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Media Disconnect   (April 24, 2007)

What are the odds of you seeing an honest headline like these in a major U.S. publication:

Real Inflation 7.5% a year, Phony "Core" Rate 2.5%


Gov't Beancounters Create 80,000 Phantom "Jobs" Last Month


Analyst: Stats Guarantee Recession in '07

The odds of blunt honesty in a major media outlet are near zero.

As newspapers shrink in readership and viewers leave network television in droves, the media is desperate for ways to stem the losses. One heavily hyped idea in the print media (newspapers) is to focus on "local coverage" which is unavailable on the Web. Another heavily hyped "solution" is to focus on "new media" such as the newspapers' free websites and podcasts as a way of building Web ad revenue.

But what virtually no one identifies as the problem is lack of credibility. Maybe young people are abandoning newspapers because they think YouTube and Yahoo are "news." Perhaps--or maybe the idea of paying $200 a year for a "delivered daily" hard-copy newspaper doesn't seem worth it.

Or perhaps the reality is much uglier: the major media can no longer be trusted as a source of non-corporatized, non-government-massaged information. As a free-lance contributor to major media (newspapers) for 20 years, I am far from the centers of decision-making within the industry; nonetheless, I retain a feel for the tenor of what editors are seeking and pick up various signals on the issues and directions being explored.

As a reader, I routinely read a variety of newspapers, including The Wall Street Journal and other "top 10" U.S. newspapers, as well as The Economist, Atlantic Monthly, The New Republic, Foreign Affairs, Scientific American, National Geographic, Proceedings of the U.S. Naval Institute, BusinessWeek, Smithsonian and MAD. (Hey, I spend a lot of time with teenagers.)

What I am picking up is full-blown panic. The advent of free online classified sites like craigslist has gutted what was once the mainstay of print media advertising. Now the print media is rushing into the online "new media" world, hoping to build an audience large enough and stable enough to support charging high rates for Web ads.

Here is a typical story (from The Wall Street Journal, subscription required) Papers' Web Hopes Dim a Bit; Ad Growth Online Slows as Sources For News Burgeon:

One major issue for many newspapers online: Roughly 70% to 80% of their online revenue is tied to a classified ad sold in the print edition -- known as an "upsell," says Paul Ginocchio, a newspaper analyst at Deutsche Bank. And as newspapers see a sharp erosion in classified advertising for real estate and jobs, their Web sites are being hit as well.

Underlining this pressure is a shift under way within Internet advertising. The ad formats that have so far proved strongest for newspapers -- banner ads, pop-ups and listings -- are losing ground to formats such as search marketing. Ad buyers say automotive, entertainment, financial-services and travel companies -- all major newspaper advertisers in print and online -- are aggressively shifting dollars into search marketing.
What I am not picking up is any sense that the media grasps that it has become little more than shills for government spinmeisters and corporate interests. In case you don't follow these things: the major media (print, radio and broadcast TV) is mostly owned by a handful of global corporations. With Google buying YouTube and Doubleclick, the same sort of aggregation of power is also occurring online.

Old Media comglomerates are buying flash-in-the-pan sites like MySpace for billions, desperately trying to extend their dominance online. Old-line newspapers like The New York Times are being pressured to generate more profit, or be sold off. The Los Angeles Times is on the sales block--not profitable enough!--and entertainment billionaire David Geffen is a likely buyer.

In other words: it's all about the money. The traditional media gets very defensive when accused of blurring the line between advertisers and marketing and the "content" or "editorial" news desks; but just because marketing doesn't choose the stories doesn't mean they aren't running the paper.

Here's how it works. Corporate (i.e. top management) sends down word that revenues are sinking and "we need to do more online and more local news." So editorial resources (i.e. journalists, photographers and editors) are assigned or told to generate "soft news" fluff like movie review podcasts, features on local fashion designers, and "man on the street" coverage about neighborhoods.

Nice, but did anyone notice that the nation is at war, the economy has been propped on a teetering volcano of debt which is about to explode and that justice is routinely being subverted at the highest levels of our government?

Maybe "corporate" isn't noticing, but readers are, and that explains why websites like Financial Sense, Prudent Bear, Minyanville and many others are attracting readers hungry for the truth or at least a skeptical view of the official cheerleading treacle reprinted and broadcast as "fact" by the major media.

With the paper's (or magazine's or network's) resources thus siphoned off to cover fluff, then there are few if any resources left to cover stories which go to the heart of the rot weakening the nation.

There are occasional hard-hitting stories coming out of those media outlets which still maintain investigative staff, and sites like patrick.net helpfully aggregate this "real news" from the cheerleading garbage reprinted/broadcast by second-tier media.

But I invite you to analyze the story placement of major media. Where did the piece on subversion of justice by the Imperial Branch--oops, I mean the Executive Branch-- appear? On page A-6? Were skeptics' views quoted in order to be shot down by "experts"? Was there any graphic or photo accompanying the story, or was it buried and made "dry" with a boring headline and back-page placement?

This kind of weak, subtly biased coverage allows the paper (or broadcast outlet) to say they're really covering this topic hard, but a close look reveals they've softened it to the point of forgotten mush via subtle cues of placement, headlines, art and editorial bias in the selection of "experts" and framing of the context.

I also invite you to add up column inches or online screen space given over to celebrities, fashion, popular music, food/diet, travel, wine, luxury goods and sports and that devoted to actual reportage (i.e. not wire service reprints).

There was a time in recent history when the nation was slipping into crisis and the media dropped the ball: the Vietnam era. Nowadays, you tend to hear about the blunt coverage of Vietnam by Walter Cronkite and the heroic Watergate investigations of Woodward and Bernstein. But what's forgotten is the soggy cheerleading that typified most of the coverage.

This is not partisan politics. The Democratic Party held Executive Branch power from 1961 - 1968, and that's when the lying, prevarication and obfuscation of reality by governemnt agencies became the norm (along with domestic spying and manipulation of "justice"). The Republicans held Executive power from 1968 - 1976, and were by and large delighted to build on the lies and misrepresentation which characterized the Johnson administration's handling of Vietnam.

Many of the distortions still being deployed (like the phony "core rate" of inflation) were created in this time frame, for the express reason they are deployed today: to con/lull the public into acquiescence.

The book I recommended last week, Reminiscences of a Stock Operator , ends with an explanation of why the media rushes to reassure the public that everything is hunky-dory with the economy and the stock market.

When the markets are sound and rising, insiders are buying and saying nothing. Why drive the price up before you've bought cheap? But as the economy weakens and stocks, real estate and bonds are set to roll over and decline, then insiders need to convince the public to keep buying so they can unload their assets at top prices.

Have you noticed the shrill ubiquity of "reassurance" lately? Everyone from Ben Bernanke down to your local real estate board is issuing daily, if not hourly, reassurances that the economy is fine, housing is fine, stock markets are fine, bonds are fine, and really, everything is fine--just keep buying!

This proves the exact opposite is true: things are not fine, and all asset classes are set to collapse once insiders and those in the know have sold.

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copyright © 2007 Charles Hugh Smith. All rights reserved in all media.

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