I submit that the entire edifice of MSM (mainstream media) from your daily newspaper (supposedly loaded with "liberal bias") to high-gloss Vanity Fair to propaganda-TV (CNBC and Fox) all suffer a fatal flaw: they are inherently reactive rather than forward-looking. They are all Masters of the Obvious, irrelevant to all outside their ideological tribe/audience.

Many moons ago I wrote here that when the bogus unemployment statistic (and its absurd "birth-death" model for boosting employment by hundreds of thousands of phantom jobs) is issued, an accurate newspaper headline would have to read, "Government invents jobs out of thin air; lies offered as facts."

Instead, the media in all its various flavors robotically ran the phony numbers as if they were fact. Any (rare) disclaimer or skepticism was placed dismissively in the last graph (paragraph in journalism-speak).

This inability or reluctance to state the truth boldly has rendered the MSM increasingly toothless and thus irrelevant. Where were the hard-hitting exposes of the "shadow banking system" three years ago, or even a year ago? Where were the editorials, not just one wimpy call but one after the other, pounding a "bought and paid for" Congress for decimating oversight of Fannie Mae and Freddie Mac?

The list of critical issues which were painfully obvious years ago but completely ignored by the MSM is nearly endless. And since so little editorial skepticism, analysis and commentary was available in the MSM, then we turned to the blogosphere for what was missing in the corporate MSM.

As a consumer of vast quantities of the MSM for decades, I can state as an informed opinion that the quality of MSM commentary (as measured by insights and cogent contextualizing offered) has sunk to nearly insight-free levels.

When parodies published in The Onion ("America's finest news source") consistently trump supposedly "fine journalism" for content, wit and insight, then the pathetic nature of the MSM is starkly revealed.

The inane rush of the MSM to cover "the new frugality" is so abject, so clueless, so reactive that it beggars parody, for it is an unintended parody of responsible journalism.

Here is the MSM's standard operating procedure distilled: studiously avoid covering or contextualizing any issue until it blows up in our faces; then cover it mawkishly, obsessively, and without any mention of the MSM's own failure to pursue what was so obviously a time bomb waiting to go off.

Even the occasional "deep insight" articles which do make it into the MSM are like Hail Mary passes tossed up with 10 seconds left in the fourth quarter (shameless football analogy). For instance, Harpers did run an insightful piece on the housing bubble and debt-serfs by Michael Hudson--but they ran it in mid-2006, as the bubble had peaked and the downside was already visible.

The new road to serfdom: An illustrated guide to the coming real estate collapse.

But by this late date the damage was already done, as millions of buyers had already swallowed the bubble euphoria whole by summer of 2006. Truly forward-looking journalism would have required the piece run in 2003 or 2004, when it could have made a difference. By summer 2006, it was like shouting "there's about to be a crash!" as the vehicle's wheels leave the curb and hurtle out over the cliff. A little late to save the occupants.

FWIW, my own skeptical commentary was published in 2003: Bay Area Real Estate: All Signs Point To A Top.

Which raises the question: what is the point of journalism? The easy answer is "report the news," but this superficial answer just raises further questions. What constitutes "the news"? "If it bleeds, it leads"? And how can sense be made of various "facts" without context? How can context be provided by journalists who either lack the knowledge required to frame that context or who are constrained by the commercial goals of the corporate entity which owns the media, i.e. to make profits off the sale of "the news" (whatever that is).

Like politicians who have learned that bluntly stating the truth loses elections, owners of media have learned that pablum and distraction ("bread and circuses") sells ads and garners eyeballs while hard-hitting skeptical journalism alienates advertisers and angers ideologue readers/viewers who want their own beliefs confirmed rather than questioned.

And so we have the usual ideological camps served by MSM which pander to their pre-conceived views (conservatives read The National Review and The Wall Street Journal, liberals read The New Yorker, Vanity Fair, The Atlantic, etc.) and a milquetoast "middlebrow" array of newspapers and other broadcast media which make a claim to represent "both sides."

But these "opposing voices" are so predictable and so bland and so insight-free that they are also parodies of independent thought. The liberal colummnists will trash Ms. Palin and deride the failing war in Afghanistan, the conservatives will trash Obama and talk up the surge in Iraq, blah blah blah. It's all utterly worthless because a simple algorithm could generate the text for any of these "commentators." No thinking required, either to generate the piece or read it.

Why is this so?

One subtle reason was proposed by my longtime friend G.F.B. who pointed to the need of journalists to keep their jobs in uncertain times. They've got bills to pay and that weight inevitably seeps into how hard they will fight and what they will risk (like getting laid off/fired) to get a story covered.

Another reason is that the supposedly impregnable "firewall" between advertising and editorial is actually quite porous, but always indirectly so. As a peon free-lance writer I have worked on the fringes of the MSM for almost two decades, and so I have a sense of what will "sell" and what won't.

A story on construction defects in a newspaper which depends heavily on real estate advertising and new home adverts will be a tough sell--not impossible, but you better have a legion of academic studies and experts, court records and the like to support any contention. And guess what: city officials will be loathe to discuss the liability issues with you, such as city inspectors' role in not catching the construction flaws. Their heads can roll, too, if the whole seamy story gets out.

So what's a "responsible" editor to do? If the whole construction defects story seems to be getting some national airplay, then the editor plays it safe by running a wire story off AP (Associated Press) or another service which safely locates "the problem" in some distant locale out of the local circulation area.

If the issue ever comes up in an editorial meeting, the editor can defend the paper's coverage by noting that the article ran.

A TV station might come across an irate new home buyer and decide to work it into the old "consumer protection" angle; their coverage will generally be limited to a superficial "little guy homeowner versus big bad homebuilder company" without really touching on the core issues of lax oversight and shoddy workmanship caused by inexperienced laborers.

In other words, in real life, journalists and editors can't afford to alienate advertisers too blatantly. Better to run a little story somewhere (public service interview at 4 a.m. or a brief article buried on page C-9) which provides a fig-leaf of "responsible journalism;" meanwhile, the front page or lead story is on the local feel-good parade or celebrity scandal or crime/shootings.

Even the most prestigious journals are suspect due to idelogical bias. The National Review is not going to run a long piece questioning the surge in Iraq, any more than The Atlantic would run a long piece supporting the surge. The "journalism" even at this level is of the "find evidence to support our ideologically derived views" type.

Some of the best remaining journalism is found in professional journals which cannot afford to have their relevance and credibility tarnished with "feel-good" fluff or slam-dunk ideological bias. For instance, the value of the Proceedings of the U.S. Naval Institute (on my stepfather's recommendation-- he was a career Air Force officer--I have subscribed for decades) lies explicitly in the magazine's publishing of critiques and clarion calls for various reforms within the Navy and the shipbuilding/Pentagon complex.

If the magazine ran fluff pieces about how hunky-dory everything was in the Navy, it would quickly forfeit its credibility within the Navy.

But in general, if you want to get a skeptical, cogently contextualized view of an issue, you have to go online and read blogs like Drug News and Health Blog by Dr. Douglas Bremner, an exceedingly rare voice of skepticism arrayed against the advertising and lobbying might of the multi-billion dollar pharmaceutical industry.

There is one other critical weakness in MSM journalism: the notion that the journalist/writer must sublimate his/her own voice and insights. Whatever the issue, the "responsible" editor requires the journalist to go get 3-5 quotes from industry or academic experts and another handful of quotes from "man/woman in the street" sources.

The journalistic obsession is not proper context or gutsy insight but confirming the accuracy of the quotes and sources. Sloppy journalism is indeed a bad thing, but the focus on accuracy of facts and quotes to the exclusion of the insight and synthesis which is unique to the journalist is a key failure in the MSM.

Why do you read Mish, or The Big Picture, or Calculated Risk or indeed, this very blog? Because the authority of the writer(s) is based on their distinctively skeptical, analytic voice. Each voice makes sense of what is presented in the MSM as "accurate facts" but which is painfully devoid of forward-looking thinking, experiential knowledge or appropriate context.

Virtually every article, story, clip or segment presented by the corporate MSM is "safe"-- safely conservative/liberal, safely limited to the "facts" (no matter how bogus the statistics might be, they are safely presented as fact), safely devoid of any troubling contextualizing or skepticism, safely free of any editorial "voice," outrage, demands, etc. and most importantly, safely free of any recognition of the limits of the MSM pablum passed off as "journalism".

Like union members, the MSM is not going to take down one of their own except as scripted theater for the consumption of the audience.

Good journalism is not limited to routine quotes and calling up the "usual suspects" of academic experts, but in asking "cui bono"--who benefits? and seeking to present a context which enables real insight rather than canning the same old tired ideological cliches for slumbering, apathetic audiences.

Lastly, the line between entertainment and journalism has blurred to stupification. Radio propagandist Rush Limbaugh explicitly identifies himself as an entertainer, and in this he is being entirely accurate. To some degree the same can be said of Michael Moore: he chooses an ideological stance and then goes out and finds sources which back that view, and then presents them (and himself) in an entertaining form.

The MSM has discovered that entertainment sells better than journalism, so it has enfeebled the voices of raw, skeptical independence for a smoothed-down pablum of "safe" "facts," "safe" (pre-packaged ideologically approved) ideas and ersatz (insight-free) commentary.

The dichotomies and paradoxes can be mind-bending and/or amusing. In the front section of a recent San Francisco Chronicle, one of the nation's top 12 major newspapers, the lead stories were: gay marriage, Sarah Palin's "army" of supporters, Yahoo cuts 10% of its payroll and a huge banner on the sports section's coverage of the S.F. 49er football team's latest coach change.

Would you detect the global financial system and the U.S. consumer are both in trouble from this coverage? Hmm, let's look at the adverts: a two-page center spread for Macys (shop until you drop, then get up and do it again!) and a backpage ad for Macys, a full-page ad for a real estate seminar (make millions as the housing bubble bursts) and another full-page ad for a stock market seminar which will teach you to make millions as global markets fall.

Is there any possible friction between these ads and coverage on the collapse of consumer spending, global stock markets and housing?

I propose this theorem of media relevancy: the safer the faux "journalism" being presented, the less relevant the contents will be to the real world and those of us struggling to make sense of it.

If any pundit or academic seeks the causal conditions behind the decline in newspaper readership and the decline of the MSM's credibility as a "news" source, they might start with this correlation.

Are blogs free of ideological bias? Of course not; you can select to read what confirms your beliefs quite easily. But if an honest attempt is being made to present a view which runs counter to the MSM or mainstream perspective, it's generally pretty obvious. That is precisely what's lacking in the MSM--any self-awareness of its many limitations and biases.

Reader Comments:

Don E.

Good expo on commercial credit/paper and its usually venerable history. i did feel you left us with the idea that personal credit was something new, perhaps an invention of the 20th century, but it seems to me that personal credit has roots as old as commercial credit.

consider the viking system of thrall, the feudal serf, the sharecropper and the company store system. were not all a form of personal credit inasmuch as the high lord/owner issued the means of subsistence to a commoner in return for a hefty cut of his future production. whereas this was in earlier times probably limited to basic subsistence items, seed and livestock, the range of goods available was certainly expanded by the company store system. if the 20th century offered anything to the idea of perpetual debt-slavery it was simply a huge expansion of how the commoner might more easily achieve this end, and finally to achieve it without even quite realizing that visa and mastercard had endchained as surely as the lord in the manor. nothing is new.

Jon H.

Your article on two types of credit made lots of sense. However, you seemed to miss another type: bank lending for non-productive trades.

When a merchant needs credit to buy goods or deal with international trade, he uses credit productively. In a sense, so does a consumer when he buys a house or car. A tangible asset is acquired and supposedly paid for over time with interest.

Both types help the movement of goods and services and are part of the commerce that is the mainstay of the economy.

However, when banks lend to anyone for the purpose of making bets on movement of interest rates, etc., it serves no commercial purpose. It is not the same as a commodity transaction where the investor is helping the farmer and the baker hedge against the cost of wheat. The world would function just fine (and right now considerably better) if there were none of this non-productive financing of intangibles.

So, boo-hoo if the banks won't lend to each other because they cannot trust each other. The point of lending is to benefit economic endeavors. Derivatives, CDOs and other paper junk are not commerce nor economic endeavors, only gambling. What bank would knowingly lend me money to go on a gambling junket to Vegas?

One other non-productive area of credit that fits the bank's lending to one another is the carry trade. What sense does it make to borrow money in one country to invest in another and make a profit from the difference in currency values? It only gives jobs to currency traders and hedge fund operators. Speculating and gambling are not fundamental economic necessities and should not be financed by taxpayer bailouts!

Subuddh P.

I am a regular reader (will contribute soon) and love your articles. However I did want to gently point out that the internet is not free. . Just think of the amount of power is required to keep the internet on 24/7. Also how many physical resources are required (with need for constant update and renewal) to keep it running? How much highly toxic trash is created? The internet sits on top of the industrial revolution, it could not exist without it. It is perhaps the most costliest invention of the scientific revolution. And even speaking of things that are available for free, say google search, how is google is able to provide this free service? By advertisement for all the products made to meet those manufactured needs you talk about.

The local life you suggest, with local communities, thrift and self reliance that has minimal impact to the environment is possible but it cannot be with the internet. Your life would truly be local. Communities like the Amish and the Mennonites or say the Indians before the Europeans came would be good examples. It could be argued that this is better, but thats what it would be.

"This guy is THE leading visionary on reality. He routinely discusses things which no one else has talked about, yet, turn out to be quite relevant months later."
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