Felix Salmon

The social media tail mustn’t wag the MSM dog

Felix Salmon
Apr 21, 2013 22:58 UTC

The Boston bombing and subsequent manhunt was in many ways the first big interactive news story. It wasn’t the first big event to be covered obsessively on social media, but it was the first big event where millions of people became part of the story themselves. Some did so through choice, combing through photographs on Reddit or 4chan; others simply happened to be in Boston and saw their public lives, as broadcast to the world on social media, become part of the story just by dint of where they were.

The result was a veritable deluge of streams, in a world where the news has become a hard-to-navigate rapids at the best of times. For anybody who wanted to stay on top of what was happening without drowning in noise, experience and level-headedness were invaluable, and were displayed most prominently by Pete Williams of NBC.

But while Williams was the most visible of the people who got it right, there were many others, mostly unsung, working at places like the NYT. The paper’s public editor, Margaret Sullivan, rightly praises its editors for “staying away from unconfirmed reports” and treating with suspicion anything coming from “unnamed law enforcement sources”.

In the tradition of journalistic oxpeckers everywhere, Sullivan concludes that the NYT’s “reporting from Boston all week was fast, deep and accurate”. Which is the truth, but it’s not the whole truth: I’m quite sure that a very large part of the credit should go to the editors in New York, rather than the reporters in Boston. In a story this sprawling, no one reporter, and no one law-enforcement source, can possibly see anything approaching the big picture; it falls to the editors to take the various streams of information coming into the newsroom, many of which outright contradicted each other, and to weave them into a coherent and accurate whole.

Anybody who was on Twitter over the past week knows how hard that job was. It’s an exercise in massively multivariate real-time Bayesian analysis: as the news streams in from multiple sources over the course of the day and night, every new piece of information has to be analyzed in light of everything else that’s already known, or thought to be known. A clear on-the-record statement from the governor can be assumed to be perfectly reliable, but just about nothing else can be — not even the reporting of your own employees, who can easily make good-faith errors during such an extended and chaotic story. Sleep deprivation alone can account for that.

An experienced editor will use her hard-earned judgment to weigh the relative reliability of all the different sources of information. Some people added enormous value on Twitter — Seth Mnookin, for instance, had fewer than 7,000 followers on Sunday, and more than 40,000 by the end of the week, for good reason. Others, like Williams, proved their reliability on television, even as their rivals at other channels were reporting things which turned out to be false.

There’s an art to working out where to find fast and reliable information, and to judging new information in light of old information, and to judging old information in light of new information. And there’s an art to synthesizing everything you know, from hundreds of different sources, into a single coherent narrative. It’s not easy, it’s not a skill that most people have, and it’s precisely where news organizations add value.

But in this particular case, as Noah Brier points out in a post headlined “Being Part of the Story”, it’s something that millions of people ended up attempting to do, on the fly, anyway:

Everyone wanted to be involved in “the hunt,” whether it was on Twitter and Google for information about the suspected bomber, on the TV where reporters were literally chasing these guys around, or the police who were battling these two young men on a suburban street. Watching the new tweets pop up I got a sense that the content didn’t matter as much as the feeling of being involved, the thrill of the hunt if you will. As Wasik notes, we’ve entered an age where how things spread through culture is more interesting than the content itself.

The crowdsourced hunt was, in the end, unambiguously counterproductive: it hurt much more than it helped. But it wasn’t just Redditors and hive minds which got caught up in this particular mindset. If you look at the missteps of outlets like the New York Post and CNN, it’s easy to see them in this light — breathlessly passing on every new tidbit of information, rather than taking their function as editors and filters as seriously as they should have done.

Which brings me to an important and quite wrong essay from Ben Smith, the editor of BuzzFeed, and his colleague John Herrman.

Under the old rules, a responsible citizen passed any potential bit of news he could find on to the professionals. The professionals collected tips, corroborated them, published the ones that panned out. Reporters could protect their readers from bad information — indeed, for reporters, the story was defined largely by what was kept from the public…

Now we should assume our readers and viewers see virtually everything that we see. We can no longer decide which rumors and scraps of information should be dignified with publication — a sufficiently compelling scrap of information, be it a picture of a man with a black backpack or an anonymous, single-sentence Reddit post from the scene of the crime, will become news on that merit alone…

The media’s new and unfamiliar job is to provide a framework for understanding the wild, unvetted, and incredibly intoxicating information that its audience will inevitably see — not to ignore it. A Reddit post seen by millions without context is worse for the story, and the public, and to the mission of reporting than the same post in a helpful and informed context seen by many more. Reporting is no longer a question of whether or not to dignify new and questionable information with attention — it’s about predicting which of it will influence the story, and explaining, debunking, or contextualizing it the best we can. That is, incidentally, what our readers want.

It’s possible that Smith and Herrman are right that their readers are clamoring for BuzzFeed to explain, debunk, and contextualize the constant stream of noise and misinformation coming from Reddit and Twitter. But I suspect that if there is such a clamor, it’s coming from a vocal minority. For one thing, only a minority of BuzzFeed’s visitors come for hard news at all. And of those who do, only a minority of them care very much what BuzzFeed’s interpretation is of the material they’re reading on Reddit and Twitter. Finally, by their nature, Reddit and Twitter are going to be presenting a different narrative to each of their millions of users: what BuzzFeed’s editors are seeing on those platforms is not going to be the same thing that BuzzFeed’s readers are seeing.

It’s undoubtedly true that in the age of social media, it’s become very easy for anybody to peer behind the news curtain and see the chaotic raw material from which it is produced. But that in no way weakens the onus on responsible and experienced news editors to filter that material and form it into a fast, deep and accurate report. Indeed, the value added by those editors has never been more obvious than it is in situations like this one.

Smith and Herrman are absolutely wrong that a compelling yet false factoid, being shared willy-nilly across various social-media platforms, “will become news on that merit alone”. News is something true and important and relevant; it is not, and should never be, misinformation. Neither is it “whatever our readers happen to be finding on the internet”. Smith and Herrman are essentially taking a hugely important story, here, and reducing it to the status of covering a viral meme: the Gangnamization of terror. I have no problem with news stories covering viral sensations, but they’re what you do after you cover the important stuff. They’re not the important stuff themselves.

Which is not to say that BuzzFeed did a bad job last week. Debunking corrosive memes is a genuine public service, and it’s great that outlets like BuzzFeed and Gawker are doing it. Where I part with Smith and Herrman, however, is in their implication that everybody else — the NYT, the WSJ, the Boston Globe, Reuters, Bloomberg, CNN — should be doing it as well. That’s silly, and I can’t believe that many people would want to live in a world where a relatively small number of Redditors could effectively set the news agenda for the entire country.

On Monday, I received an email from someone calling herself Sarah Hanson, in which she claimed that she had successfully auctioned off 10% of her post-tax future income for the next ten years, raising $125,000 in the process. I wasn’t the only journalist to hear from Hanson: she had already, at that point, managed to score an interview with VentureBeat, which in turn begat lots of other coverage around the internet. But various aspects of the story didn’t smell right, to me, so I sent an email to VentureBeat, asking if they were sure this girl was for real. It turns out that she almost certainly isn’t. I was perfectly happy for VentureBeat to write the debunking; in fact, that was the perfect place for it to happen: there was very little point in me writing a story saying “some person you probably haven’t heard of is very unlikely to actually exist”.

Given the amount of information pouring onto the internet every minute, it’s statistically inevitable that a substantial amount of that information is going to be erroneous — especially when the source is something as unedited as Reddit or Twitter. No mainstream journalism outlet should allow its coverage of a major story to be hijacked by backchannel noise — especially when a large part of the value such outlets provide is that they filter out the noise and transmit only a reliable signal. Just because your readers can peer behind the curtain, doesn’t mean you have any responsibility to yank it open yourself.


Dear Felix,

I enjoy your e-mails and look forward to your “Counterparties” digest each day. Thanks.

Although I’m computer savvy and I’ve been on the internet since before there were browsers I don’t follow anyone on Twitter and up until the bombing I’d heard of but never been to Reddit’s site. However, during the manhunt I did read the Reddit threads which summarized in near-real time the police scanner chatter and I did read Seth Mnookin’s Twitter feed–the experience was a revelation. (I also kept track of CNN on TV and the NYT, CNN, CBS, and Fox web pages).

My observations?

–CNN and the major news web pages were an hour or two behind the Reddit thread except at the very end when the suspect was apprehended.
–CNN and the major news web pages were *greatly* lacking in detail.
–CNN, at least, was embarrassing to watch. To use one prominent example, they had video of “Naked Guy”–by the time CNN started broadcasting the video Reddit already was saying the guy was not a suspect. CNN replayed that footage for an hour at least (maybe more, I gave up on CNN at that point) and breathlessly interviewed and reinterviewed their own camera man as their only eyewitness to the detention of the Naked Guy. They repeatedly called him a suspect in the bombings, often calling him “Suspect #2.” Meanwhile on Reddit the real story, far ahead of CNN, was rapidly unfolding.
–CNN (and maybe the other media outlets) had trouble following the moving action. They got stuck broadcasting from a given physical location and didn’t seem able to move locations easily.

The only great *reporting* (vs. summarizing scanner chatter) that I observed was an excellent piece in the NYT that described the shootout with the brothers that appeared early in the manhunt.

I wish I had seen Pete Williams because my confidence in the TV and print media to convey a rapidly moving story is greatly diminished.


Posted by darinb | Report as abusive

The social network you can’t opt out of

Felix Salmon
Feb 12, 2013 17:24 UTC

As befits a company backed by a Who’s Who of Wall Street names, Relationship Science has tapped Andrew Ross Sorkin as the vehicle of choice for its big public unveiling.

The idea behind RelSci is that if you’re one of the 2 million most important people in the business world, there’s a huge amount of public knowledge out there already regarding the people you know and are connected to. You don’t need to connect with them on Twitter or Facebook or LinkedIn; RelSci knows who you know anyway, just like IMDB knows who has appeared in a movie with Kevin Bacon.

What’s essentially happening here is that the network which connects us all — the true, real-world social network, which has existed as long as humanity — is now being mapped without our consent, and being sold back to masters of the universe for the low, low price of $3,000 a year. As Mark Zuckerberg will tell you, there’s enormous value in networks. And although RelSci can’t control the real world in the way that Zuckerberg controls Facebook, it has the advantage that it includes the most powerful and important people you could ever want to get in touch with, from Lloyd Blankfein to the president of the United States.

Of course, there are no guarantees here. I’m friends with Ezra Klein on Twitter (or whatever it’s called when two people follow each other) — I’m sure that’s in the RelSci database. And Ezra, as Julia Ioffe says today, talks to the president: that’s public too. So does that mean I’m just one degree of separation from the president? Not really. I’d never ask Ezra to tell the president anything on my behalf, and if I did ask, he’d say no.

But for some relationships, RelSci could be very effective. Once you get to friends of friends of friends — two degrees of separation or more — I think it’s pretty useless. But friends of colleagues? That can be very powerful. If I’m a relationship banker, say, and I want to sit down with a CEO, I need someone to effect an introduction, and it’s possible — probable, even — that I’m quite unaware how many of my friends are directly connected to that CEO. Alternatively, if I’m in the midst of fraught deal negotiations, and talks are breaking down, RelSci could be invaluable in finding someone who’s close to, and trusted by, the principals on both sides of the table.

RelSci is initially targeting its product at Wall Street and the nonprofit sector, which has long spent enormous amounts of time and effort putting together detailed dossiers on potential donors and the people who might be able to influence them. But I suspect that DC lobbyists are going to be lining up to subscribe, if only for the way that RelSci might be able to turbocharge their opposition research. “Privacy by obscurity” isn’t working for Julia Angwin any more on Facebook, and it’s not going to work for politicians and business leaders in real life much longer, either. It used to be that our web of personal connections was known only to ourselves; those days are over, whether we like it or not.

My guess is that RelSci won’t last as an independent company for long: it will probably be acquired, with Facebook, LinkedIn, and Bloomberg at the top of the list of possible buyers. My own employer, too, might be interested: we already have a product called Westlaw PeopleMap which is not dissimilar. If Google buys RelSci, it might even open up the entire database to the world for free. But even if it doesn’t, it’s clear that we’re still at the early days of drawing real-world connections between real-world people. Over time, the RelSci network, or the companies which try to copy it, will get bigger, and the price of accessing it is likely to fall to zero surprisingly quickly.

Which means that even if you unfriend everybody on Facebook, and you never join Twitter, and you don’t have a LinkedIn profile or an About.me page or much else in the way of online presence, you’re still going to end up being mapped and charted and slotted in to your rightful place in the global social network that is life. People are going to make money from your social connections whether you like it or not. Unfortunately, it seems that in the first instance, those people are going to have names like Henry Kravis, Ron Perelman, and Ken Langone.


Products like RelSci have been around for some time but they probably don’t have deep pockets like RelSci for all the PR. Take a look at BoardEx and Prospect Visual. BoardEx has been around for 20+ years. Prospect Visual has a vast database of 70-80 million people and a super cool visualization of your network and connections.

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Counterparties: The social network that’s three times larger than Facebook

Felix Salmon
Oct 12, 2012 22:18 UTC

Welcome to the Counterparties email. The sign-up page is here, it’s just a matter of checking a box if you’re already registered on the Reuters website. Send suggestions, story tips and complaints to Counterparties.Reuters@gmail.com

If you’re reading the Web version of today’s Counterparties email, there’s a good chance you got it from somebody else. That is to say, someone likely put this post on the “social web” of platforms like Facebook, Twitter or, if you’re cooler, younger and snarkier than us, Reddit.

For Web media companies, the social web has become the fastest-growing, most-obsessed-over method of distribution at a time when the online ad market is shifting away from display ads to “native advertising” and sponsored posts from advertisers. BuzzFeed put the rise of social media in chart form: For BuzzFeed and its 200 or so partners, more traffic is now coming from Facebook than Google.

But Alexis Madrigal has a fascinating new piece on why we’ve gotten the social web wrong. Madrigal argues that today’s web analytics programs miss the most common way we share stories. The largest social network, Madrigal writes, isn’t Facebook – it’s people sending things to each other directly (likely by email or IM). This is what he calls “dark social”: the articles and links you’re navigating to directly and not getting from a social networking site, or finding on some other web page.

Looking at data from the clients of the analytics firm Chartbeat, Madrigal found almost 69% of social web referrals were so-called dark referrals. Facebook accounted for 20% of social referrals from Chartbeat’s clients; Twitter referrals made up just 6%.

What does this mean for media companies? For one, it suggests that Facebook, which has been fighting to convince big corporations and small businesses that it’s the center of all social activity on the Web, isn’t our main way of sharing content. And, as Madrigal suggests, it means that there’s no real way to trick the world into sharing your stories, no matter how many rules you come up with or tweets you send in capital letters. “The only real way to optimize for social spread is in the nature of the content itself,” Madrigal writes. Quality matters. How refreshing. — Ryan McCarthy

On to today’s links:

The Fed
Why QE3 is a “masterstroke of market manipulation” by Bernanke – Quartz

New Normal
Economists to nation: Get used to 7% unemployment – WSJ

Wow. Just Wow.
Unmasking Reddit’s Violentacrez, the biggest troll on the web – Adrian Chen

EU Mess
The European Union wins the Nobel Peace Prize, despite record unemployment – NYT
How Switzerland is manipulating its currency and hurting the euro zone – Vox EU

The final word on Mitt Romney’s tax plan: It was “plucked out of thin air for political reasons without regard to whether it was feasible” – Josh Barro

How going over the fiscal cliff will discourage people from working – WaPo

JPMorgan reports record profits – JPMorgan

Why are Indians getting poorer? – WSJ

Advice to publishers: “Atomize everything” – Matt McAlister

Twitter’s CEO: Our company is “gritty like the city” – All Things D



“But Alexis Madrigal has a fascinating new piece on why we’ve gotten the social web wrong. ”

By “we” I assume you mean “you,” since this would be obvious to anyone who isn’t in marketing.

Posted by Moopheus | Report as abusive

Why social mobility is important

Felix Salmon
Jul 30, 2012 21:46 UTC

Tim Harford is a fan of the clear way in which Alex Tabarrok has couched the debate — which started with a Tyler Cowen post back in January — about the desirability of intergenerational economic mobility. Or, in English, is it a good thing if quite a lot of poor people become rich?

The Marginal Revolution guys say that looking at economic mobility is overrated; Cowen, also in January, linked to a bunch of critics of that position, including John Quiggin, Brad DeLong, and Paul Krugman. Recently, DeLong resuscitated the discussion, and Krugman came back for a second go-round as well, all of which resulted in Cowen being rude about Krugman, and Tabarrok trying to clear things up.

Tabarrok’s post is indeed clear, but it’s clear in an invidious way. He basically starts with his conclusion, saying that if a high-mobility society has no better outcome, in general, than low-mobility society, then there’s not very much to choose between them. And similarly, he says, if both a high-mobility society and a low-mobility society have the same very good outcome, then again there’s not much to choose between them.

But this obtusely misses the fundamental reason why high mobility is a good thing: that it improves outcomes. A sclerotic society where no rich people become poor and where no poor people become rich is never going to be a hive of creative destruction. Cowen even comes close to admitting this, when he says that “if the general standard of living is rising, mobility takes care of itself over time” — except he has the causality largely backwards. If you have lots of social mobility, then the general standard of living is going to go up: you’ll have lots of poor people becoming richer, and you’ll also have the rich protecting their downside, in the likely event that they become poorer, by doing their best to improve the lot of the poor.

So when Cowen talks about economic mobility not mattering much “for a given level of income”, or when Tabarrok talks about “some simple societies” with fixed levels of income, they’re taking the variable in the equation and they’re turning it into a constant. What they should be doing is looking at two societies, equal in all respects except that one is high-stasis and the other is high-churn, then fast-forwarding to see which one turns out better. The answer, of course, is the high-churn society — which means, working backwards, that if you want growth, you also want social mobility.

As a result, it’s reasonable to conclude that anything which impedes social mobility — like rising inequality, say — also impedes growth. The effect might not be huge, but it’s there. And the only way not to see it is to effectively assume your conclusions.


Of course I meant “tenets”.

Posted by FifthDecade | Report as abusive

When credit cards go social

Felix Salmon
Apr 24, 2012 22:18 UTC

There’s a new credit card out there, called Barclaycard Ring, which manages the rare feat of being a good, solid financial product even as it’s also incredibly gimmicky. It’s being branded as “the first ever crowdsourced credit card” — a financial product “built on a community” which, by the looks of the stock photography on the website, is full of incredibly happy, healthy, outdoorsy types who live only in bright sunshine. You don’t just apply for this thing, you “join the conversation”.

Which is not to say you shouldn’t apply. This card has an 8% APR, and no penalty APR. You miss a payment? You default on some other credit card debt? Your APR stays at 8%. For “revolvers” — people carrying a balance — this has got to be one of the cheapest credit cards out there, and certainly one of the least dangerous. The fee schedule is the one place where you don’t find gimmicks: no 0% APR balance transfers (with 3% up-front fee hidden in the small print), no hugely complicated reward program you’re never going to use, no annual membership fee which you have to mentally amortize against the perceived value of all those hypothetical rewards.

I hope and trust that the idea of a card without a penalty APR will catch on. Under new regulations, credit-card companies aren’t allowed to apply a new penalty APR to the entire balance being revolved any more; they have to apply it just to new purchases — and they have to pay that high-rate balance down first. As a result, penalty APRs aren’t nearly as profitable as they used to be. And when you do introduce a card with no penalty APR, it becomes incredibly easy to make apples-to-apples comparisons between cards: you should just go for the one with the lower rate.

Barclaycard is also promising to publish its own P&L statement for the card, showing how much money it’s making from interest payments, from late fees, and from interchange fees. That’s going to be interesting, when it starts being published in the next few months. It says that any profit over and above its own reasonable hurdle-rate expectations will then be rebated back into the “community” somehow, although the exact mechanism here is unclear. The general idea seems to be that if the cardmembers want something like onshore card servicing, then they’ll be given the choice to essentially pay for it, out of the excess profits that the card is rebating back to them.

At the same time, watching a big bank try to be all cool and down with the social kids can be rather like watching your father try to rap. The Twitter feed is embarrassing enough, but the sponsored posts are much worse. For instance: companies who “get” social media are “are the ones that are leading the fold and have good futures ahead of them”, says BrainFoggles, who seems to have been paid to write that by something called Dweeb Media, which specializes in “creating conversational blog post campaigns”.

And when I spoke to Barclaycard’s Paul Wilmore, I was far from convinced when he tried to sell me on the idea that if people with a Barclaycard Ring feel as though they’re part of a community, they’re going to be less likely to default on that card. That might be true with credit-union credit cards, where people really are part of a pre-existing community. But I doubt that the group of people with this Mastercard rather than that one will ever cohere into something real enough to change collective behavior by 200-300bp, as Wilmore is hoping.

For the representative of an exercise in radical transparency, Wilmore was also surprisingly reticent on some pretty basic issues. For instance, what’s Barclaycard’s profit margin going to be on this card? That number is going to be public, but he wouldn’t even give me a hint. Or, why do you need to become a cardmember before being able to read either the official cardmember agreement or the shorter summary agreement? Why aren’t those documents freely available on the card’s website, for people to read before they apply for the card?

Wilmore did tell me, quite proudly, that Barclaycard has filed no fewer than 14 patents around this card, which scared me a little: I’m not a fan of the idea that financial innovations can or should be patented. Insofar as there are good ideas here, I want to see them broadly adopted, but if anything these patents seem designed to discourage anybody else from trying out interesting products in this space.

In a sense, then, I wish that Barclaycard had just released a simple no-annual-fee, no-rewards, no-penalty-APR card and left it at that. I fear that the gimmicky social side of Barclaycard Ring is going to overshadow the fact that underneath its trendy exterior it’s actually a perfectly good product. Even if, as someone in financial media, I will admit to looking forward to those P&L statements.


thanks for credit card information and this is very good information on credit card.

Posted by kevinyong1882 | Report as abusive

The social benefit of pension funds

Felix Salmon
Dec 29, 2011 04:45 UTC

Matt Yglesias is, I think, very wrong about this:

The idea that a mass market of retail investors ineptly attempting to maintain a balanced diverse portfolio serves a useful role in steering capital to productive uses doesn’t pass the laugh test.

Not only does it pass the laugh test: it’s the driving idea behind capital markets. You take a large mass of inept investors — call them noise traders, or dumb money, or whatever you like — and watch as they do silly things, often lose money, and nearly always underperform some simple buy-and-hold strategy. Then sprinkle in some smart investors and arbitrageurs and the like, who make markets vaguely efficient and help with price discovery. The effect is a market where people feel safe stashing millions of dollars, and where companies can raise billions in equity and debt.

The point here is that you don’t need the noise traders to be smart or efficient in order to make markets work; their role is basically to provide the fuel for the fire. It’s the companies and entrepreneurs who light the match, add value, and create economic growth.

And the more efficient a market is, the dumber investors can be while still making near-optimal returns.

Yglesias has an alternative, of course. Basically, retail investors pay more in social-security taxes, leaving less money left over for savings; that money gets put into some form of federally-insured savings account where it can be used on a rainy day or maybe Christmas. The government takes on the job of insuring all those savings at 100 cents on the dollar, and of guaranteeing a comfortable retirement from Social Security.

Now I’m a great believer in the government offering defined-benefit pensions to its own employees. But there’s a difference between Social Security and defined-benefit pensions: pension funds can and do invest in anything they like, while the Social Security trust fund invests only in Treasury Securities, nearly all of which currently trade at a negative real yield.

The point here is that pension plans can do something that Social Security can’t: they can invest in the future growth of the economy, rather than just paying out pensions to the elderly and maybe buying a few Treasury bonds, at the margin, so long as the plan is still cashflow positive.

There’s another reason, too, why individual pensions are a great idea: they don’t suffer from the kind of maturity mismatch that’s endemic to most of the rest of the financial world. I can invest my pension-plan money with a 20-year time horizon, because I’m not going to be retired for another 20 years. (And even once I’m retired, I’m not just going to liquidate everything and go to cash.) By contrast, the people putting money in a savings account until Christmas literally measure their time horizon in months. Banks take that money and lend it out for much more than a few months, of course — it’s called maturity transformation, and it’s basically a good thing. But it’s also dangerous, and needs careful hedging and insurance and risk management.

And banks do much more than simple maturity transformation: they’re involved in what Steve Waldman calls a mutually-beneficial con. (Go read his post, by the way, it’s fabulous. Chris Hayes says it “may be the most thought-provoking post I’ve read all year”.) Banks create all manner of opacity and complexity just so that everybody thinks that he’s not bearing any risk; as a result, they can end up putting on risk trades that none of us would really have any appetite for on our own.

Except, that is, perhaps, in our ultra-long-term retirement accounts.

Pension plans are the one part of the financial world where risk appetite is real, and doesn’t have to be covered up with financial opacity and complexity. Let’s build them up, rather than try to marginalize them by constructing an ever-growing welfare state. “No firm is nearly as big or durable as the entire United States of America”, says Yglesias, quite rightly. But if there’s one thing we’ve all learned this year, it’s that even the United States of America isn’t risk-free. And the bigger its entitlement programs get, the bigger the amount of sovereign risk there is in the US.

By radically expanding Social Security, you would be making it riskier, at exactly a point in time at which it’s generating negative real returns. And that can’t be sensible. Right now, thankfully, there’s an enormous amount of demand for Treasury securities coming from all over the world. Let’s embrace that demand, and use it to fund our present expenditures. But let’s not kid ourselves that Treasury bonds are a smart investment over a retirement-style time horizon.


A révkomáromi tanár október végén jelentette be, hogy a szlovák mellé felvette a magyar állampolgárságot is. Miután nem tett eleget annak a felszólításnak, hogy önként mondjon le szlovák állampolgárságáról, a városi hivatal lakosság-nyilvántartó osztálya telefonon közölte vele: utasítást kaptak rá, hogy töröljék a nyilvántartásból.

Az állampolgárságától megfosztott 99 éves asszony mellett tüntettek Rimaszombatban
Magyar állampolgársága miatt veszítette el a szlovákot egy révkomáromi férfi
EU-biztosnak panaszkodott a szlovák állampolgárság-megvonások miatt Navracsics

Újabb szlovákiai magyar közölte, hogy a magyar állampolgárság felvétele miatt a hivatalok személyi iratai leadására szólították fel. A Hírek.sk szlovákiai magyar hírportál információi szerint Fehér István révkomáromi tanár október végén Nyitrán jelentette be, hogy felvette a magyar állampolgárságot. Később az illetékes hivatal levélben közölte vele, hogy elveszíti szlovák állampolgárságát, és arra kérték, hogy töltse ki a mellékelt nyomtatványt, melyben lemond szlovák állampolgárságáról.
Ezek a magyarok őshonos magyarok. Ez a terület Magyarországhoz tartozott és elvették tőlük igazságtalanul. Jogvédők ez diszkrimináció!

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How social networks beat email

Felix Salmon
Dec 26, 2011 22:48 UTC

Maija Palmer, with another one of those end-of-email articles, finds this intriguing story:

Andy Mulholland, chief technology officer at Capgemini, says email works poorly for people working in unstructured roles, such as engineers solving IT problems. “Someone asks you a question you don’t know the answer to, so you send out emails to everyone you know. Out of 20 people, 19 have their time wasted and the 20th gives you half an answer,” he explains. Social networking, in this case, can give faster and better answers.

He cites a recent example where an engineer had an unusual problem with some Unix code. He posted the question on Yammer, and within two hours had an answer from someone in the company he didn’t know, in a department of the business he barely knew existed.

On its face, this doesn’t make a lot of sense. If you’re worried about wasting people’s time, why is it better to waste hundreds of employees’ time on Yammer than a couple of dozen over email? I think the answer to that question is the key to understanding the power of social networks.

The Yammer solution here is clearly superior for the person asking the question, in other words — but why is it superior for all the people reading and thinking about and maybe or maybe not answering it? After all, they spend much more time on this question, in aggregate, than any email cc list would.

But it’s voluntary time: Yammer is the kind of thing which fits neatly into whatever interstices one has in one’s day. It doesn’t ping at you and annoy you and distract you at inopportune moments.

Social networks are also supererogatory: they have none of the feeling of being forced to read and participate that comes with almost all corporate emails. Much of the current case against James Murdoch, for instance, is based on the idea that if he was emailed something, he must have known it. No one would dream of making the case that if some fact was revealed on a Yammer board, and Murdoch had access to it on Yammer, then he must have known that fact.

Related to that is what you might call lurkability: you can spend as much (or as little) time as you like on these boards, learning about anything you’re interested in, without being formally copied-in on anything. Something which might be a waste of time to you can be useful and valuable to me — and social networks are a great way of giving people access to the stuff they find valuable, without anybody having to second-guess what it is they want to know.

Finally, if and when you do choose to participate, you get to do so in public. The engineer who answered that question got noticed, in a good way, and no one else took credit for what he said or tried to hide his participation in the process. No space is entirely free of office politics, but social networks, because they’re public, make such politicking rarer and less harmful when it does happen.

It’s also much easier to share information you find on a social network: worries that some piece of information might be confidential tend to be much smaller and much less important. As a result, such networks have much less friction than email does.

And anything which reduces the mounds of emails we all have to deal with every day has got to be a good thing. My work email account, in particular, is a nightmare: it’s 95% unsolicited PR pitches and 4% internal emails going out to enormous distribution lists which I have no interest in at all. Which means I have to go to a lot of effort to find the 1% of emails that I actually want to read. There’s got to be a better way.


I’m happy to share with you!!!

Posted by KSH | Report as abusive

The social safety net is broken

Felix Salmon
Nov 8, 2011 20:07 UTC


A lot of the coverage of the Census Bureau’s new Supplemental Poverty Measure treats it as a bit of a wash — child poverty down, poverty among the elderly up. But for me the big news is that America’s safety net isn’t working.

The old poverty measure — which is still the official measure — excluded a lot of the programs designed to reduce the effects of poverty — things like food stamps and the Earned Income Tax Credit. On the other hand, it also excluded things which increase the effects of poverty, like payroll taxes, transportation costs of getting to work, and childcare and healthcare costs.

Put the two together, and you get the changes spelled out in the chart above. There are more people living in poverty than we thought — 16% of the population rather than 15.2%. A lot of people didn’t take the urgency of America’s poverty crisis seriously, given the old methodology, because they reckoned the “real” rate was lower, once you took into account things like the EITC. But it turns out that in reality, the poverty rate is even worse than we thought — much worse, in fact.

It’s true that the poverty rate for children has come down — but it’s still unconscionably high. There are 13.6 million children under the age of 18 living in poverty — that’s 18.2% of all the children in the country.

And most egregiously, even after taking into account food stamps and the like, 5.4% of the population — and fully 8.6% of the Hispanic population — is living on less than half the poverty level.

What does that mean, in practice? Here are the new poverty levels:


To live on less half the poverty level means that a family of four — two adults and two children — would have a total household income of no more than $12,172 per year. Call it $1,000 per month. And that’s after accounting for aid from the government.

Is it possible to feed and clothe and house four people on $1,000 a month? Evidently it is, because millions of Americans do. But I certainly wouldn’t want to attempt it. And it can’t be good for the kids in such families.

Up until now, I thought that the US social safety net, such as it is, was at least managing to catch people at the very bottom of the distribution. If you were earning less than half the poverty level, you’d be looked after somehow. But in fact, fully 80% of the ultra-poor in the official poverty statistics stay in the same place when you look at the new numbers. And that’s just unacceptable. As politicians try to compete for areas to cut spending, let’s at the same time try to increase the amount of aid going to the country’s poorest, through food stamps and Medicaid and the like. Because if America really aspires to be the greatest country in the world, it can’t have 16.1% of its population living in poverty.


Can’t take credit for that, y2kurtus. Am lucky to have found a school that makes this recipe work!!! Might not believe it if I didn’t see it daily.

Now if only we can find the money to stay open. :) Serving the disadvantaged isn’t a terribly profitable industry.

Posted by TFF | Report as abusive

Will Europe socialize Greek losses?

Felix Salmon
May 2, 2011 22:45 UTC

Guggenheim’s Scott Minerd, speaking at the big morning panel discussion which kicked off this year’s Milken conference, laid out a simple case for how the next crisis could arise:

When you look at Greek assets, about 55% of bank capital in Portugal is exposed to Greece. And 83% of bank capital in Ireland is exposed to Greece. So it’s pretty clear that if we restructure Greece, we will severely damage the banking systems of Ireland and Portugal. And the big exposure to Ireland and Portugal is in Spain. Ireland represents 138% of the capital of the Spanish banking system, and Portugal represents 133%. And if we take out Spain, Spain represents 94% of the capital of the German banking system. And I’m not adding these numbers up. You see how it’s very easy to get a scenario going in Europe where the dominoes start to fall and it causes a crisis.

Greece is going to restructure, and when that happens (not if), creditors are going to take some kind of haircut. The buffer in Minerd’s scenario is Ireland: since the banks have all been nationalized anyway, their debt won’t necessarily get downgraded just because their capital is wiped out.

I’m also not convinced that Iberian exposure to Irish banks is as large as Minerd says it is. Here’s Michael Lewis, in his epic article on Ireland:

One of the most closely watched numbers in Europe has been the amount the E.C.B. has loaned to the Irish banks. In late 2007, when the markets were still suspending disbelief, the banks borrowed 6.5 billion euros. By December of 2008 the number had jumped to 45 billion. As Burton spoke to me, the number was still rising from a new high of 86 billion. That is, the Irish banks have borrowed 86 billion euros from the European Central Bank to repay private creditors. In September 2010 the last big chunk of money the Irish banks owed the bondholders, 26 billion euros, came due. Once the bondholders were paid off in full, a window of opportunity for the Irish government closed. A default of the banks now would be a default not to private investors but a bill presented directly to European governments.

Still, Minerd’s main point remains: insofar as the losses from a Greek restructuring aren’t socialized, they have the potential to cause a serious crisis. As a result, they probably will be socialized. And if you’re going to socialize those losses anyway, you might as well do it directly, rather than doing it by bailing out affected banks. Which means that Greek debt could go the way of Irish bank debt, and simply disappear into the ECB, which can afford to take a haircut on it.

That will take time — which is one reason why the people here at Milken predicting a Greek default in 2011 might well turn out to be wrong. Right now, the ECB has about €40 billion in Greek debt. That’s due to rise to €80 billion in 2013, at which point the ECB will own about half of all Greece’s outstanding bonds. If the number starts rising more quickly than that, it could be a sign that a restructuring is nigh.