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The Big Problem with Financial Journalism

One great problem with financial journalism, especially in the decades leading up to the crash, has been that it’s often written in an argot understandable only to the already highly financially literate. Andrew Ross Sorkin doesn’t usually employ such specialized language. This has led to the mistaken belief that he’s explaining the industry to regular people. In fact, he is a dutiful Wall Street court reporter, telling important people what other important people are thinking and saying. At the same time, he is Wall Street’s most valuable flack. He isn’t explaining finance to the people—you’d be better served reading John Kenneth Galbraith to understand how finance works—he’s justifying it.

The modern finance industry is at a loss when it comes to justifying its own existence. Its finest minds can’t explain why we wouldn’t be better off with a much simpler and more heavily circumscribed model of capital formation. Sorkin likewise can’t make his readers fully grasp why the current system—which turns large amounts of other people’s money and even more people’s debt into huge paper fortunes for a small super-elite, and in such a way as to regularly imperil the entire worldwide economic order—is beneficial or necessary. But the New York Times and Wall Street each need him to try.

Alex Pareene, in The Baffler (2014).

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Photo via Wikimedia Commons

The Financial Reality of a $200,000 Book Advance

In 2008 I sold a book-in-progress for $200,000 ($170,000 after commission, to be paid in four installments), which still seems to me like a lot of money. At the time, though, it seemed infinite. The resulting book—a “paperback original,” as they’re called—has sold around 8,000 copies, which is about a fifth of what it needed to sell not to be considered a flop. This essentially guarantees that no one will ever pay me that kind of money to write a book again.

It took me a while to realize that my book had failed. No one ever told me point-blank that it had. It was more like the failure occurred in tiny increments over the course of two years, after which it was too late to develop a solid Plan B.

I spent some of the advance on clothes that no longer fit my body/life, but mostly I spent it on taxes—New York even has a city tax, on top of the state and federal kind—and rent. I lived alone for three years in Brooklyn, paying $1,700 a month ($61,200 all told) for a pretty but small one-bedroom within eyeshot of the Brooklyn–Queens Expressway. I also spent $400 a month on health insurance. At one point I thought I would find another full-time job after finishing the book, but then I must have convinced myself that teaching yoga part time would better enable my writing. I also thought that I would immediately start another book, which I would sell, like the first, before I’d written half of it. In order to believe this I had to cut myself off from all kinds of practical realities; considering these realities seemed like planning for failure. In retrospect it seems clear that I should never have bought health insurance, nor lived by myself.

Emily Gould, in an essay from the anthology MFA vs. NYC, about the book business, personal and professional failures and the harsh financial realities of being a writer. Read more from Gould in the Longreads Archive.

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The Writing Genius of Harold Ramis

Bad is usually good in Ramis’s films, if only because good is so obviously bad. In “Groundhog Day,” Ramis’s masterpiece, a jaded Pittsburgh weatherman named Phil Connors (Bill Murray) is forced to repeat Groundhog Day over and over again in the tiny town of Punxsutawney, Pennsylvania. At one point, he devises numerous ways to kill himself:

INT. CADILLAC

PHIL begins to accelerate, turning a fast lap around the square. Gus looks back at the police car chasing them.

GUS

I think they want you to stop… .

PHIL

It’s the same thing your whole life. Clean up your room, stand up straight, pick up your feet, take it like a man. Be nice to your sister. Don’t mix beer and wine—ever.

The car skids around and comes to a stop straddling the railroad tracks… .

PHIL

(eyes gleaming)

Oh, yeah—don’t drive on the railroad tracks.

GUS

Well, now, that’s one I happen to agree with.

The director Jay Roach says that the six films Murray and Ramis made together define a level of achievement he calls “extreme comedy.” “You would watch people in the audience just lose their minds,” he told me. “Harold Ramis is the yardstick of what you want to reach for, of people’s bodies around you going into convulsions of joy while your brain is thinking and your emotions are deeply tied in to the characters, and you’re going, ‘Oh my God, This is the best two hours I’ve ever spent.’ ”

Tad Friend, in The New Yorker in 2004, on the comedy of Harold Ramis. Ramis died in 2014.

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Confessions of a WikiLeaks Ghostwriter: A Cautionary Tale About Agreeing to a Book Deal

I wrote through the night to assemble what we had. The thinness could become a kind of statement, I asserted; it could become a modernist autobiography. But the jokes wouldn’t hold and Julian, despite promising his publishers and me that he’d produce pages, paragraphs, even notes towards his book, produced nothing in all the months I was there. Not a single written sentence came from him in all that time. But at the end, from all those exhausting late night interviews, we assembled a rough draft of 70,000 words. It wasn’t by any means great, but it had a voice, a reasonable, even-tempered, slightly amused but moral voice, which was as invented as anything I’d ever produced in fiction. Yet it hadn’t felt like creating a character in a novel, so much as writing a voiceover for a real person who isn’t quite real. His vanity and the organisation’s need for money couldn’t resist the project, but he never really considered the outcome, that I’d be there, making marks on a page that would in some way represent this process. The issue of control never became real to Julian. He should have felt worried about what he was supplying, but he never did – he had in this, as in everything, a broad illusion of control. Only once did he turn to me and show a glint of understanding. ‘People think you’re helping me write my book,’ he said, ‘but actually I’m helping you write your novel.’

Andrew O’Hagan, in the London Review of Books in 2014, recounts the disastrous experience of trying to ghostwrite the autobiography of WikiLeaks founder Julian Assange. (The publisher later released an unauthorized early draft of the book.)

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From Facebook Reject to Purchased by Facebook for $19 Billion

Over the next nine years the pair also watched Yahoo go through multiple ups and downs. Acton invested in the dotcom boom, and lost millions in the 2000 bust. For all of his distaste for advertising now he was also deep in it back then, getting pulled in to help launch Yahoo’s important and much-delayed advertising platform Project Panama in 2006. “Dealing with ads is depressing,” he says now. “You don’t make anyone’s life better by making advertisements work better.” He was emotionally drained. “I could see it on him in the hallways,” says Koum, who wasn’t enjoying things either. In his LinkedIn profile, Koum unenthusiastically describes his last three years at Yahoo with the words, “Did some work.”

In September 2007 Koum and Acton finally left Yahoo and took a year to decompress, traveling around South America and playing ultimate frisbee. Both applied, and failed, to work at Facebook. “We’re part of the Facebook reject club,” Acton says. Koum was eating into his $400,000 in savings from Yahoo, and drifting. Then in January 2009, he bought an iPhone and realized that the seven-month old App Store was about to spawn a whole new industry of apps. He visited the home of Alex Fishman, a Russian friend who would invite the local Russian community to his place in West San Jose for weekly pizza and movie nights. Up to 40 people sometimes showed up. The two of them stood for hours talking about Koum’s idea for an app over tea at Fishman’s kitchen counter.

Parmy Olson, in Forbes, on the early failures of WhatsApp founders Jan Koum and Brian Acton, who just sold their messaging service to Facebook for $19 billion. Read more on Facebook.

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Photo: abulhussain, Flickr

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The True Cost of Our Almond Addiction

The global almond boom is being fueled in part by sleek marketing campaigns that have made almonds the nut of choice for consumers. Subway stations in China are blanketed with billboards proclaiming almonds to be a heart-healthy snack that makes people “perpetually feel good” (almond exports to China have more than doubled in the past five years). In Korea, California almonds have been integrated into the storyline of a popular prime-time television show. And in Europe, French and British TV personalities have lauded almonds as a healthy alternative to processed foods.

In the United States, almonds have become a staple for many health-conscious consumers. In its raw form, the “power food” is said to lower cholesterol, spur weight loss, and provide powerful antioxidants such as Vitamin E and manganese. Products like almond butter and almond milk have also become increasingly popular in health food stores.

But growing almonds in an arid climate requires lots of water. In fact, Westlands’ almond orchards suck up nearly 100 billion gallons of water a year. Cotton, by contrast, needs 40 percent less water per acre, and tomatoes require about half as much water as almonds.

Also, unlike cotton and tomatoes, almonds are a “permanent” crop, meaning the land they’re grown on can’t lie fallow when water is scarce. “It means farmers really do need to get a hold of water in dry years in order to keep the trees alive,” explained Ellen Hanak, a senior fellow at the Public Policy Institute of California and an expert on water.

Joaquin Palomino, in the East Bay Express, on what the California drought means for the almond business. Read more on agriculture.

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Photo: healthaliciousness, Flickr

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The Shadow Legal System on College Campuses, and What It Means for Reporting Sexual Assault

"Patrick Henry College is not alone in internally adjudicating sexual assault. Every college and university maintains its own shadow legal system—and many secular colleges have a terrible track record of investigating and punishing sexual assault. But Patrick Henry College is one of only four private colleges in the United States that eschews federal funds in order to avoid complying with government regulations. This poses financial hardships for students and their families—PHC students are prohibited from accessing FAFSA loans, Pell Grants, state funds, scholarships, or the G.I. Bill—and it makes the institution particularly dependent on its conservative evangelical donor base. Homeschoolers see this as a worthwhile price to pay for freedom from government intrusion. The financial-aid page on PHC’s website notes, “In order to safeguard our distinctly Christian worldview, we do not accept or participate in government funding.”

This also means PHC isn’t subject to the Clery Act, Title IX, or the more recent Campus Sexual Violence Elimination Act. The Clery Act requires schools to issue campus crime reports. Title IX says schools must hold an investigation independent of a criminal investigation and ensure that victims can change dorms and class arrangements, get campus restraining orders, and receive help filing a police report if they choose to do so. The Campus Sexual Violence Elimination Act mandates that schools have prompt disciplinary proceedings and inform victims of their rights and options under Title IX. These regulations are no guarantee that sexual-assault accusations will be handled properly, and students at dozens of schools have recently filed Title IX and Clery Act complaints with the Department of Education that document widespread victim-blaming, mishandling of reports, and impunity for perpetrators. Yet, PHC students lack even that legal recourse. (The school says it tries to “generally follow the principles of those laws,” but it is not legally bound to comply with them.)

“As a private campus, it’s outside of federal influence. They can do whatever they want,” says Brett Sokolow, an attorney and president of the National Center for Higher Education Risk Management. “If you’re a female student, and you elect to enroll at a campus that does not provide any of the federal protections that attach to other colleges and universities, you need to know that going in.”

Kiera Feldman, in The New Republic, on Patrick Henry College, an evangelical school in Virginia accused by former students of victim-blaming and covering up reports of sexual assault. Read more from Feldman.

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Photo: Wikimedia Commons

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Roger Ebert's Love Story

From "Life Itself," via rogerebert.com.

“How can I begin to tell you about Chaz? She fills my horizon, she is the great fact of my life, she has my love, she saved me from the fate of living out my life alone, which is where I seemed to be heading. If my cancer had come, and it would have, and Chaz had not been there with me, I can imagine a descent into lonely decrepitude. I was very sick. I might have vegetated in hopelessness. This woman never lost her love, and when it was necessary she forced me to want to live. She was always there believing I could do it, and her love was like a wind forcing me back from the grave.”

-The late Roger Ebert, in 2012, on celebrating his 20th wedding anniversary with his wife Chaz.

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‘The Millionaire Couple Who Will End Divorce’ Says Three Things Will Keep Your Marriage Intact

Harville and Helen take turns talking and clicking through a PowerPoint that includes slides in both English and Spanish. Helen explains that half the people here tonight are the “draggers,” the other half are the “draggees,” and that it will actually be that second group that’s more excited by the end of the workshop. “See,” she says. “Your partner already decided that you’re the problem.”

Harville goes over what couples generally want from a relationship, which he boils down to: safety, a connected feeling, and joy. Helen explains that even if we forget everything else, they hope we remember three things. One idea: that childhood influences marriages. One skill: the ability to have safe conversations. One decision: a commitment to zero negativity.

We both bristle a bit at that last one.

-From 2014, writer Michael Mooney and his fiancée participate in couples counseling with Harville Hendrix and Helen Hunt, for D Magazine.

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Photo: emdot, Flickr

There Are Three Types of People Who Can Afford to Write Books

Several editors, agents, and authors told me that the money for serious fiction and nonfiction has eroded dramatically in recent years; advances on mid-list titles—books that are expected to sell modestly but whose quality gives them a strong chance of enduring—have declined by a quarter. These are the kinds of book that particularly benefit from the attention of editors and marketers, and that attract gifted people to publishing, despite the pitiful salaries. Without sufficient advances, many writers will not be able to undertake long, difficult, risky projects. Those who do so anyway will have to expend a lot of effort mastering the art of blowing their own horn. “Writing is being outsourced, because the only people who can afford to write books make money elsewhere—academics, rich people, celebrities,” Colin Robinson, a veteran publisher, said. “The real talent, the people who are writers because they happen to be really good at writing—they aren’t going to be able to afford to do it.”

Seven-figure bidding wars still break out over potential blockbusters, even though these battles often turn out to be follies. The quest for publishing profits in an economy of scarcity drives the money toward a few big books. So does the gradual disappearance of book reviewers and knowledgeable booksellers, whose enthusiasm might have rescued a book from drowning in obscurity. When consumers are overwhelmed with choices, some experts argue, they all tend to buy the same well-known thing.

George Packer, in The New Yorker, on Amazon and the book business. Read more from Packer.

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Photo: chasblackman, Flickr

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