The greatest economic challenge of our lifetimes is not now, it was 25 years ago under Jimmy Carter — Get ready for the Obama Drama Ding Dongs

In his first news conference since Election Day, President-elect Barack Obama said the United States is ”facing the greatest economic challenge of our lifetimes.”

“Obama Drama Ding Dong.” (Let’s see if that phrase catches on). For the next four years we are going to read and hear about crisis after challenge for Obama Drama Ding Dongs. (Inspired by the “Animal House” nightclub scene.)

And the “free press” in America fails to report that Jimmy Carter’s presidency was on an economic disaster with mortgage interest rates of 19 to 21 percent, gas lines, unemployment of over 8.5 percent and the highest tax rates ever seen in the United States since LBJ’s Great Society.

Today’s media is a propaganda machine for the Democratic party. This week the Washington Post in an editorial admitted they had an overwhelming bias to get Obma elected. Woopsie. But the LA Times was even worse. The editors there kept a tape of a toast to a Jew hater named Khalid.

We will see the tape eventually. But will it have been edited? What do you think?

There is no comparative, investigative reporting. Watch America transform into an Eastern European socialist nation with no future and the middle class transformed into a lower-class, mediocre society ruled by the rich, elite class.

Advertisements

Craigslist.org single-handedly destroyed the giant newspaper classifieds

Mick Gregory

“You took over our advertising — now are you going to take over our news?” — a question from a San Francisco Chronicle journalist to Craig Newmark, founder and CEO of craigslist.org.

“We took a straw and drained your milkshake,” from “There Will Be Blood.”

Craigslist.org has dominated the classified advertising market with its free listings for everything from real estate — to jobs — to personals. Big city newspapers, like the SF Chronicle have been crippled by this new kid on the block.

How much traffic does craigslist get?
A: More than 10 billion page views per month

Q: How does that compare with other companies?
A: craigslist is #8 worldwide in terms of english-language page views

Q: How many people use craigslist?
A: More than 40 million each month, including more than 30 million in the US alone

Q: How many classified ads does craigslist receive?
A: craigslist users self-publish more than 30 million new classified ads each month

Q: How many job listings does craigslist receive?
A: More than 2 million new job listings each month

— The Q&A is from Craigslist.org

The average user/reader spends so much time on the site–about five days a month, 20 minutes per day–the site ranks a startling seventh in terms of monthly page views. This is 4 billion page views per month. A billion here, a billion there, now we are talking about real readership numbers.

So how exactly does Craigslist make money?

By charging $25 for job postings in six of its largest U.S. markets and $75 for job listings in San Francisco and by assessing a $10 fee for brokered apartment listings in New York City, according to their website.

Classified advertising was the real money-maker for newspapers. Want ads, are the little ads placed by individuals. They were not only the most profitable for newspapers on a word-for-word basis, they also generated great readership numbers, a fact that was lost on ALL of the newsrooms in America. The editor-centric news “executives” had not bothered to do any research on the readership of the ads that paid their salaries. They mocked MBAs, IT and celebrated BAs from America’s most liberal J-schools.

The arrogant editors who “manage” the entire newspaper enterprise, didn’t have a clue. They thought that they called the shots. People were paying 25  cents to read the ads just and a few pages of news and entertainment.

This just in from the Washington Post:

Let’s not bury the lead: This is a rough time for the newspaper business, a rough time for The Washington Post and a rough time for me.

No one need shed any tears for the people leaving this building. The more than 100 journalists who have just taken early-retirement packages are voluntarily accepting a generous offer as the company trims its payroll — a situation far better than at newspapers that have resorted to layoffs.

With advertising revenue sinking and classified competition from the likes of Craigslist, newspaper market values are taking a hit. Avista Capital Partners, which bought the Minneapolis Star Tribune 14 months ago, recently had to write down 75 percent of its investment. The purchase price had been $530 million; the previous owner, McClatchy Newspapers, paid $1.2 billion for the paper in 1998.

That’s just a few pieces to the puzzle of what went wrong. It’s not unlike the fall of family-owned business, where the next generation of trust-fund brats drain the profits and only find interest in the fun, ivory tower aspects of the business.

In these sob stories of more layoffs, there isn’t any mention of the marketing/advertising departments, because the editors have no interest in that aspect of the media.

If newspapers were run like real companies, there would have been “big picture” studies of trends and competition. How’s this for an idea, cut out five top level editors and buy 100 servers, two webmasters and one internet marketing guy.

What a concept.

Mainstream media didn’t hide the housing bubble — They didn’t see it. They were too busy writing puff pieces on celebrities making millions on their mansions

Mick Gregory

I really do like to say “I told you so,” once in a while, especially to liberal Californians in the mass media. My family and I moved from the Bay Area to Houston, Texas three years ago at the peak of the housing bubble. We were watching the market trends and came to our own conclusion well before the “experts” in the media. Our neighbors, both attorneys, had also noticed the growth was hitting 30 percent a year in our San Francisco suburb. Those stats come in every month by realtor associations; polished up by their PR departments — they are finally picked up by journalists and edited neatly following the AP style book. There are a lot of hacks in the industry who think that’s what makes good journalism. No analysis, just following the rules of serial comma usage and the very important difference (in their minds) between that and which.

Never mind that the price per square foot was over $350 and there were multiple offers coming on homes. The time spent on the market wasn’t measured in days, but hours.

Three years ago, there were very few reporters at the LA Times or SF Chronicle looking at the historic, unreal climb in prices. “This is California, there will always be a market for a piece of paradise,” we’ve seen in various versions in the entertaining Homes sections that ran every Saturday and Sunday.

Reports on the housing bubble and wobbles were rare. How could you expect anything better? Business reporters don’t have the resume to get an administrative assistant job at Fortune 500 companies or with developers. They don’t have the ambition to sell real estate, or the skill to be a property flipper.

More important than that, journalists are tied to their home town newspapers or TV stations. They can’t be objective in reporting bloated housing prices or comparing the quality of housing between markets such as LA and Houston.

The free fall of California real estate is finally front page news. Now that foreclosures are equal to home sales in some California neighborhoods. All this sudden analysis is 2.5 years too late for the thousands losing their homes.

Back then, the “executive editors” promoted cute columns called Hot Properties with features on how celebrities were tripling their prices on Bay Area and Malibu homes.

The party is over. That was the last time newspapers made windfall profits off of 5 pound Sunday newspapers.

Here is an excellent look at the media circus from Dan Gillmor’s blog on citizen journalism is among the best in the blog biz. Gillmor gives journalists too much credit. He should know some 94.5 percent didn’t even take Economics 101.

Housing Bubble Coverage: Defending the Indefensible

Editor & Publisher: Newspaper Biz Editors Defend Mortgage Crisis Coverage. Did the growing mortgage credit crisis, which took a huge turn with last week’s collapse of Bear Sterns, get enough early coverage from newspapers? Top business editors at several of the nation’s major papers say yes, although a few admit some of the more complicated elements may not have been broken out enough for readers.

“What tripe. The newspaper industry almost totally failed to do its job, and the public got screwed once again.”

Citing a story here and there, as several editors do in the E&P piece, is not evidence of newspapers doing their job. It’s quite the opposite.

When an economic catastrophe of this sort — and entirely predicable one — is building, journalists are failing to do their jobs when they don’t harp on it.

As I said in a previous posting, newspapers and broadcasters were raking in billions in advertising from the real estate and banking industries as this bubble inflated. I do not believe this is a coincidence. I also don’t believe it was deliberate malfeasance; but you just don’t see lots of tough coverage in media of the people and companies paying the bills.

Many if not most papers have special weekly real estate pages or sections where you would find little hint of the potential for trouble. I know I looked for it in the papers I read. That’s where the discussion belonged — as well, of course, as Page One — not solely in the occasional business page stories. Hundreds of references to bubbles, most in the past year and not when there was a chance to slow down that train, were dwarfed by comparison to the buying advice that dominated coverage of real estate overall.

Oh, sure, there were extremely infrequent stories containing warnings in a few publications — and occasional quotes from skeptics in the prices-just-keep-rising stories that overwhelmingly dominated the coverage. But the reality is that journalists mostly didn’t have a clue, or didn’t want to have a clue. I don’t know which is worse.

Some bloggers, and some economists, did shout warnings. They were ignored, or worse, insulted by wishful thinkers and (I suspect) people who stood to gain from the continuing bubble.

Again, from a previous post, here are some questions the media all but ignored until too late:

Where were the stories we should have been seeing, noting that “buyers” — a word that is ludicrous in context –were running headlong toward a financial cliff? What happened to the coverage of a housing market that fewer and fewer people could afford to enter except with no-interest or no-down-payment loans, where home prices were so far out of sync with the economy that there was no precedent for such imbalance?

Where were the stories pointing out that the secondary (and far beyond) mortgage markets were salting hugely risky debt all through the American economy? You think your bank or pension fund doesn’t have some of this garbage somewhere in its books? Think again.

The media also bungled by not fingering the makers of this bubble apart from foolish “buyers” who proved to be such suckers. This boom was fueled by people who knew it couldn’t last: brokers, bankers and, above all, Wall Street’s ever-clever wizards who risk other people’s money for gigantic fees.

This is another journalistic scandal. It’s not quite on the order of the bended-knee, pre-war coverage — stenography of government officials’ lies and deceptions — that helped steer America into the Iraq war, but only because it’s not killing people in large numbers.

It’s a massive enough scandal, though. There’s plenty of pain left in this deflation, possibly including an outright tanking of the economy.

The journalism craft should take a long, hard look at what it’s failed to do, yet again, in the housing bubble. It has failed to warn — as loudly and incessantly as it did in promoting the housing bubble — that a financial crunch was on the way.

There’s plenty of blame to go around in this mess. The finger-pointing has barely begun. But when it gets going for real, I hope that journalists who do some of that pointing will at least look in a mirror.

“I can remember the yards of copy written about new developments and real estate sections filled with puff pieces promoting house buying, with no hint of any risks involved with these investments. For the few stories you cite, what about those that quoted the National Association of Realtors about how this was the right time to buy a house, and that house prices have never declined. Remember how we were told house prices were supposed to be “sticky” and that when there was a downturn, the prices would stick rather than fall precipitously. Where were the investigative pieces about how low-income people were being ripped off by subprime mortgages? Both the New York Times and Wall Street Journal you cite ran endless stories about high prices for New York apartments, with appropriate pictures of the luxury amenities that came with them. In my lifetime, newspapers have missed the S&L excess of the 1990’s, and they dropped the ball on this one, too. And what about the culpability of Congress in this? Where are the investigative pieces of House and Senate banking legislation that opened the door to easy lending, no-document loans and giving mortgages to people with lousy credit reports — including illegal aliens working day work construction jobs? From what I’ve heard on CSpan, Sen. Jon Kyl has reams of information documenting how Congress contributed to the collapse now happening, but no reporters seem interested.”

DanGillmor.com Home page