Move Along

Yves Smith has a very good post on how hard much of the mainstream media has fallen for the “everything is OK, go on with your lives” theme. She cites the Pew Research Center to show that media coverage of the financial crisis and recession has focused primarily on political battles – stimulus, bailouts, etc. – rather than on problems in the real economy. What’s more, economic coverage in general has fallen off since the stock market rebound earlier this year and the Obama administration’s “all clear” signal. She also discusses psychological research that shows that people can be easily influenced to believe things that are not true, simply because people around them seem to believe those things.

Smith traces this phenomenon to two main sources: the steady evolution of journalism into a traditional profit-oriented business than can no longer afford to invest heavily in investigative journalism; and the increased ability of political leaders, following the lead of private corporations, to control the message that is transmitted via the media. The Bush administration was allegedly the master of the latter, although the fact that they were so obvious about it sort of undermines that claim. (Although probably their attitude was that they didn’t care if the “New York liberal elite” saw how they were manipulating press coverage.) But the Obama administration is no slouch either.

I had my first experience with modern PR during the Internet boom, when I was in marketing at Ariba. (Remember us? Market value of $40 billion at a time when our revenues were less than $100 million per quarter.) We would be planning an acquisition, and I would meet with these nice people from our PR firm who understood nothing about our technology, or our products, or our markets, or the company we were buying. And they would decide that our top-level messages needed to be X, Y, and Z, which were so devoid of content that they couldn’t even be accused of being false. And that’s what we would use in our press release and our analyst call, and a few hours later we would see it echoed in the news stories and the analyst comments.

Now, if you’re a company of only middling interest (even when we were the hottest thing in Silicon Valley, we were not one of America’s major companies), this is easy. You don’t have the New York Times or Wall Street Journal trying to bust you, and, it’s true, most of the people covering you tend to be nice — in part because they don’t want to lose their access, but probably more because, at the time, they wanted to be a part of our success. Calling a spade a spade would not only have been impolite, but it would have exposed the lie that all these Internet-era financial journalists and research analysts were living just as much as we were.

However, it should be a little harder for the government. But the fear of alienating sources no doubt plays a big role. And then there is the fact that the financial crisis and the recession are just complicated. On some levels they are simple, but on others — like the relationship between banking profits and bank lending (there isn’t necessarily one), they are complicated. In a situation like that, the person with the biggest megaphone has an advantage — if he can tell a simple, plausibly believable story. And the administration and the Fed have hit on one: “We were on the brink of the abyss, so we had to do a lot of unpleasant things to pull us back. But now things are back to normal in the financial system, and we’re just dealing with an ordinary recession, so things will be tough for a while, but we’ll pull through.”

Smith and I probably agree on the major problems with this story: it enables the government to avoid tackling the flaws in our financial and political systems that caused the crisis in the first place, and so, in a real sense, nothing has changed; it also minimizes an extremely severe recession and implies that there is little more to be done at this point to help the millions of people who are hurting from it. But that’s the message the government is putting out, and there’s not a lot that a few people who are crazy enough to spend their free time writing blogs can do about it.

I should add that there are good people doing good work in the mainstream media. Off the top of my head (apologies to people I leave out), there were the articles David Cho wrote about the aftermath of the crisis and, in particular, the concentration of the banking system; Joe Nocera still has his outrage; and there is Bloomberg’s lawsuit trying to force the Federal Reserve to comply with Mark Pittman’s FOIA request. But this is wonk stuff for crisis and policy junkies, not top-of-the-evening-news material. Out on Main Street, people may be out of work, unhappy, and confused, but there’s no political momentum for change, at least not on the real issues that affect their economic well-being.

By James Kwak

77 thoughts on “Move Along

  1. The focus of the mainstream media on politics is not new. All you need is hot air. If the politicians do not provide it, you can generate your own.

  2. “There’s not a lot that a few people who are crazy enough to spend their free time writing blogs can do about it”

    Sorry James, you are wrong. There is far more that you can do about this. You are the “groundswell”.

    It is very disappointing to dip back into Baseline Scenario and find much the same people having much the same conversations.

    Obama is no fool. Might is right, don’t you know. Suck it up. The only question is “what are you going to do about it?”

    If Baseline Scenario is only a place to let off steam, without harnessing that energy to anything more constructive, then its role is arguably counterproductive. It is wasting an extraordinary opportunity. The web can be so much more than a safety valve for the disaffected, it can be the host for collective intelligence – just ask MIT’s own Tom Malone. It only takes someone to coordinate and cultivate this.

    For example, contributors here might naturally coalesce into several communities:
    • Those who want to do something about Too-Big-To-Fail banks (more that is than moving their own accounts to smaller banks).
    • Those who want to see effective regulation (Wired’s proposed Radical Transparency and the spread of XBRL and crowdsourcing, perhaps)
    • Those who would rather see TARP money funneled to the beleaguered mortgage holders than dissipated in kickbacks to Goldman Sachs, Deutsche Bank and their cohorts.
    • And so on.

    People could still contribute to several communities of interest. Baseline Scenario’s role would be to facilitate a more constructive discussion, clarifying aims, raising issues and inviting diverse views.

    Aims answer the question “what results does this community want to achieve”. Clarifying aims collaboratively strengthens the bonds between the people involved and helps everyone grasp “what are we doing here”.

    Issues are those matters that command our attention. They are both the obstacles to achieving our aims and the way forward. People need a process for working through issues and the web can provide a forum for raising issues safely, discussing them openly, assessing them correctly, and responding appropriately. Issues are the crises we face and the ultimate test of each community’s way of dealing with events. Handling issues effectively would reinforce the social fabric of Baseline Scenario’s communities.

    Inviting the frank exchange of dissimilar ideas is the basis of the thinking together that is the lifeblood of more forward looking, more practical and more action-oriented discourse.

    Clarifying aims, raising issues and inviting views creates a framework for the emergence of collective intelligence, but this is not the only component. It matters how we connect these communities, how they relate to one another, how we collate feedback and detect patterns of thought.

    This is quite simply the best antidote to destructive and self-serving governance.

    In this context, Elinor Ostrom’s Nobel Prize for Economics is pertinent. She is yet another to demonstrate that – in complex relationships – management top down and from the centre usually doesn’t work while management from the grassroots up can. It is the point made by people like Muhammed Yunus, William Easterly (in “The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good”) and, of course, Naomi Klein in “The Shock Doctrine”.

    It is also the motivator of the more enlightened business leaders, like Cisco’s John Chambers (see The Economists article of 27 August 2009

    The web should be far more than a lightning rod for public unrest; it can be a powerful mechanism for improving the quality of the discourse. This is more than ever necessary (see the unusually frank statement of Howard Davies reported here today Too many are still living in Davies’ “fool’s paradise”.

    Changing gear in this way must be the next challenge for Baseline Scenario if it wants to stay relevant and keep growing.

  3. Who you gonna believe, the New York Times or your lyin’ eyes?

    The Bush administration’s ability to manipulate its press coverage ended in 2003. The current administration’s ability is quite intact; it would take at least an Iraq-sized disaster for them to lose it, I think.

    A second collapse following all of these policy initiatives and “happy talk” might do it, actually. I wonder if the Obama folks fully understand how dangerous a game they are playing.

  4. That’s why blogs like Baselinescenatio are essential. These days I spend more time on blogs than on mainstream media. MSM media have lost all credibility in my eyes. Sometimes I find myself boiling with rage reading them. Their most powerful weapon is omission. They always lie by omission.

    Thank you James Kwak and Simon Johnson! Keep up the good work. Intelligent blogs like Baselinescenatio will carry the day.

  5. Very interesting essay and I don’t want to minimize your discussion of the manipulation of the media by the political establishment but I was most taken by your words “no political momentum for change”. Isn’t it amazing that an administration that came to Washington with CHANGE as its headline campaign promise has totally ignored such a huge opportunity to implement genuine change? When will we ever learn? When will we e-ever learn?

  6. This is why traditional media is in terminal decline. You can only have your life savings destroyed so many times while they claim nothing is fundamentally wrong before you start wondering what’s going on.

    It is also generational. In my circle of acquaintances, blogs and podcasts continue to replaced MSM financial reporting. One still reads the Wall Street Journal, but even he is reading Spengler/David Goldman at the atimes, etc. My parents and their friends, in contrast, continue to rely on traditional financial media reporting. The eye-rolling when I forward them non-traditional links has noticeably decreased since the collapse, however. When I hear one of them call CNBC “pump-vision” then I’ll know that the end game is in play.

    I’d like to add Dylan Ratigan to your list of MSM do-gooders. He’s been solid, especially since he (*cough* *cough*) left CNBC.

    Carson Gross

  7. Here’s a classic of mainstream media (MSM). Watch Congressman Anthony Weiner explain to Maria Bartiromo that he’s not currently on Medicare because he’s not 65.

  8. I agree. What are you going to do about it?

    As I do my daily reading (Calculated Risk, Mish, Jesse’s Cafe Americain, etc) I notice a lot of brilliant (and fast) investigative reporting but no innovative solutions are being suggested by the blog community.

    So, for a few months I’ve had my focus on possible innovative solutions (no matter how “crazy”). Many quality blogs now routinely describe the current “intelligent solutions” as fraud, extortion and theft. But no solutions are being offered.

    One thing is clear : As reported on Zero Hedge (who I don’t really like much – too much Schadenfreude) even GS is stating that the current situation (I paraphrase here) is so bad that only prediction you can make is : something radical has to change or the whole economic and political system goes down in the next few years.

    Has anybody pulled together a list of solutions offered on the blogs? And perhaps made a table to compare then to the current solutions?


  9. There is ample evidence that your statement, “…but there’s no political momentum for change,” is just wrong.

    When Bernie Sanders, Alan Grayson, Ron Paul, Dennis Kucinich and John Boehner can all come together behind a single piece of legislation that will give Americans more insight into the Fed’s role in this economic crisis; I’d call that political momentum for change.

    When the Tea Party protesters and the G20 protesters are complaining about the same basic issue – the internationalization of U.S. monetary policy, I’d call that political momentum for change.

    When both Republican and Democratic legislators are facing primary challenges because of the general mood of “throw the bums out”, that is political momentum for change.

    There is a growing anger in this country about the finances of our nation, and more importantly about how and by whom the federal financial policy is set. The momentum is there. Channeling that momentum for real change will be the significant challenge for our society.

  10. There is a very interesting structural constraint related to the news cycle known as CONCISION. This is the idea that you must make your point entirely in the span between two commercials.

    This factor produces the ridiculous back and forth arguments that litter news broadcasts. If one is going to discuss something profound and relevant, something other than the regurgitated nonsense (“We were on the brink of the abyss, so we had to do a lot of unpleasant things to pull us back. But now things are back to normal in the financial system, and we’re just dealing with an ordinary recession, so things will be tough for a while, but we’ll pull through”), he/she would need to provide a great deal of evidence and the time needed to present it without sounding like a lunatic. Our news model conveniently disallows the presentation of intricate ideas, enabling the institutional power structures like corporations and government to control the terms of debate.

    A free press refers not only to the ability of newsmen to gain access to information, but also to disseminate it.

  11. No shortage of ideas about what is to be done, just no clue as to how to do it.

    For some ideas, look at history, pace Alan Greenspan. In 1911 the US broke up Standard Oil. How did that happen? Not just because there were muckrake journalists and scholar/lawyers like Brandeis writing about other people’s money and the trusts. It happened because there was a political dynamic nlike what exists today.

    Like them or not, in 1911 the context for breaking up Standard Oil included a real socialist party and a real labor movement that shaped the way the leaders of the major parties governed. There was not just chatter. There was organization. Corporate power was addressed the way it was in part because there was a real challenge from the left – not enough to elect Eugene Debs, nor enough for the IWW or the AFL or any other labor group to triumph, but enough to make a difference in how such issues were addressed.

    We are living with the fruit of weakened unions and the absence of even medium small political parties that could put some institutional weight behind ideas like limiting the powers of corporations.

  12. “the steady evolution of journalism into a traditional profit-oriented business than can no longer afford to invest heavily in investigative journalism”

    I am a bit speechless. As a “profit-oriented business” traditional media are clearly dysfunctional. As a 4th Estate in the “business” of ensuring the informed citizen, there appears to be a problem with supply, demand, or both. The incentive structure for what is misleadingly referred to as journalism these days has to be completely decoupled from profit or polity, at least at the management level.

    In most cases, what is lacking is not investigation but honesty, followed by common sense, followed by passion. Addressing either of these deficiencies might or might not have a positive impact on the bottom line, but “cost” is not how we got here from there.

  13. “the increased ability of political leaders, following the lead of private corporations, to control the message that is transmitted via the media”

    Pray tell, how does this control work? Last time I looked, corporations own media, but government, by and large, owns neither.

    I would have less skepticism about a claim that elite interests own the corporations that “control” both political leaders and the media. I also have a bit of trouble with the notion of “control” here – not every dysfunctional media organization is “controlled” in the explicit, immediate way that FOX News apparently is.

    Whatever “ability” political leaders might have to use the media, that ability is given, granted, by those that pass on the message. To what extent the mouthpieces are bought-and-paid-for, true believers, or just lazy and incompetent I cannot say, but the focus should be on how they got selected for their positions in the first place.

    I would also suspect a marked difference in the ability of some “leaders” (Obama, Clinton) to get out their message of choice on issues potentially changing the status quo against the interest of the elites (health care) compared to the ability of others (Reagan, Bush) to have distributed messages perceived by the elites and their retainers as to be in their interest (Iraq war, Missile Defense, National Security State, welfare “reform”, bailouts, incumbency, immunity).

  14. “Out on Main Street, people may be out of work, unhappy, and confused, but there’s no political momentum for change, at least not on the real issues that affect their economic well-being.”

    If the public held on to the simplistic but common sense notion that any dollar earned by corporations and elites has to come from somebody, and that their having a dollar or a thousand less now might be related to the unashamed headlines spouting the boom of an economy that does not seem to serve them, then maybe there would be less confusion.

    If the public also voted any politician out of office who did not deliver, there might eventually be momentum for change. Hero worship and celebrity-driven attention are not civic virtues.

  15. This seems to assume that Baseline is something other than another pipe in the “Mighty Wurlitzer” of applied social conditioning. Beware of pundits, journos and bloggers that say all the right things. As dear Silke reminded me, when working towards the big sale or big con, you need to collect a string of “yes’s” to properly prepare your mark. The impact of the blogs has become even more insidious because we are tempted to read them as independent vessels of truth, uncorrupted by those evil media barons. Yet Simon is (was?) associated with the Peterson Institute, MIT, and Lord Sith knows what else (US Govt now too), James sits in the gaping maw of the home of secret societies, and is apparently getting ready to influence global law. Peter Boone is off… where *is* Peter Boone?

    “… the person with the biggest megaphone has an advantage

    Many many smaller megaphones are now much more effective than one big megaphone since we distrust and avoid the messages coming from the big megaphones now.

    “…there’s not a lot that a few people who are crazy enough to spend their free time writing blogs can do about it.”

    There are blogs and then there are blogs.

    So they’re winning our loyalties and influencing our behavior. To what end? I’m still convinced that many of these bright academics and writers think they’re working towards a greater good of some kind, but what is the nature of that good? And are they, in reality, just being conned into doing the work of our future fascists?

  16. Short on time and evidence, but I seem to remember reading that the “break-up” was just cosmetic. It produced a number of smaller companies that continued to make money (more money?) for the same people. In campaign finance we now have “bundlers.” Instead of 3 nightly news anchors we have endless bloggingheads.

  17. Could you guys ask William K. Black to give us a little guest post on the role of organized crime in our lives? Control Fraud, and all that good stuff?

    For some reason he seems to stop short. Even Bill Moyers was daring enough to whisper “Mack the Knife” when he was talking to Simon the other day on PBS.

  18. Before you go throwing stones at the media, allow me to draw your attention to the tags in the side bar of your own blog. Notice the teeny tiny letters spelling the words “real economy” and the comparatively large ones spelling the word “banking”.

  19. Given the comments and the need to turn to an Action Plan given that words appear to be insufficient to be the catalyst for change, it may well be a fact to consider the cancer surgeon confronting a terminal case. The cancer on the American body politic is so pervasive and deep and has spread to other parts of society that it is best to remove further efforts to save the patient. Maybe the Second Republic will be born !!

  20. @Uncle Billy Cunctator

    A good point. Perhaps your are asking : What if Hitler had the MSM *and* the 100% detail Internet information about everything that everybody (right down to the individual person) was doing, reading and writing every day?

    The Fed already has every mortgage transaction and (since recently) every credit card transaction. Cell phones and car GPS systems map every inch that a person moves in their entire life. Facebook is a social engineering gold mine – and if you join you can never delete your own information.

    It’s funny that the best bloggers seem to think that they can’t get conned. The con is simple : identify the potential trouble-makers while they are still small groups or lone rangers. Counter-propaganda their ideas and discredit them before they can reach critical social mass.

    Google can see what your IP/Internet address is, where you are located in the world, the web sites you arrive from and the web sites that you go to next. It’s a “service” that they are proud of.

    In fact, I could coin a term : The Blogger’s Dilemma. Freedom of speech on the Internet reduces the freedom of action of readers because it exposes them to the people who own and control the information pipelines. This allows the readers to be profiled for manipulation *before* they can form their own opinion.

    The only hope is this : any system that squeezes too tight implodes? Intellectual monoculture can make small pests extremely efficient? Modern math indicates that the primary product of Total Control is total chaos?

    Time for some creative thinking? I wonder if there is a swap yet for betting on whether the Survivalists will survive. The Ultimate Swap.

    BTW: They prefer to be called corporatists instead of fascists. Corporations, by law, are immortal.

    Despite everything, I remain optimistic. I have no idea why. Just human nature, I guess.

  21. I am always amused by the American concept of “there’s a solution for everything and all we have to do is find it”. This is the concept that got us into the present mess. The
    “solution” this time was endless wealth without risk. “Endless wealth” is another American myth. No limits you see. We are gods and can do anything. There aren’t any consequences for our behavior. The vast majority bought into it hook line and sinker. Frankly, they still are.

    We love the myth of the “mighty individual warrior that defeats the insurmountable enemy”. The reality is America today is the America that has always been. We have always been a nation run by powerful moneyed interests. And the vast masses of us who didn’t have money dreamed endlessly of having it.

    Of course the media is managed and controlled. What’s new? And I don’t know about you but my days of putting on my armor and riding forth to do good are long gone. I take comfort in blogs like this as I don’t feel so alienated and that’s nice. The rest of the time, I stick to myself, put wood on the fire and have a cup of coffee.

  22. the focus of the media is on “the story”

    the story needs characters, plots and dramatics

    politics is a ready-made reservoir of characters, plots and dramatics

    besides banks, credit card companies, insurers, financial service companies, oil companies and other multinationals are advertisers

    advertisers fund the media

    media companies do not shoot advertising buyers

    a key step in the development of audio recording was the practice of recording radio shows for review by the advertisers

  23. One way that the Financial Sector is winning is by keeping the options limited. However, almost all of the press seems to be going along with it, from my point of view. Except for the FT (meaning Buiter, Wolf, and Kay ), and Peston, I’ve heard very little about Narrow/Limited Banking. The banks must be very happy about that.

  24. You just summed up everything I have been thinking.

    I’m not sure how to feel about that.

  25. “Pray tell, how does this control work? Last time I looked, corporations own media, but government, by and large, owns neither.”

    Corporations own media AND government, therein lies the problem.

  26. Excellent post James. Brings to mind the Manufacturing Consent documentary about Chomsky.

    It’s as if the media simply stopped covering the economic reality of the majority of us on the bottom of the two tiered economy. I think we’re all supposed to read the happy headlines about the top tier rebounding (which is debatable, of course) and get some warm fuzzy feeling of wealth by proxy.

    Wealth by Proxy… a sad state of affairs.

  27. No, Yala as in the Kuna “Indian” word for “homeland, sanctuary, safe place to talk”.

    The Kuna are the second smallest race on Earth (after the African pygmy). They live in the 300 or so island archipelago formerly called the San Blas on the South East border of Panama with Columbia, now called Kuna Yala.

    They are fiercely independent and have a unique matriarchical society, which they have been so far able to preserve remarkably well against the inroads of civilisation (casual sex, drugs, guns, TV and so forth). The men work in the mornings and everybody meets every day in the island congreso in the afternoon. This is possible because they have a relatively easy subsistence existence (good fishing and lush jungle for agriculture). Thus, they thrash out all the village issues in an environment where nobody owns the truth and everybody has a right to be understood.

    One innovation in particular that would enormously improve dialogue in US Congress or British House of Commons is that the elder women are inclined to let out sudden ear shattering yells if they spot anyone nodding off or failing to pay attention.

  28. Ted, I have had a medicare card for nearly 12 years. I have never taken it out of my wallet. Ask me why?

  29. Kwack–
    You’re jaw may have dropped when The Maestro said maybe we could break up the big banks. Mine dropped when you seem so surprised that the big media outlets seem to focus on politics and not the actual damage occurring in main street.

    They’re in the bag!!!!!!!!! Welcome to the discovery.

  30. I agree that the internet is going to have a massive impact soon.
    As soon as people turn off their TV sets and cease subscribing to newspapers and magazines.
    Probably not in time for this round of economic disasters, but when things get bad enough, I think it will become an invaluable resource that makes the ultimate recovery (at some indeterminate future date) much different from previous ones.

  31. I think it’s good to be skeptical like you are. Certainly, people with elite university pedigrees don’t have the best track record, and motivations and such should be questioned closely. Still, as far as facts and reasoning goes, what alternative ways of thinking are you suggesting?

  32. The Russians used the same propaganda during the collapse of the SU. Obama’s using proven and time-tested techniques.

  33. I agree that the political momentum for change is there. The MSM’s job is to make sure no one realizes this, or it might really take hold.

  34. The corporatists control the terms of the debate because they own the media.
    You also need a populace that’s capable of being entertained by multiple 40 minute presentations on technical topics, after having had a long day at work and while stuffed to the gills with corporate food.

  35. It is funny how organize crime is supposed to be huge in terms of revenue and political power, yet gets almost 0 coverage anywhere.

  36. Don’t you know Zeke, God provided us with endless abundance to fuel our endless consumption and acquisition?

  37. Americans have still not woken up to the fact that 95% of them will never achieve “the American Dream” (in any of its current incarnations).
    Americans have less upward mobility than “old Europe” even. Yet, they are far more optimistic.

  38. @Yakkis

    Looking at the thread I can’t tell if the question is addressed to me.

    In case it is :

    What I did :
    – after the crash I spent 6 months reading thousands of pages of top quality blogs and reports. Personal blogging Verboten. Start with the facts.
    – then I came up with an idea around March last year and blogged it
    – by chance I noticed that the White House had hit my business blog and I got a bit optimistic
    – here we are in October. The mess just keeps getting worse. Obama says “We need to look at new ideas” and then the White House pumps out nothing better than reheated French Fries.
    – so I blogged the idea again the other day

    I apologize if the idea is not really well written. The basic idea is simple. Six months later (and thousands more pages of information) I have not seen a better idea. If I had I would be supporting that idea instead of mentioning my idea.

    And my tone in the blog post is heavy/not-great. It’s hard to find a good style for writing about these things. Please don’t take it as arrogance.

    If you want to check it out it’s at :

    In any case, I hope that my suggestion will inspire some creative neurons. Great ideas need both inspiration and perspiration!

  39. The silence is deafening, Yakkis.

    They’re busting little guys left and right in many countries. Otherwise we just get vague references like “Mack the Knife” or “Vampire Squid.” Maybe the ones who should be covering this are just afraid for their livelihoods or lives? In Russia and Mexico journalists, lawyers and judges die on a fairly regular basis…

    The bad guys, one would think, consider themselves geniuses. Are they really that smart though if they can’t work their cockroachy schemes without threats and violence?

  40. to me it seems that the media are really short on money – I have read the Atlantic ever since 9/11 and loved it and used it archives as available on the internet extensively but recently it seems their pieces are written without a competent editor thus the pieces have turned into little more than long blog posts. I wonder what’s the reason: saving costs for the owners combined with journalists’ hubris that they can be just as good without an editor?

  41. Yakkis
    how would you like to be threatened with knee capping?
    just heard a profile on Alexander Lebedev the guy whose reporter Anna Polytkoskaya was murdered not so long ago – he bought himself a British newspaper and the BBC guesses he did it because that might give him some protection
    I have my doubts about the storyi.e. whether he really is angering Putin but sure it can’t be only the Russians who know how to keep their people in line

  42. in defense of Americans I must say that quite often their can-do attitude brings really nice results
    especially when dealing with our old Europeans hemming and hawing

  43. I love Wealth by Proxy
    great description for the thrill I get looking at glossy magazine photos if only they’d stop using these emaciated looking women

  44. The mainstream media is useless, nothing more than so much information channel noise. As Taleb has said, If there is any really important news, it’ll find you.

    So save lots of time, naval gazing and hand wringing over the “shortcomings” of the media. Like peace on earth and a cure for the common cold, our media will never be “improved”. So kick back, and embrace your universe’s inner randomness!

  45. James, I have said that for some time there is no mainstream media that has not been captured, especially now, at a time when advertising dollars are so scarce. So they play only to the preferences of the plutocracy, and we get what we get. Only PBS, sometimes, MSBC, and maybe one other really go for the depth and contrast. Unfortunately much of what they do is too wonkish for the average viewer, and not sensational enough to attract the Survivor and Desparate Housewives set (the growing brain dead of the middle class).

    It’s a shame that our entire society seems to gravitate toward useless extremes and seems to have left rational thought in the dust. Maybe this really is the era of Big Brother, but we just don’t realize it!!!

  46. I seem to recall Bush tried something like that 18 months ago, but I fear in his case it was only to butter people up for the ultimate bank bailouts.
    But as far as consumer bailouts go, I’m all for it and it seems like a logical way to do it.

  47. Of course it is as I see it. Politicians, esp of the long-tenured and liberal persuasion, just love having as many people as possible who meet these criteria to be a ZOMBIE CITIZEN:
    addicted to MTV, Housewives, Lost, Idol, etc.;
    addicted to crack, booze or sugar;
    inclined to laziness;
    inclined to blaming others, never oneself;
    slightly depressed and lethargic;
    paying zero taxes bec the threshold is so high;
    know exactly zero if not negative about civics, history, rhetoric, logic, math, economics;
    don’t care where money comes from–other than the government;
    vote predictably if you can carry them from the sofa to the polls;
    watch the right channels (MSNBC, CBS, ABC, NBC, AirAmerica, comedy channel);
    did I mention pay no taxes;
    works for the government or on another form of dole;

    It’s the perfect storm. BO and company takes your money, skims a bit for reelection, passes out money to those who meet the criteria. Zombie citizens have at least one brain cell that tells them to vote for the guy who gave them the best handout or promises to.

  48. blaming/slandering/bashing Zombie citizens doesn’t help with Solidarnosc
    it even is outright harmful to it – how to you expect people to “march” with you after you have called them names?

  49. Given that the success of mortgage derivatives was based on the assumption that housing prices would continue to increase forever (profoundly stupid assumption), how is it the that the whole fiasco was not just a huge pyramid scheme?

  50. Without touching on the Posse Commitatus laws, – since laws no longer exist – of the government ultilizing military information domination, disinformation, perception management, and operations ON THE AMEICAN PEOPLE to brute these various sundry fictions and myths, – and the people stupidly succumb. We tolerate the abuse, and the criminality, and avarice greed, and hardship, because,… whoknows. Who can tell us why we allow this thievery and criminality, this collusion and fascist concentration of economic power in the form of predatory and ruthless oligarchs and a legion of pampered pretty predatorclass operators who benefit from the usupation of the American government.

    The world was brought to the brink of economic collapse, – and you expect me to believe the hilarious fiction that no one was responsible, that CRIMES were not committed, the highrankingofficials were derelict in their duties, that thefew illicitly purchased the government to rob, pillage, and oppress themany?

    These injustices will not stand! It is our duty as human beings to stand up against abuse and wanton criminality. If not, then what are we? Money?, our assets? What are we?

  51. I’ve once read that Americans hold their rights to carry weapons so dear because it was allowed them so they could resist a government up to no good. But what you have now cannot be fought with weapons. Boycotts have been suggested here, switching banks but if it should happen on any scale they’d soon counter it with some truly good offers, so it seems a rather blunt instrument compared to what militias could have done to a state army.
    One would probably have to attack the internet but with that the collateral damage/unintended consequences would probably be even more enormous.
    so what would effective militias in a digital environment need to effectively scare predatory gamblers off (remember those old movies where papa would gamble his wages away leaving his family starving but enjoy being considered a great guy by his pals?)

  52. To kill the beast you have to starve it:
    *starve the politicians of votes; vote for a third party
    *starve the media of attention; tune them out and tune into truly independent bloggers
    *starve the banks of money; don’t invest, move most money into other currencies, use only local credit unions interested in local community development
    *starve the bad corporations of business

    You are right that as the beast starves there will be concessions and some attractive offers made, but as long as you realize WHY you are doing it, it shouldn’t take too long.

  53. I should say one more thing. People still harbor the hope that the U.S. will not collapse. Ask yourself if this is realistic given what you see going on.
    There are many ways collapse could happen, and many degrees of collapse. I think if people band together they can to a certain degree influence the failure mode in a way that harms them least, and from which they might be able to rescusitate themselves better afterwards.

  54. We’re still waiting for this interesting story on why you haven’t used medicare for 12 years. Head trauma as a child???

  55. The internet will play the biggest role, I think, in the banding together of people, and in keeping the actuality of the situation in view.

  56. Also, I might add that guns are essentially obsolete, and were never that effective to begin with from the point of view of the individual who was in turn being shot at.

  57. that’s how real decline looks like and still it laboured on for a little less than 200 years …
    also remember that with that GDP/Debt ratio you will after all that spending still be lower than some still thriving European states (Italy) – and you have that huge land mass in the middle i.e. you have a lot more potential and a lot less people fighting for the same piece of ground than probably anybody else – Russia may have more mass but it doesn’t have oceans on both sides
    Though the Nikean exile had strengthened and purified Byzantine culture, the Empire had been too badly damaged and its decline could not be arrested. By the fourteenth century an Arab geographer related seeing “sown fields within the City and many ruined houses”. The Imperial Palace was in ruins the last Latin Emperor had stripped the lead off the roof to pay his debts. A city which had housed one million people lay almost deserted.

  58. Oh well, I agree. I shouldn’t use the word collapse to describe what has happened every fifty years or so in Europe for the past 200 years.

  59. will the internet really help people to organise? it makes spreading infos about meeting points and times very efficient but is what we are doing here really useful in seeding a community?
    It is definitely beneficial for me personally and I cherish it for that, my opinion of things has become more focused or adapted or even changed and I get great satisfaction from trying to put ideas into words.
    But would I ever go to a meeting, follow a leader, let alone organize anything for the real world?
    I doubt it and not least because I got this wonderful outlet named internet which supplies me with enough like-minded human interaction that I do not feel the need to go to boring meetings with all their posturing etc. But those real human get-togethers are exactly what helped roughly in the middle of the 1800s to get all those community outfits going – here is a list reads like the little people then had figured out that without their doing something for themselves the fat ones would bleed them more than white. Old-fashioned like I am I believe ideas flourish better in controversy between physically present people where not just words interact but whole persons and their either irritating or reassuring body language. (and note the Prussian state intervened with a law thus standardizing the idea! – big money can’t have corrupted all your local governments, there must be some decent ones with some legislative power left)
    or here is a small town mayor whose idea thrives to this day – I imagine he went at it in pubs and on markets just as much as in his office. I can’t imagine how he could have gotten it going on the internet

  60. I don’t like meetings either. There may have been certain advantages to face to face meeting, but I think the internet makes up for it in other ways.
    So far, we haven’t seen anything major accomplished over the internet, but the resources are there for when a critical mass forms. One thing that has killed a lot of grassroots action is that people don’t know what to do after they achieve some kind of limited success. I think the internet will help a lot with this.

  61. Sorry about the delay.I’m still learning to keep track of what is said where on these lists.

    My story is about buying time to do research as cheaply as possible.

    For 20 years prior to taking my SS at 62, I cut my expenses everywhere I could in order to afford time on the book-keeping research. I quit insurance because my medical costs were way less expensive than the insurance. I went on to macrobiotic food to cut my medical services. That and exercise. I took SS at 62 to get a medicare card.

    However, when the card came along the home remedies worked so well I found myself more trusting in the home remedies than is the medical attention that a medicare card would buy me.

    Part of the macrobiotic advice was to take no drugs, which I have followed since 1991. And so the card sits in my pocket unused.

    I know that my case is an exception. People will argue that I have been lucky. But in terms of runaway medical costs, I found an alternatives that not only helps reduce runaway costs, it helps me to have a more fulfilling life.

    I read a statistic that on average a medicare card holder spends $8400.00 a year. Suppose there was an advantage to me for saving the government that much money? Might more persons follow the route that I took? Particularly when the doctor is providing services that are designed to fatten is gross receipts.

    When insurance takes the consumer out of decision process relative to cost of service,

  62. I’m happy to hear you have done well. It is a refreshing feeling to hear a good health story. And you are to be applauded for avoiding prescription drugs and not leaning on the government for help. But I think your story falls way outside the “norm” shall we say. A large percentage of people your age have diabetes or heart problems, cancer etc. I just don’t see it (even assuming your good habits) as realistic to expect those results.

    Recently there have been stories in the news about employees at Wal-Mart, Safeway (grocery stores) and others rewarding employees for good health habits with lower insurance premiums. This is a trend which I imagine catching fire quite quickly because it has saved money for Wal-Mart and it does provide people with an incentive to get their act together. Although really the incentive to maintain health has always been there, but I guess people in today’s world have to be slapped in the face with that incentive by looking at the monetary bill.

  63. yakkis: I have yet to hear anyone say it is, and I haven’t seen the question asked. I am not an economist and am just trying to figure things out…I was serious when I asked the question.

  64. Dear Mr. Kwak and Mr. Johnson,

    It is simply not true that those of who understand the true nature of the issues that gave rise to the Baseline Scenario are doomed to being helpless victims shouting in the wilderness. As your own research has clearly shown, small groups of dedicated people are able to affect massive change, through means dictated by circumstances. That is called leadership, and *all* social change, positive and negative, is the result of leadership.

    In that light, I call upon us all to ACT in order to reform not only the U.S. financial sector, but by doing so lay the foundation for the more just society we all seek.

    I challenge you, dear sirs, to exercise LEADERSHIP by committing yourselves to acting on your convictions. It is only through acting on your convictions that you will provide the best possibility for seeing them realized.

    In fact, you are already intellectual leaders of a gathering movement, even if you have yet to realize it. You have it within your power, yes power, to provide necessary sustenance to this movement. In the immediate term this can be done via the following:

    Post information about the Showdown in Chicago (, a protest against the same policies that you also oppose. You need not endorse the action, merely help publicize that people who hold views very similar to your own (i.e., Dean Baker) are brave enough to act.

    When you find yourself on major media outlets, like Bill Moyers, mention that there are grassroots organizations fighting this battle. Again, not an endorsement, just assist us in letting people know such organizations do exist and they can decide for themselves whether joining such an organization is good use of their time.

    Provide free speaking engagements to organizations like A New Way Forward (I am a volunteer member of a local ANWF organizing committee), who would absolutely be honored to hear from you.

    This is just a start, but it might have more impact than you realize.

    At the very least, please do not help perpetuate the notion that, unless we happen to be a member of the oligarchy or in a position of extreme political power, we must be resigned to our fate on the short end of the stick.


    W.E.B Crawford
    Volunteer Organizer ANWF-Bay Area

  65. Thank you Mr/Ms Crawford for pointing this out to James/Simon. A dialogue about this dialogue is overdue.

    They are stuck in a cycle of digging up a particularly heinous sample of fraud, corruption, ignorance, stupidity, spin or greed. The commentators then respond with suitable exclamations of shock and horror, or by offering their own competing instances of skullduggery. After 50 to 150 remarks, all goes quiet again until the bloggers post their next outrageous tidbit and the pattern repeats.

    Whatever is going on here is hardly commensurate with the scale of the catastrophe that awaits us.

    There are plenty of sites that do couple thought and action like yours and

    By the way, here is your link again – URLs in brackets do not work here.

    So, is the dearth of action:
    – Utter disillusionment and loss of faith in macroeconomics?
    – Academic abhorrence of anything practical?
    – Fear of power brokers and becoming branded political troublemakers (surely a bit late to worry about that)?
    – MIT timidity (hasn’t Baseline Scenario played down that link enough already)?
    – Or what?

    I do not believe it is a lack of understanding of where to start or what to do to make their case more compelling. This is the age of Wikinomics, Groundswell, We-Think, Here Comes Everybody. MIT has a Centre for Collective Intelligence. Obama, himself, is an object lesson in surfing the social media.

    My gut feel is that it is simply that – like anorexics trapped in a dysfunctional frame of reference – Simon and James just can’t see their way out of their rut.

    So, come on people. It is not good enough for Susan Hockfield to bemoan the need to downsize, If ever the world needed thought leadership it is now.

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