The Major League

“There’s Adam Clymer, a major league a**hole with the New York Times.”

George W. BushIn the early days of the century…before everyone seemed to go daft…journalists were different. Reporting was a lowly craft, practiced by disreputable, untrained people who drank too much.

Of course, reporters had bad qualities too. Many were illiterate and a few were simply insane. But it didn’t matter too much, as people didn’t take very seriously what they wrote anyway.

But since then, reporting the news has gotten its own ‘ism’ – as in journalism – and the trade has gone immeasurably downhill.

Instead of reporting what they see and hear, they aim to contribute to one of the great popular sensations of the day. Perhaps they are revealing to the world the horrors of the modern rag trade – with its sweatshop labor in Malaysia and Thailand. Or, maybe they are uncovering the evil of ‘red-lining’ by lending institutions, who hope to reduce their losses by staying away from areas where they are most likely to end up with a bad debt. And every reporter on the campaign bus hopes that he will one day make it into the major leagues of journalism – and have his name on the Pulitzer roster next to Woodward and Bernstein, for bringing down an unpopular leader with the power of a laptop computer.

Whatever they are covering, they try to work their stories so they amplify whatever popular hysteria is most appealing. Had there been modern journalists on the beat at the time of the Salem witch trials, for example, you can bet that the Pulitzer hounds would have outdone each other to uncover every lurid detail of the charges. Would evidence of the alleged witches’ misdeeds have figured in the reports? Of course not. There was none…and there is no power, no glory in stifling a popular sensation.

During the 1980s, a similar sensation swept through America: the mass and grotesque abuse of children at day care centers. Reporters jumped on the story like a Congressman on a defense contract, each one hoping that this would be his big break with the Pulitzer committee. The charges were trumpeted in huge bold-faced type…and on the evening news…in the nations’ various yellow rags and news-entertainment shows.

Then, the public prosecutors – spotting an opportunity for their own 15 minutes of fame – leaped onto the case. Janet Reno, conspicuously, presided over one of the most sensational prosecutions in the nation.

And had not the day care centers been such penny ante enterprises, the tort lawyers also would have shown up.

But it was all hooey – as Dorothy Rabinowitz has chronicled in the Wall Street Journal. Anyone with half a wit could have seen it was rubbish – just by looking. The testimony was generally extracted from pre-schoolers by quack psychologists. Since the toddlers were asked to participate in fantasy – they didn’t know where to stop. So they provided prosecutors with incredible stories – of subterranean rooms, monsters, and sexual violations which were physically impossible.

It was nonsense. But popular sensations have a mind of their own. The prosecutors and juries went along with the hysteria…and reporters amplified it with more charges …new revelations…and confirmation from various charlatan ‘experts’ and public officials.

The whole spectacle was sordid. Only many years later – after reporters and prosecutors had moved to more powerful positions – were the convictions quietly over- turned and the innocent people, one by one, lamely and pathetically, allowed to take up their own lives.

A reporter’s career goal today is make it into the elite corps that trails along with presidential candidates. Better yet, perhaps he can get onto the editorial page – where he no longer has to distort the facts to fit his sensationalist agenda, but can opine directly on them.

In today’s International Herald Tribune, for example, Flora Lewis tells us that “US Military Policy Ought to be Getting an Airing.” Ms. Lewis seems to have some opinions on missile treaties, the readiness of U.S. troops and so forth – which she wants to share. And she seems to think that strategic planning “should be put before the public.”

The public, of course, has no more idea of strategic military planning than Flora Lewis does. But the motivation behind the editorial piece is not to improve the security of the U.S. – but to make military policy a matter of crowd thinking and popular sensation.

Likewise, Richard Cohen, tries for a purchase on the same issue. “Is the U.S. Too Timid to Use Its Forces?”, he asks. The headline is senseless. No one doubts that the U.S. would use its forces if it were attacked. What Mr. Cohen is really encouraging is the sensationalism of foreign military intervention. “Bring in Radovan Karadzic,” he says, coining a catchy phrase, “dead or alive.”

He points to Britain’s smooth handling of the ‘West Side Boys’ in Sierra Leone and notes that “The West Side Boys, and other outfits, are much less likely to mess with Britain again.”

Gee, if dealing with gun-toters, assassins and kidnappers were so easy, how come Britain has been bogged down in Northern Ireland for a quarter of a century? But you’re not supposed to examine the details of these editorials closely. This is mob thinking…intended to feed a popular sensation…not intended to be worthy of real thought. Entire nations are transformed into the cartoon characters of professional wrestling – the good, the bad, and the ugly. We are supposed to root for the good guys, turn over half our earnings so it can used for various mob-causes…and never count the cost. Casualties? “We Americans,” says the Washington Post writer beyond the draft age, generously, “take casualties all the time.”

Cohen is the worst kind of editorial writer. Glib. Foolish. A jingo-monger without a mirror, incapable of noticing how ridiculous he appears. But Richard Reeves, over in the far right-hand column, is more clever. He watches himself.

Reeves reports on Bill Clinton’s attitude toward the press as relayed by his former press secretary, Dee Dee Myers.

“I’ve heard him talk about it,” she said. “He was out there taking the risks, putting his a** on the line, trying to make the world a better place…”

(I am relieved to discover that at least our president, or Dee Dee Myers has a sense of humor.)

“And they (the press),” Ms. Myers continues, reporting the president’s thoughts, “were sitting on the sidelines taking potshots…”

But Reeves defends the press corps with at least as much hilarity as Clinton defends himself:

“That’s the way it should be,” he writes. “We’re there to shout if the emperor has no clothes.”

Shout? Spotting an emperor with no clothes, the typical journalist is more likely to bend over and kiss his bare a**.

Your reporter, just telling you what I see and hear,

Bill Bonner

Paris, France September 15, 2000

P.S. What effect has the press corps…and the new worldwide Solomon’s Porch of the Internet…had on the biggest popular sensations of our time – the dollar and equities? I’ll take up those issues next week. Enjoy your weekend.

*** More beating on the hull yesterday. The Big Techs are still alive…pleading for the oxygen of investment cash.

*** The Nasdaq rose 19 points. Juniper banged up $9, but when the day was over even it had become faint – ending up just 25 cents. Cisco went down. Microsoft fell $2.50. Intel fell below $60.

*** Microsoft’s price puts it once again below the strike price for options handed out a few months before. Will the capitalists be exploited once more…while the workers’ options are again re-priced? We will see.

*** While the Nasdaq managed a small gain, the Dow sank further, down 94 points. Why? Well, who knows… McDonalds stock fell $1.50 – to its lowest level in 2 years. The brand names – Colgate, P&G, and McDonalds – are major global enterprises. They suffer from a high dollar. It makes it hard to export, and revenue from overseas operations goes down…while dollar-based costs increase.

*** One of the big costs is oil – which has tripled from its low of less than 24 moths ago. Crude held above $34 yesterday.

*** The Producer Price Index appeared yesterday – showing that wholesale prices were under control…at least if you ignore the price of oil and food. Take out inflation, in other words, and prices don’t appear to be rising.

*** “The prospects of a soft landing for the U.S. economy strengthened,” said the Financial Times, “with publication of figures showing a fall in wholesale prices and a moderation in consumer demand.”

*** The decline in consumer demand, as Dr. Richebacher has pointed out, is a result of the stagnant ‘wealth effect.’ Both the Dow and the Nasdaq are down for the year. People are not feeling much wealthier this year – and beginning…barely…to cut back on spending. The trade deficit, just to remind you, for the first 6 months of this year is as great as for all of 1998.

*** The CPI comes out today. If it, too, albeit thanks to the magic fingers of BLS statisticians, shows a moderation in inflation… “the next rate move might be downward,” according to the FT.

*** The bond market is not happy about something. Yesterday, the European Central Bank intervened on behalf of the euro. It was emphatic about not intervening. And still claims that it did not. Yet, perhaps on a Wim, it bought $2 billion worth of euros.

*** So, the euro rose slightly against the dollar. And I can’t help but wonder if this might be the ‘tipping point’ for the greenback. The Danes are supposed to vote next week on joining the euro-bloc. The odds are only 50/50 that they will go along. Either way, the news could have a big effect on the struggling currency. But sooner or later, something is going to push the dollar into a downtrend against the euro.

*** You’ll recall I reported earlier this week, that Kevin Klombies had predicted the ECB would make a move within 5 trading days. Well, he was right. Although “the 2.2 billion ‘drop in the bucket’,” says Kevin “is certainly not an intervention…it draws the line in the sand for the market.”

*** Long bonds fell $1.25 per $1,000 of face value yesterday. Higher oil prices…perhaps a topping out of the dollar…bond investors are worried.

*** This might be a good time for worrying. Mr. Bear is capable of doing a lot of damage in a short period of time, if he set his mind to it. And his summer vacation is over.

*** “Corporate debt has reached a record 46% of GDP… and for the first time ever total consumer liabilities exceed annual disposable income.” says Strategic Investment’s David Tice. And “while… businesses have been piling on debt, banks have been ratcheting up risk in their loan portfolios. So-called ‘leveraged lending’ now represents more than a third of the…loan market, up from just 7.2% in 1993. Leveraged lending – loans that are below investment grade – has grown from $20 billion in 1993 to $391 billion last year.” By comparison the Fed puts the total banking industry at a trillion dollars. Chase will head south, merger or no.

*** “Fuel is starting to flow again…” the FT reports, “as UK counts cost of crisis.” New Economy or not, Britain proved surprisingly vulnerable to an interruption in the energy supply chain. A report from the scene, thanks to William Fleckenstein:

“It’s all dry and NO GAS here…No taxis in London…a strange sight. I went out in my “Black Limo” mini Morris (40 mpg) this morning and it’s all gone… The M25 and all other roads were like that scene with Charlton Heston in “Omega Man” where he was the last man alive. I was that man!!! The shops are now running out of food…I’ve never seen anything like it…As I speak, it’s just been announced that the Army, Navy and Royal Air Force are to be mobilized to deliver emergency fuel to the hospitals.”

*** And on the west side of the Atlantic, Bush and Gore have agreed to bore the public by throwing slogans and jingoes at each other in debate format. Wouldn’t it be much better if they faced off in an Ultimate Fighting Championship…armed with the weapons of their choice? It would be so much more entertaining. And the winner wouldn’t have to be determined by checking a poll…but merely by checking a pulse.

*** Seriously, though admittedly gratuitously, it would be so much better to choose Congress by lottery. It would be much more representative of the public…and no one would have a career or financial conflict of interest. No campaigns. No campaign contributions. And no annoying elections.

*** Then, let Congress elect a president. And don’t even bother to tell us. The best president will be anonymous …like the President of Switzerland…whose name we do not know…nor do we care.

*** Yesterday, after receiving a sentence of 3 months in prison for blowing up a McDonald’s, a sheep farmer from the Larzac region in Southwest France “vowed to continue his fight against globalization and what he views as bad food.”

The Daily Reckoning