Felix Salmon

Don’t ignore Tim Cook’s sexuality

Felix Salmon
Aug 25, 2011 19:47 UTC

Tim Cook is now the most powerful gay man in the world. This is newsworthy, no? But you won’t find it reported in any legacy/mainstream outlet. And when the FT‘s Tim Bradshaw did no more than broach the subject in a single tweet, he instantly found himself fielding a barrage of responses criticizing him from so much as mentioning the subject. Similarly, when Gawker first reported Cook’s sexuality in January, MacDailyNews called their actions “petty, vindictive, and just plain sad.”

But surely this is something we can and should be celebrating, if only in the name of diversity — that a company which by some measures the largest and most important in the world is now being run by a gay man. Certainly when it comes to gay role models, Cook is great: he’s the boring systems-and-processes guy, not the flashy design guru, and as such he cuts sharply against stereotype. He’s like Barney Frank in that sense: a super-smart, powerful and non-effeminate man who shows that being gay is no obstacle to any career you might want.

One of the issues here is that most news outlets cover Cook as part of their Apple story, and Cook’s sexuality is irrelevant to his role at Apple. And so the other story — the fact that the ranks of big-company CEOs have just become significantly more diverse — is being overlooked and ignored. And that’s bad for the gay and lesbian community more broadly.

The institution of the closet is one of fear — one where people would rather be ignored than noticed, because they fear the negative repercussions of being known to be gay. It’s an institution which Cook, like any gay man born in 1960, knows at first hand. But now the risk of being ignored is bigger in the other direction: if the world can’t see gay men and women in all their true diversity, if the only homosexuals they know of are the flamboyant ones on TV, then that only serves to perpetuate stereotypes.

As the Apple story moves away from being about Steve Jobs and becomes much more about Tim Cook, we’re going to see a lot of coverage of Cook, the man. He is, after all, not just one of the most powerful gay men in the world; he’s one of the most powerful people in the world, period. The first instinct of many journalists writing about Cook will be to ignore the issue of his sexuality. It’s not germane to his job, they’re only writing about him because of the job he holds, and therefore they shouldn’t write about it.

On top of that, Cook is not exactly open about his sexuality, and Apple has never said anything about it. Cook’s formative years, professionally speaking, were the 12 years he spent at IBM between 1982 and 1994 — and at that company, in those days, coming out was contraindicated from a career-development perspective. Mike Fuller, a gay VP at IBM, told the Advocate in 2001 that he knew “IBM employees who worked for the company in the 1980s who told me they left IBM because they weren’t comfortable coming out at work”; this comes as little surprise. After all, the years that Cook spent at straight-laced IBM coincided with the height of the AIDS panic, when people were worried about sharing toilet seats with homosexuals. It would be hard to come out at any company in that kind of atmosphere.

But thankfully we’ve moved a very long way from those days. Homosexuality is no longer something shameful, to be coy or secretive about — especially not when you’ve risen to the very top of your profession. In fact, it’s incumbent upon a public-company CEO not to be in the closet.

Four years ago — a long time itself, in the history of gay rights and public acceptance thereof — John Browne resigned as CEO of BP under a shameful cloud. The reason for his downfall was not that he was gay, but rather that he was in the closet. As I explained at the time, in trying desperately to remain comfortably in the closet, he ended up lying repeatedly to the UK High Court – and that is why he had to resign.

Back then, there were no public-company CEOs on Out magazine’s gay power list; this year, Cook topped the list even before he became CEO of Apple. Keeping his sexuality a secret is no longer an option. And so the press shouldn’t treat it as though it’s something to be avoided at all costs. There’s no ethical dilemma when it comes to reporting on Cook’s sexuality: rather, the ethical dilemma comes in not reporting it, thereby perpetuating the idea that there’s some kind of stigma associated with being gay. Yes, the stigma does still exist in much of society. But it’s not the job of the press to perpetuate it. Quite the opposite.

Update: For a better and more heartfelt version of this post, read Joe Clark from back in February: “When you tell us it’s wrong to report on gay public figures,” he writes, “you are telling gays not to come out of the closet and journalists not to report the truth.”


Seriously, people? If you don’t like what is being said, all I can say is “F*ck off”. No one is holding you at gunpoint to read the article, nor are they forcing you to like it. If you don’t agree with it, go somewhere else and do something else. Don’t make your bigoted opinion ruin the article for those who actually want to enjoy it.

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Adventures with paywalls, FT edition

Felix Salmon
Aug 23, 2011 14:05 UTC

Every so often, I get puzzled looks from FT types when I complain about their paywall, and say that it’s not only user-unfriendly for non-subscribers, it’s particularly user-unfriendly for subscribers, too.

Here’s what greeted me this morning when I followed a link to an FT story:


What happened was that the page started loading — it got as far as the headline. Then it greyed out, and the paywall box appeared. (And then — this is my favorite bit — a video flash ad started playing on top of the paywall box; it went away before I could get a screengrab.)

You can see, in the greyed out bit, that I’m logged in to the site: it says “Welcome felix” right there. Yet the paywall is asking me to login again.

When I did that, I ended up at the FT.com homepage, rather than the article I wanted to read. So I went back to the link which sent me to the FT and clicked it again. This time, I got this:


This is not much of an improvement. I’m still logged in, but now it thinks I’m a registered reader who’s used up his quota for free articles and who isn’t a subscriber. Not true! I’m a paid subscriber.

If I click on the big button saying “Click here to continue”, however, it treats me as though I have no subscription:


But if I make my way to the “Your account” link, the site still tells me that I have “Unlimited FT.com access”. Ha.


Now I have a theory for what might be going on here. This is the link I was following; if you look at the URL, it’s a bit of a mess, seems to include the address twice, and has the string “Authorised=false” in the middle. Here it is:


I have no idea what might be going on here, but I seem to run into this problem quite a lot when I follow FT links which other people have shared using various social media tools. When a link to the FT escapes into the wild, it seems, the FT tends to treat it with extreme prejudice, and errs on the side of shutting it down. The FT’s OK with people sharing links using its own internal sharing tools, but good old-fashioned linking is not something it’s very cool with.

This is why I say that the FT and NYT paywalls are very different beasts. If someone’s doing the NYT a favor by linking to its stories, the NYT will welcome all those visitors. The FT, by contrast, sends them away, even if they’re FT subscribers.

The FT site works fine for subscribers who read it the old-fashioned way, starting at the homepage and then clicking around. As does the web app on the iPad. But for those of us who get our news from feeds, following links from email or Twitter or Facebook or an RSS reader, the FT paywall is a disaster. And it generates a large amount of ill will from people like me who pay hundreds of dollars a year for “unlimited access” to the site.


I just cancelled my subscription to the FT out of disgust. They dropped the print edition in Texas and equivocated about access to FT.Com. I was using it for teaching purposes in a university–marvelous, ideal vehicle–but their pricing structure and dreadful customer service has led me to this. They obviously don’t give a damn how many educated subscribers they lose.

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Hewlett-Packard and the M&A scoop

Felix Salmon
Aug 19, 2011 19:34 UTC


The death of the M&A scoop is going to happen slowly, but frankly it should happen as quickly as possible — and the past 24 hours in the history of Hewlett-Packard is an excellent indicator of why.

Yesterday, just after noon, Bloomberg found itself in possession of some market-moving news about HP: it was engaging in a major strategic shakeup, closing its WebOS division, buying UK company Autonomy for about $10 billion, and putting its PC business up for sale. (Bloomberg has since updated its story to reflect HP’s formal announcement, so I can’t link to the scoop itself.)

The markets, suffering through a massive down day, loved the news, in its leaked-to-Bloomberg form. HP shares were trading about $29.85 before the news came out; a few minutes later they were as high as $34. That’s a rise of 14%, or, to put it another way, an increase in market capitalization of some $8.5 billion.

One blogger, at least, was unimpressed. Zero Hedge, in an astonishingly prescient post entitled “Hewlett Packard Leaks Good News Early, To Mask Bad News Later,” explained exactly what was going on:

With less than 5 hours until the company’s official earnings release, Hewlett Packard just leaked to by Bloomberg that it would spin off its PC business and purchase British software developer Autonomy PLC. This is the oldest trick in the book to get a stock to drop from a higher level in the hopes that staggered releases of news, first good, then bad offsets each other, instead of having the good news be overwhelmed by the bad… We very much doubt this surge will sustain itself for more than a few minutes after the scam is understood. We also very much doubt that today’s earnings release will have anything good to say about the future.

By the end of the day, HP was back to its pre-report levels, in anticipation of a weak earnings report. But no one guessed just how weak the earnings would be.

HP was still spinning, though: its official news release was headlined “HP Confirms Discussions with Autonomy Corporation plc Regarding Possible Business Combination; Makes Other Announcements.” Among those “other announcements”:

FY11 GAAP diluted EPS is expected to be in the range of $3.59 to $3.70, down from its previous estimate of at least $4.27.

In English? “We’ve been telling shareholders to expect earnings of at least $4.27 per share this year. But actually we’re not going to come close. In fact, we’re not going to make more than $3.70, and we might make as little as $3.59.”

The drop from $4.27 to $3.59 is a whopping 16% — a huge miss, given that we’re already more than three quarters of the way through Hewlett Packard’s fiscal year. HP didn’t even attempt to guess what 2012 might hold in stock, perhaps because it’s likely to take most of that year to slough off the PC business it poured so much money into back in 2002.

And so when HP shares opened for trading today, they fell sharply — just as Zero Hedge predicted they would. They’re now trading at less than $24 per share — a 20% fall from the closing price yesterday and a whopping 31% fall from the post-leak knee-jerk exuberance levels of about 12:15pm or so yesterday.

We still live in a world, sadly, where it’s considered good journalism to get a scoop like Bloomberg’s and to move the market by publishing it — in the world of financial journalism, moving markets like this is the gold standard of what editors and proprietors are looking for. Even if you move them in what turns out to have been entirely the wrong direction, with a one-sided story which leaves out the most important news of the day.

It’s clear today that HP’s strategy is failing, that the big strategic moves are something of a hail-Mary pass, and that it’s massively overpaying for Autonomy. We got there in the end. But the M&A scoop which kicked off the news cycle looks like an attempt by HP to manage media coverage and to distract attention from its dreadful earnings guidance. And, at least for a few short minutes, it actually worked.


“I’ve never seen such a well managed well run company fall down a flight of stairs so quickly after a management change.”

Quality management is proven over a period of years… Fiorina saddled HP with a low-margin PC business, at a time when well-managed companies like IBM were getting out. Hurd slept with the help, while the board was playing footsie under the table. Apotheker may be taking the company in the right direction, but does he have the vision to make it work?

The management of HP has been generally abysmal for a decade, yet they have leading positions in servers and printers/copiers, and have a decent chance of establishing themselves in services. The Autonomy purchase is probably overpriced — but it is a profitable and growing business. Even bad management ought to be able to turn a profit on that mix!

As for selling their PC division, I wonder if Microsoft could be interested? They certainly have the cash to do so, and the demise of HP/Compaq would be the death knell for their Windows franchise. If Google saw synergies in the integration of their software with Motorola’s hardware, might Microsoft grasp at the same straws?

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Matt Taibbi vs the SEC

Felix Salmon
Aug 18, 2011 15:31 UTC

Matt Taibbi’s 5,000-word exposé of the SEC’s document-shredding is a magnificent piece of journalism, and is the first and last place that you should look to understand what’s going on here. After the piece came out, Senator Chuck Grassley — who’s quoted in the article — made growling noises in the general direction of the SEC, which is now very much on the back foot. But all the news and background that you need can and should be found in Taibbi’s article, rather than Grassley’s 325-word press release.

So how well is the mainstream media reporting this news? Everybody’s reporting Grassley’s statement, of course, as they should be. But the WSJ, Bloomberg, FT newspaper, and even Reuters make no mention of Taibbi or his article at all. The NYT is better, providing a link to the article and saying that the document disposal was “first reported by Rolling Stone magazine on Wednesday”, but the link feels grudging and there’s nothing which indicates that if you follow the link you’ll get a much fuller and richer version of the story than you’ll get from the NYT. Only FT Alphaville draws a direct connection between Taibbi’s article and Grassley’s statement and really encourages you to read the piece.

Blogs and Twitter, of course, are much better. Zero Hedge, Dealbreaker, Naked Capitalism, Daily Intelligencer, Clusterstock, Atlantic Wire, and many others took Taibbi’s article seriously, linked to it prominently, devoted entire posts to it, and mentioned him by name rather than just referencing the name of his publication. The Huffington Post gave the article its standard aggregation treatment, and Arianna tweeted it personally.

As for the substance of the article, Taibbi makes a very strong case. Only Matt Levine has attempted a defense of the SEC, and he says that the agency’s policy of destroying files was “publicly announced”, when in fact it was a secret internal policy which the SEC wouldn’t even admit to when asked point-blank by the National Archives and Records Administration, the agency in charge of all federal document-disposal decisions. Levine says that “the trouble with Big Brother was too much all-pervading surveillance, not too little”; the financial crisis, I think, proves him clearly wrong on that front. The SEC in particular was toothless and ineffective for the entire Bush Administration, effectively giving banks and other fraudsters a green light to do anything they wanted. And its response to these latest allegations has been distressingly defensive and obfuscatory.

I hope this turns into a big scandal and causes significant changes at the SEC — although I’m not holding my breath. But if it does, Taibbi will deserve a huge amount of the credit. And judging by today’s coverage, he won’t get it from the mainstream financial press.


I want to commend you on your work regarding the SEC. It is dispicable what is going on there. Please keep on them. Let me know if there is anything I can do to support you.
thank you

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Annals of anonymous analysts, NYC real-estate edition

Felix Salmon
Aug 16, 2011 14:17 UTC

Back in April of 2010, Elizabeth Dwoskin of the Village Voice, with the help of two reporter/translators, put together an excellent 4,700-word article on the complex dynamics at 55 and 61 Delancey Street, in downtown Manhattan. There was a new landlord, Madison Capital, which was better than the old landlord, but was still harassing rent-controlled tenants. There was a lot of mutual incomprehension between the mostly-Chinese old tenants and the mostly-white new tenants paying market rate. And nobody really had a full grasp of the facts.

So it’s a bit weird, 16 months later, to find the NYT’s Michael Powell put together something much less nuanced and much more one-sided on the same issue — with one of the worst abuses of the “analysts say” construction I’ve seen in a long time:

Madison Capital bought these two tenements, at 55 and 61 Delancey, in 2008 for $20 million total. (The same buildings sold for $6 million in 2003.) The tenants of the 45 apartments, predominantly Chinese and Dominican, generally pay $1,000 or so each a month. Newer arrivals, N.Y.U. students and post-college kids, pay $3,000 or so. To turn a profit, analysts say, Madison needs a minimum of $6,500 per apartment.

Which leads suspicious souls — I plead guilty — to suspect Madison’s real long-term play is to demolish the tenements and build one of those blue-glass condos where no one ever thinks of putting up a curtain.

Powell doesn’t mention that the buildings come with eight retail units, housing glamorous market-rate tenants like the Berkli Parc cafe and James Fuentes gallery. I’m no expert on retail rents on Delancey Street, but let’s be conservative and put them at $5,000 each, for a total of $40,000 a month. On top of that add $6,500 per apartment in residential rents — the “minimum” that Powell thinks Madison needs to make a profit on the buildings. The total comes to a nice round $4 million per year.

I really don’t think you need to be making $4 million a year in order to turn a profit on a $20 million investment. Let’s say that Madison took out an 80% mortgage at 5% interest: then its annual interest payments would be about $800,000. Add on a couple of hundred thousand dollars in management costs, and you’re still talking about costs in the $1 million range for the two buildings. That’s a quarter of the kind of money that Powell thinks Madison needs to turn a profit.

And frankly it’s pretty silly to think that Madison wants to tear down two perfectly good old tenements and replace them with glass condos — especially since it would be much easier and cheaper to take the existing buildings and convert them to condos over time. At a purchase price per apartment in the $400,000 range in what is now one of the most overheated property markets in America, there’s definitely potential profit there — and it’s a lot easier to sell apartments to their existing tenants than it is to try to vacate two huge buildings with 53 different tenants so that you can tear them down and build something else.

I would dearly love to know the identity of the “analysts” Powell talked to in order to get his crazy $6,500-per-apartment estimate. What’s the minimum qualification needed to be considered an “analyst” for the purposes of the NYT? On the basis of this article, simple numeracy would seem to be lacking.


Also, the existing stabilized tenants are almost assuredly not buyers of the condos. After a conversion, assuming the developer could get enough sales among the market-rate renters for the plan to be effective, they would continue to be stabilized renters for as long as they cared to, serving as an ongoing drain on the building’s finances. On the other hand, it is legally permissible (I don’t do residential development, so I don’t know how high the bar is in practice) to evict rent-regulated tenants for a demolition if you relocate them appropriately.

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Why the NYT paywall isn’t like the FT’s

Felix Salmon
Aug 15, 2011 13:40 UTC

Fred Wilson has nice things to say about my analysis of the NYT paywall — thanks, Fred! — but it’s worth teasing out one area where he and I might differ.

Fred says that the NYT “went with the FT’s model”, and I’ve also heard privately from another person making an impassioned case that the NYT and FT models are basically the same.

But they’re not.

The NYT paywall is so porous that it can be considered to be a genuinely freemium model. If you follow a link to the NYT site, you will never run into the paywall — no matter how many times you do so or how many NYT articles you’ve read that month. If you then want to stay on the NYT site and read other stories there, it’s very easy to do that too: the paywall might appear, but it’s easy to circumvent. (One popular way of doing this: just strip off the extra garbage in the URL which summons the paywall.)

That’s why I likened the NYT paywall to a polite “please keep off the grass” sign, with symbolic low green hoops separating would-be readers from their desired content. If they want to get there, it’s easy to do so; the NYT is just making it clear to them that it would like them to pay for a subscription first. Being both polite and reasonably wealthy, it turns out that hundreds of thousands of nytimes.com readers have done just that.

At the FT, by contrast, the paywall was much less porous from day one, and has been tightened up substantially since then. In fact, with the exception of Google’s First Click Free program, the FT has deliberately made it as hard as it possibly can for non-subscribers to read its content.

The difference between the NYT and the FT, then, is that the porousness of the paywall is a feature at the NYT and a bug at the FT. Yes, both of them have an official meter which counts how many stories you’re allowed to read before the paywall gets thrown up. That’s the crack-dealer model of selling content: give ‘em a little for free, and soon they’ll be begging for more. The free stories you read before the paywall goes up aren’t a porous paywall, they’re an integral part of the whole paywall model.

Put the question this way: when it comes to paywalls, is the FT more like the NYT, or is it more like the WSJ? The WSJ doesn’t have a meter; it has a more old-fashioned system where some articles are free to everybody and others sit behind the wall.

But I’m more interested in how forbidding the wall is, rather than in where and how exactly it’s placed. Both the FT and the WSJ are signed up for First Click Free, which means that both of them are susceptible to the elaborate workaround of copying the headline, pasting it into Google News, and then clicking through from there. Beyond that, both of them basically make it as hard as possible for non-subscribers to read stories behind the wall.

If I link to a WSJ or FT article, I can have no assurance that my readers will be able to read it. The same is true with respect to sharing that article on Twitter or Tumblr or Facebook or even LinkedIn. (The exception is Google Plus, since First Click Free is in effect there.) More generally, if a non-subscriber wants to read a specific story behind the WSJ or FT paywall, it’s very hard for them to do so, compared to the NYT site, where it’s much easier.

That’s why I like the NYT paywall and lump the WSJ and FT paywalls together. Whether there’s a meter or not is pretty much irrelevant, especially considering the way in which the FT has steadily tightened up its meter to the point at which non-subscribers can barely read anything at all. Even subscribers, like myself, find it very hard to read FT content a lot of the time: try following a Twitter link to an FT story on your mobile device, or trying to read an FT story in Flipboard, and you’ll see what I mean.

The NYT paywall is generous to subscribers and non-subscribers alike, and the NYT has managed to keep both goodwill and traffic with respect to its non-subscribers. That can’t be said of the WSJ and FT, who take a much more hostile and adversarial approach to the people who aren’t paying them hard cash. The NYT sees value in remaining accessible to everybody; the FT and WSJ see value in restricting access only to paid subscribers.

Which is why I think it’s fundamentally misconceived to think of the FT paywall as being very similar to the NYT paywall. Rather, it’s at heart the same as the WSJ paywall: a way of restricting content as much as possible to subscribers exclusively. The NYT is a free website with a mechanism for getting readers to subscribe; the FT and WSJ are subscription websites with some content available for free. It’s the NYT model which I love, not what’s going on at the FT.


You make a good point about walls and the message they send. Exclusivity and hostility can lose you future subscribers; moreover, you may alienate potential ones in the present.

This podcast had an interesting part about sacrificing long-term loyalty for short-term gain: http://www.npr.org/blogs/2011/01/26/05/t he_friday_podcast_can_a_publi.html, circa 9:00. I don’t think their market research captured the full spectrum of npr listeners — which is maybe where the difference between t-shirts and media comes in, but that’s a discussion for another time.

Habits and loyalty are like trust. They take time to build, and it has to happen willingly. It’s a cooperative endeavor. Once broken, they require additional efforts to rebuild.

To the commenter above, I share your concern about viable business models. However, I feel the same way about journalism here as I do about primary school teachers. If people need great social status, perks or boatloads of money to do it, they probably aren’t the kind of people you want to see following that calling.

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Whither the M&A scoop?

Felix Salmon
Aug 15, 2011 13:04 UTC

You’ve heard it here and everywhere: Google is buying Motorola Mobility for $12.5 billion. But here’s the media twist to the story: you didn’t hear it anywhere first.

Deal scoops are the most basic currency of business journalism. Once a deal is certain to get done, but before it’s officially announced, an M&A banker on one side or the other (it’s nearly always the bankers, rather than the lawyers or the actual companies doing the deal), tactically leaks news of the deal to a carefully-chosen source.

Virtually everybody wins when this happens. The leak always takes place when markets are closed, so there’s no risk of insider trading on the news. The banker leaking the news gets to control the story, since the journalist isn’t going to call around before publishing it. And the journalist gets a big scoop.

I’ve never been particularly impressed by these scoops: if a piece of news is going to come out in a press release in a few minutes or hours, then getting it first, while markets are closed, has little value to readers. But journalists fight incredibly hard to get them, and financial journalism’s biggest names have been made this way — think Charlie Gasparino or Andrew Ross Sorkin.

But given the value being created for bankers and journalists alike by the existence of the market in scoops, it’s notable when a deal like this one comes along with no advance word at all — not even someone reporting it breathlessly on CNBC five minutes before the press release comes out.

Is there a reason for this dog not barking? It might conceivably be a function of the buyer in this case. Leaks more often come from the buy side, rather than the sell side, and there’s normally a nod and a wink from the acquirer to the banker before they happen. If Larry Page made it clear that he didn’t want such shenanigans going on around his biggest deal ever, then that would probably have sufficed to shut them down.

And then there’s the more general decline of the scoop ecosystem. No longer is it possible to control the way that a story is received by leaking it strategically for prominent placement on the front page of the WSJ or NYT or FT. All those publications will put the news online first, it will instantaneously get disseminated across hundreds of news sites, and the resulting front-page story — if it even makes the front page, seeing as how it’s now commodity news — will be reported out rather than a single-source affair.

Right now, there’s a vacancy in the scoops market: there’s generally been one go-to reporter on the M&A beat, and there isn’t one any more. Steve Lipin gave way to Sorkin, and Sorkin has now largely given up his scoopmongering for grander jobs as a book author, newspaper columnist, website editor, and TV anchor. But maybe Sorkin will be the last of the breed. Mike Arrington still gets a lot of scoops in the tech world, but the big M&A scoops from Wall Street just don’t seem as important any more, thanks largely to the speed of the internet.

Sorkin’s Dealbook was clearly set up to bring together a large number of excellent financial journalists who care about this kind of thing and who can deliver scoops — but it hasn’t done particularly well on that front. Wall Street bankers don’t care half as much as Silicon Valley dealmakers do when it comes to the most important blogs in their area — but they know that the era of the important front-page newspaper M&A scoop is largely over.

So while it’s still possible that someone new will come along and inherit the mantle that Lipin passed to Sorkin, I’m not holding my breath. And maybe that’s a good thing. Because it might free up precious journalistic resources to concentrate on real enlightenment, rather than evanescent exclusivity.


Avoiding scoops is easy: bonus deal teams IB and legal, on news, stock/options not reflecting the deal before it is announced. Then it is in their individual interests to keep quiet and to make sure the others on the deal team keep quiet.

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Feces, fascists, and Michael Lewis

Felix Salmon
Aug 14, 2011 03:33 UTC

Kevin Drum doesn’t think much of Michael Lewis’s latest European dispatch for Vanity Fair — and neither do I. There’s precisely one thought-provoking paragraph in the entire 9,600-word article:

One view of the European debt crisis—the Greek street view—is that it is an elaborate attempt by the German government on behalf of its banks to get their money back without calling attention to what they are up to. The German government gives money to the European Union rescue fund so that it can give money to the Irish government so that the Irish government can give money to Irish banks so the Irish banks can repay their loans to the German banks. “They are playing billiards,” says Enderlein. “The easier way to do it would be to give German money to the German banks and let the Irish banks fail.” Why they don’t simply do this is a question worth trying to answer.

Sadly, Lewis doesn’t bother trying to answer that question. Instead, he returns to the running theme of the article, which might be evident if I excerpt a few words from here and there:

excrement – anality – Scheisse (shit), Dreck (dirt), Mist (manure), Arsch (ass) – The Money Shitter – crapping – rear end – toilets – “shit” – “my little shit bag” – laxative – “Purgation-Calendar” – anal – “As the fish lives in water, so does the shit stick to the asshole!” – scatological – “I am like ripe shit, and the world is a gigantic asshole” – sitting on the john – indulgence in fecal imagery – Scheisskerl (“shithead”) – feces – one of his favorite things to do with women was to have them poop on him – filth – coprophilia – The Call of Human Nature: The Role of Scatology in Modern German Literature - bowel movements – ring of filth – shit – Scheisse – splattered by their mud – a men’s bathroom – urinate – sat in the stall – “shit” – crap – crap – “Lick my ass” – “Lick my ass” – anally obsessed – stewing in their own filth – energetic anality – a blowout with prostitutes – anality – “Kackwurst is the term for feces” – ‘shit sausage’ – Bescheissen: “Someone shit on you.” Klugscheisser: “an intelligence shitter” – “you are said to shit money: Geldscheisser” – Die Kacke ist am Dampfen: the shit is steaming – a secret fascination with filth – “Scheisse glänzt nicht, wenn man sie poliert—Shit won’t shine, even if you polish it” – “Scheissegal: it just means I don’t give a shit.” – stick figures engaged in anal sex – simulating anal sex onstage

Which is not to say that there isn’t a sub-theme here. There is:

Nazi – Hitler’s favorite words – Hitler’s doctors – Hitler – the Nazis’ ambition – provincial Nazis – Hitler – Göring’s Air Ministry – Hermann Göring – the only advantage to the German financial system of having no Jews – the new Holocaust Memorial – Jewish Museum – spending decades denying they had ever mistreated Jews – Nazi-era expropriation of shares in the zoo owned by Jews – Hitler’s bunker – German guilt – “the Jews” – there are no Jews in Germany, or not many – “They never see Jews” -When they think of Jews – their victims – terrible crimes – a Jew whose family was driven out of Germany in the 1930s – Aryan – A Jew’s Life in Modern Germany - HOLOCAUST – Nazis – Hitler – A landscape once scarred by trenches and barbed wire and minefields – another Holocaust Memorial

Yes, the article’s about Germany. And, like Lewis’s previous articles on European countries, it’s an attempt to shine a light on the European financial crisis through the lens of national stereotypes. This is a dangerous exercise at the best of times, but in this case Lewis has gone way over the line. His article fails to say anything new or interesting about what happened in Germany during the crisis. And that’s fine, it has a lot of company in that respect. Everybody has an off day. But this essay is worse than that: it forces us to re-examine all of Lewis’s previous articles in the series as well.

Lewis’s articles on previous countries have all been criticized within those countries for precisely the kind of stereotyping which is so pointlessly offensive in this one. Not only has Lewis descended to an extended scatological riff which demonstrates absolutely nothing about the Germans’ propensity to buy subprime-backed bonds; he’s done so while violating Godwin’s Law. (Full disclosure: I’m half-German, so not entirely impartial in this case.)

Lewis is the best writer in financial journalism by some large margin, and much of what he does when reporting and writing his stories is simply unique. His technique is a labor-intensive one: Lewis talks to an enormous number of people, works out what story he wants to tell, and then puts together various tales and individuals he’s discovered over the course of his reporting in the service of telling that story in the most entertaining and compellingly readable way. It doesn’t matter how important you are, or whether you’ve given Lewis an important nugget of unreported news: if it doesn’t help the structure of his story, he’ll happily leave it out.

There are other financial journalists who are excellent writers, albeit not very many of them. Matt Taibbi and the NYT’s David Segal spring to mind. But none of them are willing to subsume news in service of the story to the degree that Lewis is.

This is not, in and of itself, a bad thing. In fact, in many ways it’s admirable. Lewis is an expository journalist by nature, and a master storyteller; he’s not a muckraker or news-breaker. We have far too few storytellers in financial journalism, while there are literally thousands of journalists looking to break incremental pieces of news. It’s clear where Lewis’s value lies — he can explain what’s going on to a broad audience of Vanity Fair readers, and doing so in a way that they love to read. No one else could make them care about Greece’s role in the European financial crisis; Lewis’s article on the country is a veritable master class on how to take a dry and recondite subject and make it thoroughly entertaining.

But Lewis’s incredible facility at storytelling is a powerful tool, and we have to be able to trust the craftsman who wields it. Lewis’s stories tend to be far more deeply reported than they seem at first glance, and in order for us to trust that he stands on the side of the angels we have to be able to trust in his judgment about what exactly the real story is. Because his raw material is extensive enough to support just about any thesis he wants.

And this is why the Germany story worries me. Not because it’s wrong, exactly. Lewis hasn’t suddenly converted to some crazy theory of the European financial crisis which fundamentally misstates what’s going on, or misleads his readers. But when he reaches so readily for the feces and fascists, Lewis does make us question his broader judgment. No honest accounting of Germany’s role in the financial crisis would — or should — include either.

I’m inclined to see the lapse of judgment in this case as being one of style rather than substance, and I continue to be a huge fan of Lewis’s journalism generally. But the lines do blur. Malcolm Gladwell has said that good non-fiction writing “succeeds or fails on the strength of its ability to engage you”, rather than on its necessarily being right convincing. The result, at least in Gladwell’s case — and, for that matter, in Taibbi’s, too — is oversimplification in the service of style. Lewis, with his Germany piece, has done something a bit different: he’s demonstrated so little faith in the ability of his subject matter to be interesting that he’s resorted to the laziest stereotypes of all. You could even say he’s the kind of person who files a polished and prestigious article for Vanity Fair, but who, on closer inspection, turns out to have filled it up with excrement.

Update: Gladwell responds in the comments, to say that while he’s OK with readers being engaged but not convinced, he’s not OK with being wrong.


This is racism pure and simple – an “opinion maker” of Jewish extraction “dumping” his barley concealed animosity against the Germans and trying to pass off the disgusting result as a piece of serious journalism. He is the mirror image of anti-Semites who accuse Jews of degrading society with moral filth – Freud and his theories on “anal fixation” being just one popular example. Just imagine if someone had written this filth about Jews – he would be drawn and quartered, so to speak. In any case, Lewis’ filthy spewings saw a lot more about his own squirming-like-a-toad mind than it does about the Germans. Go to hell, you hater!

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How the NYT paywall is working

Felix Salmon
Aug 12, 2011 15:19 UTC


When I wrote about the success of the NYT paywall last month, I got a lot of pushback in the comments and on Twitter. Here’s a sample:

“The fact people pay speaks more people’s average techno-illiteracy/laziness about how to change a link address in their browser than anything else.”

“Add ?ref=fb to the base link of any NYT article and the paywall drops, and Felix thinks this is “working”? Huh?”

“After seeing how many ways you can get by the pay “wall” I would say it isn’t working at all.”

But of course the paywall is working — with the emphasis very much on the “pay” rather than on the “wall”.

Yes, the NYT paywall is porous — but that’s a feature, not a bug. It allows anybody, anywhere, to read any NYT article they like. That makes the NYT open and inviting — and means that I continue to be very happy to link to NYT stories. (If you follow a link to the NYT from this or any other blog, you’ll never hit the paywall.)

I’m in England right now, home to both of the sights above: the polite request to “please keep off the grass”, accompanied by tiny iron hoops; and the forbidding walls surrounding the gardens of Buckingham Palace. The former encapsulates everything which people like about England; the latter is the dark and regrettable side of things.

Now imagine that both of the gardens above were open to anybody paying an annual membership fee. The gardens on the left would have many more freeloaders — people who just saunter onto the grass and enjoy the sunshine without paying. The ones on the right would be much more effective in keeping such people out.

But here’s the thing about freeloaders: if they value what they’re getting, a lot of them will end up paying anyway. What happened when the Indianapolis Museum of Art moved to a free-admission policy? Its paid membership increased by 3%. When the Minneapolis Institute of Arts did the same thing, paid membership increased by 33%.

Sales people and business-side executes tend to believe as a matter of faith that if people can get something for free, they won’t pay for it. But all they need to do is look at their own behavior to see how that isn’t true: when they go to a restaurant in a distant town that they’ll never visit again, they still leave a 20% tip. A large segment of the population feels that it’s only proper to pay for something if you’re getting value from it — and if you invite as many people as possible onto your lawn, that’s a great way of maximizing the number of people who get value from it. Especially in a world where your own enjoyment of it doesn’t impinge on anybody else’s.

The fact is that no one subscribes to the WSJ or the FT because of their exclusivity. As a result, the smart thing for both papers to do is to maximize their paying readership by maximizing their overall readership. Instead, both have taken a scared and defensive approach to digital subscriptions, fearing that if their readers can get their content for free, then they won’t pay.

Wonderfully, the NYT seems to have disproved that idea. It’s no philanthropy: it’s a publicly-listed for-profit corporation, run for the financial benefit of its shareholders. But its paywall marks a new model and very promising in getting consumers to pay for content. It’s not a completely free pay-as-you-wish approach: the NYT nudges people quite hard to pay quite a lot of money. But I’d wager that the majority of people buying digital-only subscriptions to the NYT are doing so only after bypassing the paywall at least once or twice. If you hit the paywall on a regular basis and barge past it, eventually you start feeling a bit guilty and pay up. By contrast, if you hit the FT or WSJ paywall and can’t get past it, you simply go away and feel disappointed in your experience.

Historically, when people paid for news, they paid for a newspaper — a physical object which had value to them. That model is still highly lucrative for the NYT, WSJ, and FT. But they’re taking very different approaches when it comes to the digital world. The WSJ and FT are taking a spines-out approach, on the theory that the pain of not reading their content will force people to pay. The NYT is taking a more open-door approach, on the theory that the pleasure of reading its content will be enough to persuade a large number of people to pay. It’s a far more attractive model, and one which is much more likely to attract new young subscribers over the long term.

Nick Rizzo has collated some thoughts on the NYT paywall from people in the key demographic between 25 and 30 years old, all of whom are paying for the digital-only version of the NYT. Here’s one:

I don’t want to have to deal with the dead trees. There are easily a dozen sections in the weekend edition I don’t have any interest in. It just seems wasteful.

The New York Times is my number one source for news and I appreciate the service it provides. I don’t mean to sound like a total goody-goody, and I certainly get around paywalls when necessary, but I think $15/month is a pretty good deal for the amount of enjoyment and information I get from the Times.

If they took the paywall away completely I guess I’d stop paying. I’m not really interested in skirting it, though. I also buy a lot of music, because I like the product, understand the incentives involved, and want its production to continue.

And here’s Rizzo himself:

I’m on the Times website literally all day long. Any work-around to avoid the paywall would still cost me precious minutes. Plus, I feel that maintaining a quality NYT is immensely important to the country as a whole, and I’m happy to play my part. I subscribe to the Weekender (indeed, to the slightly cheaper Sunday-only edition), which is the cheapest possible way to give myself online access. I subscribe to the New Yorker (which has a semi-paywall) and give to WNYC (which, of course, doesn’t) for similar reasons.

It’s worth noting here the way in which people often end up paying for the NYT largely in proportion to their ability to pay. Those who can’t pay, don’t. Those who can afford only the cheapest subscription buy that. Those with comfortable incomes subscribe to the seven-day paper product. It’s a great way of maximizing both audience and goodwill.

Paying for something you value, even when you don’t need to, is a mark of a civilized society. The NYT treated its readers as mature and civilized adults, and outperformed internal expectations as a result. Meanwhile, the WSJ and FT are still treating their readers with mistrust, as though they’ll be robbed somehow if they ever let their guard down a little. It’s a sad and ultimately self-defeating stance, and I hope in future they learn from the NYT’s embrace of the open web, even in conjunction with a paywall.


Wonder if NYT considered the NPR model of voluntary subscription?

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