Newspapers and Vice

Maureen Dowd has some intriguing ideas for how to revive the newspaper business in yesterday's column. Taking a look back at the history of print journalism in this country, she notes that newspapers were not exactly holy places - they reeked of alcohol and gambling, and sex in the office was not exactly unknown. Today, in our more enlightened times, we do not tolerate such things. But, Ms. Dowd opines, what if we allowed newspapers to take bets on sporting events? Lots of papers are flirting with money-making enterprises that were traditionally associated with the lesser emotions. The NY Times, our NY Times columnist points out, has a wine club, and Conde Nast has a dating site. Just about every newspaper in the country covers sports. And every one of those newspapers - from the smallest hometown rag in Montana, to the Times itself - has readers who bet on sports.

What she doesn't mention is that there is a whole category of newspapers who advertise much worse things than gambling. "Alternative" weeklies have ads for massage parlors and escorts. That's basically legalized prostitution. Here in LA, they also have ads for marijuana "clinics," where you can go to buy pot if your doctor prescribes it. Of course, it's absurdly easy to find a "doctor" who can prescribe that for you. And some of those newspapers do real investigative journalism. The LA Weekly recently won a Pulitzer. OK, it was for their restaurant columnist, but still, it's a good paper. All we are doing by prohibiting gambling on sports is driving it underground. It happens all the time. Every day. We also drive it offshore, to Websites based in Caribbean islands, where it cannot be taxed by US governments. I'm not advocating for massage parlors and drug clinics. But as long as they are there, and some papers are making money off of them, why don't we let more respectable newspapers engage in businesses in which no one gets hurt?

Newspapers and the "unique content" problem

Newspapers are in trouble. This we all know. Today, Kos, in his latest post on the topic, looked at how many links to newspapers Daily Kos had over the course of a week. Maureen Dowd interviewed Eric Schmidt, CEO of Google. She's a little nervous about her job.

One problem newspapers face is that they used to (emphasis on the past tense) have a semi-monopoly on news in their geographic area just by virtue of their format. Megan McArdle once pointed out (I think it was Megan) that the NY Times used to know at least two things about their customers. 1, they lived in the NY area. 2, they could afford a daily newspaper. Now the Times reader could be in Bangkok.

Newspapers used to have a huge advantage because they were the only source of news in a particular geographic area that was available almost whenever you wanted it. If you wanted to know if your team won last night, you could listen to the radio, watch TV, talk to someone else, or read the newspaper. Of those sources, newspapers are the only one that is available at any time after you picked it up. Radio and TV broadcast news at a specific time. If you missed any of that day's broadcasts, you were out of luck.

Newspapers also provided a great deal of content for a very cheap price. A newspaper has a lot of content, particularly compared to a radio or TV broadcast. And that content was not available anywhere else. Providing it gave newspapers a sort of monopoly. The only way to avoid that monopolization was for there to be multiple newspapers in a given city.

My grandfather, a small-town lawyer in the Midwest in the 1950's, used to subscribe to the Sunday NY Times. It would arrive on Thursday (even though NY was less than 1,000 miles away) because it took that long for the mail to deliver it. But he still read it, presumably because there was content in there that he couldn't get from any other source (I never talked to him about it, I heard this from my mother).

What newspapers have to do is figure out a way to provide unique content. I subscribe to the LA Times and the Financial Times. The LA Times is convenient (I can read it on the bus into work), but there isn't a lot of unique content. I like some of their columnists, particularly Meghan Daum, but I rarely read the articles on the front page, because I usually already know the story. The LA Times has done a fair amount of innovating in the last few years, but there is still much to do.

But the FT has a nice amount of unique content during the week. At least it's unique for me, because I don't subscribe to another business periodical, like the Wall Street Journal. And it's got global news, which I like.

Where the FT really shines is on the weekend (again, particularly for me), and most newspapers could learn some things about unique content from the FT Weekend. They have columnists that I can't read anywhere else, but who I read religiously. I don't have any particular interest in real estate in London, but I read Secret Agent religiously. I have learned a fair amount about wine from Jancis Robinson. On the back page is Fast Lane, by Tyler Brule, the ultimate jetsetter, and Slow Lane, by Harry Eyres, one of the few people alive who can write about Madonna and Nietzsche at the same time.

The NY Times, of course, has a fair amount of unique content, starting with its columnists. The LA Times has some unique content, like Dan Neil's car column, which is a great read. But it needs better unique content. Which, if you think about it, really should not be a problem. LA is one of the largest metropolitan areas on the planet. There are 88 cities in Los Angeles County. There are multiple mountain ranges in this county. We have a National Forest that has 650,000 acres. This is the world headquarters of the entertainment industry. There are something like 130 institutions of higher education just in LA County. There's no lack of material. Plus, there are several thousand writers who are all on a constant lookout for work.

So here's a new buzzword that will hopefully enter the zeitgest: "unique content." It's not hard to understand. Once upon a time, all newspapers provided it, just by virtue of being what they were. That is no longer the case.

Oh, and that unique content has to be in interesting formats, it can't just be text. The LA Times is doing more interesting things with photo essays, but I still don't think they're doing enough with video, particularly since some of the best cinematographers in the world (and many aspiring camerapeople) live and work here.

John McCain still obsessing about earmarks

John McCain is still obsessed with earmarks. Apparently he stood on the floor of the Senate denouncing them, and denounced them on Twitter as well. I have a hard time picturing this - did he use his own BlackBerry? Props to the man for joining the 21st centuy, I suppose. Maureen Dowd is impressed, sort of, and gets in some digs at

I think I finally understand why John McCain focuses so much on earmarks: he doesn't have any big ideas. He doesn't think in terms of grand theories. He thinks he does, crusading for campaign finance reform, and I'm willing to give him some credit for thinking big for himself, what with running for president and all. But in terms of policy, his strongest card is an intense aversion to the most trivial details in the budget.

One item Dowd cites from McCain's Twitterfest is an item for $650,000 in "beaver management." Yes, that sounds ridiculous. A reader wrote to Andrew Sullivan, however, and explained that this is legit; beavers have the ability to reroute streams, which can wreak havoc on roads and homes.

It's time to defend earmarks. Sullivan's reader got me thinking. $650,000 is a drop in a drop in a drop in the bucket in the federal budget. But it's a huge amount of money to whoever is trying to control these beavers in North Carolina and Mississippi.

Someone had to take the time to apply for this earmark. They had to draft a proposal. They had to crunch the numbers. They had to get approval for the project from their local city council, or state legislators, or regional wildlife management agency, to do whatever they are doing to manage beavers. They probably looked for funding from the city, state, or private agencies. They had to get the attention of whatever Representative or Senator sponsored it, which means that they had to get the attention of some local officials. They have to work with the local press. By the time this gets to be an earmark, a lot of work has been done to vet this proposal. It has survived lots of competition.

For every earmark that is in this budget, I would be willing to bet that there are 100 that were rejected at some point along the way. Every single American can think of something that they would like the government to be spending their money on in their neighborhood. It might be as simple as potholes, as complex as high-speed rail. It might be a high school gym that needs a new roof, it might be a bridge that needs to be rebuilt, it might be a town hall damaged by a tornado. Every single American can think of something. Every single American would love to have an earmark attached to that problem. But very, very few Americans are going to benefit from managing beavers in a few places in the South.

So John McCain ridicules the needs of the few, pretending to be defending the interests of the many. What he's really doing, however, is encouraging Americans to think of themselves as isolated individuals, alientated from the collective, their interests thwarted by the demands of people remote from them.

Take out your wallet, Senator McCain. Look at a one dollar bill. See that eagle on the back? See that ribbon in his beak? You might want to remember what it says: E pluribus unum. Out of many, one. We're all in this together, Senator. Some of us are as eager as beavers to make it all work.

A solution for those absurd banker bonuses

Paul Krugman is pissed about the bankers who have lost hundreds of billions of dollars, and have yet paid themselves large bonuses. Maureen Dowd is also pissed. She wants disgorgement - she wants to get the money back. Of course, many, many, many people are pissed. I would say the "pissed off" group includes pretty much every American who does not live in Greenwich, Connecticut or various neighborhoods in Manhattan.

I would like the money back as well, but I don't want it back by demanding back their bonuses. I'm going to take the logic that justifies these bonuses just a bit further.

There are a couple of justifications for paying people in the financial industries lots of money. First, there's the idea that they earned it. If I negotiate a deal worth $100 million, and I negotiate a 1% fee, that means that I get $1 million. And I get it because I negotiated it, and all parties agreed to it. I am selling my services for what they are worth. That's the free market at work. I have no problem with that. I've benefited indirectly from that system; I used to work at an investment bank as a secretary, and I got good bonuses because the people that I worked for negotiated good fees for our company.

The second justification for paying large bonuses is that if you don't pay your best people well, they will leave and go elsewhere. There are a couple of problems with this argument at this point in time. First, where are they going to go? Pretty much all banks are in the same boat. Second, if your bank just lost tens of billions of dollars, then the people who work for your bank are not very good at their jobs. Seriously, would you want "Lehman Bros. mortgage bond trader" on your resume right now?

But let's take this justification at face value. The idea is that people who provide essential services should be compensated well for providing those services. Lawyers who negotiate extremely complex contracts should get paid more than ambulance chasers. Investment bankers who negotiate multibillion dollar LBOs should be paid more than people who arrange standard mortgages. As I wrote above, that's the free market at work.

But let's think about this a little differently. Right now these banks and other companies are in dire straits. The federal government is providing an essential service by bailing them out. Some people think we should be demanding partial or total ownership of these banks in exchange for our money. We're handing over large checks, we should get equity (this is Krugman's argument). But that way, some would argue, lies socialism, and banks should not be nationalized. I tend to agree. I'm not in favor of the government running my bank, even if it's in serious trouble.

When lawyers negotiate deals, they don't ask for equity in the deal, unless there are unusual circumstances; they get paid straight fees. Bankers might get equity, and venture capitalists by definition do get equity. So some equity in exchange for the taxpayer's money is a good idea, but it will not work for the whole deal.

So let's get back to this idea of high fees for essential services. The government is definitely providing an essential service to these bankers and insurance companies, and all their assorted associates. How can we charge them high fees for these essential services?

Simple. Raise their taxes. The Bush administration lowered taxes for the wealthy, arguing that would stimulate greater economic growth, because individuals are better stewards of their own money than the government. That argument is not working all that well right now.

I would love to see Republicans try to argue against raising taxes right now. I understand that raising taxes in a recession is supposed to be a recipe for disaster, so maybe we can wait six months or a year. But we are definitely providing essential services to rich people right now.

Rich people argue that they are wealthy because of their own initiative. This is true to an extent, but not the whole picture. They are capable of acting on their own initiative in ways that make them wealthy because they live in the United States of America. If they lived in Zimbabwe, no matter how resourceful and ambitious they are, they would not be wealthy (unless they were part of the corrupt ruling regime). The government is not only providing essential services right now by bailing out the financial system, it has been providing essential services for decades. Centuries, even. A reasonably effective, if often flawed, judicial system. An excellent, if often flawed, educational system. Roads, airports, etc.

One large problem with this bailout is that if the banks et al. lose huge amounts of money, even if they don't pay bonuses, they don't pay negative bonuses. Even if we get every dime of the bonuses back, all $18 billion, that's still a tiny fraction of the money required for the bailout. We can't make these bankers pay us directly for providing the essential service of bailing them out. And even if we could get money from them, it still wouldn't be enough.

One of the essential services that the government is providing is a form of insurance. The FDIC works because it is an insurance company, of sorts. Banks pay insurance premiums on their deposits; the FDIC uses that money from the premiums when it has to bail out of savings and loan or a bank. That's what the (former) $100,000 limit was for; deposits were insured to $100,000. Now it's $250,000.

There is no official insurance fund for the bailout, besides the Troubled Asset Relief Program, but that is an ad hoc insurance program, developed on the fly. The insurance fund that the banks are relying on is the pool of money that is the United States government's ability to borrow money, which is, in turn, backed by the financial stability of the United States as a whole. So, in a sense, the taxes that we all pay are payments into this insurance fund that we call the United States government that is bailing out our financial system. This is, in a sense, another version of the "essential services" that we, as a country, are providing to bankrupt bankers. We are providing them with ad hoc, made-up-on-the-fly insurance coverage for their mistakes. The problem is that they haven't paid into the insurance fund as fully as they should have; that's why the federal government has a huge debt.

So, to make sure that the insurance fund that we call the US government is fully funded, we need to charge the people who rely on that insurance fund the proper premiums. Which, in this case, is called "raising taxes." I think we should start with the capital gains tax.

Remembering the campaign: Geffen on Obama

Now that we are betwixt the election and the Inaugural, this seems like a good time to look back on the historic campaign we have witnessed. One of the earliest defining moments was way back in February of 2007, when Maureen Dowd wrote a column in which she quoted David Geffen making disparaging comments about Hillary Clinton. Geffen had been close to the Clintons, but he was seriously disenchanted, and believed strongly in Obama. Of course, you don't get to be one of the most powerful men in the entertainment industry unless you have a world-class ability to spot talent before anyone else. It's even more helpful if you can actually commit to helping that talent reach their goals.

It was a key moment in part because Geffen was not subject to pressure from the Clintons; he's in his own league. As powerful as Bill and Hillary are, there's not much you can do to affect a billionaire with decades of building allegiances. Geffen was one of the few people who could have challenged Hillary's frontrunner status with impunity, which is what he did. Patrick Goldstein reminisces with the man himself in today's LA Times.

MoDo Gets Her Groove Back

Finally, another great Maureen Dowd column. I was starting to wonder about one of my formerly favorite columnists recently - her writing for the last few months has been listless, unfocused, petty. Maybe she was torn writing about intraparty Democratic fighting. Now that the Obama-McCain tussle is heating up, her pen is once again sharper than a sword. She nails the problem of the old guard's jealousy of Obama. Bill Clinton, John Edwards, Jesse Jackson: they're all getting caught up in their own insecurities vis-a-vis the new guy, who's a better politician than any of them. I used to think Bill Clinton was the best politician of his generation. That may still be the case, but, of course, a new generation is on the rise, and Obama is clearly the best of the new gang.

But McCain's green-eyed monster is, of course, the real problem.

"For McCain, being cool meant being a rogue, not a policy wonk; but Obama manages to be a cool College Bowl type, which must irk McCain, who liked to play up his bad-boy cool. Now the guy in the back of the class is shooting spitballs at the class pet and is coming off as more juvenile than daring."

McCain is the prankster who gets away with graduating at the bottom of his class because everyone knows that he really is a good guy. He's the guy who has a reputation for being cool because he says what everyone else is thinking but doesn't want to verbalize.

But McCain has managed to get by on charm and grit, rather than his smarts. Obama, on the other hand, automatically has outsider status, has McCain's charm plus a whole lot more, and has the smarts to boot.

McCain has no problem looking smart next to Bush. He also compares well with Bush Sr., because he's a "maverick" and not a preppy WASP. McCain even compares well with Reagan, because he has real combat experience, and he doesn't come across as a little confused and in need of a nap.

But against Obama? No wonder he's jealous.

MoDo enjoys the race

We are witness today to an odd phenomenon: Maureen Dowd saying someting positive about Hillary, even if it's positive in a tangential, slanted, sideways,"Hmm, well, maybe sorta" kind of way.

"Whether or not she wins, Hillary has already given noble service as a sophisticated political tutor for Obama, providing her younger colleague with much-needed seasoning. Who else was going to toughen him up? Howard Dean? John Edwards? Dennis Kucinich?"

Some have questioned whether or not Obama was tough. I answered that a long time ago; I've always thot he was tough. But I have to admit that part of his being tough was, at the start of this campaign, more potential than actual. He has the resilience to respond to difficult situations, but he had not had to respond to them on the national stage. Hillary has had that experience, and, in a perverse way that MoDo points out, this has been good for him.

"Without Hillary, he never would have learned to be a good debater. He never would have understood how to robustly answer distorted and personal attacks. He never would have been warned about how harmful an unplugged spouse can be. He never would have realized how a luminous speech can be effective damage control."

He addressed all of those issues almost as quickly as they came up, and therefore toughened up before our eyes. Which, ironically, Hillary did not anticipate. And what she particularly did not anticipate is that he answered her toughness with eloquence.

But MoDo misses something. It's not just to Obama's benefit in the primary and the general election that he has been through the fire in the primary. McCain has not. Of course, McCain has been through the fire in ways that no one else has or can even imagine. William Kristol, in a very good column (I finally appreciate why the Times hired him), appropriately titled "Biography Is Not Enough," points out that military veterans have not always won the general election; otherwise George H. W. Bush, Al Gore, and John Kerry would have won their elections.

"When we elect a president, we’re not giving a lifetime achievement award. We’re choosing someone to govern for the next four years. The qualities of a young military hero may not be those of a successful president."

McCain will run on his biography, not his domestic policies or vision. And while the Democratics are having at each other, those domestic policies of McCain will lie unexamined until the general. At which point Obama will be very well prepared for him. So it's not just that Obama is getting tougher by the day; it's that McCain is not being forced to sharpen his knives.