Bloomberg Government as D.C.'s Daily Racing Form
In the casino that is Washington, every investor and businessman needs a tip sheet.
The best reflection of Washington's ever-expanding command and control over the economy can be found in the journalistic gold rush now being led by Bloomberg News, Politico, and the Atlantic Media Group, which have unloaded their pack mules and are dredging the Potomac, Congress, the White House, the agencies, and trade associations in search of news that moves financial markets.
Bloomberg's operation, Bloomberg Government, which will have 150 journalists and analysts on staff by the end of 2011 and a complete staff of 300, will charge $5,700 per user. The Bloomberg Government unit joins a Bloomberg News bureau of 175 journalists. Politico Pro intends to charge on a sliding scale, the New York Times reports—"$1,495 to $2,500 a year for the first topic and $1,000 for each subsequent topic." The Times was silent on whether the Politico Pro subscription would include a sluice box, pan, and dry washer. Meanwhile, one of the granddaddies of high-price policy journalism, Atlantic Media's National Journal, has used buyouts to dismantle and rebuild itself into a Web and print harvester of free and premium Beltway news across its brands—NationalJournal.com, National Journal Daily, National Journal, National Journal Hotline, and more. Meanwhile, CQ Roll Call, owned by the Economist people, keeps on keeping on with its own lucrative Chinese menu of data services and publications for observers of official Washington.
Journalism isn't dead. It's just going up market.
Washington doesn't make anything except scandals. But by dint of its regulatory powers, its executive orders, its judicial decisions, its ability to conjure money out of thin air, and its budget-making authority, Washington dictates who can do business and how.
According to public choice theory, politicians like to argue that they make decisions for the common good, but like everybody else they're governed by self-interest, be it the well-being of their constituents, the bank balances of their fundraisers, the survival of their most beloved government programs, or the success of their own careers. One of public choice's founders, James Buchanan, called this school of economic thought "politics without romance," that is, politics viewed without the lip service usually given to "public service" and the "will of the people."
The burgeoning genre represented by Bloomberg Government exists not because an audience wants to read such journalism without romance but because it must. Like a horseracing fan needs the Daily Racing Form, businesses need a guide to help them game the Washington system, especially in these days of endless quantitative easing and rampant government intervention.
Although $5,700 for a subscription to Bloomberg Government might sound steep to you, it's chump change for businessmen who become the first in their cohort to read Line 125 in a pending bit of legislation and can place a bet on— or against—it in the market. Nor is this kind of high-priced government news anything new. The newsletters, which these new tip sheets resemble, have made millionaires out of hard-working journalists. Just last week, the Washington Post ran a profile of two gentlemen who started a Washington newsletter company 33 years ago and whose sales were estimated at $463 million in 2008. They're so rich now that they own Atlanta's NBA and NHL franchises.
If I were a Washington newsletter owner covering energy, banking, pharmaceuticals, taxes, transportation, telecommunications, or any of the other realms the federal government lords over, these encroachers would make me very nervous. Remember, Bloomberg stole the lunch of Dow Jones' Telerate division with his famous terminals that made it easy for investors and other money managers to manipulate market data to the nth degree. Just as Bloomberg and his terminals excelled at sponging up micro-pieces of business and financial news and data and distributing them inside of the micro-news cycle, Bloomberg Government will do the same.
If BGov—as it is called—and the other new or newish federal-news and -data oxpeckers are to succeed, they'll have to do what the Bloomberg terminal did before: Extract a toll from moneyed interests by positioning themselves between the interests and useful news and data. This formula is well-known. The Daily Racing Form, for instance, made huge profits byplacing itself between bettors and the window (or their bookies). And daily newspapers thrived for a century by commanding the place where the public found its information about jobs, places to live, goods, and services (classified pages and display ads).
As long as power and influence continue to flow into Washington, BGov or its kin will thrive. And Washington isn't the last stop. The Timesreports that Bloomberg hopes to move its model to the state level if Bloomberg Government thrives in D.C.