In 1987 I joined a relatively small cadre of mid-career hires at JP Morgan. I and my new colleagues were needed because we had experience in putting up large high tech buildings and Morgan had just begun their headquarters project at 60 Wall Street. In those days the employees of the bank numbered between 12-14,000 and virtually all of them had come up through the internal training program. Understanding how the firm worked for a new arrival in those days was difficult. There seemed to be interminable rites of passage until you were deemed trustworthy. Once that happened, things became more fluid.

 

In the early 90’s there was a massive culture shock. Meetings were held and everyone was informed that they no longer had “a job for life”. We would remain employed only if there was a fit between the needs of the organization and the skills we had to offer. Lunch was no longer free – literally, although it still remained cheaper than going outside to the local deli. We all understood, many for the first time, that we were employed at will.

We live in a world where the means of exchange (money) has become vastly more important than what we exchange (goods and services). We have moved from a time when money or profit was one of several metrics by which a company could be judged to the only metric and more recently in many cases, to becoming the product of a company – buy our stock because we make money. How did we get here?

Last week everyone with an Internet connection had the opportunity to see John Stewart incinerate CNBC’s Jim Cramer on the Daily Show. During that program Mr. Stewart showed clips of Mr. Kramer talking about his famous “pump and dump” strategy with a young reporter – saying things that he said that he would never say on television. The show was full of those moments that rarely occur on television; an accurate and well researched analysis of the gap between what people know to be true and what they are willing (or paid) to talk about publically. Mr. Stewart comes by his reputation as a fearless satirist and, in this case, reporter honestly. He took on Tucker Carlson and Paul Begala on CNN several years ago on their show when he chastised them for not only not reporting the news but also obscuring it.

 

It is no wonder that people increasingly look to the Daily Show and Internet sites for information about what is going on in the world. This is not a new story, it is a story of a decline in the news media that has been going on for some time and shows no signs of abating. It is as though we are watching a meltdown similar to what we have been experiencing in the financial sector. Our mainstream press, whether it is network news, cable news or our major daily newspapers, continue to obscure information that is vital to understanding what is going on in the world and, as a consequence, making it more difficult to fashion solutions.

 

Today’s editorial in the New York Times about the AIG bonuses compounds a problem that all of their reporters and particularly one of their columnists, Tom Friedman have created. The editorial continues to promote the myth that “taxpayers” are somehow funding the AIG bailout. They are not. The $170 billion that has gone to AIG is the result of a series of loans from the Federal Reserve. Essentially the Fed used the device of the loans to channel money to their stockholders (the banks) so they wouldn’t default. Whether this is good or bad can’t really be understood because it is not reported. There is no taxpayer money in the Federal Reserve.

 

Let me digress for a moment to address what some economists may insist makes that last statement not true. The Federal Reserve does receive interest payments on the money that it loans to the US government and those interest payments are funded by tax revenues. But to insist that these are still taxpayer dollars is like saying that somehow there is an extension of ownership of any money that is paid in interest. It would mean that the interest that you pay to the bank for your credit card purchases is somehow still your money. It’s a specious argument.

 

Americans are not taught how their financial system works in school. I have done a brief survey of the high school curriculums of some public and private high schools in New York City and discovered that there does not seem to be any information on the subject. There is some reference to President Andrew Jackson’s railing about central banks but it is relegated to a brief mention with no connection to the organization of our monetary system and the creation of money.

 

That said, it is possible to find a great deal of information on the Internet. To be sure, a good deal of it is written in bold capital letters and comes in the form of conspiracy theories about the Illuminati and the eleven families who control everything in the world. But a good portion of it is very straightforward. Americans are educating themselves about the Federal Reserve, its status as a private corporation owned by the banks and its responsibility to manage the monetary system and create the very currency that we use as a means of exchange. Increasingly this information is making its way onto public television stations (albeit very slowly). My sense is that we are very close to a tipping point.

 

In the moment the news media and the political class are making hay by attacking the people who received the bonus money at AIG and Merrill Lynch. That’s fine. It makes no sense to give out bonuses when the company is loosing money no matter where it comes from. The excuse that it is necessary to retain all the top talent that either actively engineered the current mess or stood by and watched it happen has a very hollow ring. Where exactly is all this top talent going to go? So, by all means let’s get Andrew Cuomo (New York State Attorney General) and others to grab these folks by the scruff of the neck and give them a good shake. Put some in prison as well. But even if that happens it will not change one iota of the system that created the problem and it will not move us on a path to recovery.

 

The only way we are going to get that is to understand how our system works and the news media seems to be working overtime to ensure that that doesn’t happen. It is a fool’s errand. They are appealing to the same instincts that cause people to watch Jerry Springer and Dr. Phil. The Roman Circus concept works when people didn’t have access to accurate information. That’s no longer the case.

 

It is hard to imagine that we may not have a New York Times in the future but newspapers are folding at a rapid rate. They are losing advertisers because people aren’t buying them and people aren’t buying them because they increasingly understand that they don’t contain much news.

 

Several weeks ago the New York Times published and article on the number of states that were actively engaged in repealing the death penalty. Apparently it is very expensive to kill someone (some estimates range as high as nearly $2 million) and cash strapped states are discovering lawmakers would rather fill potholes than exercise self-righteousness in the service of the ultimate penalty. And then there is also the increasing number of false convictions; of the 232 convictions overturned by the Innocence Project, 17 spent time on death row. The advance of technology has resulted in many states reconsidering the irrevocable choice of putting someone to death.