’m not leaving anything out — the ellipses are his, not mine.

Back in 2007, Carr tried to jump to WTKK (96.9 FM), which wanted him as its morning guy. Unfortunately for Carr, he turned out to have a contract more restrictive than Curt Flood’s, and he was forced to stay.

What’s not known is whether Greater Media, which owns ‘TKK, still wants him. Morning drive is now ably helmed by Jim Braude and Margery Eagan. Would ‘TKK move Jay Severin out of afternoon drive to make way for Carr?

Moreover, given the changed economic climate, it certainly seems unlikely that Greater Media would still be willing to pay Carr $7 million over five years.

The other mystery factor is how much Entercom really wants WRKO to succeed. There’s a lot of audience overlap between ‘RKO and another Entercom station, WEEI (AM 850), a sports-talk outlet that also carries the Red Sox. No doubt the company wants WRKO to make money, but not at the expense of its more-valuable sports station.

Carr is a legitimate talent, but it’s been years since he’s showed more than an occasional glimmer. His suspension comes at a time when he probably has little leverage. Maybe he’ll be back on the air in a week as though nothing happened. But you have to wonder if Entercom executives have finally decided it’s time to do something drastic about its faltering talk station.

Photo (cc) by Paul Keleher and republished here under a Creative Commons license. Original at Wikimedia Commons.

Analyzing coverage of the Phoebe Prince story

Occasional Media Nation commenter Bill Weye has written a detailed critique of how his local newspaper, the Springfield Republican, has covered the Phoebe Prince story. Weye offers a harsh analysis, pointing his finger at newsroom cutbacks and a court reporter whom he considers to be inexperienced.

I know nothing about the Republican. But whether Weye is right or wrong, his post strikes me as a well-thought-out take that is worth reading.

Playing on racial fears

Let’s see how many media outlets report on the speaker who angrily referred to President Obama as “Barack Hussein” (not even the typical “Barack Hussein Obama”) at this morning’s tea-party rally on the Boston Common — and on all the members of the audience who cheered. Not this one, unfortunately.

I won’t call it racism, but it’s certainly a case of playing on racial fears.

Talking back to the news with NewsTrust

Who doesn’t like to talk back to the news? That, in its essence, is the idea behind NewsTrust, a site I’ve been involved with almost from its inception in 2005. The basic idea is to rate news stories on journalistic criteria such as sourcing, fairness and depth. You can rate news organizations, and other reviewers get to rate you as well.

Last week Mike LaBonte, a volunteer editor for NewsTrust who lives in Greater Boston, visited my Reinventing the News class to lead a hands-on demonstration. Dividing the class into four groups, we reviewed a story in the Washington Post on a day in the life of an Iowa tea-party protester.

It was a difficult story to rate, and my students were of two minds. On the one hand, the story was woefully incomplete, and the reporter allowed the protester to make all kinds of ridiculous assertions about President Obama and health-care reform. On the other hand, the story had value if viewed not in isolation but, rather, as part of the Post’s ongoing coverage. As a result, student reviews ranged from a high of 3.5 (out of 5) all the way down to a 1.7.

We followed that up with a class assignment: each student was asked to find, post and rate at least three stories, and to write about the experience, as well as the positives and negatives of NewsTrust, on her or his blog. Here is our class wiki, which links to everything.

Unlike previous semesters, we did not participate in a news hunt on any particular topic. Thus you’ll find stories ranging from the death of Polish President Lech Kaczynski and the pending retirement of Supreme Court Justice John Paul Stevens to lighter fare such as why yoga appeals mainly to women.

Students have differing views about the value of NewsTrust as well. One positive aspect, it would seem, is that perusing NewsTrust restores some of the serendipity that existed back when everyone read a print newspaper every day.

Yet Mark DiSalvo observes that Google News and the people he follows on Twitter already put news stories in front of him that he might not otherwise know about, and with less technological hassle. “Google News has better customization tools, and the people I follow on Twitter are already people whose taste I trust,” he writes.

Hannah Martin writes that NewsTrust makes her think about the news in a more critical and discerning way. “What I liked about the reviewing experience was it forced me to really analyze my news on its journalistic value, which, as bad as it sounds, is often something that slips my mind,” she says. “I browse the headlines of nyt.com, read what looks important, and accept it as fact, rarely stopping to count sources or assess context. The process of reviewing though, forced me to think through all the elements of each piece, and consider what, as a journalist, should ultimately be there.”

My own view is that NewsTrust is potentially valuable as a crowdsourced front page — an alternative to letting the New York Times or the Washington Post tell us what the most important news of the day is. The problem is that the software is time-consuming and not particularly intuitive, even though it has been improved over the past year.

And though NewsTrust claimed more than 15,000 registered users by the end of 2009, most of the stories you’ll find seem to have been posted and rated by just a small handful of regulars. This is not surprising. Studies have shown that two much-bigger crowdsourced sites, Wikipedia and Digg, are the handiwork of small numbers of unusually active users.

I hope NewsTrust will continue to grow, because the idea is sound. The challenge is that crowdsourcing only works when there is a crowd.

How Facebook is driving the push for real names

Could Facebook — or at least the Facebook ethos — help turn the tide of negativity when it comes to online newspaper comments?

Richard Pérez-Peña reports in the New York Times that an increasing number of news organizations are requiring commenters to use their real names, or at least providing incentives to do so. They credit Facebook and Twitter, where most people use their real names, in fostering a change in attitude. Pérez-Peña writes:

Several industry executives cited a more fundamental force working in favor of identifying commenters. Through blogging and social networking sites like Facebook and Twitter, millions of people have grown accustomed to posting their opinions — to say nothing of personal details — with their names attached, for all to see. Adapting the Facebook model, some news sites allow readers to post a picture along with a comment, another step away from anonymity.

Several months ago I led a workshop on social media for the New England Newspaper & Press Association. The most interesting idea to come out of the workshop, I thought, was put forth by a weekly-newspaper editor who said he had been posting links to many of his stories to a Facebook group and encouraging readers to comment there.

The Facebook group, he said, had turned into more of a real online community than the comments at his newspaper’s Web site, where anonymity had transformed even mundane matters into fodder for nasty rhetoric and personal attacks. And it’s not just real names; it’s the entire online persona people create on Facebook, with pictures and personal information, all of which encourage users to act more like human beings when they start typing. I was so excited that I instituted a real-names policy at Media Nation as soon as the conference was over, though I’ve held off from taking the Facebook route.

But what about the notion of sending readers away from your Web site, where you presumably have some advertising you want them to look at? I would argue that if you become a trusted source for your readers, they will reward you by coming back and providing you with more traffic than you would otherwise get.

Besides, as Pérez-Peña notes, advertisers generally don’t want to be associated with the kind of vitriol that characterizes anonymous comment sections.

Facebook is a great technological solution for small organizations that don’t have the wherewithal to offer a registration system of their own. But Howard Owens has managed to put together a registration system accompanied by a real-names policy at the Batavian, the community-news site in western New York that he owns. Owens writes:

Real names may not prevent people from spewing misinformation and defamatory bile, but at least if readers trust that the person making such assertions is using a real name, they can judge it accordingly, or fact check the source themselves.

Owens goes on to note that if the Cleveland Plain Dealer had had a real-names policy, it could have avoided the ethical dilemma in which it finds itself over a judge whose e-mail address was being used to post anonymous comments about cases in which she was involved. (The judge claims, not too convincingly, that the anonymous poster was her daughter.)

The Plain Dealer outed the judge, Shirley Strickland Safford. And last week Saffold sued the paper for $50 million, claiming the paper had violated its own privacy policy.

Of course, that’s something of an inside-out argument — that is, the Plain Dealer wouldn’t have done anything unethical if it didn’t have private information it could handle unethically. The best reason for real names is to foster a civil discussion. Along with strict moderation, real names can help fulfill the promise of a comments section that helps build community and readership.