Capitalisn’t: Manufacturing dissent

Feb 01, 2021

Well-functioning capitalism requires well-functioning democracy, which in turn relies on a well-functioning media. Is the US media functioning well right now? Has it ever? On this episode of the Capitalisn’t podcast, hosts Luigi Zingales and Bethany McLean sit down with journalist and media critic Matt Taibbi.

Matt Taibbi: I mean, it’s impossible to unknow how this works. If you know that saying X, Y, or Z is going to get you more clicks or more eyeballs, you’re just going to drift in that direction.

Bethany: I’m Bethany McLean.

Phil Donahue: Did you ever have a moment of doubt about capitalism, and whether greed’s a good idea?

Luigi: And I’m Luigi Zingales.

Bernie Sanders: We have socialism for the very rich, rugged individualism for the poor.

Bethany: And this is Capitalisn’t, a podcast about what is working in capitalism.

Milton Friedman: First of all, tell me, is there some society you know that doesn’t run on greed?

Luigi: And, most importantly, what isn’t.

Warren Buffett: We ought to do better by the people that get left behind. I don’t think we should kill the capitalist system in the process.

Bethany: Let’s just start by talking about why we felt this episode was important, why we feel like it’s critical to talk about what’s going wrong with the media, because I think we’d both agree things are going wrong.

Luigi: We had planned this episode for a while, but it could not have come at a better time, because it’s not just what’s wrong with the media, but to what extent the media are an essential part of our democratic system. I would go even farther and say, even of a good capitalist system, but let’s stick with the democratic for today, which we have plenty. Without a well-functioning media, people are not informed, you cannot keep together a polity.

And I think media can help do that or can hurt that. However, I think that in the past, media have done more than that. They have basically created a common narrative that you could not challenge in the public discourse unless you basically were ostracized. So, the only way to challenge the narrative was to live at the fringe of the public discourse.

Bethany: And now the fringes are all that exist, right? That’s not entirely true, that’s an overstatement, but there’s some truth to that. And it’s interesting. I’ve existed most of my career in business media. I grew up in what was once a powerful magazine empire, Fortune, which was part of Time Inc. And, for sure, there was a narrative we enforced, although I was so steeped in it I didn’t even realize we were enforcing it. And the narrative was business is good, profits are better, the free market always functions the way it should.

And I don’t think I fundamentally began to question that narrative until the financial crisis. And I didn’t realize how much that shaped everything we wrote. And I’m sure the same is true across the spectrum. And so, voices that challenged that, that said, “This isn’t so great. Something’s going wrong here,” didn’t necessarily get play. And that deeper problem is that you as a journalist don’t even know. You’ve bought into a system of beliefs, particularly if you grow up somewhere and you’re young, or you grow up and you’re educated in the same elite system, and then you find yourself surrounded by all those same people.

I’ve always thought about implicit corruption versus explicit corruption, and explicit corruption, in my view, is somebody slipping somebody a bag of cash under the table to do something. Implicit corruption is when you don’t even need to do anything because you all think the same way. And so, you’re not even allowing in an alternative point of view. And you saw that in the run-up to the financial crisis, whether it was Brooksley Born at the CFTC trying to change derivatives regulation or people protesting the hegemony of the rating agencies, and they couldn’t break through the “free markets are good” mentality. But that’s just the tip of the iceberg, or just an example of the bigger problem.

Luigi: I have to say that an advantage of growing up in Italy is that you are exposed to these ideas early on. The only Italian philosopher of the 20th century worth knowing is a guy called Gramsci. He invented the concept of cultural hegemony. I think that’s the position that Chomsky takes in his famous book Manufacturing Consent. There was a cultural hegemony within the United States, but also in many ways around the world, of the United States on some ideas.

As you said, it’s very important that in your education you are exposed to these ideas, because they make you question. And then you can buy in or you can not buy in, but at least you realize the air you’re breathing and the water you’re swimming in.

Bethany: For this episode, we decided to talk to Matt Taibbi, who’s a well-known journalist and published a book called Hate Inc., which is a pretty straight-down-the-middle—the cover features both Sean Hannity and Rachel Maddow—look at what he believes has gone wrong in the press, and perhaps what he believes was always wrong with the press.

We thought it was interesting that we’re recording this the day after the siege on Capitol Hill. I thought it’d be interesting to start with that and your views. I thought maybe it marks the apex or the culmination of what you lay out in Hate Inc.

Matt Taibbi: Yeah. Unfortunately, it’s the apotheosis of the whole thesis, right? For decades now, we’ve had a system of media whose business model is predicated on stirring some groups of the population against others. Because there’s so little crossover, the groups don’t communicate with each other so much. It’s very, very easy for legends to develop, for people to nurture hatreds without checking their prejudices.

I’ve had friends in journalism who worked in Yugoslavia in the ’80s and early ’90s, who talked about a similar phenomenon of media talking at demographics in ways that were irresponsible. And I think we’re in a similar place, unfortunately.

Bethany: Let’s back up and talk about how we got there. You start with your own awakening, maybe that’s the wrong way to put it, but your intellectual growth, beginning with reading Chomsky’s Manufacturing Consent. Is that where it begins? Are we in the case of, thus it’s always been, and it’s just gotten worse, or did something fundamentally change?

Matt Taibbi: No, we’ve had huge changes in the media business. I grew up in the media; my father is a television reporter. So, from birth, basically everybody that I’ve known in my life has worked in this business. We went through some very significant changes, especially in the late ’80s and early ’90s. It was really three things. The first was the development of the 24-hour news cycle, which put tremendous stress on news companies to create content at a pace they never had before. And one of the first things they realized that really worked was just putting two people on set and having them argue with each other. Argument sold, conflict sold, and that was easy and profitable. And that’s the first thing.

The second thing is that the internet completely changed the financial model of media. Newspapers, for instance, used to really depend on their distribution advantage. That was all wiped out in an instant. When the internet came along, distribution no longer mattered, so it made it impossible to have a dependable ad base. And that created new stresses to make money, which of course impacts this.

The third thing is that Fox News discovered a dependable new way to make money, which was based on the idea of, rather than trying to get the whole audience, let’s just pick a demographic, and let’s try to dominate it by feeding it news we know they’re going to like. That was very successful for them. For a while, they were the outlier, but over time, this sorting process developed, and now in the Trump years, basically everybody does that to some degree or another.

These three things have greatly heightened the commercial pressure to create this polarizing media landscape.

Luigi: But let’s get this straight. So, the fact that in the past, the media was “objective” was not because they were better people; it’s simply because the business model was very different. As you said in your book, the Reader’s Digest that it was advertising was told, “I want to be in the middle of the road to capture the entire market.” And today, the business model has changed, and so the media has changed. So, some of the rhetoric of the great old media of the past in fact is overstated. In part, it is because the business model was in their favor, but in part, and here’s Chomsky, it was not that great in talking about the real issues. There was a lot of consensus, but some of this consensus was on the wrong dimension. Right?

Matt Taibbi: Oh, of course. I’m not at all saying that the old system was better or more honest. A company like CBS was going for the whole audience. They wanted to sell as many ads as they could, and that was how the “objective” news style developed. It was basically a lukewarm, liquid medium that they created to sell the most possible ads, except the one big difference was they were very successful in creating unifying myths for the whole population. This new form of media doesn’t bother with that. You’re right. It’s just a different animal. Unfortunately, commercially it has the impact of dividing people a little bit more.

Bethany: It actually raises an interesting question: is a unifying myth better than a series of myths that tear us apart?

Matt Taibbi: It’s a great question. Actually, I talked with Chomsky about this a little bit before I sat down to write this book. We didn’t have a real good answer to that question, but for a while, the media had the best of both worlds. When it felt necessary to do so, it was still able to manufacture consent for things like the Iraq War, which is not necessarily a good thing, but it was still possible, even as we were moving into this model of a divided media landscape.

Now, what we have is a totally dysfunctional media landscape, where there is no single ability to get everybody on board at the same time. It’s almost impossible to do, absent some kind of national emergency that would galvanize the whole country, but we’ve seen in a pandemic that that didn’t happen. So, I don’t know the answer to that question, but it’s a good one.

Bethany: The way I’ve actually thought about it, I don’t know if you agree or disagree, is that the old system actually was sort of a virtuous circle. It didn’t always work that way, but it made it easier for good journalists to try to be good. And the new system is almost a vicious circle in that it makes it much harder to try to be good and much easier to be bad. And so, it spirals down, whereas the old system, at least at its best, could spiral up.

Matt Taibbi: Yeah. I think so. I agree with that.

Luigi: Sorry, I disagree. I think that there was this good sense of being mainstream, but most journalists were not really attacking the fundamental questions. The Tuskegee syphilis experiment went on for, what, 40 years before the media exposed it? I don’t think in today’s world that would survive that long. I like a civil conversation, but if there are a bit more fights on the internet, but some of the most gruesome experiences are eliminated, I’ll take this any time of the day.

Matt Taibbi: Yes and no. I agree with probably both of you here. I mean, obviously in my own career, I was extremely opinionated. I always took the strategy that it was better to not bother with the phony balance and the phony objectivity and just give it to readers and audiences the way that I saw it, and also to regularly try to ask myself whether there were deeper systemic issues involved than was commonly being talked about in the press.

The one thing I would say that the old system did encourage journalists to do, however, is that it forced them to ask themselves if they were giving fair play to every side of an issue, because you knew you had to deal with the entire audience. In the current system, you know you’re never going to get blowback from your audience if you should give short shrift to a certain point of view or another one. If you’re Fox News and you ignore an important, say, left-wing or liberal criticism or a convincing one, you’re never going to hear about it. And the same thing is true at MSNBC. And I think that creates a little bit of a laziness factor in journalists. They know they can get away with a little bit more rhetorically, which I don’t think is positive.

Bethany: I agree with that. I think even beyond the laziness factor, you know how to get applause, and you know that you’re going to get the positive feedback that, on some level, we all as human beings crave, if you take a particular point of view and take it to an extreme. So, it not only encourages laziness, it encourages almost outright . . . maybe manipulation is too strong a word, but manipulation.

Matt Taibbi: Sure. I mean, look, especially if you know on some level we’re in the click-generating business, we’re in the eyeball-attracting business, and if you know, I mean, it’s impossible to unknow how this works. If you know that saying X, Y, or Z is going to get you more clicks and more eyeballs, you’re just going to drift in that direction.

I think one of the big problems with the Trump era is that, right away, journalists realized that he was a ratings magnet. No matter what you said about him, it was going to get a lot of eyeballs and a lot of hits, but he was also someone about whom it was not necessary to have a nuanced point of view in any direction. All you had to do was go for the easy headline with him, and you were going to get a lot of audience on one side or the other.

I think that’s a danger. When you know there’s an easy route to manipulating your audience, that’s dangerous.

Bethany: There’s another dynamic I think about in that, that I wonder if you agree with, but in old-school journalism, the idea of writing something about somebody without having to call that person for comment first, you couldn’t do that. And the fact that you had to call them for comment acted as a form of policing on what you were going to say, because you had to call them and give them a chance to respond, and that wasn’t fun. And the rules on social media are completely different. You don’t have to call people for comment. And I’ve often thought about that, and I wonder if you agree with this, that, yes, freedom of the press, but with responsibility. And being forced to call somebody for comment was a form of responsibility. And in the online version, that responsibility has gone.

Matt Taibbi: Absolutely. There was a moment in 2016, I actually can’t remember which reporter it was, but there was a fight that was going on on social media between a couple of prominent journalists. And one of them said something to the effect of, “I can’t stand the telephone. I hate to go on the telephone.” Which I thought was an extraordinary thing for a reporter to admit.

My idea of a journalist, and this is from watching my dad growing up, you are constantly on the telephone. And being on the telephone was a significant part of what the job was about. And, yes, you would never have thought of doing a story without at least having to pick up the phone to ask for comment. Even if you were doing it insincerely, you had to do it. And that acted as a break on your worst instincts a lot of the time.

What’s happened with this young generation, and I hate to sound an old fogey, but there’s a lot of people coming up in the business now whose idea of research is they look for a link. It’s an antiseptic process that takes the humanity out of the research procedure. Having to face people, having to maybe hear something surprising, because really what you’re doing is you’re looking for confirmation to something you already think, most of the time. So, yeah, I agree with you. That’s a key part of the problem, I think.

Bethany: In your view, is there an answer to the chicken-and-egg question? In other words, media companies would say, “Well, we’re giving people what they want by giving them this highly politicized content.” And the other view would be, no, the media is teaching people to want what they want. And so, do you have a view of where it begins, and of where, then, possibly, it can end, based on what you see from your readership?

Matt Taibbi: Well, the original Telecommunications Act of 1934 mandated that companies that lease the public airwaves had to create content in the public interest. And this was an indirect subsidy to media companies. It was part of the trade-off of being able to make money selling sitcoms and entertainment and movies and sports programming and whatever it was. All that stuff made a fortune, but it was understood that companies had to do something, and that was a news program that was in the public interest, and the news was allowed to lose money. There wasn’t a stigma associated with losing money that there is now. And when news companies discovered through shows like 60 Minutes that they could actually make money doing this, I mean, it didn’t immediately have the impact.

So, I think originally, the news was understood as something that could be a loss-leader. It wasn’t understood as purely a profit-making mechanism. It was something that existed at the time that attitudes about this shifted, and by the ’80s and ’90s, when the people who started to run news programming tended to come from the same place, they were people who switched over from the entertainment or the sports wings of those same companies. I mean, think about CNN, for instance. They’re run by ex-entertainment executives. That wasn’t the case once upon a time. I think once upon a time, the news was understood to be something different. Now, they start with the profit objective and try to work the news in.

Luigi: But in your book, you have a very interesting point that 60 Minutes started to do serious investigative journalism and didn’t last very long because it was sued the hell out of it. Right?

Matt Taibbi: Yeah. And they had to learn to pick their targets very, very carefully. And I do think that they did do some very, very important journalism. I don’t think anybody could argue with that, but the real Alamo for them didn’t really come until the ’90s with, for instance, the Brown & Williamson story, where they went after big tobacco, and they were basically told by the people upstairs, “You can’t do that story,” or, “You can’t do it the way you want it. You have to do it a little bit less.” That was a moment that a lot of media companies were going through at that time.

Also, a lot of them began to self-censor and realize, “Hey, we don’t have to do exposés on Chiquita Banana. We can make just as much money doing a consumer report about a restaurant downtown or something like that.” They realized that the audience didn’t necessarily have that screaming need for that. Even though that was probably the right use of the medium, they resorted to other things.

Bethany: I want to go on a tangent for a little bit. How do you think your time working in Russia shaped your willingness to be an iconoclast and your views today on the pros and cons of the media business?

Matt Taibbi: I worked in Russia for almost a dozen years. I had my own English-language newspaper, I worked for expat papers, but I also wrote in Russian for Russian papers. So, I had a little bit of experience with the Russian point of view on how they do news, which is very, very different. The ’90s in Russia were a period of tremendous flowering of journalism. They were these amazing muckrakers who were taking incredible risks. And a lot of them were very heavily punished for it. I mean, there were a lot of people who got killed or beaten or assassinated.

I remembered that experience; I’ve always brought that with me. Any time anybody tries to say, “Well, journalists are brave,” or that they have it really tough in America, I think about what my old colleagues in Russia went through, and I laugh about that. Risking a lawsuit isn’t necessarily bravery compared to having your head caved in with a crowbar, as some people that I knew went through.

It was a little bit of an incentive to think outside the box and to not worry so much about being conventional and all those other things. I think I learned a lot from that experience.

Luigi: But now you have broken out on your own with Substack. Tell us a little bit about the business model of Substack and what are the pros and what are the cons.

Matt Taibbi: I moved from a traditional legacy media outlet at Rolling Stone to a subscription-based service called Substack. And I had a little bit of experience with them, unlike some of the other new arrivals like Glenn Greenwald and Matt Yglesias and Andrew Sullivan. I had actually serialized, among other things, this book on Substack years before. I was exercising a little contractual loophole that I had at Rolling Stone.

I found out that this system works very well, and I was also a fan of I.F. Stone growing up, knew some people who knew I.F. Stone, and talked about how happy he was just putting out a newspaper out of his basement and how he made a good living and felt good about himself when he went to bed at night.

And Substack is a little bit like that. It’s basically a newsletter service where you’re compensated directly by your audience and by your readers, cutting out the middlemen that existed previously and advertisers and your owner.

I think there are pros and cons. The pros are that it gives you independence that you didn’t have before. The cons are that this model will never institutionally support hardcore investigative journalism of the type that we really need. That kind of journalism needs to be subsidized. You can’t have a situation like Substack where somebody is doing a four- or five-month investigation. They need more regular content than that. So, this is not a solution to all the ills of journalism, but I think it’s an interesting development for sure.

Luigi: What is the difference between the New York Times that now basically lives only by subscriptions and Substack, except the fact that the New York Times has a bigger collectivity that they have to support? But if the New York Times is brought, as you said, to the news as entertainment, where you are trying to excite the converted rather than speaking to a broader audience, why is Substack any different?

As an economist, I look at the incentives, especially on the margin. And you might say, “I make so much money with Substack, I don’t even care on the margin, because on the margin, I prefer to express myself.” That’s fine. But if you want to increase your audience, aren’t you subject to the same pressures that the New York Times has to increase your audience?

Matt Taibbi: Yes, although what I would say is that just from my own personal experience, my audience expects me to give it to both sides. They expect me not to pander, actually, in an odd way. I occupy a very odd niche in the media market. So, it’s a little bit different. The New York Times has to institutionally commit to one strategy. And that’s what they’ve been doing. Substack isn’t like that. I think it’s just a place where a lot of individual voices can eke out a living. You can do something pretty interesting with just enough to get by, whether it’s a newsletter just following freedom-of-information searches or following an arcane corner of the financial markets or whatever it is, that’s what this is good for. It’s just for finding just enough audience to report on something.

I happened to luck out just because there’s a lot of need out there, a lot of desire among media consumers, a lot of frustration with the highly politicized nature of commercial media. And so, they’re going to any place where they feel like they might get a little bit of a different take or an alternative or an unpredictable take on things. So, yes, at the very early stages of this new media phenomenon, I think that’s where my audience is coming from.

Luigi: Yeah. But imagine for a second that you discover all of a sudden that your balanced view is wrong. If you say, “OK, I tried to see the right side on both sides, but all of a sudden, I realized that one side is actually more wrong than the other, and so I need to change my view and cater to one side more than the other.” That will make you lose a lot of your customers. So, you are somewhat limited in your ability to speak your mind, based on the fact that you carved out a character and brand, and you have to live by that brand.

Matt Taibbi: Yes, but throughout my career, I already baked in the disappointment of losing audience share from taking stances that I know are going to turn people off. Look, you have to do that. You have to know in advance that when you make that decision to call things as you see them, that it might have consequences.

Luigi: At the Stigler Center, we had a report on digital platforms. And one of the parts of this report was about the media, because, of course, the digital platforms did have a lot of impact on the media. Not just them—Craigslist was clearly important, as you said, in hollowing out the profits of the media. So, the media used to provide, at some level, a public service, but this public service disappeared as a result of the changes to the business model. The question is, how can we substitute for that? And, at a personal level, Substack might seem like a good solution, but I don’t think at the societal level that this is going to fix the problem. So, do you have any idea of how to do it?

Matt Taibbi: First of all, I agree with you. Subscriber-based models, that’s not the solution. If you go back in our history, you’ll find that basically any time the press was functioning very well, somewhere in the picture, there was some kind of subsidy baked into it, whether it was the Pony Express carrying newspapers free out West, back in the 1800s or, again, the cheap leasing of the public airwaves, whatever it was.

I don’t know what the solution is, exactly. This audience-based model, I think it helps a little bit, because, among other things, it provides some competition for the corporate model that I think has really regressed and gotten worse over the years. But it’s part of the solution. I think, at some point, people are going to have to come up with something that is more institutional in nature and funds a more civic-minded approach to the job. Substack isn’t going to do that unless they come up with a highly efficient, collective Substack, where you have five or six investigative journalists really, really working overtime to produce high-quality content. They won’t be able to do it fast enough to make money doing it this way.

There has to be some kind of institutional solution. I just don’t know what it is.

Luigi: Julia Cagé has proposed a voucher model, in which you give a citizen a voucher to buy their newspaper, and then in this way newspapers can flourish. Do you see a future in something like this?

Matt Taibbi: That could work. This is what people don’t understand: one way or another you’re paying for journalism. So, even in the old system of free newspapers, you were paying for that, free television news, you were paying for that in the form of higher prices for the products that were advertised on TV. So, one way or another, you’re always going to end up paying for journalism. The question is, how much are you willing to pay?

That’s a system that could work. I think if people understood that better and were educated a little bit more about if you want to get some information about the world, you’re going to have to pony up somewhere along the line. I think most people understand that. If they had a system that was rational and that seemed fair to them, I think a lot of people would go for that.

Bethany: Although I think it’s complicated in that people have also been trained to think in short sound bites and only about things that they find interesting. And there is a hurdle to overcome to get yourself to dive into something that’s going to require work to understand and work to read in an era of shorter attention spans. I don’t know. I think back to the old days, I grew up at Fortune in the magazine business, and I think the big problem there was that there was an institutionalized way of thinking, which was mostly that free markets were good and that they functioned. And we were so steeped in that that we couldn’t see when it wasn’t good until it hit us over the head, like in the case of the financial crisis.

But the good thing about it was that there was plenty of incentive to do great long-form investigative journalism, because the only person you had to please was your editor at the end of the day. And as long as you had a good-enough reputation, if you did a story that didn’t work out, it was OK. You could spend months on something that didn’t work out and your career could survive that. And in an era where you have to produce at some point in order to please your readers, in order to please your bosses, and on relatively short order, the incentives against doing real investigative work, particularly on topics that aren’t immediately interesting to most people, it’s just so difficult. They’re so low.

Matt Taibbi: No, you’re right. You’re absolutely right. Yeah. But also, it’s necessary in order to be an ethical journalist. You have to have the ability to walk away and say, “You know what, there’s not anything here,” and disappoint your readers that way. I mean, that’s another kind of disappointment that is baked into this process in addition to the political problem.

And then the additional complication of audiences having trouble with difficult topics. I mean, I went through that a lot with the financial stuff, where what I was really trying to do was use all these different fiction-writing techniques and humor and all these other things to try to get people interested, basically fake them into making the commitment to learning something that was really difficult. That’s become a lot harder as time passes in the internet era, because people, their attention spans are just getting shorter and shorter. They read less, generally; they don’t read books as much. And so, you have to find faster and faster ways to grab them, which I think is hurting the business also, because, just to take a really quick example, if you have to cover the 2008 financial crisis, you can’t do a CDO in one minute on TV. It’s just not doable. You need people to commit to longer than that. And if you don’t have that space, it’s a problem.

Luigi: Yeah. In The Big Short, there is that scene where they use that famous actress, what’s her name, that is in the bathtub while they’re trying to explain some complicated finance, and so they get attention by basically having a naked woman in the bathtub, because that is what keeps people’s attention.

Bethany: I was giggling as I listened to you a little bit, because the one fluffy piece I did for Vanity Fair was a piece on J-Lo and A-Rod. And I remember as I sat down to write it thinking, “Oh, this writing thing isn’t so hard after all, when you don’t have to make people be interested in what you’re . . .”

On a more substantive note, I was thinking as I read your book and as we talked, that we in the traditional print media tend to blame social media for our destruction. And it certainly is our destruction financially. But I wonder if we set in place some of the very dynamics that we now complain about in social media, and if social media was just the apex of the dynamics that the traditional media put in place by dividing people, by preying on people’s emotions, by trying to make people dumber. And so, I wonder if we unintentionally laid the groundwork, not necessarily for our own financial demolishment, but for the very things that we now blame social media for.

Matt Taibbi: Absolutely. I think about that all the time. And I say this in the book, my career, I was basically an insult artist. I mean, that was before I started doing the finance stuff. In America, anyway, my job was basically to cover politics and load it up with one-liners that were putdowns of politicians that were designed to make people laugh at certain groups or certain . . . Republicans, especially. I did it in longer form, and I wrapped it around often more substantive reporting about some issues, but basically that was the attraction of the medium.

The difference with social media is that something like Twitter reduces that instinct. You can just do that all on its own now. That’s all you have to do now to keep an audience. I worry all the time that the kind of work that I did was the progenitor and paved the way for a lot of the hot-taking that goes on on social media, disguised as substantive commentary when it really often isn’t. And so, yeah, I do worry about that all the time.

Luigi: I think you’re taking too much blame. One of the things I was saying before you joined is that one of the things in common between Bethany, myself and you is we’re willing to criticize our own professions, I, the economists, and you, the journalists, which is very rare. In your book, you have that part in which you’re in the presidential campaign, and they tell you this is a no-fly zone, that you cannot discuss what happens, and I think it’s very telling.

But in this case, I think you are taking too much blame, because I think that journalists started this style simply because that was the way to attract audience and their audience is what gave them reputation and money and et cetera. And I’ve seen in my generation the transformation among economists. Once they have access to Twitter, they become worse than journalists.

And why? Because they all compete on who has the most followers on Twitter, and now there are the rankings or the most-followed on Twitter. And there’s no doubt that if you want to maximize the number of followers on Twitter, you go after insulting somebody and trying to add the one-liners and so on and so forth, which is, to me, the opposite of what a researcher should be about, and economists, especially professional economists, professors, are even more to blame, because at least you have the justification that you need to do it for a living. We don’t need to do it for a living. We have a salary regardless of what we say on Twitter. And we still do it.

So that is showing that, actually, monetary incentives are not everything. There are these social incentives, and the social incentives on Twitter are terrible.

Bethany: Oh my God, worse than journalists, Luigi. For Luigi to say something—

Matt Taibbi: That would be amazing if there’s somebody actually below us in the—

Luigi: No, no, but I am fascinated by the fact, there are people that, you meet them, and I’ve known them before Twitter, they are the sweetest, nicest guys. They would not offend anybody. And then, on Twitter, they transform themselves into the most aggressive animal you’ve ever seen. It is something that is so unbelievable, that if I didn’t see it before my eyes, it would not believe it.

Matt Taibbi: It’s absolutely true. People are so much worse online than they are in real life. I think this is one of the reasons, a lot of people probably don’t remember this, but in 2016, when the New York Times dismissed their public editor, Liz Spayd, one of the things that got her in trouble was her idea that maybe it wasn’t such a good thing for New York Times journalists to all have their own Twitter handles. Part of her reasoning was, once upon a time, when you read somebody’s byline in a newspaper, you didn’t know who they were, what their beliefs were, what they thought privately, and that was a good thing, it turns out, right?

It turns out it’s not always a positive thing to know what people do in their private lives and what they’re thinking, what their offhand thoughts are while they’re watching the Oscars or a football game. We don’t need to know that to digest journalism. And the temptations are really bad online, to start fights and get into attention-attracting flame wars and things like that. It’s all negative incentives.

Luigi: It’s funny, because what you both describe in terms of investigative journalists sounds awfully similar to academic research. The only justification why tenure exists is precisely to allow people to do crazy research that might not pay off for many, many years. The reason why we subsidize the universities and so on, so forth. So maybe journalism schools should write newspapers.

Luigi: So, Bethany, what did you think of Matt’s interview?

Bethany: I thought he was really clear and thoughtful. I think the idea that this goes back to the beginning of the press, that he was so influenced by Noam Chomsky’s Manufacturing Consent, he’s not saying this is a modern issue that’s all the fault of social media as so many of us traditional journalists want to say. He’s pointing out the historical roots of it.

Luigi: Yeah. I was very impressed by the fact that he understood that what he was doing is wrong. It’s very easy to understand when other people are wrong. It’s not that easy to understand when what you are doing is wrong, especially when you’re good at it. He’s also very critical about how the press was doing afterward, how they were following Trump. And it seems to me, I was reading the New York Times and Washington Post the other day about how they plan to cover Trump now that he has gone. I don’t think they seem to have learned much.

Bethany: Yeah. I fear that, and perhaps that’s a tangent, but I thought Matt was really interesting on that front as well. Speaking of advertising money, the press created Trump. We were the oxygen he needed in order to blow himself up into the monster that he became. And had it not been for the press, Trump would have languished in obscurity. And I wish that the new approach to covering Trump would be, we don’t. It’s done. We’re not giving him the oxygen he needs anymore.

And I agree with you. I’m not sure that we have learned our lessons. And part of that is because I worry that this love fest, which right now is warranted and very much what our country needs, with President Biden, will mean that, oh, well, if we want to do something critical, it has to be about Trump and it has to be about the remnants of Trump or what Trump is doing now to spoil our democracy. And that will have the effect of both undermining the coverage we need of Biden, as well as continuing to amplify someone we don’t want amplified.

To that point, Forbes also published a piece about how they were going to use extra scrutiny of every everyone who worked in the Trump administration, any business that hired any of these people, Forbes was just going to be merciless toward that business in terms of the scrutiny they were going to apply to it. And I thought, well, all well and good, but shouldn’t you do that with any ex-administration official? And shouldn’t the scrutiny of corporations always be relentless and hypercritical? Because that’s what we do as journalists.

And so, the idea that you have to make a special point about people coming out of the Trump administration is actually quite dismaying on a more fundamental level. And I worry about that, too. You see the numbers about the trust in the media. It’s terrible right now. And I worry that if all the outlets that rightly wanted to see Biden win, if they turn into utterly uncritical chroniclers of his presidency and fail to raise any issues, we’re almost in a worse world than . . . well, I don’t know if we’re in a worse world than where we started, but it sure isn’t good.

Luigi: To your point, it is actually even worse than being hagiographic. Many journalists on Twitter are becoming kind of Praetorian Guards of the Biden administration, to the point that there was a famous journalist from Bloomberg I saw on Twitter who was saying to somebody from Jacobin, who has written a very interesting article about the fact that Trump is a terrible human being but does not fit the standard definition of a fascist, and the tweet was, “You cannot say that because that helps the enemy.” So, we’re not having an intellectual discussion anymore, we are in a fight, and there is stuff that helps my side, and that should be written, and stuff that does not help my side and so should not be written.

Bethany: It is quite dismaying. The other point I thought Matt raised that was really, really interesting, is he was at the forefront of using language that you never would have seen in the press before in order to get attention. And it worked, and it was shocking at first. If you read a swear word in a piece, you were like, “Wow, look at that.” And I think we all started to do that. And now it’s commonplace and banal and a really annoying substitute for actually knowing how to write.

And I find it interesting that he’s ahead of the curve in changing his tone, too. He’s changing something that he helped to create, because he’s realized that it’s made the dialogue less civilized than it should be—more incendiary, less civilized, and less, frankly, well-written.

Luigi: Yeah. And I fear this escalation did not just hit the journalists, it hit everybody. Do you remember what our mayor said to President Trump? I don’t want to say it on here, but it’s not a compliment, let’s put it this way. And the fact that the mayor says that about the president of the United States, I remember the time somebody called, I think, the elder President Bush, George H.W. Bush, bozo. And that was considered, ah, how could you dare say bozo to the president of the United States?

Now, I think bozo is probably the nicest compliment that you can use. I think that that’s an escalation. But I think the part Matt mentioned, but I would like to emphasize, because I think it’s the most important part, is that that escalation of hate is really the business model of social media. It is not a bug, it is the feature. Not only did they promote Trump, they promoted the most extremist groups. And so does YouTube. If you start looking at some stuff on YouTube, immediately it proposes stuff that is more radical than what you’ve seen.

To prepare this episode, I watched some video on Chomsky. Immediately, I got some suggestion of a video from a strange TV channel. And then I started looking at it. It was actually Chavez’s thing from Venezuela. There was a TV station of Venezuela. And I would have not even known this existed. Certainly I would not have watched it, if it wasn’t for the fact that I looked at a Chomsky video, and all of a sudden, this is proposed to me. And you do that on the left, they do that on the right. So, of course, not only do they make extremists, but they promote the stuff. It’s not that they just let them speak, they promote that.

Bethany: When you Google something, what you get in response depends on who you are and what you’ve searched for in the past. So, talk about the idea that there’s no universal truth today. Even Google, which we tend to think of is a Google search is completely individualized.

I thought this was an interesting component of our conversation with Matt, too, which is that I don’t think this is just social media’s fault. I think the traditional press had put this dynamic into place even before social media came along. Social media was just able to capitalize on it because of their algorithms and because of the data they have in a way that the traditional press couldn’t do. So, I think social media accelerated and intensified the problems with traditional media. As we were talking about, it’s not as if traditional media was perfect before this and social media came along and screwed everything up, right?

Luigi: No, no, no. I think you’re absolutely right. It’s a change in the business model. I think that the first big change was with Fox News, because they realized that they could get a big chunk of the market without trying to be in the middle. The New York Times is catering to the converted. They keep saying how bad Trump is, but I don’t think they go and escalate to go even worse and worse every time. Social media needs to do that to keep your attention. And, in a sense, it is a form of addiction. It’s as if I know you’re particularly subject to kind of one liquor or wine, and I keep pouring it for you in order to get you more and more addicted and consume more and more.

And what is funny is that when it comes to alcohol, we have restrictions. If I am a bartender and I keep pouring you alcohol when you’re plastered, I can get in trouble. But if I am social media and I keep proposing to you the most extremist view of the world to keep you addicted 24 hours a day to my Facebook account, there is no restriction.

Bethany: Right. Well, that’s a perfect example of why unregulated capitalism doesn’t really work. It’s because we want, as consumers, things that are really, really bad for us. So, the idea that consumers choose the media they want to consume, and therefore that media is the good media and should be elevated, just couldn’t be more wrong, right? Most people would rather watch some stupid cat video than read about what’s happening in Afghanistan. And so, consumer preference, actually, in this context, isn’t a good thing.

And per your example of the consumer going into the bar, we have limits on what people are allowed to be served precisely because we say, “Look, consumer choice isn’t always a good thing. Sometimes you actually do need to be protected from yourself to some degree.” And what’s interesting is that we’ve allowed a business model that is predicated on capitalizing on everybody’s absolute worst instincts, in a way that might actually be very destructive to our democracy and to capitalism itself, to thrive because we refuse to regulate it.

Luigi: I agree with you halfway. I don’t want to go from the fact that, yes, we have some addiction in preferences that needs to be taken care of, to consumers don’t know what they’re doing, because I don’t think that I want a world in which I’m forced to read news—

Bethany: I was not advocating that.

Luigi: Okay. No, no, no, I know you’re not, but I want to cross the t’s and dot the i’s. I don’t want to be in a world in which we force people to eat broccoli, even if I like broccoli, but saying we should let people eat what they want should not be saying, in my book, it should not be saying, when we know that people prey on addiction . . . So, people in the United States put sugar on everything, including your McDonald’s hamburger, because we know that from a neurological point of view, sugar is something we like and makes it taste better. This is part of the cause of obesity in the United States, is they put sugar everywhere.

So, saying that we should let people eat what they want should also say we don’t want people to prey on addiction, because those are very dangerous, whether sugar, cigarettes, alcohol or bad videos.

Bethany: Capitalism functions by allowing companies to prey on people’s addiction, whether it’s sugar as you just said, or gambling or all sorts of other things. I’m thinking back to a famous piece by Jerry Corrigan, who was once the chair of the New York Fed, authored back in the 1980s, which made a case for the fact that banks were different. That was his argument in this paper, you may remember it, banks are different. And I’m thinking as we talk, well, maybe the media is different. Maybe news is different. And we’re in a place now where we need to think about whether it really is great to allow companies to capitalize on people’s addictions, on our very human propensity for addiction. And I’m not sure of the right answer, because I agree with you, the last thing I want to do is have to read that article about Afghanistan if I want to watch a cat video, but on the other hand . . .

Luigi: Actually, I will read the article about Afghanistan any time of the day, rather than cat pictures. Anyway.

Bethany: One thing that gives me a lot of hope going forward is that I think social media has at last finally recognized that they are the parasite upon traditional media, and that if they are the parasite that kills the host, that they cease to exist, too. In other words, if there’s no longer anything to Google, because traditional media isn’t creating content because it’s gone out of business, then Google’s in trouble. And on Facebook, if there’s no longer anything to share, because everybody who actually creates the original content no longer exists, then you’re screwed if you’re Facebook.

And so, all of these companies have become a lot more thoughtful about, and I’m not saying there’s an answer yet, but they’ve become a lot more thoughtful about the ecosystem and a lot more thoughtful about the need for the existence of traditional media, which is a different subject than getting their own problems under control. But the two are related. And so that does give me some hope going forward.

Luigi: I’m glad you’re so optimistic, because—

Bethany: I’m not so optimistic, I offered a ray of hope.

Luigi: I see two things. One, I see traditional media lobbying very hard to get a piece of the profit. And this is in Australia, which is known as the country of Murdoch, where he controls basically almost every newspaper, they passed a law that forces Google to pay the newspapers in some way or another. As a journalist, you might be happy about this. I’m not so sure that this is the right solution, and I fear that this could be the solution going forward.

The other is that there is this phenomenon, which is very interesting for variety, but undermines the business model of journalism even more, which is Substack, which Matt Taibbi is actually subscribing to. So, if you are famous enough, then you go to open your own Substack, and you make a lot of money with that.

Bethany: Here’s the fundamental problem with Substack, though, and I hear you, but the fundamental problem is that if you are a one-off independent journalist, then what you’re doing is more commentary than it is original reporting, and that commentary has as its feature the same key problem that social media does, which is that it’s parasitical, it’s derivative of the original work. And there’s so many business models that have come along that are like that, that are commentary-based.

But if you’re going to satisfy an audience on Substack, you’re going to produce really regularly, which means you’re probably not going to take three months and do a big investigative project, which may or may not pan out, because you can’t afford to. And most of your work is going to be, “I read this by this person and I read that by this person. And now I’m putting these things together and coming out with my own spin and my own take on it.” But it’s all derivative. It’s not original reporting.

And there’s a place for that. People have won Pulitzers for commentary. It’s important, but it’s a little bit like financialization. When the financial system starts to be the tail wagging the dog, you’ve got a problem. And when commentary as part of the media starts to be the tail wagging the dog of original content, original reporting, that’s not a long-term solution.

Luigi: No, no, I completely agree with that. And I think that that’s the reason why I think this trend is, to some extent, dangerous, because it undermines the newspapers even more. And I think that, in part, in the past, there was a mix in which the investigative journalism was what I call the haute couture of the newspapers, because the big fashion designers don’t really make money from haute couture, but it creates a brand, and investigative journalism was a luxury like haute couture is. It is a luxury that was branding the newspapers like the Boston Globe or the Washington Post, but it was subsidized by the commentators that were probably making less than they make today on Substack, but they were writing every day.

And now this cross-subsidization is broken. The result is that investigative journalism is even less common at the time where we need it desperately because, at least under Trump, everybody was looking for problems in Trump. But now that Biden is being sanctified, we can’t even discuss that. It’s like the Virgin Mary for the Catholics. You can’t even discuss it.

Bethany: Well, the good aspect of that may be that it may take eyes off Washington for a period of time, and maybe that’s not great, because so much of our country, including our financial system, is now effectively run by Washington. Maybe I’m being hopelessly naïve here to say that eyes off Washington might be a good thing, but there are lots of things happening in other parts of the country, including in the business world. I mean, just think about the way the financial system is changing with the advent of cryptocurrencies and with companies like Facebook potentially having their own currency. That has an incredible power to shape most Americans’ lives. And maybe there’ll be more time and attention for that if all eyes aren’t on Washington, because there are other issues than the president and his peccadilloes. So, maybe there’s a silver lining to that.

Luigi: I’m glad you called them peccadilloes. I think that there are more than peccadilloes, but anyway, I’m very inspired by that, let’s take off the eyes from Washington and look into Main Street.

Bethany: There you go. I’m trying to find a silver lining. I don’t know why I’m in the silver-lining mood today, but I actually agree with you. I hope that our desperate need to be optimistic and hopeful about the country going forward doesn’t become so desperate that we’re not able to look at the Biden administration with clear eyes, and at some point, everything has to stop being Donald Trump’s fault.