Nolan, a popular tech/biz gossip columnist, was publicly humiliated by her employer for buying preferential shares in a friend's tech company -- and having the bad taste of getting outed by the Wall Street Journal, even though she had told her editors in advance.
This tawdry affair struck a nerve among online journalists, who spewed forth a volley of arguments on all sides of the issue, agreeing only on the fact that the New Economy has created an endless series of New Ethical Situations never before encountered in journalism.
The most revealing and well-researched of the post-Nolan navel-gazings was Janelle Brown's "New Ethics for the New Economy?" in Salon.com Aug. 6, in which a who's who of New Media writers complain of not having a unified code of professional journalistic conduct -- preferably one that would allow them to keep getting rich.
"The question is whether those rules will be flexible enough to anticipate new issues that will surely arise in this fast-paced industry, where the lives of journalists are increasingly entwined with the people whom they write about and the companies that they cover," Brown concludes. "Or must all technology journalists simply accept that by joining the writer corps they are taking an oath to disavow the temptations of technology riches?"
INTELLECTUAL DISHONESTY AND THE NEW GREED
In the Wall Street Journal "Digits" column that proved her undoing, Nolan explained her purchase of "friends and family" shares in AutoWeb like this: "I, frankly, needed the money. ... We don't take vows of poverty and chastity when we go into the newspaper business."
Nolan, according to the Iconocast, reportedly earns a salary above $100,000 a year at her newspaper job.
In Brown's Salon article, Business 2.0 Managing Editor Judy Lewenthal also complained about the straightjacket that traditional ethics places on technoogy journalism: "If I had liquid money, where would I put it? The place where I get the best returns. But by essence of being an editor at a computer magazine I can't invest in my future?"
Michael Malone, the editor of Forbes ASAP, told Brown: "Now it's almost impossible to remain completely chaste on this. Even with your 401(k) you make choices."
"Some," Brown reported, "have begun to ask themselves if journalists must be barred from the profits the rest of society is making by investing in tech stocks."
It is disingenous, if not insulting, for these journalists to discuss "the rest of society." The rest of society averages $19,000 a year in real income -- not $100,000. It may be "impossible" for Michael Malone to remain "chaste" with his 401(k), but the 238 million or so U.S. residents who do not have 401(k)s would love to have his dilemma.
(In fact, there are as many Americans living in poverty -- 35 million -- as those who hold 401(k)s, according to Employee Benefit News.)
You would think, reading Fast Company or Red Herring or Forbes ASAP, that every half-bright geek in the country was driving a Porsche, and day trading cubicles had been set up in every 7-11. In fact, there are only 5.6 million online investors, according to the July 15 Iconocast ... or the same number of people who watched the World Wrestling Federation on the USA Network July 26. The entire IT sector as a whole only employs slightly more people than the 1.82 million locked up in America's prisons.
These kind of details about America's losers are largely irrelevant to technology journalists and their business-minded readers, except when it comes time to lobby Congress for another 100,000 hi-tech work visas to fill jobs Americans are too poorly educated for. The existence of a real and ignored underclass, though, makes reporters' bleatings about poverty ring more than a little hollow.
And it also makes one wonder for a moment about what kind of reporting we'd see if all this fantastic energy spent on biz/tech was devoted, even for a short while, on the lower third of American society. But in an era when big city newspapers -- once the self-styled champions of the little guy -- are scrambling to beef up their business and lifestyle sections to "improve demographics," there isn't much hope for Business 2.0 developing an overnight concern for the unwashed masses.
With the better journalists drifting toward richer subjects and readers, it's no huge surprise that after five years of a hysterical stock market they have finally begun to snap. So many of the stories are so fantastic -- 18-year-old programmer writes some software in his bedroom, and less than two years later sells his company to AOL for $100 million -- that it seems entirely rational to join a startup for a year or two, and walk away with enough money to spend the rest of your life traveling by ocean liner.
In the last few months I have heard at least five of my college friends -- people who have lived most of their lives below the poverty line -- speak matter-of-factly about "retiring in two years." In the journalism ranks, defections to the dot-com world have trickled into a flood this summer: CNN's Lou Dobbs is now at Space.com, CNNfn's Mark Berniker is helping launch Pseudo.com, CNN correspondent Peter Arnett glommed on to ForeignTV.com, tech/biz freelancer extraordinnaire Rebecca Eisenberg started her own company, Media Grok's Mark Glaser joined e-mail server company Topica, Marshall Loeb ditched the Columbia Journalism Review for CBS MarketWatch, and so on.
"Maybe it was the latest string of recent Internet IPOs, too many of which made an uncomfortable number of my ex-significant-others filthy rich," Eisenberg wrote when she jumped into the fray. "I would see them zip by on Folsom, driving their new VW Beetles or shiny red BMW Z3 convertibles, talking on their StarTacs, placing trade orders with their brokers at Schwab. 'You could never hold down a job until I taught you a work ethic!' I wanted to scream as they zipped off, leaving a trail of exhaust."
Eisenberg's candor is, unfortunately, rare. In the wake of the Nolan fiasco, too many tech journalists have engaged in intellectually dishonest hand-wringing about the lack of coherent standards to set their ethical compasses by.
"I don't know what the rules are and I don't want to do anything wrong. I have no one here to tell me," author Po Bronson told Brown. "I used to trade this stuff -- I know what to do. I just can't do it anymore; my money is now parked in index funds. I wish the laws were clearer so I could be advised."
Well, boo-hoo, Po. Maybe you could "unpark" some of that money from those distasteful index funds, and spend it on a little poverty tour of all the American cities that haven't yet created a cute nickname using the words "silicon" or "digital." There you could visit the "workforce of tomorrow," and see how 18 million of the little tykes live in poor households and receive shameful educations, eight years along into the "Best Economy in History." Meanwhile, Jai Singh and the other "responsible journalists" at the Online News Association will hopefully write up some ethical rules with enough loopholes to keep you flush and guilt-free until the next book advance.
The Internet Economy is hardly the first industry or beat where reporters have attended the same conferences and shared the same urinals as the people they cover. Any editor of a small-town daily is infinitely more intimate with the paper's subjects (and readers) than a San Francisco-based columnist for CBS MarketWatch. Foreign correspondents routinely drink with the politicians they criticize and the colleagues they compete with. The Beltway, as Dominick Dunne so vividly illustrated in the May issue of Vanity Fair, is a vast spiderweb of intertwining professional, political and sexual conflicts-of-interest, so deeply enmeshed that the insiders themselves consider it passe to explain the tangle to the rest of us.
But perspective is an increasingly rare commodity in a region that has changed the world so much in five short years. Surrounded by chaos and innovation, dazzled by the glare of attention, some editors of successful online publications have taken to believing that each new challenge they face represents totally unchartered waters.
"In New Media, we are both owners and content creators," Salon Senior Vice President David Weir said at a Berkeley/OJR online journalism conference I attended this March. "The walls between commerce and content, between church and state, are also walling us in."
At the same conference panel, then-BabyCenter senior editor (and occasional OJR contributor) J.D. Lasica said: "The church-state walls have come down, and lo and behold, we've discovered that the army on the other side is not the enemy."
While Weir and Lasica and thousands of other journalists may be experiencing share ownership and publishing-side management for the first time, the Internet had exactly zilch to do with inventing either concept.
Before World War II, American cities were thick with brawling round-the-clock newspapers started by ambitious newsmen or publishers who wrote front-page headlines and editorials. The '60s and '70s saw a grassroots blooming of alternative weeklies and other left-bent publications around the country, the '80s brought us desktop publishing and the creation of a massive newsletter industry, and the collapse of Communism ushered in an explosion of English-language newspapers around the globe, many of them (like one I helped start in Prague) launched by journalists who soon had to confront the built-in conflicts of owning the paper you edit.
If anything, the past 20 years of corporate chain ownership and monopolistic city newspapers -- the era that spawned and shaped many of today's online practitioners -- has been a startling aberration, one that goes against a fine 200-year-old tradition of maverick pamphleteers and iconoclastic publishers who routinely wore two hats marked "church" and "state."
But it's more than understandable for Bay Area journalists to get carried away with all the talk of "new paradigms" and "revolutions" in the Digital Economy, mostly because such terms are so frequently true. Now, unlike five years ago, companies such as Dell Computer can all but eliminate their inventory, crank up their production and delivery speed, slash their supply costs, sell to brand new markets, and drastically increase customer support efficiency, all to degrees never seen before the Internet came along. Any industry that relies on brokerage services or retail of easy-to-ship goods has already been shaken to its roots. And, not least, hundreds of millions of people can write whatever the hell they want to a potentially global audience.
But the failures and hype-cases can be just as profound -- see PointCast, or the set-top box. Any journalist who has dipped a toe in the tech world realizes how treacherous it can be to make the simplest of assertions or predictions -- when even the specialized market research companies can't ever agree on anything, how's a parachuting reporter supposed to differentiate between "hits" and "page views" without getting savaged to bits by The Industry Standard's Media Grok or Slate's Today's Papers?
Mocking the missteps of Old Media hacks who dabble in New Economy journalism has become an entertaining new beat. But the clever insiders face their own reportorial challenges, especially if they are the slightest bit human. While the outside public and media has, in the words of Media Grok, gone from "technophobia to technoskepticism to technophilia," those who have been writing the code and preaching the religion since 1991 have likewise made the earth-rattling transition from Incomprehensible Geek to Smart Cheerleader to Prophet.
This kind of violent upward mobility, and the perks and demands it comes with, is almost as hard to handle as it is wild fun. It's not so easy to keep it real when seemingly the entire world is scratching at your doorstep for a crumb of wisdom, while the demands of your job crank up exponentionally. Like a 19-year-old midwesterner who moves to Hollywood and suddenly records a hit album, the constant media attention, even if treated with a healthy sense of humor, inflates the self-importance and distorts the view.
I know first-hand how the spotlight can mess with your head. During the first half of this decade, I -- and the thousands of other Americans who happened to live in Prague for any stretch during those years -- were all interviewed at great length by 60 Minutes, NBC PrimeTime Live, the Los Angeles Times, The Wall Street Journal, the BBC and just about any media bigwig you can think of, all because we were part of the "Young Americans in Prague" phenomenon.
At first we laughed it off as phony media nonsense, but eventually even the most world-weary of expatriates could be heard at bars earnestly discussing topics like "why are we all here?" and "who is Prague's Isherwood?" With a little distance the whole hubbub now seems properly absurd, but for a few years there we really came to believe our plight symbolized the struggles of Generation X, and the Search for Meaning in the Post-Cold War Era.
Now, imagine that instead of the dubious achievement of living in a certain city with other people at the same time, you and your crowd are at the forefront of a revolution that is drastically changing business and culture around the world, from Burma to Budapest and beyond ... and most everyone you know is making crazy amounts of money.
ETHICS START WITH THE BOSS-MAN
Ethics, like honesty, is a very internal concept, for which a written guide is useful mostly to the young and the weak. Disclosure policies, however, are very useful for news organizations and especially their readers, and in that spirit I would like to disclose the four main reasons why I should have never been allowed to write this article:
1) I have written for Salon before, and hope to again. 2) Salon's Scott Rosenberg, whom I am about to mention, worked with me on my previous article, and I consider him to be a very swell and smart guy. 3) Janelle Brown's piece in question discussed the tenuous ethical stance of tech freelancers, especially those who get into cushy consulting gigs ... and I am a tech-ish freelancer who has dabbled in consulting. 4) I have a deep and abiding hostility for the kind of J-school robots who would argue that I should have never been allowed to write this column.
If we are all lucky, the Nolan affair will do to journalism ethics what George Bush's coke story may (but probably won't) do to the drug debate -- inject a little pragmatic honesty, deflate the fake righteousness, and shed new light on how ridiculous existing policy is.
Conflict-of-interest policies typically -- and incorrectly -- focus on individual reporters and editors, as Nolan smartly pointed out in her letter to the Mercury News editor, which was published in Wired News:
"Knight-Ridder, the newspapers' parent company, has made lots of investments up and down Silicon Valley. It has a stake in America Online, a relic of its very profitable investment in Netscape Communications. It was an investor in PointCast, the much-publicized 'push' service that faltered two years ago. Not until 28 July did the paper's business section decide to regularly tell people when it writes stories about companies where KR has investments. But the company has an active Silicon Valley venture fund and venture funds often like to keep their deals private. How will KR's investment activities be covered? Is the paper also saying that its corporate parent can invest -- and, one assumes, take advantage of the knowledge that comes from running a local newspaper -- but that individual reporters are barred from the same kind of activity?"
Salon's Scott Rosenberg also made the following simple but seldom-heard point, which in my mind goes a long way toward explaining why reporters submit to urine tests and shrug at mediocrity:
"Journalists who are afraid of losing their jobs are at least as likely to make ethical compromises as those who play the stock market -- but the lapses of the former are likely to be those dictated by the interests of their employer."
The boss' ethics are more likely to be questionable, and less likely to be disclosed. In this era of newspaper monopolies, it is in the public's vital interest to know how the publisher and parent company stand to benefit from any given story.
In Los Angeles, for example, the secessionist movement of San Fernando Valley residents is covered in diametrically opposed ways by the monopolist L.A. Times and the Valley-based Daily News. Both publishers have spent tangible money on opposite sides of the issue, and clearly stand to gain if their side wins. Yet neither paper discloses a damn thing when covering the story, and the Times at least is quick to write long multi-part series about other organizations' lack of "media ethics."
This kind of conflict is almost never disclosed in a U.S. newspaper, yet is more common and 100 times more significant than the ethical hiccups of individual reporters (the L.A. Times' direct involvement in diverting water to Southern California, for example, is surely more conflicted and corrupt than the worst transgressions of all its reporters throughout its history combined). The New York Times (see OJR, April 24) is involved in a series of battles and competitions with Amazon.com, yet rarely mentions them, even when publishing long attacks on the bookseller (including ones examing Amazon's ethics!).
The story gets more convoluted on the Internet, where the journalism brand names are much younger, and the web of cross-ownerships and business arrangements are almost so dense that there is little way of knowing that the same tech news site that trashes a recent conference is owned by a company that runs a competing conference business. (To begin sorting it out, see "Who Owns Internet News".)
In the Nolan aftermath, many pointed out the various new ethical complications in the Internet era, and all but threw up their hands:
"The old rules are hard to apply to the new economy," Brown wrote. "Take, for example, the old ethics standby of 'don't invest in companies that are in the industry that you cover.' For technology journalists, this can be tricky -- just consider how many 'non-Internet' companies now have prominent Internet plays. Is Disney a technology company? AT&T? Viacom?"
Employee share options just make things more complex, Brown wrote: "If journalists like myself who work for these companies own stock or have options in these companies, can we claim to have no conflicts of interest? The most stringent interpretation of journalistic ethics would argue that, as participants in the sector, we shouldn't write about the Internet -- or that if we write about the Internet, we shouldn't participate in our companies' incentive stock option programs."
If New Media types are serious about finding an "ethical framework" or whatever, the first thing I'd suggest is to cease, once and for all, invoking "the most stringent interpretation of journalistic ethics" when discussing the problem, because that is always followed by a laundry list of gray areas, and then usually by a demoralized shrug. That's when the bastards bring in the steam rollers, flattening out protests against urine testing, discouraging critical attention of media/entertainment synergy, and trying to make it seem normal that search engine results are paid for by the highest bidder.
This business is bloody complicated, to be sure, but the first step in simplification is to approach these questions with a pragmatic and brutal honesty. Does owning shares in CBS MarketWatch give you an incentive to glorify the Internet and diss the competition? Of course it does, though it gives you much stronger incentive to help the company sell high-quality information at the speed of light. Does owning an index fund mean you are conflicted when writing about Internet companies? To find out, try disclosing the investment every time you write about an industry that's represented in your index.
Maybe the embarrassment of that exercise will convince the poor, conflicted souls of the Silicon Valley to truly explore how "the rest of society" gets by.
Are Bay Area journalists too far removed from the rest of society?
Have your say on the OJR Forums.