Felix Salmon

Rattner’s rabbi

Felix Salmon
Dec 8, 2010 18:21 UTC

At the bottom of the NYT‘s long and fascinating account of the feud between Andrew Cuomo and Steve Rattner, there’s a startling kicker:

After earning millions from managing Mr. Bloomberg’s fortune, Mr. Rattner now advises the billionaire mayor without pay, as the terms of his S.E.C. settlement require, reducing a onetime Wall Street titan to a volunteer.

This is news, I think, and fascinating, to boot. In its press release, the SEC said only that Rattner had “consented to the entry of a Commission order that will bar him from associating with any investment adviser or broker-dealer with the right to reapply after two years”; when Dan Primack called Bloomberg for comment, he was told that “Mr Rattner is a friend whose advice the Mayor has and will continue to rely on.”

Why is Rattner working without pay for Bloomberg? A few possibilities present themselves:

  • Bloomberg is somehow paying Rattner under the table, or in kind, or with some kind of nod-and-a-wink understanding that Rattner will somehow be able to invoice for services rendered at some point in the future, a bit like Mike Milken managing to charge $50 million in M&A advisory fees even after he was barred from the securities industry for life.
  • Rattner is hopeful that he’ll be able to charge for his investment-advisory services once he’s able to reapply in two years; obviously it’s worth staying in charge of Bloomberg’s multi-billion-dollar portfolio for a couple of years unpaid if you get to start charging for managing it in the foreseeable future.
  • Rattner loves the idea that he’s found a loophole in the SEC agreement he made, and can continue to manage Bloomberg’s money for him even though it would seem that the SEC agreement prevented him from doing that.

I suspect that the real reason, though, is hinted at a bit earlier in the NYT story, when it says that Bloomberg is Rattner’s “most coveted and prestigious client,” and that Rattner’s relationship with the mayor “has conferred credibility and stature on Mr. Rattner despite the legal pall that hangs over him.” Rattner needs a rabbi to protect him, and Bloomberg is the best possible rabbi he could have, with the possible exception of Barack Obama himself.

Earlier in the piece, there’s this:

The attorney general was known to be especially galled that in February 2009, in the midst of the investigation, Mr. Rattner had accepted the high-level post in the White House, overseeing a task force reorganizing the American automobile industry, and later announced he would write a book about the experience.

Cuomo clearly thinks that Rattner was hoping to protect himself with Obama’s coattails, and generally bolster his reputation as much as possible through public service. When that didn’t work, Rattner turned from Obama to Bloomberg for protection. I wonder how much that’s worth to him—how much Rattner would be prepared to pay in order to retain his connection to Bloomberg.


“When that didn’t work, Rattner turned from Obama to Bloomberg for protection.”

Rattner had been close to Bloomberg for many years before he went to work for Obama, and Rattner’s former firm was already managing Bloomberg’s money before Rattner became the auto czar. So it is far from accurate to say that Rattner “turned from Obama to Bloomberg for protection.”

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Quantifying the second stimulus

Felix Salmon
Dec 8, 2010 15:01 UTC

Michael Linden and Michael Ettlinger have a good overview of the cost in dollars of the tax-cut compromise, and its benefit when it comes to employment numbers:


David Leonhardt then boils their numbers down even further:

Of its estimated $900 billion-plus cost over two years, roughly $120 billion covers the high-end tax cuts and the estate tax cut, $450 billion covers Mr. Obama’s wish list and $360 billion covers the tax cut extensions both parties favored.

Both in terms of dollars and in terms of jobs, then, this deal is heavily weighted towards progressive options. Yes, the tax cuts for the rich are expensive, at $60 billion a year. But the payroll cut as proposed will cost $120 billion a year, and it does look as though the Obama administration has found its second stimulus.

As Catherine Rampell reports, cutting taxes is almost never the first-best form of stimulus. But it’s the only form of stimulus which is politically feasible—and what’s more, there are diminishing marginal returns to extra spending-related stimulus, in terms of jobs created, since the first stimulus more than covered the low-hanging fruit.

Incidentally, Leonhardt disagrees with my take on payroll-tax cuts. I reckon it makes perfect sense to give them to employees rather than employers, but he says no:

The ideal package would have been larger than the current one, and it would have been better tailored. The $120 billion cut in the payroll tax, for example, will apply to the portion paid by workers, not companies. The Congressional Budget Office and other analysts have said that cutting the workers’ portion provides less bang for the buck because individuals are likely to save some portion of the money. Cutting the employers’ portion subsidizes hiring.

But politics prevented the best kind of payroll tax cut. Republicans did not want one larger than the $120 billion, one-year cut in the package. Administration officials wanted the political benefit of having that whole sum apply to individual workers. The resulting compromise will help the economy, but not as much as it could have.

John Carney made a similar point yesterday:

Temporary tax relief tends not to increase consumer spending by very much. What’s more, tax relief that comes in the form of a temporary payroll tax cut is even less likely to stimulate spending.

Carney has a certain amount of academic literature on his side, especially a recent paper based on a poll of consumers, asking them how much of any tax cut they would save rather than spend.

Here’s the more detailed testimony of CBO director Douglas Elmendorf. He calculates that reducing employers’ payroll taxes would increase GDP by between 40 cents and $1.20 for every dollar spent, while reducing employees’ payroll taxes would boost GDP by somewhere between 30 cents and 90 cents. On the jobs front, every million dollars spent on the employer side would create between 5 and 13 jobs in the first year; if the cuts were applied to employees, the range is between 3 and 9 jobs.

Elmendorf writes that reducing employees’ payroll taxes “would have effects similar to those of reducing other taxes for those workers”; he doesn’t go into any detail about the behavioral economics of quietly reducing withholding versus sending out splashy rebate checks.

So, let me apologize to Greg Mankiw for calling him disingenuous yesterday: there’s clearly much more of a consensus here than I thought.

I’m not yet persuaded that employer-side tax cuts are better: I still think that for three main reasons, employee-side cuts make sense right now. The experience of the last cuts shows how invisible they are and therefore how likely they are to be spent; the size of corporate cash piles shows how unwilling companies are to reinvest extra temporary cashflow; and in general employers are richer than employees, so giving the tax cut to them seems regressive. But it’s clearly credible and intellectually honest to believe otherwise.

That said, I love Elmendorf’s idea of cutting employer-side payroll taxes only for those employers who increase their payrolls. That policy would surely have a very large bang-to-buck ratio.


Wasn’t sure where to add this , but this is an example of what happens to stimulus money that is given to a business … it uses it for anything but jobs unless you impose some mandatory conditions …

http://workinprogress.firedoglake.com/20 11/01/19/union-members-disrupt-mortgage- banksters-meeting-in-dc-video

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Felix Salmon
Dec 8, 2010 05:49 UTC

Looking forward to seeing the video of the Mike Lazaridis interview at AllThingsD. I love trainwrecks — AllThingsD

Kid Dynamite clears up the unemployment confusion. If you’ve been out of work for 99 weeks, there’s no new UI for you — KD

“Looking at American politics from a 100,000-foot level, conservatives have won” — MoJo

Design analysis of why Google Maps is so much better than Bing and Yahoo — 41Latitude

Excellent skepticism from Carl Zimmer on bugs eating arsenic. I wish he’d been harsher on Science, though — Slate

Why banks don’t write in English

Felix Salmon
Dec 8, 2010 05:46 UTC

This is why I can’t wait for the arrival of BankSimple, or at the very least for some kind of concerted effort to require banks to communicate in English. It’s a letter I just got in the mail from Citi:

Scan 7.jpeg

Why do banks tell their customers to read such stuff carefully, when it’s incomprehensible no matter how carefully you read it? For one thing, it makes no sense unless you’ve retained your Checking Plus (variable rate) Account Agreement and Disclosure, and nobody does that. (Incidentally, the Agreement and Disclosure is not available online: I looked.)

So in a fit of masochistic perversity, I decided to do what I was told, and call Customer Service to ask them what on earth this notice meant. It took a while to get a human, of course: I had to type in my social security number, and then my PIN, and then my ATM card number, and then another PIN, which was apparently wrong, and then my mother’s maiden name, and then the last four digits of the social security number I typed in at the beginning. At which point I was told that “at this time we are experiencing heavy call volume” (it was 11pm), before Ricky answered the phone and asked for my ATM card number (again), and my date of birth, and the last four digits of my social security number (for the third time), and for the date of letter. Then, finally, he put me on hold.

Eventually, Ricky came back to tell me that he was talking to his colleague but that he’d worked out that “you have a change in the rate that the account is set at”. He went away again, came back, said “All right sir, you still with me?” — and then we were disconnected, 16 minutes into the call.

Naturally, since I am clinically insane, I called back. ATM card number, mother’s maiden name, 0 for operator, 1 for questions about accounts, 1 again, “all of our associates are currently servicing other clients, and we are experiencing long call delays”, “thank you for holding”, and finally I get James. Who actually answers my question!

“All the letter is letting you know,” James told me, “is that previously, if the prime rate would change during a cycle, your interest rate would change during that cycle and we would backdate it to the whole cycle. Now, whatever the prime rate is on the first business day of the month, that rate will stay in effect the whole month.”

A simple explanation, in plain English, from someone who clearly understood what he was saying, and who could explain it a few different ways if I didn’t understand it the first time.

Citibank clearly employs people with brains, even to answer phones at 11pm on a Tuesday night. So how come it’s apparently beyond their abilities to write letters in plain English in the first place? I didn’t ask James that, but he volunteered the information anyway: “Everybody’s getting one of these,” he said. “It took us quite a long time to get an explanation of what it meant.”

In other words, that language about “if you have any questions, please call Customer Service” wasn’t put there to be helpful, since no one bothered to inform Customer Service about the changes before the letter went out. It was just put there as standard boilerplate, and was put in, I’m sure, by the same person who decided that if you’re telling customers about a change in terms, you shouldn’t say what the old terms were, thereby making it impossible to work out what the change is.

The myriad ways in which banks extract money from their customers are well known. But why are they so dreadful at communication when it comes to perfectly anodyne announcements like this? Maybe it’s just so that if and when a less anodyne announcement arrives in my mailbox, I won’t even try to read it. Maybe it’s just that there are far too many lawyers floating around in a bank which was brought to its knees by the leadership of its former general counsel. Or maybe it’s simply that no one cares, not when the number of banks communicating in English is zero. But I suspect that the real reason is that information asymmetry is so ingrained in banking culture that these notices are treated as a regrettable legal necessity, rather than an opportunity to actually communicate something germane. Is it possible to change that culture? I have my doubts.



Jon Stein here, CEO of Betterment.com. Our goal at Betterment is to make smart investing simple and accessible (as it should be!) – and an important part of that mission is explaining things as clearly as possible. I agree that most bank and investment firm communications are incomprehensible. Granted, it’s not always easy to make complex concepts simple – the work is in choosing what’s important to focus on, and what is unnecessary detail. I’d love to ask for you and your readers’ help in making our site and product more accessible. Check us out at http://www.betterment.com.

We love your writing and have re-tweeted and written linking posts to some of your pieces. Thanks!


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Should states be able to go bankrupt?

Felix Salmon
Dec 7, 2010 22:42 UTC

Jimmy P has discovered a secret GOP plan to push states to declare bankruptcy in order to avoid bailing them out. Like most secret plans, it was splashed all over the Weekly Standard in a piece by David Skeel, and it does make a certain brutal sense:

Although bankruptcy would be an imperfect solution to out-of-control state deficits, it’s the best option we have, at least if we want to have any chance of avoiding massive federal bailouts of state governments…

The effectiveness of state bankruptcy would depend a great deal on the state’s willingness to play hardball with its creditors. The principal candidates for restructuring in states like California or Illinois are the state’s bonds and its contracts with public employees. Ideally, bondholders would vote to approve a restructuring. But if they dug in their heels and resisted proposals to restructure their debt, a bankruptcy chapter for states should allow (as municipal bankruptcy already does) for a proposal to be “crammed down” over their objections under certain circumstances.

Skeel doesn’t mention the single biggest problem with this idea. If it were implemented, or if it even looked like it might get implemented, prices of municipal bonds would plunge, and most states would find it pretty much impossible to borrow money. As such, facing a massive and immediate liquidity crisis, they would be in more need of a federal bailout than before the bankruptcy legislation was seriously mooted.

The fact is that there’s only one reason to invent a Chapter 8 bankruptcy provision for states—and that’s to come up with an efficient and legal way to impose losses on bondholders and other creditors. (Chapter 9, which applies to cities and other municipal entities, doesn’t apply to states.) The creditors, fully aware of this, would immediately cease lending, certainly to the rockier states like California, Illinois, and New York. That’s not what we want. As a result, unless or until those states can bring their budgets into a primary surplus, introducing such a provision would certainly do more harm than good. And if those states can bring their budgets into a primary surplus, then we don’t need the bankruptcy provision, since they’ll be easily capable of rolling over their debts.

If the states had a bankruptcy provision all along, then I’m sure some people would be thinking seriously about whether it made sense for one or more states to file. But they don’t, and there’s basically no way of getting there from here. As such, the idea’s a non-starter.


“The reality is that most red states are tax parasites. IOW they receive more federal dollars back than they send in for taxes to the federal level.”

I belive that is true of all 50 states… think about it, the federal goverment currently spends very roughly 150% of what it collects… so all states get more than they pay in.

I accept that there is inequity between states and that red states get a better deal than blue states… but all states eat more gubmint cheese than they paid for.

It will be very unpopular for stingy states to bail out generous ones. Can you imagine states where workers get 60% final average salary pensions at 65 are asked to bail out states that get 100% of final average sallary pensions indexed for inflation at 60? Hardly fair.

Best hopes for more forced savings in the future… otherwise the prudent will be required to support the shortsited more than they currently do.

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The NYT toughens up its paywall

Felix Salmon
Dec 7, 2010 21:08 UTC

Martin Niesenholtz, the head of digital at the NYT, clearly hasn’t been taking my advice when it comes to how to build a paywall. Instead, he’s pre-emptively cracking down on a tiny and financially meaningless minority of hypothetical readers who might want to find ways around his wall:

“We will take great pains to make sure that the first-click-free policy isn’t abused in any way,” said Martin Nisenholtz, the Times’ digital chief. “Google has been quite cooperative in terms of setting a limit for the number of free articles that can go in for any one day, so that you can’t just sit and engineer your way into a free use of the website.”

What this says to me is that the NYT is spending too much time designing its paywall, and is disappearing down rabbit-holes best left unexplored unless and until it becomes clear that they need examining.

The NYT‘s paywall is designed to be porous: readers coming in from some other site (Google, Twitter, Facebook, Reuters) will always be able to read the article they’re looking for, even if they’ve used up their monthly quota. As a result, it’s more of a navigation fee than a charge for content.

That’s fine—except Nisenholtz now seems to be backpedaling from that concept, and saying that he’s going to “take great pains” to crack down on people who read a lot of nytimes.com without paying the company.

That’s silly, for three reasons. Firstly, great pains tend to come at non-negligible expense, and there’s no point in spending significant amounts of money unless you think you’ll recoup those costs in extra revenues. In this case, Nisenholtz seems to think that (a) there will be a large number of people trying to find a way around the NYT paywall — and that (b) a significant proportion of those people will end up giving in and subscribing (as opposed to simply going elsewhere), if the paywall is made hard to get around. I very much doubt that he has any concrete evidence that either proposition is true, let alone that both of them are; common sense, then, would dictate that he wait until he gets such evidence before working on bolstering the wall.

Secondly, there are so many ways to get around paywalls—simply deleting your cookies generally does the trick—that there’s no good reason to believe the NYT‘s “great pains” are going to actually work very well in practice.

Finally, the less porous the wall, the more annoying it is—for subscribers and non-subscribers both. That’s simply the way that paywalls work. Strengthening your paywall sends the message that you don’t trust your subscribers, or your subscribers’ non-subscriber friends: you’re treating them as potential content thieves.

Why would Niesenholtz do this? Why won’t he just satisfy himself with raising revenue from loyal readers, rather than trying to prevent people from reading lots of stories? It should be flattering that some people want to read NYT content so badly that they will take the long way round the paywall. Instead, Nisenholtz seems to find it downright threatening. And one possible reason is hinted at by Rick Edmonds:

A Kindle subscription to the Times cost $19.99 a month, and Scott Heeken-Canedy, president of The New York Times newspaper, said that might be indicative of where pricing for full Web access will end up.

If by “will end up” he means “will end up eventually, after we’ve quietly raised the subscription price half a dozen times,” then Niesenholtz’s tactics don’t make sense. But if by “end up” he means “will end up being when the paywall goes live next year”, then they do.

$20 per month is a large amount of money for people to pay for a product they’re used to getting for free, and indeed it’s so large that most of the NYT‘s regular readers will simply refuse to pay it. In that situation, the subset of people who will pay but only if the paywall is a tough one might start becoming relevant.

Niesenholtz says that 15% of current visitors view 20 pages or more per month. But people won’t pay $20 to read 20 pages per month: that kind of money only begins to be worth paying once you start reading a few pages per day, or say 100 pages per month. Let’s say that 5% of current visitors fall into that bucket, and that of that 5%, only one in ten will actually pay $20 a month for website access. (I’m not counting print or iPad subscribers who get free access to the website with their other subscription.)

At that point, Niesenholtz is directly monetizing just 0.5% of his visitor base—a number which is small enough that grabbing a few people who otherwise like to find a way round paywalls could actually make a significant difference.

I think it would be silly to start the paywall experiment at a high $20-a-month price point. Somewhere between $5 and $10 would make more sense. But if the NYT really is considering making nytimes.com a $240-a-year product, then maybe that explains their newfound emphasis on cracking down on those who would try to get around it.


$240 is toothpick money if you’re a partner at Goldman Sachs, but it’s a daunting sum if you’re nearing retirement on a nest egg more modest than those owned by New York’s uppercrusters. If the NYT thinks $20 a month is a modest amount for online access, it’s a bit out of touch with the real world.

But I don’t think that’s the problem. The NYT is a premium product, and its owners and managers think it should sport a premium price. That’s partly a strategy to protect the paper’s value, partly a strategy to protect the managers and owners from the humiliation of offering Wal Mart prices.

It’s also an old way of thinking. I’d price the paywall for unlimited access at a dollar a month, and work to get 30 million subscribers.

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Chart of the day: California taxes

Felix Salmon
Dec 7, 2010 18:02 UTC

ARJTurgot2 left this comment on my chart of US taxes:

You are, of course, going to follow up this chart with a second one that comprehensively reflects the changes in State and Local taxes, especially including sales taxes, that have changed since 1950. And that data is going to include things like registration and usage fees, especially gasoline, telecommunications and sin taxes on things like liquor and cigarettes. I understand that is going to vary widely from state to state, so two, perhaps, should be instructive: say New York and California?

If someone wants to point me to a dataset which gives me that information, I’ll happily chart it. But in the meantime, I pulled table D1 (Californian GDP) and table M13 (Californian state tax collection) from the California statistical abstract. That only gives data from 1967 to 2007, unfortunately, and the GDP series changes slightly in 1997. But in any case, here’s the result:


It seems to me that tax revenues have been floating pretty steadily around roughly 5.5% of GDP since the mid-70s, with a brief blip up to a high of 6.8% during the dot-com bubble. I’m sure that the recession has brought the ratio down of late. But what I’m not seeing is any indication that the decline of federal tax revenues is made up for by a concomitant increase in state tax revenues.


For a long time California was the reddish state that gave us Reagan, and present tax boundaries locked into California statute are a reflection of this.

As the influence of public unions increased, we moved to our present situation where prison guards in California earn six figures and eye-popping retirement packages are the norm. The result is a rather Greek-like combination of generous public spending and low tax receipts with massive bond sales to make up the difference.

At least California has Google, Apple and wonderful and productive agriculture. Under higher taxes the farms at least would have to stay put.

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Why employees got the payroll tax cut

Felix Salmon
Dec 7, 2010 17:29 UTC

Greg Mankiw discusses the economics of the payroll tax cut, and raises the question of whether it might have been better used to cut employers’ share of payroll taxes, rather than employees’ share:

This payroll tax cut goes entirely to the worker. This increases work incentives, but the main motivation is probably to increase take-home pay, consumer spending, and aggregate demand…

An alternative would have been to reduce the employer’s share of the payroll tax, at least to some degree. Given a sticky wage, this policy would have reduced the cost of hiring and, to the extent labor demand curves slope downward, increased employment. It would also have increased business cash-flow and, to the extent that firms are cash-constrained, increased business investment.

After raising the question, Mankiw stops short of answering it, leaving the possibility open that maybe Congress and the White House came to the wrong decision for political reasons. But of course they didn’t: this is a no-brainer.

Michael Cooper had a great article in the NYT in October about the last payroll tax cut, a/k/a “the Tax Cut Nobody Heard Of.” The idea is that the less noticeable a tax cut is, the more effective it is:

The tax cut was, by design, hard to notice. Faced with evidence that people were more likely to save than spend the tax rebate checks they received during the Bush administration, the Obama administration decided to take a different tack: it arranged for less tax money to be withheld from people’s paychecks.

They reasoned that people would be more likely to spend a small, recurring extra bit of money that they might not even notice, and that the quicker the money was spent, the faster it would cycle through the economy.

Economists are still measuring how stimulative the tax cut was. But the hard-to-notice part has succeeded wildly. In a recent interview, President Obama said that structuring the tax cuts so that a little more money showed up regularly in people’s paychecks “was the right thing to do economically, but politically it meant that nobody knew that they were getting a tax cut.”

So we know that people spend payroll tax cuts rather than saving them, which is exactly what we want any fiscal stimulus to do. Businesses, by contrast, are another thing entirely: they’re sitting on large and growing piles of cash, and showing little if any propensity to spend any excess cash which falls into their laps.

I certainly can’t imagine that a 1-year cut in payroll taxes would incentivize any employer to hire more people. A 2% cut in payroll taxes on a worker earning $30,000 a year amounts to a one-off payment of $600: very nice for the worker, but not remotely enough to get the employer to hire someone else. After all, payroll taxes will go back up to their normal levels in 2012.

And while business investment might increase “to the extent that firms are cash-constrained,” as we’ve already seen, they’re not really cash-constrained at all. Certainly large companies aren’t.

So really there’s no conceivable reason to give this tax cut to employers rather than employees. And if Mankiw weren’t being disingenuous*, he might make that a bit more obvious.

*Update: Apologies to Mankiw, I’ve now changed my mind, and no longer think he was being disingenuous. (But I’m still a fan of employee-side tax cuts.)


The employees got the Payroll Tax cut – because the “Payroll Tax” is actually what you pay to your Social Security account; so – if you pay in less – you will eventually receive less. Everybody is on to this except the workers. It used to be called FICA, remember?
Eventually you will get so many “Payroll Tax” cuts that you won’t have a Social Security Account at all and that is the object of the game.
It is the same with those Health Insurance and Communting expenses you can use to reduce your “Payroll Tax”.
All those fine economists speculating on the result – are either uninformed or, much worse, in favor of the game.

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The $100 hamster wheel

Felix Salmon
Dec 7, 2010 15:20 UTC

Back on October 1, the Fed put out a short, bland press release announcing “a delay in the issue date of the redesigned $100 note.” Sometimes, there’s a great little story hidden behind such news, and in this case it was CNBC’s Eamon Javers who found it:

An official familiar with the situation told CNBC that 1.1 billion of the new bills have been printed, but they are unusable because of a creasing problem in which paper folds over during production, revealing a blank unlinked portion of the bill face.

A second person familiar with the situation said that at the height of the problem, as many as 30 percent of the bills rolling off the printing press included the flaw, leading to the production shut down.

The total face value of the unusable bills, $110 billion, represents more than ten percent of the entire supply of US currency on the planet, which a government source said is $930 billion in banknotes. For now, the unusable bills are stored in the vaults in “cash packs” of four bundles of 4,000 each, with each pack containing 16,000 bills.

Officials don’t know exactly what caused the problem. “There is something drastically wrong here,” a person familiar with the situation said. “The frustration level is off the charts.”

Javers had time to put together his story, and it shows. But according to some weird rule of journalism, the minute that CNBC ran the story, a full nine weeks after the original press release came out, everybody else felt that they had to have it too, and have it immediately.

And so it came to pass that Brady Dennis of the Washington Post started making phone calls to Treasury, Thomas Grillo of the Boston Herald called up the printers, the AP phoned the Bureau of Engraving and Printing, and Alex Branch of the Fort Worth Star-Telegram called the Bureau’s Engraving and Printing Western Currency Facility, all in the service of re-reporting hastily what CNBC had already reported carefully. Charles Riley of CNNMoney spoke only to “an official familiar with the situation,” while Dan Arnall of ABC spoke to “sources.” None of them, with the honorable exception of WaPo’s Dennis, credited CNBC; Krystle Gutierrez of Fox in Dallas even put an “originally reported by myfoxdfw.com” slug on the bottom of her story, mentioning CNBC nowhere.

On top of that, lots of sites rewrote the CNBC story, giving CNBC credit but doing no new reporting themselves, and sometimes mangling the facts along the way.

$100 bills are sexy things: even the rich get a frisson from handling them. As such, they’re irresistible to news editors, especially on a very slow news day. But aren’t we meant to be entering the age of reporting a few stories well and then linking to the rest? Haven’t we always worked under the general principle of “faster than anyone better, better than anyone faster”? I can’t help but think that if news organizations put a tenth of the amount of effort into external linking that they do into re-reporting other people’s stories, we’d have a much more vibrant and useful news culture.


Yes, they’re used in other countries. The US gets enormous amounts of seignorage from them — although that number’s falling now that interest rates are so low.

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