Opinion

Paul Smalera

How to reboot Slate

Paul Smalera
Aug 29, 2011 16:01 EDT

By Paul Smalera
The opinions expressed are his own.

There’s really no schadenfreude to be had for Slate, which laid off four staffers and a few freelancers last week. After all, this is the online magazine that gave birth to a Twitter meme, #Slatepitches, that was instantly understandable by almost anyone who has ever read an article on the site, ever. The publication’s formula of taking an already counter-intuitive conceit for a story and adding an extra inversion might be easy to poke fun at, but it’s also become, like so many other of its early innovations, a signature of writing online.

The writer of that “Slate pitches” recap, Juliet Lapidos, was sadly one of the staffers reported to be laid off, along with veterans Timothy Noah, Jack Shafer and June Thomas. Despite having contributed regularly to The Big Money, Slate’s erstwhile business website, I have only met Lapidos once or twice (though she did write about my favorite government document ever, which dealt with effectively communicating the dangers of nuclear waste dumps to humans 10,000 years in the future) and I don’t know Shafer, Noah or Thomas. But I’ve been reading Shafer and Noah online for over a decade — maybe not since I bought my first modem, but definitely by the time I bought my third — because they are so good at what they do and also because there simply was no one else to read online that was as smart as them and wrote for and understood the web.

Slate’s history, until recently, felt like that of the New York Times of the 1970’s after the shakeout of New York City press strike of 1962-63 led it to a brief period of outsize influence and dominance in media. The Times in the 1970’s through the early 1990’s became the locus of criticism, praise, conspiracy theories and honest-to-goodness news because there was nowhere else for New York and America to turn. (I guess it’s not surprising Jack Shafer already dissected the impact of that strike.)

Slate had a chance to gestate in the mid to late 1990s and dominate online media in early 2000s, when few still understood the effect the Internet would have on our lives, but many good journalists who were chronologically closer to the Times’s glory days, like its founding editor Michael Kinsley, and Jack Shafer, were getting excited about the new medium. Since then, some of the very qualities of Slate that Kinsley took pride in on the occasion of the site’s 10 year anniversary have become, if not antiquated, surpassed by the competition.

For Slate to succumb to the fate of niche magazines everywhere — wielding influence in reverse proportion to its circulation — would be a cruel fate. Kinsley, Weisberg and others at Slate come from the cloth of publications used to that — Harper’s and The New Republic – but that shouldn’t be the model that Slate aspires to. The point of Slate was to prove smart journalism could find a broad online audience, not to replicate smart journalism’s niche status online.

When Microsoft, Slate’s founding benefactor, sold the website to the Washington Post Company in 2005, Slate’s new editor Jacob Weisberg developed an ambitious growth plan for it and moved up a level to become chairman of the Slate Group. But competition on the Internet had grown fierce, and the Tyranny of the CPM forced those growth plans off the rails. Some of those side projects, like The Big Money and DoubleX, were shuttered. Now the core of the original product, the institutional DNA, is starting to succumb. If I make it sound like Slate was a great place that is just too old — a victim of circumstance, a BlackBerry in an iPhone world —  the story isn’t quite that simple.

Slate is still young — very young. Founded in 1996, it seems far too young to be dealing with these kinds of growing pains. But it’s also an experiment in everything journalism can be. The era of Slate making sense as a rounding error on the balance sheets of Microsoft and The Washington Post/Kaplan is clearly over. Yet the era of smart, web-only journalism is just beginning. It’s time for Slate to fully embrace its startup roots. It’s attempts at profitability and book-balancing have probably always been buttressed by the idea that the money to operate is going to come from somewhere. So why not make it come from real investors, with a real stake in the financial success of Slate?

Here’s the solution: spin it off. Slate doesn’t deserve to be slowly whittled away to the bone, or to be publishing link-bait, traffic-gaming pieces, no matter how witty the conceit. Slate is an established, valuable brand, with a lot of smart people (still) working on the editorial side. But the business side of Slate has not kept pace with the desires or the needs of the editorial team. Both sides are stifling each other — Slate’s bookkeepers demand budget cuts that lead to staff reductions, and Slate’s editors are under the gun to deliver a more valuable product with less resources. Weisberg may be Chairman of the (dwindling) Slate group, but what Slate needs is a CEO, someone who can lead a spinoff, attract venture capital, talent in the engineering, sales and business staffs with the prospects of equity and a clean, er, slate, with which to reinvent the modern online magazine.

The Washington Post may not love the idea of selling out — Slate was supposed to be a feather in their cap, and an incubator of ideas and talent, but like Microsoft before them, the Post should accept that they didn’t manage the acquisition well, and be willing to divest it. They could try to sell Slate to another company, as they did with Newsweek, but that makes little sense — Slate was conceived without the extraneous baggage and overhead of a print publication. Physically, it’s little more than office leases and web servers.

Based on billion dollar valuations, new media companies have been raising tens of millions of dollars at a clip from venture capitalists. Even pure media plays like Capital New York have managed to nail down angel funds from Silicon Alley’s tech elite. So what if a real technologist and business person like Google News’s Josh Cohen was offered the chance to transform the Slate group into something venture capitalists like Fred Wilson, Chris Sacca and Reid Hoffman would invest in? The Post could keep an ownership stake, but the company would run in startup mode and rid itself of the big-company bureaucracy and IT nightmares that drag on growth and innovation. Keep Slate fresh and going for a year, Cohen could tell Weisberg, and I’ll get you a clean house and cash infusion to make Slate Group 2.0 a real possibility.

Slate was the original, crazy experiment of its time. It won the fierce loyalty of a generation of readers. But it’s time to re-run the experiment, exploiting the cash-rich, talent-starved startup environment of 2011, and see what the editorial mission of Slate — indeed, of online journalism as a whole — can become over the next 15 years.

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Downgrading democracy

Paul Smalera
Aug 8, 2011 16:46 EDT
debt ceiling | S&P downgrade | Washington

By Paul Smalera
All views expressed are his own.

The Washington debt ceiling debate over these past months was the throwing open of the doors to the democratic slaughterhouse — let’s please not ever complain again about not being able to watch the sausage get made. Though our media window onto the killing floor surely contributed to the S&P’s downgrade of U.S. debt, that’s not an entirely bad thing, as I’ll explain in a moment.

The preemptive downgrade of U.S. debt breaks a disturbing ratings agency pattern: Too-late downgrades from S&P and the other ratings agencies in the cases of Bear Stearns, Lehman Brothers, AIG, Greece and Ireland among many others. In the econoblogosphere, reliably hind-sighted ratings-agency downgrades, whether of sovereign debt or a teetering company’s bonds, have come to be something of a dark joke. It’s overdue that S&P got itself back into predictive rather than reactive mode. Yet the company’s sovereign debt committee surely chose the wrong target in U.S. Treasuries and broke the late-downgrade pattern for all the wrong reasons.

The ratings agency’s decision reads like nothing other than a fit of pique towards the government institutions and American people that had come to blame it as a prime enabler of the global financial crisis. The agencies, as my colleague Christopher Whalen just wrote, “prostituted themselves and their special position of trust with respect to mortgage-backed securities and exotic derivatives.” To get a little more anatomical, executives at the ratings agencies churned out AAA ratings on CDOs and other risky debt — debt that their analysis should have shown to be junk-bond quality at best — because they risked losing business if they were too critical. (Call it the, “every John is the best lover ever” theory of credit rating.)

The S&P’s biggest blunder here is that the U.S., thanks to the debt deal everyone hates, will continue never missing a debt payment. A close second is that even if the U.S. had run out of borrowing power, Timothy Geithner and the Treasury Department surely had a “Plan B” that would’ve prioritized debt payments to avoid a default, probably for at least a few more months before its cash-on-hand situation became truly dire.

But the real reason the S&P was wrong to downgrade the U.S. is because what we all just witnessed in D.C. was, as the famous quote goes, the sausage being made. It was an open, democratic process. The Tea Party Republicans who blocked more moderate debt ceiling legislation are duly-elected representatives who were fighting hard for their constituents and beliefs, however radical. It may frustrate moderate or liberal voters to no end that Tea Party governance appears to be little more than obstruction, but that’s been the prerogative of minorities in divided governments for centuries. In the end, as analysts conceded, they were brutally effective in swaying the Obama administration and Senate Democrats much closer to their preferred, fiscally constrictive debt ceiling deal. Since when are political compromises supposed to be pretty?

While Americans, and indeed the world, would’ve surely preferred a smoother debt deal, our divided viewpoints on the country’s proper economic direction forward produced the only deal that all sides could begrudgingly sign onto. And that’s how democracy is supposed to work. What S&P downgraded then, as it admitted when it tossed out its own $2 trillion error and went full speed ahead, was the democratic political process and the representative form of government as it currently exists in the U.S. (Aside: Has the S&P boxed itself into reaffirming its rating based on the results of every national election from here on out?)

When investment banks and insurance companies presented unified fronts and financial pressure on ratings agencies in demanding AAA, the agencies willfully acquiesced. But when the U.S. government, in unprecedented fashion thanks to the 24×7 media climate, opened its doors on the strife, division and battling that goes into shaping the single largest component of the GDP, well, the ratings agencies would respectfully request that democracy get its PowerPoint slides in better shape next time.

While the debt ceiling debate was painful to watch, it was the delivering on of a promise that President Obama made as a candidate with regards to the health care debate. He promised to hold negotiations over that legislation in the clear light of day, and never did. In the debt ceiling debate, the political players had little choice but to throw open the slaughterhouse doors. If we didn’t like what we saw, it’s now up to us as voters to change things for next time. But sunlight has lit up the political process as never before. It’s no one’s fault but its own that the S&P seems to prefer the boardroom or the backroom to the family room when it comes to keeping the nasty bits of governance out of sight.

I’m reminded of Joel Salatin, a farmer chronicled by Michael Pollan in “The Omnivore’s Dilemma.” Salatin  has a slaughterhouse on his radical, which is to say, highly traditional, farm. It’s an open-air shed — no walls, lots of sun, nowhere to hide what happens there. His customers can even come by and watch the proceedings. Government food regulators were extremely squeamish when it came to his methods — why not use a traditional slaughterhouse with a cow-sized hole at one end and an idling tractor-trailer at the other? Why grow meat outside the industrial system at all? In his own book, “Everything I Want To Do Is Illegal,” Salatin writes, “The stronger a culture, the less it fears the radical fringe. The more paranoid and precarious a culture, the less tolerance it offers.”

Not only have we seen the radical fringe of fiscal politics, we’ve seen, in the S&P downgrade, the fear of the radical fringe of open, sincere dialogue around issues like the national debt. But thanks to debt ceiling debate, everyday Americans know more about the precariousness of our fiscal situation and the power of voting for their elected officials than ever before, and not a moment too soon. For that alone, the U.S. deserves a big upgrade.

COMMENT
See all comments (16) | Add comment
Aug 10, 2011
2:46 am EDT

I fundamentally agree with you on Social Security and Medicare…good (in concept) for America. The unfortunate reality is that in keeping Senior’s costs down, it has the effect of increasing everyone else’s medical costs.

If I had my way, all health care would be managed by non-profit entities, and there should be some common sense as to, say, not authorising new hips for people that statistically will never walk again, or multi-thousand dollar treatments for people that will statistically be dead very soon anyway. All would have to execute a Living Will and organ donation form before being admitted to a hospital.

Health care is way too important and complex for government to administer, it seems fundamentally immoral for shareholders to profit from another’s poor health. I would not be opposed to a “universal health care system” of common rules, checks and balances under which multiple regional non-profit entities would compete to serve individuals (similar to Medicare Pt. D). If pushed, I would view insurance companies similarly.

It is unfortunate that the only time unions and management are of common mind is when taxpayers are stuck with the bill for their agreements. Speaking strictly of today, the “average” take-home pay of a union worker IS higher that that of the “average” take-home pay of a non-union worker, but that tide doesn’t raise all boats.

The “average” non-union worker can’t join the union… he/she has to “know somebody”. Fact be known, the steward’s son or brother-in-law probably gets more hours than others of similar seniority; and seniority trumps skill and productivity in a union every time.

In that sense, I don’t think the “union privilege” helps the going rate in the trades at all…it’s supply and demand where contracts don’t require union help. It certainly doesn’t help the average American afford a house or government to work on infrastructure and get a dollar’s worth of effort for each dollar spent.

Our Uncle Sam was the crook that plundered the trust fund, and I’d like to neuter big Pharma’s lobbiests…they’re good. Really good!

Whaddaya think now?

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