Category Archives: New York Times

Ups and Downs in Business Journalism

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Two very different stories that slipped into my feeds this morning shed telling, if unsettling, light on the state of business journalism. Indeed, the tales of Suzanne McGee, an author and longtime Wall Street Journal reporter now working retail in a Banana Republic store, and Julia Angwin, a fired and rehired editor at an online startup, are curious statements on the health and challenges of our field today.

McGee, 57, had a distinguished career at the Journal for 14 years. She toiled in her native Canada, London and New York for the paper, bringing to bear her prior experience working for an English-language newspaper in Japan. After the trauma of 9/11, when she was working near Ground Zero, she left the Journal to become a corporate writer for an investment management and research firm. In time, she left there, freelanced for various big-name publications and then wrote a notable book about the 2008-09 financial crisis, “Chasing Goldman Sachs.”

So why is she now folding clothes and helping customers, even occasionally sweeping the floor, at a retail outlet in a shopping mall in Providence, Rhode Island?

The answer is likely quite complicated. Why does anyone slip from a great height professionally to wind up pinching pennies, to working for what likely is minimum wage or not far from it? Lots of reasons, both professional and personal, could enter in.

But McGee shared some thoughts with Providence Journal columnist Mark Patinkin. He shared them in an intriguing piece that sketches out this distinguished reporter’s troubling career trajectory. It doesn’t answer every question, but does help us understand a few elements.

First, there’s the professional part – McGee was doing okay freelancing, especially after she moved out of New York to lower-cost Rhode Island. But then a regular $4,500-a-month gig with The Guardian ended in about 2016, when the paper trimmed ties to independent contractors (though she still did some work for the paper afterward, with a byline as recent as August 2017). The loss of that steady paycheck put a dent in her finances, a dent big enough that she avoided even opening a credit card when she was pitched one at the Banana Republic outlet where she now works.

Patinkin reported that McGee still gets offers to freelance. But the pay is pathetic, $125 or less for pieces on subjects such as where the markets are headed – this for a savvy, experienced journalist with lots of insights to share. Three decades ago, McGee broke into journalism with a piece for a Canadian paper that paid $200 for it back then. Clearly, the numbers aren’t going in the right direction and Patinkin noted that McGee’s career path in part reflects tough times in journalism.

Then, there’s the personal part. McGee was extraordinarily lucky on 9/11. She was due at a conference that morning in 2001 atop the north tower of the World Trade Center. But by happenstance she got there an hour late, arriving just when the second plane hit. After the horrors of being at the focus of that disaster, however, the migraines she was prone to worsened. All that, it seems, led her into PR, to freelancing and ultimately to Providence.

McGee told Patinkin she’s not done with writing. Indeed, it’s ironic that a piece she did in July for the Wall Street Journal focused on a well-heeled and successful Morgan Stanley money manager. Moreover, she has another book in the works and she and a friend are looking into starting a business writing personal histories for families. A friend of mine in Omaha works in a similar business, Legacy Preservation, so that line may have potential for her.

In the meantime, folding clothes seems like a low-stress way to keep the bills paid. And she told him that her story is about both renewal through change and the dignity of making ends meet.

On another front, there’s Julia Angwin’s peculiar tale. Angwin was a hard-charger at Propublica and The Wall Street Journal, where she helped the paper win a Pulitzer Prize. Armed with a B.A. in math from the University of Chicago and an MBA from Columbia, Angwin had left those news outlets to help create a news start-up, The Markup, that would cover technology with investigative and data-driven journalistic techniques. Last April, she was fired after differing with the executive director, a cofounder of the site, over the cofounder’s suggestion that the site advocate against tech (the cofounder, Sue Gardner, disputed that, according to The New York Times, citing leadership issues on Angwin’s part. Gardner also wound up leaving).

But now, Angwin is back at The Markup. She has several distinguished journalists by her side, including most of those who quit with her. And they expect to launch the site by year-end. It is backed by a host of nonprofits, principally the Craig Newmark Philanthropies, but also the John S. and James L. Knight Foundation, the Ford Foundation, the John D. and Catherine T. MacArthur Foundation and others. They all chipped in about $23 million to get the site going.

The Times account leaves a lot unanswered. The paper reported that Angwin and six of the seven staffers who quit in support of her are all back and were paid while they were out. Indeed, they had continued to work on pieces the site will produce, meeting roughly once a week in Angwin’s living room in Harlem.

So had they really been fired? Were they made whole after returning? What was the fracas all about anyway?

The $23 million that the backers anted up could buy a lot of good journalism for a quite a while. One of the tales that would be fascinating to hear is just what came off the rails at The Markup in the spring and what put it back on track. That may take an outside journalist’s work to tell.

Still, it’s encouraging that even as much of mainstream journalism struggles – driving some folks to work in shopping malls – opportunities continue to arise in other areas. These areas are not dependent on advertising, the loss of which to online outfits such as Facebook and Google has been killing news organizations nationwide. Such startups, tumultuous as they may be, likely will offer a better future for business journalists alongside of or as substitutes in time for today’s big publishing names.

 

 

Cojones at Standard & Poor’s

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You’ve got to hand it to the folks at Standard & Poor’s. It took cojones to stand up to the Treasury Department and give an honest assessment of U.S. debt and the problems of dysfunctional government. The downgrade to AA+ doesn’t make up for the misses the outfit was guilty of in the financial crisis and doesn’t atone for its seemingly willing blindness to the fool’s paradise we were living in. But its clear-eyed view of the shadows on our horizon now is worth a bundle.

The big question, though, is whether it will make a difference. The U.S. will not default, no matter how keen the GOP pols are to use threats such as that. Investors know that and they won’t flee Treasury securities. Where would they go anyway? Investors have known the same things S&P has known for months and still the yields on Treasurys are at historic lows. Putting money into the government bonds is safer than any bank, and that won’t change anytime soon, as even our tut-tutting creditors in China know.

Still, the grand game of “chicken” will continue in D.C. for the rest of the year, at least, and the downgrade could make a difference in how the game is played. The Gang of 12 – the bipartisan panel that is supposed to decide our financial fate – will have S&P’s jaundiced judgment to bear in mind as they go through their ideological faceoff. As they try to resolve problems that should have been dealt with in recent weeks, the prospect of a continued low rating, or even a further downgrade, could focus their minds on the consequences of fiscal mismanagement and dithering. Their debate, too, could keep a dead hand on the markets.

Politics, and the prospects of ousting a President, will weigh heavily on those folks, no doubt. The temptation to deny President Obama a victory – a financial resolution that would serve the country well – will be just about irresistible for half the panel. Maybe S&P’s independent judgment will prove to be a bracing slap of cold water, a reminder that the bloodsport that politics has become does have real consequences outside the Beltway. Voters could make judgments about mismanagement similar to that S&P folks made and simply throw all the bums out.

But it is too easy to cast this drama as simply a matter of gaining political advantage. This is much more than just naked opportunism. This fight is over the real and yawning ideological gulf between the parties. It is all about the longstanding argument over the size and role of government that has colored every election since at least the Reagan days. The Californian shook up prevailing wisdom in D.C. and made people believe government was the problem, not the solution – a view that is echoed decades later by the likes of Rep. Eric Cantor and, of course, the Tea Party movement.

The “two different worldviews” that divide Washington are too far apart for anything more than an armistice, Cantor suggested in a Wall Street Journal piece today. The Virginia Republican argued that expanding the welfare state and redistributing income are the central plays in the Democratic playbook. “The assumption … is that there is some kind of perpetual engine of economic prosperity in America that is going to just continue,” Cantor said. “And therefore they are able to take from those who create and give to those who don’t. We just have a fundamentally different view.”

Beyond that is the Keynesian-supply-sider divide. Keynesians such as New York Times columnist and Princeton economist Paul Krugman say Obama and Washington aren’t doing enough to use government money to stimulate the lackluster economy. By contrast, the GOP leaders invoke economist Arthur Laffer’s dictum – the Laffer Curve – to argue that tax cuts would be far more effective than government spending, especially when so much of the government money is borrowed. Variations of this debate are as old as the Great Depression and economists still are split on whether the government pulled us out that 1930s slump or prolonged it with government programs.

These are serious disputes, and unresolved economic questions. It comes to a matter of faith, of whether you worship at the Church of Laffer or the Congregation of Krugman. And, lately, it comes to a matter of who has the power to either turn on the government spigot or choke it off and, in theory, let the economy heal itself. Problem is, with a 9.1% unemployment rate, an outrageous amount of debt and the never-ending political campaign that Washington has become, the power centers and the course are anything but clear.

That’s partly why we should tip our hat to S&P. The outfit, the economic engine of my former longtime employer, McGraw-Hill Cos., didn’t bow to what had to have been enormous pressure from Washington in coming to its judgment. We can only imagine the debates that raged at company headquarters: Will this downgrade lead to higher interest costs for all Americans? What are the consequences when the economy is so weak? And what of the unlikely possibility that vengeful government regulators could make life tougher for S&P and McGraw-Hill, especially at a time when McGraw-Hill is facing pressure to reorganize or sell itself?

In fact, it’s a remarkable thing about our system that Washington can’t dictate terms to S&P. One can’t imagine that kind of independence in some other major global economies. Wall Street and Washington intersect at crucial points but neither can dictate to the other. That’s a priceless strength of our system and it would have been a sorry statement if S&P had caved to Treasury.

It is fascinating, of course, to see these warring economic visions collide. But this is no classroom exercise, no parlor game. The entertainment value is far outweighed by the size of the stakes. What Washington does will affect the livelihoods of millions, the legacy our kids inherit, and the role of the U.S. in the world. It doesn’t get much more serious than that. It will take smart and independent people to help the pols to chart the way.

Making business journalism sexy (almost)

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Looking for ways to make business journalism come alive for students? How about creating scavenger hunts for juicy tidbits in corporate government filings? What about mock press conferences that play PR and journalism students against one another? Then there are some sure bets – awarding $50 gift cards to local bars for mock stock-portfolio performances and showing students how to find the homes and salaries of university officials and other professors – including yourself — on the Net.

These were among the ideas savvy veteran instructors offered at the Business Journalism Professors Seminar last week at Arizona State University. The program, offered by the Donald W. Reynolds National Center for Business Journalism, brought together as fellows 15 profs from such universities as Columbia, Kansas State, Duquesne and Troy, as well as a couple schools in Beijing, the Central University of Finance & Economics and the University of International Business and Economics. I was privileged to be among those talented folks for the week.

We bandied about ideas for getting 20-year-olds (as well as fellow faculty and deans) excited about business journalism in the first place. The main answer was, of course, jobs. If they’d like good careers in journalism that pay well, offer lots of room to grow and that can be as challenging at age 45 as at 20, there really are few spots in the field to match. These days, with so much contraction in the field, business and economic coverage is one of the few bright spots, with opportunity rich at places such as Reuters, Bloomberg News, Dow Jones and the many Net places popping up.

The key, of course, is to persuade kids crazy for sports and entertainment that biz-econ coverage can be fun. The challenge is that many of them likely have never picked up the Wall Street Journal or done more than pass over the local rag’s biz page. The best counsel, offered by folks such as UNC Prof. Chris Roush, Ohio University’s Mark W. Tatge, Washington & Lee’s Pamela K. Luecke and Reynolds Center president Andrew Leckey, was to make the classes engaging, involve students through smart classroom techniques and thus build a following. Some folks, such as the University of Kansas’ James K. Gentry, even suggest sneaking economics and (shudder) math in by building in novel exercises with balance sheets and income statements.

Once you have the kids, these folks offered some cool ideas for keeping their interest:

— discuss stories on people the students can relate to, such as the recent Time cover on Mark Zuckerberg or the May 2003 piece in Fortune on Sheryl Crow and Steve Jobs, and make sure to flash them on the screen (at the risk of offending the more conservative kids, I might add the seminude photo BW ran of Richard Branson in 1998)

— scavenger hunts. Find nuggets of intriguing stuff in 10Ks or quarterly filings by local companies or familiar outfits such as Apple, Google, Coca-Cola, Buffalo Wild Wings, Hot Topic, The Buckle, Kellogg, etc., and craft a quiz of 20 or so questions to which the students must find the answers

— run contests in class to see who can guess a forthcoming unemployment rate, corporate quarterly EPS figure or inflation rate

— compare a local CEO’s pay with that of university professors, presidents or coaches, using proxy statements and Guidestar filings to find figures

— conduct field trips to local brokerage firm offices, businesses or, if possible, Fed facilities

— have student invest in mock stock portfolios and present a valuable prize at the end, such as a gift certificate or a subscription to The Economist (a bar gift card might be a bit more exciting to undergrads, I’d wager)

— follow economists’ blogs, such as Marginal Revolution and Economists Do It With Models, and get discussions going about opposing viewpoints

— turn students onto sites such as businessjournalism.org, Talking Biz News, and the College Business Journalism Consortium

— have students interview regular working people about their lives on the job

— discuss ethical problems that concern business reporters, using transgressors such as R. Foster Winans as examples. Other topics for ethical discussions might include questions about taking a thank-you bouquet of flowers from a CEO or traveling on company-paid trips, as well dating sources or questions about who pays for lunch

— discuss business journalism celebs, such as Lou Dobbs and Dan Dorfman

— discuss scandals such as the Chiquita International scandal (Cincinnati Enquirer paid $10 m and fired a reporter after he used stolen voicemails)

— use films such as “The Insider,” “Wall Street,” and “Social Network” to discuss business issues

— use short clips from various films to foster discussions of how businesses operate. Good example: “The Corporation”

— team up with PR instructors to stage a mock news conference competition pitting company execs in a crisis against journalism students. Great opportunity for both sides to strut their stuff.

We also heard helpful suggestions from employers, particularly Jodi Schneider of Bloomberg News and Ilana Lowery of the Phoenix Business Journal, along with handy ideas from Leckey and Reynolds executive director Linda Austin, a former business editor at the Philadelphia Inquirer. My biggest takeaway: run some mock job interviews with students and teach them to send handwritten thank-you notes.

And we were treated to some smart presentations by journalists Diana B. Henriques of the New York Times about the art of investigative work (look for her new Madoff book), the University of Nevada’s Alan Deutschman about the peculiar psychologies of CEOs (narcissists and psychopaths are not uncommon), the University of Missouri’s Randall Smith’s view of the future for business journalists (it’s raining everywhere but less on business areas). We got some fresh takes on computer-aided reporting, too, by Steve Doig of the ASU Walter Cronkite School of Journalism and Mass Communication as well as on social media by the Reynolds Center’s Robin J. Phillips.

For anyone interested in journalism, especially biz journalism, it was a great week. As I take the lessons from ASU to heart, my students will be better off. My thanks to the folks there.

Economic Slowdown: Ideology at Work

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To the Obama-haters at the Wall Street Journal, the stubborn economic slowdown reflects business’ fear of looming tax hikes. The Administration-friendly folks at the New York Times, by contrast, blame the lackluster economy on political stalemate in Washington. Meantime, over at Bloomberg Businessweek, they tell us it’s all a matter of us having our cake and eating it, too — loving both the Bush-era low taxes and Obama-era high spending and failing to choose between the two.

The inability of our economy to surge back consistently from the Great Recession has become a Rorschach test for pundits. They look at the ugly blot and discern a pattern, one that – not surprisingly – reflects their biases. Love small government and Bush-era tax cuts? Obama’s overreaching is to blame for our woes. Never met a problem that more money from Washington couldn’t solve? It’s the shortfall in such largesse that is making that blot so skinny. And if they can’t make up their minds, they blame both Bush-era “wisdom and folly” – whatever that fence-straddling phrase means.

For my money, the reality is more a matter of the Depression-era notion of pushing on a string. Our policymakers can’t find the levers that will kickstart the economy, that will ignite the animal spirits of our business leaders, and that will drive down the pathologically high unemployment rate. Nothing seems to work, though the folks at the Fed aim to keep pushing whatever buttons they can. Their newest tack, revealed on Aug. 10: buying up more Treasury debt to keep interest rates low.

In the end, the problem may be that the hole we put ourselves into in the Great Recession is just depressingly deep. It took years to dig. And it could take years, sadly, for us to find our way out. To take just one measure, U.S. employment plunged by more than six percent in the recession that began in 2007, the steepest fall of any of the 11 recessions we’ve suffered through since World War II. To take another measure, these downturns lasted from six to 16 months, and our latest slide – believed to have ended in 2009, though the National Bureau of Economic Research has yet to date it – will almost certainly prove to be longer than any of them. (For policy wonks, the Minneapolis Fed puts all these comparisons into perspective here.)

If history proves anything, however, it’s that economies do claw their way back. Sometimes, they do so with the help of Washington. Sometimes, they move on despite government meddling, however well-intentioned. Even today, economists don’t agree on whether D.C. pulled us out of the Depression or prolonged it – making that bout of global misery our first and biggest political and economic Rorschach test.

It’s no comfort to people who have been out of work for months or even years at this point. It’s also small comfort to investors or people considering whether to deploy capital, especially since they are still sussing out Washington’s new regulatory reach. And, if this downturn proves at all similar to earlier ones, whole industries will emerge reshaped as a result of it (think Detroit), not to mention companies (think GM). We will come out of this as a far different economy with areas like Internet-related industries taking a dominant place over the manufacturing icons of the past. (How is it that people still have enough money for iPads?)

Following every twist and turn in this uneven recovery is enough to generate serious palpitations. For players in the capital markets – or anyone, for that matter — it’s healthier to set aside the dire headlines of the moment and keep your eyes on the horizon, however distant it seems. Bet on a long slow ride up, with lots of dips. Keynes famously said that in the long run, we are all dead. But at the moment, the promise of the long run is the only thing we have to hang onto.