Tabloid Truths

The British press thrives on scandals of their citizen’s private lives, but is that really any worse than the force-feeding of opinions and other people’s politics that goes on in American papers? Bill Bonner explores…

We went over to our new club last night. Not that the place is new – it was founded hundreds of years ago. But we are new to it. A marvelous old gentlemen’s club, it is the sort of place that we like; the sort of place that wouldn’t normally let us in the door.

"Here is where Charles used to come with Diana," said one of the waiters, showing us a private room. Of course, the whole club is private. But that is what we like about the English; they keep things private.

We sat down in one of the reception rooms, richly furnished in red leather and green walls. At nearby tables Lords and Ladies, along with various parvenus like your editor, harrumphed and gurgled. We don’t know why but one of the particularities of the British upper class, after a certain age, is that they spend much more time clearing their throats. And there, on the table, were the day’s newspapers.

"Queen’s Guards in Porn Shame," said the full-page headline on yesterday’s SUN in London. "Troopers filmed in group sex," continued the piece, "…at a late-night orgy less than a mile from Buckingham Palace." It reminded us of what must have been one of journalism’s great moments. It happened only a few months ago, when a colorful member of the Prime Minister’s team, Boris Johnson, was accused of the usual hanky panky. The paper quoted the mistress in a huge, front-page headline: "Bonking Boris Made Me Pregnant!" You couldn’t do better than that.

But back to the SUN article. Next to the headline about the Queen’s guards was a photo of Queen Elizabeth II, herself, looking disappointed.

We turn the page for more details. There, on page 3, we get an eye-full. "Zoe, 23, from London," had taken her clothes off for SUN readers. And next to her, when we finally turn our tired eyes to it, "Camilla is upstaged by Deirdre," began another article. It turns out that Charles and Camilla have chose to wed on the very same day that Ken and Deirdre will tie the knot. We don’t know who Ken and Diedre are, but their marriage must interest SUN readers more than the vote in Iraq, or an increase in European interest rates, or an overhaul of Nato’s finances, or the political situation in Serbia, or the "growing power of blogs," or Gerhard Shroder’s lack of response to "America’s advances," or any other matters of high-minded humbug and Vital Public Interest presented in the same day’s International Herald Tribune.

British Tabloids: The International Herald Tribune

The French read fewer newspapers and watch less television than anyone else in Europe. That is to their credit. The frogs are protected by their own incompetence. The newspapers are too dull to read. Likewise, the television channels are too boring to watch. Maybe that is why the high-culture and decent manners hang on in France – while in American and England they have been practically exterminated by the popular media.

In America, the papers are as respectable and dull as those in France. The International Herald Tribune, published in Paris but American from the headline to the gutter, is relentlessly world improving. Every article stinks of activism. Hardly a one passes without inducing an earnest response. On the first page, the reader is supposed to be outraged by fresh violence in the Middle East (he makes no connect between the news headline and his own morbid fascination with it). On page two, he is supposed to be concerned about the way the Germans react to American foreign policy guff. On page three, it’s the Serbs that get out interest. Why we should be interested in the Serbs is not explained. And on page four, come the Saudis, with complaints about their own stumbling steps towards democracy.

And so on…and so on. The paper is relentless. We are supposed to be interested in the politics of every godforsaken republic and every cockamamie kingdom on the planet. There is even an article about Tog "We are ready to die for it," says on Togonian quoted in the paper. What they were willing to die for was, of course, the right to cast a ballot in a national election. Why a person would prefer to be dead than democratic is another of those mysteries that the gods keep to themselves…perhaps entertaining each other with them at teatime…each trying to outdo the other, prefacing his story with "you think that’s something…"

In a section entitled "International Education," a reader gets his hopes up. But even here, the paper takes such a high road; soon it is running out of oxygen.

"French reform plan battles school crisis," says a headline. An "alarming" number of students are dropping out of French public schools, it explains. What to do about it? "Reform," of course. In the pages of American newspapers, reform is an all-purpose word, used either as a verb or a noun, vaguely meaning: "even though the last great change we supported cost a fortune and probably made things worse, we have yet another plan…"

"This time we’re going to take more revolutionary measures," the IHT quotes an expert.

And the poor reader. What is he to think? Anyone who spent more than 10 minutes in a French public school knows why students drop out. The places are like American prisons, only not as well furnished. And the discipline is more severe.

British Tabloids: A Political Issue

But rather than give the reader a useful discussion of alternatives…or a titillating look at naked coeds, the International Herald Tribune treats the matter not as opportunity or entertainment, but as a political issue. The next thing you know, the reader has an opinion about it.

But the air really gets thin when we get to page 20. There, the headline begins: "What the world’s schools need…" The author doesn’t waste any time; he tells us directly. What the world’s schools really need is: him! Stephen Heyneman is a professor of "international education" at Vanderbilt. "Countries might benefit from having an outside perspective," he tells the world. What schools need is "…the view of professionals …who come from outside and have their disposal a significant offer of new incentives." What Mr. Heyneman is proposing is the creation of something such as a "World Bank for education," a new bureaucracy that would tell local teachers what to do.

"The outside group might agree to lend a school district the equivalent of up to 25 percent of its annual recurrent budget," he explains, getting down to business, "…enough resources to provide an incentive to make ‘non-marginal changes.’ Conditions of the loan might include the elimination of less-necessary programs, such as competitive school sports."

Just what schools need – more money and more meddling! How does Mr. Heyneman know which program are "less-necessary?" How does he know what would make schools better? How does he know what children should learn…or how it should be taught? How do the world-improvers know what is an improvement? How do they know what is evil and what is good? How can they tell sin from wickedness…good from bad…right from wrong? Of course, they cannot. They are just like the rest of us; they only know what they like.

What is nice about the British newspapers that give less space to world-improvement and more to private life. Indeed, the whole nation seems more focused on private life, which helps it preserve a feeling of decency and gentleness. It is a nation of trainspotters and small shops…and small, country lanes that wind their way around hills and vales. People still drive on the wrong side of the road, despite the fact that they are odds with nearly the entire world, and despite that fact that probably a few dozen American tourists get run over every year because they instinctively look in the wrong direction before crossing the street. The British have helpfully painted warnings at road crossings telling pedestrians which way to turn their heads. But drivers seem to speed up at intersections as if to even the odds.

In London, the roads go off at all angles and so do the Londoners. Every man has his own quirky opinions, but he rarely tries to force them on other people. Instead, he rants and raves to whomever will listen. His neighbors call him a "silly old bugger," and that is the end of it. In America, he’d be elected to Congress.

Even addresses in Britain are charmingly particular, rather than regular and digital. People live in towns with English names, but they are not the simple, direct, understandable names of American English. Instead, they are strange places with strange names that sound like English but have no English meaning, followed by postal codes that are combinations of numbers and letters according to a plan that baffles foreigners. One address might end in SW12. Another in OX3 7DE. And still another in SK23 7JH.

The English have no particular interest in philosophy or ‘isms’ or grand ideas. Instead, they collect stamps and catalogue mushrooms. It is the particular that interests them. The details of family life seem to fascinate them – especially when they are sordid. And an everyday concern for simple fair play and honest dealing still seems to motivate and outrage them.

Not that Britain is immune to public mindedness. But it does seem to enjoy a bit of resistance. Even the British Empire was acquired, not according to a plan of global domination and improvement, but often simply by expanding a private web of commercial contacts…and then sending the troops in to protect them. British explorers, were then followed by British merchants, who were trailed by British regiments and British civil servants…and soon, a quarter of the entire world map was pink, meaning it was part of the British Empire. Most of the pink places gained from it. The British built railways and schools and brought medicine and sensible administration. And then, when the colonial period was over…Britain took its leave from these foreign places as gracefully as it could…and many of them sank back into benighted savagery.

British Tabloids: Public Issues, Private Angles

Even when a public issue is in the news, the tabloids approach it from a private angle.

"Foxy J-Lo fuels the fur debate," begins a cover story in the Daily Mail. The mail continues its round-up of the news with a story on page three about a boy who accidentally locked himself in a suitcase. The frantic mother couldn’t open it, so she drilled holes to make sure he had air and drove to the nearest fire hall. Then, on page five is the story of a passport photo that was turned down by the Passport Office. The photo – of a baby lying in a bassinette – was sent back by officials who worried that the picture might be offensive to Muslims (the child was not wearing a shirt). So, the Mail reporters got on the phone with Muslim groups who confirmed what every reader was beginning to think: passport officials were dolts. That is what is up-lifting about the British press; it often shows public officials…celebrities…politicians…the rich…and even churchmen as the pretentious blockheads they often are.

On page seven, a fortune-hunting woman has hired the nation’s top divorce lawyers to try to squeeze more money out of her ex-husband…and even her ex-husband’s father. And on page nine, there is an amusing photo of a house that has collapsed. "Reduced to rubble after renovations go wrong," is the headline. We turn the page again and there is another strange story: "Teacher faces prison over her year-long fling with boy of 14."

Our favorite is over on page 33. "Couple spot the face of their dead pet in a log beside the fire," is the headline. Next to it is a photo of a piece of firewood with a pattern that could, vaguely, be said to resemble a Labrador’s face. "I’ve been offered money for the log but no amount will persuade me to part with it," said the dead dog lover, "But now Bess has come back to us in the most amazing way…and this time she’ll be staying right by our side forever."

Regards,

Bill Bonner
The Daily Reckoning
February 18. 2005 — Paris, France

Bill Bonner is the founder and editor of The Daily Reckoning. He is also the author, with Addison Wiggin, of The Wall Street Journal best seller Financial Reckoning Day: Surviving the Soft Depression of the 21st Century (John Wiley & Sons).

Every public spectacle begins with a bold lie…and ends in shame, regret and disaster.

Every world improver is a bold dissembler…and every crowd is a bunch of damned fools for listening to him.

The Medicare Drug Benefit program, enacted during Bush’s first term, was meant to cost $400 billion during its first 10 years. Turns out, the official estimates included 2004 and 2005, that is, two years before the program existed. The real 10-year cost of the program floated through this week’s news at $720 billion. Americans voted for their representatives in Congress and the White House…the politicians voted for the free drugs. Thus, it was the divine right of the majority – the brute power of the more to tell the few what to do – purified by the ballot box. The polite forms of democracy were respected. But the essential act was a sin and a crime. Why should some Americans get drugs at other Americans’ expense? Is it not larceny on the part of one and complicity on the part of the other? And how will those "others" pay for it; are they not already on the hook for $55 trillion in unfunded federal obligations?

But now the scam is the law of the land. And so we stumble along, as the great public spectacle develops from comedy, to farce to tragedy… with petty acts of tomfoolery and fraud.

George W. Bush wants to create an "ownership society." But is it a strange form of ownership. More and more houses are really owned by mortgage finance companies. Cars are owned by GMAC and other auto financers. People expect to retire on the equity locked up in their houses. But at any minute, a single word from Japanese or Chinese central bankers would whoosh across America like a tornado, knocking down real estate prices from Santa Monica to South Beach. And Social Security? A forensic accountant could pore over the books for 1,000 years and never find a trace of the cash supposed stashed away for Americans’ retirement. It doesn’t exist!

Bush says he wants to change that. He wants Americans to own their own retirement funds – with private accounts invested in stocks. The young have caught on to the scam. There is no way they can get a decent return on investment in Social Security; they want out. The old are alarmed; they’re afraid that the something for nothing they’ve grown to expect will turn out to be more nothing than something. And the Bush Administration wants votes from both groups. So, it does was dissemblers always do – it embraces the humbug…and smooches on more deceit.

Enjoy the show.

What the country needs most is what it most hasn’t got: The courage to face up to the lies…and take the consequences. Americans have to stop spending so much…and save. Businesses need to invest billions in new equipment and new training; otherwise, relative standards of living will fall. The government needs to admit that it can’t deliver what has been promised. And investors have to realize that they won’t get 10% per year….

Of course, it’s not likely that the public will suddenly go sane. Still, we can dream…

More news, from our team at The Rude Awakening:

———————

Eric Fry, reporting from Wall Street…

"Yesterday the Rude Awakening received a letter from a hedge fund manager. The letter outlined a trading strategy. It’s a trading strategy for oil, and there really isn’t any downside…"

———————

Bill Bonner, back in Paris…

*** "What is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom," wrote Adam Smith. We wonder about the contrary…what is folly in private conduct, is it is not folly for the great kingdom?

Volatility is at a 12-year low. People do not expect much movement in the stock market. They are not getting much. Investors are calm, bullish, and delusional. Nothing happens. And nothing is just fine.

Because while they are making nothing from their stocks – the market is no higher today than it was 6 years ago – they are getting rich in real estate. Seventy percent of Americans own their own houses. In round numbers, the average house is worth $200,000. And the average house goes up 10% per year. This gives the average household $20,000 more ‘wealth’ each year. What’s not to like?

In some areas, houses are going up five, six, even 10 times faster than consumer price inflation.

Wait, how could house prices be rising so fast and consumer price inflation so slowly? Isn’t housing the biggest single item in private expense accounts? Well, the statisticians who compile the figures take care to put into the CPI only items that people don’t like to see go up. More than two out of three houses are owned by their occupants, but who among them complains when house prices rise? The complainers are renters. So it is the rental figures that go into the CPI.

For the homeowner, the rise in house prices comes like free booze on an empty stomach. He puts the cup to his lip; in hardly any time, he’s a little giddy. The average homeowner thinks he has $20,000 more to spend. How is he supposed to know that the "wealth" is a figment of Alan Greenspan’s financial fiddle, and not the real thing?

Who can blame him for wanting to take advantage of a free drink?

Multiplied over millions of households, the alcohol eats away at the nation’s balance sheet as if it were liver. Every day, as Warren Buffett puts it, the nation spends 5% more than it earns. We are like a very wealthy family, he says, with a very big farm. We don’t earn the money we used to, so we keep mortgaging more and more of it to pay current expenses. In the end, we will still be a family, but we will not be wealthy.

*** James Boric may soon be working the deep fryer at Taco Bell…

"It’s amazing how little people know about the small-cap market. I’ve received five emails in the last two hours from co-workers hoping I don’t get canned. I guess they haven’t looked at the stocks I’ve discovered for them. One is sitting on billions of dollars in guaranteed revenues – and it’s trading for $3 a share. And the other one is getting ready to open 120 stores in China – where it will likely earn as much as $120 million in sales over the next three years. That’s more than double it total worldwide sales for all of last year.

"Sure, I can’t guarantee these stocks will rise. But they certainly have all the right ingredients to make small-cap investors a lot of money. I guess time will tell who’s right. But I expect to have a job this time next year!"

*** Pittsburgh correspondent Byron King, on mobile homes that sell for seven figures…

"You all comment so often on the soaring, inflating housing market of the U.S…."

"Buy a trailer home in California, on a site that happens to be near an ocean basin, and you will have all of the benefits of paying over one million dollars for a mobile home with the added joy of making monthly payments for the ground lease. Yep, that’s my idea of a goooood deal. Next thing, people will be buying condos in the towers of the Brooklyn Bridge. Manhattan view, of course…

*** Problems at Fannie Mae are inevitable, says Greenspan…

"Enabling these institutions to increase in size – and they will, once the crisis passes – we are placing the total financial system of the future at a substantial risk," he said yesterday. He must have touched a nerve. Immediately afterwards, A Freddie Mac spokesperson disagreed. "Our retained mortgage portfolio helps us fulfill our charter purposes of providing liquidity and stability to the U.S. residential mortgage market in good and bad economic times," she said.

The jury’s still out.

*** We could not be married to a world improver. The arguments would wear us out. So, we are married to a personal improver instead. Elizabeth is trying to improve your editor. Last night we went to the Opera at Chatelet, where we saw a performance of modern dance by the Lyon Ballet Company.

"What did you think," asked Elizabeth.

"Not bad. The music was awful and the dancing was boring. But it was fine; I needed the sleep."

"Oh stop being such a philistine. It was very fresh and innovative."

"I’m not a philistine. I don’t even know where Philistinia is. I’ve never been there. Actually, I was impressed by the part I saw. It reminded me of a guy who could fit four billiard balls in his mouth at one time."

"How so?"

"Well, it was one of the same sort of achievement. Something remarkable…but probably not worth doing."

"I give up…"