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Media, ethics, and journalism. What works. What doesn't.


Jeffrey Dvorkin

Sunday, September 21, 2008

The Dangerous Ignorance of Management

Listening to the BBC World Service (thank you XM Satellite Radio) while driving around doing the usual Saturday errands and heard a fascinating program. It was a panel discussion on what the hell happened on Wall Street and how can it be avoided in the future. It aired around 4 pm eastern on September 20th.

I was unable to locate the broadcast on the BBC's impenetrable website. But the program involved bankers, both British and American and two academic economists, one from a Scottish university. It was the clearest explanation of what happened that I've seen, read or heard anywhere. If anyone can find it, I'd be grateful.

One thing that struck me in the discussion was when one of the panelists remarked that the upper reaches of the economy have no idea or even concern about the consequences of their ideas.

He mentioned that even Robert Rubin admitted that he had never heard of something called a Collaterlized Debt Obligation.

Neither had I, but I am not Robert Rubin, Clinton's former Secretary of the Treasury in both administrations, and now chairman of Citigroup and chairman of the Council on Foreign Relations.

Collatoralized debt obligations are, according to this panel, one of the extremely clever devices that maximizes profits, insulates the financial industry from incurring further debt and pushes that debt down to consumers. It's what made Wall Street eager to engage in their highwire act, not realizing that they were in fact walking the plank on the economic ship of state.

The panel also opined that because of devices like CDO's, there was no risk to Wall Street and even if there were the occasional failures, no one seemed to suffer from the consequences of their decisions. Indeed, one bank remarked that a young person could join a Wall Street company in New York or a City firm in London. Within two to three years, that person would make enough money to retire on. Sounds incredible but it is, apparently true.

But the gap between management practices and consequences for the rest of us, sounded familiar.

Where have I seen that before? Oh yes. The upper reaches of media companies suffer from many of the same sorts of ignorant assumptions about the consequences of their financial and journalistic adventures.

Some examples:

"Move everything to the web?"
Sure boss, why not.

"Get reporters to file for radio, tv and online in each news cycle!"
They must be slackers if they don't.

"Fire the overpaid ombudsmen!"
No problem...we'll let the blogger in his pyjamas be our watchdog.

What seems to have been lost - both on Wall Street and in media organizations - is the idea of consequence. In journalism, the consequences are proving to be dire as news organizations struggle to survive while failing to adequately inform the public.

The true value of information is being lost in the struggle for more efficient work processes and higher ratings. Investigative reporting is seen as not giving "value" to the organization because it takes reporters out of the news cycle for days at a time.

Years ago, NPR, one managing editor demanded that reporters produce 30 minutes of airtime a month. That may not sound like a lot, but a reporter filing for the hourly newscasts, could do that easily. If a reporter looking into the Jack Abramoff story, might only get two 3 minute reports on the air in a month. But those stories could have an importance that a story on a newscast might not. But reporters' reputations and promotions rose and fell on that 30-minutes-a-month rule.

At the CBC a certain tv station manager invited me up to his office to talk to me about getting more philosophy in the 6 o'clock supper hour newscast. Now, I'm happy to shmooze about Schopenhauer over a pint, but I told him it was more important for the show to have access to extra editing machines beginning at 5 o'clock. The stress on the staff was becoming enormous and there was a risk the show might not get on the air. He thought I was being boorish. I thought he was arrogant.

Perhaps we were both right.

The problem of losing sight of the values of an organization have been building for some time, no doubt. It seems to have gotten worse over the years.

Visionary leadership in finance and in journalism is necessary. But there is a difference between "vision" and "ego." Certainly in much of journalism these days, there is little concern or managerial regard for the real victims of those visions - a weakened journalism and a poorer democracy.

4 comments:

  1. There was a really great This American Life show titled The Giant Pool of Money that clearly and entertainingly explained how we got into this whole mess: http://www.thisamericanlife.org/Radio_Episode.aspx?episode=355

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  2. Thanks John. I'm a fan of TAL and will check it out. Best, JD

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  3. The TAL story was excellent radio - as usual. Another powerful analysis of the stock market debacle was sent to me by Eli Dvorkin:
    http://www.dailykos.com/storyonly/2008/9/21/9322/74248/245/602838

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  4. My former editor Cara Fogarty found the BBC link (she always knew her way around a website...). It's in the second half of the program and is one of the best roundtables on the causes I've heard: http://www.bbc.co.uk/worldservice/programmes/000000_newshour_listen_again.shtml

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