Tag Archives: unions

The Newspaper of the Future (ie. Now)

The painful decline of the daily city newspaper is well chronicled by now, so much so that there is even an entire website dedicated to watching newspapers die. The causes are myriad (see the footnote below), but they can generally be tied to A) the internet; and B) changing patterns in the consumption of information.

Papers have tried a variety of approaches to counter these trends, with most of these approaches based on changing websites (paid, free, semi-paid!) and cutting costs. Few of these approaches, however, have even touched on content strategy. As regular Thoughtbasket readers know, I firmly believe that content is king.  My thoughts on what city newspapers should do are highly influenced by my reaction to my local news market, San Francisco. SF’s historical daily, The Chronicle is, and always has been, a terrible paper. The Chronicle’s website, SFGate, is even worse than the paper.

My advice is pretty simple: relentless focus on local journalism. Cover city hall, cover local issues, cover local teams. Big parade for Columbus Day? Cover it. District attorney owns a strip club on the side? Cover it. Downtown real estate prices dropping? Cover it. Cut costs by getting rid of all non-local coverage. A city paper doesn’t need any national or world coverage. License a few AP stories to give your readers the big picture basics, but certainly don’t have a Washington bureau. Maybe, if your city is big enough (ie. Chicago, LA and not much else), you have one reporter in DC to cover what your Congressmen do. In the same vein, maybe you have a reporter in your state capital, but purely to cover local issues. Leave broad coverage of the state capital to that city’s paper. If your readers want state, national or world news, they know how to find it: on the internet!

Do people care about local coverage? Absolutely. Think about the old axiom that all politics is local. Because people care a lot more about the pot holes near their homes than they do about Washington DC discussions of foreign aid. In my city, San Francisco, there are not one but TWO new papers that have launched purely to provide deep local coverage. Both are non-profits, it’s true, but they clearly sense a consumer need or they wouldn’t have bothered to raise the money required to launch. And that is in addition to the two local alternative weeklies, one of which has repeatedly (like the two stories summarized here) broken major stories about local politics that the Chronicle has missed. Plus you have AOL’s Patch, which provides hyper-local coverage. Moreover, the old afternoon paper, The Examiner, is still around, although kept alive through some payment deal with the Chronicle. The presence of all these local news sources tells you that people want to read local coverage. The question is why the big legacy local papers, who should own this space, don’t cover it.

Some people say that you can’t make money on local news because good local coverage will eventually cause discomfort to the powerful and wealthy in the community, who will then pull advertising. Certainly a strong local paper will, at some point, have to cause some pain to the city’s power brokers. Since most cities are run by a few wealthy families, a couple of businesses, and real estate interests, everybody knows what the sensitivities are. But it’s exactly those sensitivities – corrupt politicians, incompetent civil servants, venal and debauched businessmen – that readers crave. Readers want to know the truth about the powerful, and as long as a paper speaks that truth, it will have readers. And if a paper has readers, there will always be advertisers ready to pay to reach those readers.

Footnote with more specific causes of newspaper decline:

  • Craigslist
  • The end of the local department store
  • Decreased public acceptance of journalistic “authority”
  • Family dynasties seeking cash instead of a legacy (hello Bancrofts)
  • A generation that prefers screens to paper
  • Lower margins for car dealers

German Economy Is Kicking Ass

Following up on my prior post about the European economic model, the Wall Street Journal reported Saturday that the German economy is expected to grow 3.5% this year, its best performance since reunification. Moreover, much of this growth is coming from internal demand, balancing the economy away from its already strong export base. In other words, the high wage, high tax rate German economy has already recovered from the global recession and is starting to kick our ass.

Public Pensions Bankrupting San Francisco

The SF Weekly has published two long articles in the past year about how poorly run San Francisco is and how our elected officials have essentially mortgaged the city in order to provide generous pensions to public employees. If you are a San Francisco resident, these articles are essential reading. And even if you live elsewhere, you should still read them, or at least the one about the public pensions, because the financial problems we have here are sadly common in cities and states across the country.

Before I get to summarizing the articles, let me first state how unbelievably, pathetically lame it is that the San Francisco Chronicle, a big newspaper with lots of resources, didn’t produce either of these articles, getting scooped instead by a free weekly. Of course, the Chronicle is in such thrall to SF’s power structure that the only truth we should expect it to speak is that Mayor Newsom’s wife is pretty.

The first article, published last December, focuses on why nothing works in San Francisco. As the article notes, SF has a massive budget deficit, a bus system that can’t run on time and an ever-burgeoning homeless problem. “I have never heard anyone, even among liberals, say, ‘If only [our city] could be run like San Francisco,'” says urbanologist Joel Kotkin.”

The problem, according to SF Weekly: no accountability. Nobody in SF government ever loses their job, no matter how badly they perform. Committees are formed, ballot initiatives are offered, bonds are issued, but nothing ever gets done, and the same folks are kept in their administrative posts year after year. San Francisco’s deep liberalism comes into play here; any initiative that supports education, or the homeless, or other traditional liberal causes, becomes nearly sacrosanct. Criticism, or even investigation into effectiveness, is shrilly attacked. The city’s liberalism also gives unions tremendous power here, so any city department with union employees will likely have high wages and accountability issues.

Speaking of SF’s strong unions, SF Weekly’s second article, from just two weeks ago, is on exactly that topic. It discusses the massive growth of San Francisco pension and benefits obligations to its public employees. Retirement costs for city employees grew 66,733 percent over the last decade. Benefits this year (not salaries, just benefits) for current and retired city workers are budgeted for $993 million. That is in a city with only 815,000 citizens. This spending is projected to keep on growing, and the city has a $4 billion unfunded healthcare liability.

Why are these costs so high? As discussed above, general incompetence plays a role; you can’t expect mediocre managers to hold down costs. The city’s liberalism also factors in; voters continually approve ballot measures that improve benefits for city workers. A recent ballot proposition that would push some health care costs back onto city workers was soundly defeated. But a big chunk of the problem is structural, and here is where other cities are facing similar problems. Policies are set by politicians, politicians respond to money, and unions are very good at throwing their money around. Moreover, those policies are implemented by bureaucrats, who are also city employees, and who thus qualify for these same generous benefits.

Cities and states around the country are grappling with this problem, and the bottom line is that public employees are going to have to take a hit. They can’t keep earning as much as or more than private sector employees, have infinitely better benefits than private sector employees, and expect the gravy train to continue. As the Wall Street Journal noted recently, in Oakland the cost of just the police and fire departments make up 75% of the city budget.

Regular readers of Thoughtbasket are likely shocked to read a post that stands against unions, and that has me referencing the Journal in an approving way. Look, I support unions. My father and both my grandfathers were members of the IBEW. Union wages put a roof over my head as a kid, and union benefits paid for my medical expenses. But this is a time of austerity, and everybody has to tighten their belt. If public sector employees get to retire at 50 with 90% of their salary and gold-plated health benefits, then the rest of us are going to be working until we’re 90. Look at the chart below. San Francisco is paying 4 retired police officers a combined $1 million per year. Until they die. I’m sorry, but that is simply unsustainable.

Income Inequality; Rise of Wacky Politicians

Here are links to two long and thoughtful articles worth reading.

The first is Timothy Noah’s ten-part (yes, 10!) piece in Slate on income inequality in America. He explores all the possible causes, in a non-ideological way, and then discusses why it all matters. Among the factors at play: taxes, overseas manufacturing, lobbyists and Wall Street. Check out this graph below to see how the share of the top 10% has grown over the last 40 years.

The second article is Matt Bai’s piece in the NY Times about Linda McMahon’s campaign for senator of  Connecticut. Bai explores how a staid, preppy state like Connecticut could possibly elect a cartoonish figure like McMahon, who based on her public statements seems utterly unqualified to be senator. He discusses the long-term trends, including white flight and the loss of industry, which lead to young adults leaving the state and public sector unions gaining power, which leads to a weakening of the traditional political system, which leads to wrestling impresarios running for senate. It’s a long article, but nuanced and thoughtful and well worth reading.

Auto Industry Bailout Follow Up

The NY Times is reporting that one of the things that kept the Republicans in the Senate from supporting the bailout was the UAW’s refusal to take any pay cuts until 2011. From the article, it sounds like Senator Bob Corker (R-TN) and UAW President Ron Gettelfinger are both lying, but regardless, if the UAW isn’t willing to make concessions right now, whether pay cuts or benefit cuts or work rule changes, then let the car companies go under and the UAW members find other jobs.