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“Journalists” are the new no-money-down mortgages

“Journalists” are the new no-money-down mortgages

Maybe tulips are a better analogy for these legends in their own minds.

A whole lot of money is chasing the new cool kids, the newly name-branded “journalists” like Ezra Klein and Glenn Greenwald, who bring their friends along with them to the bottomless internet money pits.

Eric Wemple at WaPo describes the superlative feeding frenzy growing the bubble in the trading of journalists, American journalism, brimming with once-in-a-generation talent:

Earlier this week First Look Media, the startup general news venture bankrolled by eBay founder Pierre Omidyar, announced the hiring of longtime Wall Street critic and Rolling Stone contributing editor Matt Taibbi. Such situations demand the use of the superlative, and First Look Media Executive Editor Eric Bates spilled forth, “Matt is one of the most influential journalists of our time.”

First Look Media is driven by the compulsion to spurn the conventions of the mainstream media, and in announcing Taibbi’s accession, it succeeded. By a hair. Traditional news outlets have settled on a fairly standard mode of implausibly praising colleagues and soon-to-be colleagues.

Late last month, for instance, The Post announced the hiring of the New York Times’ Catherine Rampell and called her “one of the smartest, most original journalists of her generation.” Uh-oh — she may have to compete with Politico’s Todd Purdum, who at the time of his hiring was “one of the most perceptive reporters and elegant stylists of his generation.” Politico is full of generational leaders, too, as Editor-in-Chief John Harris said of “Playbook” author Mike Allen: “One of the most exceptional journalists of his generation.” (Allen has a more humble view of himself as “one of Washington’s top journalists.“). Politico Magazine editor Susan Glasser was feted upon her hiring last year as “among the most respected thinkers and editors of her generation.” As opposed to Steve Coll, who was hailed as “one of the most experienced and respected journalists of his generation” upon being selected as dean of Columbia Graduate School of Journalism. Coll has written a great deal about the war on terrorism, so he’s doubtless familiar with the work of Gregory Johnsen, who, upon his selection as a BuzzFeed Michael Hastings fellow, was celebrated as “one of his generation’s wisest and most original voices on national security.” [Go to the link for more examples.]

I suppose the founder of First Look Media, who also was the founder of eBay, doesn’t much care if he loses tens of millions of dollar to buy ego-journalists, but what about the others.   How will traditional media deal with the raising of everyone’s boat from the combination of ego-journalism and superlative-mania?

The bidding up of mostly mediocre journalism has to end badly.

Bubble always do end badly.  And no one expects it.

From the Preface to the 1852 Edition of Charles MacKay’s Memoirs of Extraordinary Popular Delusions and the Madness of Crowds (caps in original):

IN READING THE HISTORY OF NATIONS, we find that, like individuals, they have their whims and their peculiarities; their seasons of excitement and recklessness, when they care not what they do. We find that whole communities suddenly fix their minds upon one object, and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first.

I’m not old enough to remember Tulipomania, but I am old enough to remember the inflation-readjusted real estate crash of the 1980s, the eyeballs-to-price ratios of the 1990’s tech bubble, and the no-money-down no-income-verification mortages of this century’s first decade.

This chart pretty well demonstrates the stages of a bubble, with the peak being the view that whatever it is people are bidding up is a new paradigm:

Stages of Bubble Chart with title

New paradigm.  Hmmm.  Where have I heard that recently? (emphasis added)

But as the Polk [Award] judges rightly recognized, Greenwald meets the definition of journalist – joining the long line of reporters who have broken accurate stories after sifting classified documents purloined by whistle-blowers. And he’s still working the Snowden material, as evidenced this morning on The Intercept, the new online magazine bankrolled by eBay billionaire Pierre Omidyar. Greenwald has decided to hang his digital shingle on that site. In a revolutionary era of new journalistic paradigms, who needs the old media?

Journalists should play an important role in exposing bubbles before they get too big.

But what if the journalists are the bubble?

Update 2-22-2014 — Can I call it, or what? Three more Washington Post staffers leave to join Klein venture. This is beginning to remind me of the law school bubble, where law professor prices were bid up in the demand for big names. For law schools, cheap federal loan subsidies fed the bubble, now it appears to be wealthy tech titans.

[Featured Image Source: Wikimedia Commons, Pamphlet from the Dutch tulipomania, printed in 1637]


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How about calling them the Beanie Babies?

That “peak delusion” on the chart should be called “the Arby’s Head and Shoulder”.

Looks like their logo.

I’ll be a little more impressed when these new media companies make money, sell stock, declare dividends and are audited by a reputable accounting firm.

    1. I’ll be a little more impressed when these new media companies (1) make money, (2) sell stock, (3) declare dividends and (4) are audited by a reputable accounting firm.

    IMHO prospects for #2 are considerably better than prospects for your other three alternatives.

    2. If and when a media-stock bubble emerges, there will be (risky) money to be made by going short.

    3. That said, existing media may be ripe for creative destruction. If we get a media bubble, the media landscape may be fundamentally different after it bursts. A few highly successful operations may emerge.

    4. That said, with the “real” economy stagnant at best, a pixie-dust bubble seems like the last thing we need.

How about a minimum wage for journalists — the ones who submit to FCC monitoring?

    stevewhitemd in reply to JerryB. | February 21, 2014 at 11:44 pm

    How about a MAXIMUM wage for journalists who submit to FCC monitoring?

    We could call them “adjunct journalists”…

Hadn’t thought of Madness of Crowds for 20 years – it’s considered a primer for scientific skepticism and shows the ovine manner in which some populations come to believe in the patently nuts. (Ref: “The Mad Gasser of Mattoon” )

An uninformed populace (often willfully uninformed)is ripe for the picking when the supposed informers are also willfully ignorant or willing to sell horseshit as news. The subject matters too. Sometimes a belief is so delicious that the believers will reject any evidence that serves to disprove it. Sound familiar?

These hirings are not for writers: they are for influencers.

I would be willing to bet that, underneath it all is the insight that we are not governable. Of course, the people who are trying to govern us are under the delusion that we, as a people, ever WERE governable.

This entire country was populated by ornery malcontents, petty thieves, third sons, and various peoples who couldn’t get along with the local government or got thrown out of their homes for one reason or another.

We don’t stand in line. We think the government elite works for us. And, we are perfectly capable of tossing our betters out of office, just because we do not like being forced to do what somebody else thinks is good for us.

Those people who are buying “journalists” aren’t buying skilled writers or thinkers: they are buying people who seem to have a following. They won’t be any better at picking winners than the people who predict presidential races three years in advance.

Doug Wright Old Grouchy | February 21, 2014 at 11:25 pm

Journalists: Is that a settled definition? Beginning to sounds like the Global Warming craze definition!

Ah, this is the post–the unique, stereotypical post, that we’ve come to expect from Professor Jacobson.

Plenty of facts, links, to research. Commentary, angst. More importantly, talking to us, instead of at us– his readers.

“Journalists”? Hmmmm. Just the other day I was thinking what “fine” ‘propagandists’ these folks are. The term journalist never crossed my mind. 🙂

On another note, your quote from the Madness of Crowds lends itself quite nicely to the phenomena of Barack Obama’s election:

“We find that whole communities suddenly fix their minds upon one object, and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first.”

They call their drivel “explanatory journalism”. They explain they claim. They bait and switch, lie, create diversion, and have no understanding about the subjects on which they opine. Their qualifications for “explaining” complex and arcane subjects are nil. Creating another level of echo chamber for propaganda media who mostly quote each other as experts is one of the goals. English majors from the Ivy League report on climate change, philosophy students from Stanford editorialize on health care economics, and art students write about the evils of conservative politics. I am not exaggerating. They know nothing but manipulation.

Who needs the FCC in the room when Leftist ‘super pac’ dollars define your journalism(?)?

“First Look Media is driven by the compulsion to spurn the conventions of the mainstream media…”

Misprint? “spurn” or should it have been “spin”?

MaggotAtBroadAndWall | February 22, 2014 at 8:35 am

I made a similar comment at Legal Insurrection about a month ago. I didn’t flesh the idea out as thoroughly as Prof J, and confused the founder of Pay Pal with the founder of Ebay, but the idea is essentially the same.

Ironically, a few days after I posted my comment I saw a tweet from Marc Andreessen about how he thinks journalism – broadly defined – is set to grow by leaps and bounds in coming years. He’s one of the founders of Netscape who made a gazillion bucks in one of the first internet IPOs, Netscape, and now makes a living as a venture capitalist funding new internet start ups. I suspect Ezra Klein is probably plugged in to this kind of thinking. I’m not saying Andreessen will be right or that Klein will be successful, but it’s a different viewpoint.

So, we have Marc Andreessen and Pierre Omidyar getting into this. What do they have in common?

Yes, that’s it: they’re obscenely rich. Therefore, *by definition*, they are smarter & harder workers than everyone else. That’s what we are all told, anyway, whenever anyone says anything negative about the rich…

I guess the reason that I’m not a gazillionaire is that I’m unable to recognize the genius that is Ezra.

When the on-line producers of “news” start to realize that “journalism” is merely an introduction to a comments section, these little hacks will no longer be described with superlatives, nor bring in more cash than it takes to feed them junk food.

Definitely won’t end well for those shelling out the big bucks to hire a bunch of third-raters (Klein) and fourtyh-raters (Greenwald) and all these other people who I have never even heard of.

All this is not big enougn to matter, macro-economically, but this little corner of journalism hell will be a disaster area in a couple of years. Journalism is a dying field far a variety of reasons, and people are desperately trying to find way to breathe life into it without addressing those real problems. Ignorant psuedo-intellects like Klein are part of the problem, paying them more will not contribute to a solution, it’ll just up the burn rate.