"(T)o say that the individual is culturally constituted has become a truism. . . . We assume, almost without question, that a self belongs to a specific cultural world much as it speaks a native language." James Clifford

Monday, August 29, 2011

In the Eye of the 24/7 News-Cycle: Profits & Attention-Seeking

For about a week toward the end of August 2011, the news networks in the U.S. seemed utterly captivated, or obsessed, with Hurricane “Irene,” which was running up the east coast from North Carolina to New England. The prognosis had been given as a fait accompli when the storm was just pulling out of the Bahamas. A rough convergence of the models was taken for certainty. If this obsessiveness sounds familiar, it may be because on virtually any major story, the 24-hour news networks have tended to crowd out other stories even when the marginal utility of the added coverage on the major story is very low. Editors go with filler on the major story rather than risk losing viewers by breaking away to cover the other news to a meaningful extent. Viewers who are not obsessed with the main story may view the networks as obsessed while the networks may view themselves as merely satisfying a growing obsession by viewers. In any case, the narrowness of coverage, as if a major story should crowd out other news, is problematic, for it ultimately leaves the American people less well informed than they would otherwise be of what is happening around them.
 
The constant coverage and hyperbole that typically accompany a major news story can whip some viewers into a frenzy of binge-watching, which doesn't hurt ratings. To be sure, some stories, such as the 2020 U.S. presidential election, contain their own built-in excitement. 

When the hurricane named Irene failed to strengthen after the Bahamas, little was made of it; reporters did not point out that the storm’s eyewall, which had collapsed, did not re-form out of a contracting outer wall. Instead, the media obsessed on where the storm would make landfall. According to James Franklin of the National Hurricane Center, “There were a lot of rain bands competing for the same energy. So when the eyewall collapsed, there were winds over a large area.”[1] Spread over a larger area, the winds were less intense. So what was predicted to be a Category 2 or possibly Category 3 storm at landfall in North Carolina was in fact a Category 1 storm. After North Carolina, the storm weakened even more rather than strengthening over the water east of Maryland and Delaware. The water was slightly cooler and the winds and drier area of another weather system kept the storm from strengthening. 

Even so, the media was reporting that the hurricane would reach New York City as a hurricane. No mention was made of the fact that the storm was downgraded to a tropical storm prior to reaching New York City. Instead, the media kept up the storyline of lower Manhattan being set to go underwater. Eventualities based on an assumed worst-case-scenario were played out ad nausea even after the storm had been downgraded from hurricane status! Not surprisingly, New Yorkers were underwhelmed and most of the rest of us might have wondered whether the five or six day marathon had been worthwhile.

To be sure, damage was in the billions of dollars (especially from flooding far from the coast). The storm was a Category 1 hurricane when it arrived in North Carolina and a large and very wet tropical storm when it headed from New Jersey to New York and into interior New England. Also, the hurricane had the potential early-on to be devastating to the major cities on the eastern seaboard. So getting the warning out, particularly to folks on North Carolina’s outer banks, was important. However, the overkill had its own costs, including the opportunity cost of foregone, neglected news. Other things were happening during that week in August 2011. At the very least, the American broadcast media suffered from tunnel vision, was slow in reacting to the diminished destructiveness of the storm and was partial in reporting the updated storm information as it came in.  The partiality was in line with perpetuating the rather dramatic worst-case-scenario. I contend that this did not happen by accident.

As if to vindicate all the attention devoted to the story and the catastrophic portant, at least one network showed water going over a reporter’s feet when the tropical storm was at New York City. After the storm, as the nonstop coverage astonishingly continued, one reporter was interviewed because at one point on a boardwalk she could see foam below the boards. So much for catastrophic. Along with the omission of data indicating the storm was weakening, the refusal to budge from the storyline of utter destructiveness points to something being up (i.e., even beyond acting on behalf of public officials in sounding the alarm).

It is as though the media were bound and determined to run through the storyline come hell or high water—even if there was neither. Better to keep on message than change course because the latter would imply that the original storyline had been wrong. In obsessing on the projected path of the storm, the media ignored data on the diminished strength. “(I)t was not surprising that the strength forecasts were off,” The New York Times observed. “The accuracy of such forecasts has hardly improved over the past several decades.”[2] In the wake of hurricane Irene, readers might have been thinking, now you tell us. However, it is not just overreliance on predictions; the media had an interest in ignoring the inherent inaccuracy.

The staff at the news networks might have wanted to take the limits of human knowledge to heart the next time a storm pops up in the Caribbean, and the rest of us might want to remember that it is in the self-interest of the media companies and their personalities to exaggerate the dramatic scenario and then pretend that they have done no such thing when things turn out differently. In other words, there is not apt to be a learning curve on this circulation of profits and attention around an eye of ego—this is one spin that can be predicted. The game is up, journalists, but whether anything can be done about your little scam is another story—one that no doubt will also be preempted by some pressing disaster that demands a monopoly of attention across the continent of North America and beyond.


1. Henry Fountain, “Hurricane Lost Steam as Experts Misjudged Structure and Next Move,” The New York Times, August 28, 2011. 
2. Ibid.

Thursday, August 18, 2011

Fraud at S&P: A Conflict of Interest

By the summer of 2011, the U.S. Government had brought relatively few cases against large financial institutions for their roles in the financial crisis of 2008. For instance, the government investigated Washington Mutual and Countrywide without taking any further action in spite of reports of “liars’ loans.” In the case of the three major ratings agencies, the business model “is riddled with conflicts of interest, since rating agencies might make their grades more positive to please their customers. Before the financial crisis,“banks shopped around to make sure rating agencies would award favorable ratings before agreeing to work with [one of the agencies].”[1] In spite of accounts of the agencies’ mixing of business and ratings, the Dodd-Frank law of 2010 retained the issuer-pays business model while putting the agencies on the same legal liability level as accounting firms. 


The full essay is at Institutional Conflicts of Interestavailable in print and as an ebook at Amazon.


1.  Louise Story, “Justice Inquiry Is Said to Focus on S&P Ratings,” The New York Times, August 18, 2011. 

Monday, August 15, 2011

Congressional Earmarks: A Personal Conflict of Interest

Congressman Darrell Issa (R-Calif.) runs his local district office down the hall from where he runs his businesses worth hundreds of millions of dollars. According to the New York Times, his “dual careers” evince a “meshing of public and private interests rarely seen in government.”[1] While advocating for business in Congress, he split his holding company into separate multibillion-dollar businesses, started an insurance company, and retained a financial interest in his automobile-alarm business. At least some of his actions in government have made him richer.[2] Most notably, he secured Congressional earmarks for road widening and other public works projects that runs his local district office down the hall from where he runs  that he owns in his district. For example, earmarks that he arranged made possible the widening of a busy road in front of a medical plaza that he bought for $10.3 million. To be sure, his constituents applaud the easing of traffic, but what if the money would otherwise have been spent to relieve more severe congestion elsewhere? Even if no worse instances existed, that the congressman’s constituents benefitted from the street-widening does not mean that his action was ethical.


The full essay is at Institutional Conflicts of Interestavailable in print and as an ebook at Amazon.


1. Eric Lichtblau, “Helping His District, andHimself,” New York Times, August 15, 2011.
2. Ibid.


Wednesday, August 3, 2011

The Debt-Ceiling Disaster Flick, Hollywood-Style

During the last two weeks of July 2011, the American media was focused on the debt-ceiling negotiations. In the midst of a summer with plenty of natural distractions, an increasing number of Americans were cluing in to find their federal government at a stalemate as the clock ticked to a possible economic catastrophe said to begin on 12:01am on August 3, 2011. The U.S. Treasury department had estimated that it would run out of ways to make up for the lack of additional borrowing authority on August 2nd.  To the media, that meant a clock ticking down to 12 midnight. In actuality, tax revenues were up so the actual date was said to be around August 10th. In any case, the U.S. would not implode at precisely 12:01am on August 3rd by any account, yet that made better drama, which in turn increased viewership.


The full essay is at "The Debt-Ceiling."