Deadly Spin (29 page)

“These guys make the KGB look like amateurs, and I used to work in Russia quite a lot,” Simon Johnson, a prominent advocate of breaking up the big banks and a former chief economist at the International Monetary Fund, told TPM.

A central element of the group’s strategy involved posting comments on the Huffington Post and launching diaries on liberal netroots sites like Daily Kos and FireDogLake. In its posts, the group paid “lip service to the idea of breaking up the big banks while at the same time adopting ‘bailout fund’ rhetoric used by Republicans, all the while devoting its resources to trying to kill financial reform altogether,” according to TPM.

The group also reportedly had ties to DCI Group, which has set up numerous astroturf campaigns on behalf of big corporate clients, including the health insurance industry.

The group’s ads ran in states represented by influential Democratic senators, including Majority Leader Harry Reid of Nevada, Claire McCaskill of Missouri, and Mark Warner of Virginia. They encouraged viewers to contact their senators and ask them to “vote against this phony financial reform and support real reform—stop ‘too big to fail.’ ”

The truth was that the legislation contained explicit language designed to ensure that there would be no more bailouts of troubled banks, regardless of their size. It also gave additional powers to regulators to seize failing banks and break them up if necessary.

Goldman Sachs used another tried-and-true tactic to try to kill parts of the reform legislation it didn’t like: saying one thing and working behind the scenes to do just the opposite. Goldman executives said in public statements that they supported the legislation, but, according to the Huffington Post Investigative Fund, they deployed an army of lobbyists on Capitol Hill to kill an important provision that would have prohibited banks from trading derivatives, which would have cost Goldman billions of dollars in revenue.
23

Derivatives protect companies from the risks of investing in stocks, commodities, and mortgage-related securities. As the Huffington Post reported, Goldman and other banks sold risky mortgage-related securities to investors, using derivatives to bet that the securities would fail and profiting when they did. Such practices contributed to the 2008 global financial meltdown. Goldman was particularly concerned about the provision in the reform bill pertaining to derivatives because, according to Senate records, it could lose more than 40 percent of its profits if the regulations passed.

Goldman didn’t get everything it wanted, despite the millions of dollars it spent on lobbying, but the final bill, which Congress passed in July 2010, and which contained several consumer protections, was still not comprehensive enough to keep banks from engaging in risky behavior.

All of the tactics used by the oil, beverage, and banking industries to influence lawmakers at every level of government were pulled straight from the cigarette makers’ playbook: Distract people from the real problem; generate fear; split communities with rhetoric, pitting one group against another; encourage people to doubt scientific conclusions; question whether there really is a problem; and say one thing in public while working secretly to do the opposite.

This, regrettably, has become common practice in the corporate world.

If there is one message—and one that is actually true—it is this: Always look
behind
any public argument to see how your emotions are being manipulated.

And count on it. They are.

C H A P T E R   X I I

Spinning Out of Control

T
HE
nation’s founding fathers so well understood the need for an informed public in their new democracy that they forbade Congress from restricting freedom of the press in the First Amendment to the Constitution, right along with guaranteeing freedom of speech and religion and the right to peaceably assemble.

In the 220 years since the ratification of the First Amendment, our mass communications have become more accessible, far reaching, and up-to-the-minute than ever, yet the need for reliable, objective information is as great as at any point in our history.

Today, we have arrived at a precarious moment. The number of credible news organizations, particularly newspapers, is declining. At the same time, the number of people, the amount of power, and the level of funding behind public relations efforts are greater than ever, and increasing. Americans are confronted daily—even hourly—with the daunting and growing challenge of deciphering truth from spin.

Alex Jones, director of Harvard University’s Shorenstein Center on Press, Politics, and Public Policy, contends that American journalism is under assault. A former
New York Times
reporter and a Pulitzer Prize winner, Jones believes that the primary culprit is the same fuel that drives every other enterprise in the country: money. With the number of traditional news outlets on the decline, primarily because of dwindling circulation and advertising revenue, Jones has deep concerns that news may someday become available only to those who are willing and able to pay for it. Spin, of course, will remain freely available, and hard to miss.

This concept is disturbingly similar to that of health care being accessible only to those with the resources to pay what the market demands. “We may be headed for a world in which there is as yawning a disparity in accurate knowledge as there is in wealth,” Jones wrote in 2009’s
Losing the News
. “The elite will be deeply informed, and there will be a huge difference between what they know and what most other Americans know. We could be heading for a well-informed class at the top and a broad populace awash in opinion, spin, and propaganda.”
1

Jones’s perspective on the price of news is reinforced by Rupert Murdoch, whose massive American media holdings include the Fox Broadcasting Company and the
Wall Street Journal
. Murdoch said in April 2010 that he believes print newspapers will survive … in electronic, pay-as-you-go formats. In an interview with Marvin Kalb on the TV program
The Kalb Report
Murdoch predicted that—despite polls to the contrary—people would be willing to pay for online news. “I think if people have no place else to go, they will pay for it—if it’s not too much money.”

As an example, Murdoch noted that users of the iPad, introduced in March 2010, were able to subscribe to the
WSJ
for only $4 a week. (He failed to point out that the iPad itself cost a minimum of $499, plus the additional cost of an Internet connection.) Murdoch insisted that news organizations should restrict access to their online information and said that the
WSJ
will “stop Google and Microsoft from taking our stories for nothing”—even when the information is credited and a link to the original story is provided. “Let them do their own reporting,” he said.
2

UNTIMELY DEATHS

A half a century ago—in the 1950s and ’60s—most major American cities, and many minor ones, had at least two daily newspapers, and several had even more. There were both morning and afternoon papers, some of which shared the same printing presses, to report the news at the beginning of the day and at the end. As the pace of the news cycle increased and the influence of television grew, afternoon papers gradually shifted to a morning schedule or folded altogether, leaving late-day updates to the broadcast media. That simple formula for reporting the news of the day is long gone.

On February 26, 2009, the CEO of E. W. Scripps newspapers told the assembled staff of the 150-year-old
Rocky Mountain News
, one of Denver’s two daily newspapers, that the paper would shut down after its regular editions the following day. “The industry is in serious, serious trouble,” said Rich Boehne, explaining what the group already knew: that the paper had lost sixteen million dollars the year before and that Scripps had been unable to find a buyer since putting the
Rocky
on the block two months earlier.
3

The demise of a well-respected daily newspaper in Denver was big news, but not because it was an unusual event. Quite the contrary: It was significant because it was part of the larger trend. The week before Boehne told the staff of the
Rocky
, which had won four Pulitzer Prizes in the previous decade, that the paper was “a victim of changing times in our industry and huge economic challenges,” Hearst Newspapers announced that it was planning to close the
Seattle Post-Intelligencer
and was considering either closing or selling the
San Francisco Chronicle.

A year later, the
Chronicle
was still the largest newspaper in northern California, but the
Post-Intelligencer
existed only in an online format. In the wake of the
Rocky
’s demise, some of its former staffers founded INDenverTimes (www.indenvertimes.com), an online publication dedicated to carrying on the journalistic mission of the deceased paper—but the venture was still scrambling for support and subscribers in spring 2010; indeed, a large percentage of Denver residents were unaware of the site’s existence.

THE IRON CORE: NEWSPAPERS

Harvard’s Jones describes news as a multilayered sphere. At the center is an “iron core of information” with a vast majority of it coming from traditional news organizations. Information in the “core” encompasses fact-based local, national, and international news—which Jones calls “accountability news” because its purpose is to hold accountable those people in power, in both government and business, whose decisions and actions drive events. “Traditional journalists,” Jones wrote in
Losing the News
, “have long believed that this form of fact-based accountability news is the essential food supply of democracy, and that without enough of this healthy nourishment, democracy will weaken, sicken, or even fail.”
4

In Jones’s news sphere, this iron core is surrounded by a thick layer of talk and opinion, which derives from the core news. In other words, advocacy information—every talk show, radio commentary, crowd-rousing speech, and letter to the editor—depends on a basic core of information provided by objective news reporting. Jones contends that the decline of core reporting means that commentary has drifted further and further from factual news. “There will be a bounty of talk—the news of assertion—but serious news, reported by professional journalists, is running scared,” he wrote in
Losing the News
, adding,

The biggest worry of those concerned about the news is that this iron core is in jeopardy, largely because of the troubles plaguing the newspaper business. It is the nation’s newspapers that provide the vast majority of iron core news. My own estimate is that 85 percent of professionally reported accountability news comes from newspapers, but I have heard guesses from credible sources that go as high as 95 percent. While people may
think
they get their news from television or the Web, when it comes to this kind of news, it is almost always newspapers that have done the actual reporting.
5

With circulations dropping, traditional newspaper advertisers are turning elsewhere to reach potential customers, which means less ad revenue to pay for reporters’ salaries and the high cost of producing and distributing printed news. (Unlike the
Wall Street Journal
, which has a fairly stable circulation and plenty of well-to-do readers who are willing to pay for online content, most daily newspapers have found that their readers will go elsewhere for information if the papers try to charge for their stories on the Web.) Government reports show that the number of newspaper jobs in the United States began declining in the late 1990s—more than one hundred thousand were lost in the ensuing decade. According to U.S. census data, employment in the newspaper-publishing industry dropped by 25.4 percent in the eight years between 2001 and 2009.
6

“The Reconstruction of American Journalism,” a report published in the
Columbia Journalism Review (CJR)
in October 2009, stated, “Newspapers and television news are not going to vanish in the foreseeable future, despite frequent predictions of their imminent extinction. But they will play diminished roles in an emerging and still rapidly changing world of digital journalism, in which the means of news reporting are being re-invented, the character of news is being reconstructed, and reporting is being distributed across a greater number and variety of news organizations, new and old.”

The
CJR
report explained the risks of the current trend: “What is under threat is independent
reporting
that provides information, investigation, analysis, and community knowledge, particularly in the coverage of local affairs … It may not be essential to save any particular news medium, including printed newspapers. What is paramount is preserving independent, original, credible reporting, whether or not it is popular or profitable, and regardless of the medium in which it appears.”
7

Jones agrees. In
Losing the News
, he wrote, “The profit squeeze has wreaked havoc on newsrooms and especially decimated the Washington-based press corps covering government on behalf of citizens back home.”
8
Of greatest concern, Jones said, is the future of investigative journalism, which has the greatest value but costs the most to produce: “The problem is financial. A skilled investigative reporter can cost a news organization more than $250,000 a year in salary and expenses” and may produce just a handful of stories during that time.
9

Meanwhile, the Occupational Employment Statistics Survey of May 2008, by the U.S. Bureau of Labor Statistics, showed 50,690 “reporter/correspondent” jobs in the country, with a mean annual income of $44,030. Correspondingly, there were 240,610 jobs for “public relations specialists,” with a mean annual income of $58,960.
10

With more and better-paying jobs available in PR than in journalism, fewer new college graduates are choosing to work in “iron core” news. It has been common historically for reporters to shift to PR after working as journalists, as I did. But it’s a shocking development that a large percentage—actually a majority—of communications majors now opt to enter PR directly after college. These newly minted public relations practitioners begin their careers, in which they will be paid generously to pass off opinion and spin as “news,” without first steeping themselves in the hard-and-fast rules of journalism and its ethics, which have provided a counterbalance to the worst instincts of many previous generations of public relations professionals.

DOWN WITH NEWS, UP WITH SPIN

Efforts to manipulate our opinions have grown increasingly pervasive over the last twenty years, in concert with the waning of traditional journalism. And with less access to credible information, we are more easily manipulated.

Göran Therborn, the renowned social theorist, author, and professor of sociology at Cambridge University, contends that there are three arguments most likely to sustain popular apathy toward any issue or problem: denying that the issue exists; insisting that it’s a good thing rather than a bad thing; or conceding that it’s a problem but claiming that it can’t possibly be solved.
11

All three have been used, with varying degrees of success, in the attempt to discredit the reality of global warming, despite the fact that an overwhelming majority of the world’s scientists agree that the temperature of the earth is rising at a potentially disastrous rate as a direct result of human intervention in the planet’s ecosystems.