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David D. Kirkpatrick and Jamie Heller

the breakfast table
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from: David Kirkpatrick

Ready for My Close-Up

Posted Tuesday, May 23, 2000, at 4:26 PM ET

Jamie--

Well, now you have gone and done it. You have introduced one of those subjects irresistible and exclusively fascinating to journalists: the relationship between reporters and sources, in this case real-estate brokers. My own experience with residential real-estate brokers is a little different. True, they take it as an article of faith that property prices are high and going up, up, up. But I find they also display a more widespread and troublesome syndrome: the just-spell-my-name-right problem.

I remember when I wrote my first Page One story for the Wall Street Journal. It was about a fashion trend--dark-blue men's dress shirts on conservative guys. I quickly realized that when I called people in the rag trade, their whole game was telling me what I wanted to hear. Blue shirts? They're in! I mean, they're old! I mean, forget it! In fact, their honest opinion was that getting one's name in the paper is always good for business. Real-estate brokers are often the same way. Their business rarely recurs. They help a client find a home and then say goodbye for years, if not forever. So marketing is all, and quotes are like money. After the markets hiccupped in the fall of 1998, some real-estate brokers quickly began exaggerating the extent of the negative impact on the market, just because they knew that was the story reporters were looking for.

This poses obvious problems for journalists inclined to report things that are true (so do trend stories in general--but forget about that for now). The truth is, it is not wholly different from paying sources, which reputable journalists would never do. But it can't really be helped.

We are often on the other side of the deal, too, because we reporters love to get on TV. It always seems like everybody in the world catches even the most obscure TV appearance. Not that I have been on TV very often--in fact, rarely. But I felt enough of a twinge of desire to say exciting things that would get me invited back that I began to wonder about how my desire for publicity might color my comments.

Once, I was on TV to talk about the New Jersey Nets' merger with the New York Yankees. It was an unusual opportunity for me, so I wanted to give good value. I found myself predicting that the new company, YankeeNets, was bound to make moves on the New Jersey Devils, too, and would probably succeed in buying the team to move it to Newark. That came to pass a year later, just as foretold by me to a 6 a.m. audience of our local Fox affiliate. At the time, though, I was nowhere near certain enough of all that to have put it in print in a magazine or newspaper. On the way back to bed, I made a note to myself to be more careful next time. But the point is that I am sure I am not alone in feeling tempted to mug for the cameras. I often think of that moment when I see print journalists dumbing things down for a TV audience.

For other kinds of commentators, too, TV appearances are like money in the bank. A Wall Street analyst, for example, was explaining to me the unwisdom of her former firm's decision to let her go. "I mean, I can just call up Steve Frank and get on CNBC any time I want!" she said. Of course, Wall Street analysts already have plenty of other conflicts to worry about. But does CNBC realize the lucrative prestige they are dishing out? And what do they think about that?

Speaking of TV, did you read Caryn James' excellent review in the New York Times today of the Tom Green cancer special? Perhaps I shouldn't reveal this in public, but since I have already let out my rent, I might as well admit that I am a closet late-night MTV fan, including Tom Green.

David

the breakfast table
entries
123456789101112131415161718
from: David Kirkpatrick

Ready for My Close-Up

Posted Tuesday, May 23, 2000, at 4:26 PM ET
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David D. Kirkpatrick is a contributing editor at New York magazine who writes frequently about business and finance. Jamie Heller is editor for strategic ventures at TheStreet.com, where she's worked since its 1996 founding.
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Reader Response from The Fray--to be read after the most recent entry:


I still don't understand how the stock market can be efficient in the long term and not the short run. And I'm not relying merely on Keynes' famous sentiments about the long run; my point is even simpler: when is the long run? Was Microsoft's long run value from 1990 to early 2000 or to today? Short run volatility must have consequences for people who claim long run efficiency. To my mind, and for many other reasons, believing in efficient markets is like believing in Santa Claus--there are correlations between expected results and reality, but people really ought to grow up and accept that no-one on Wall Street knows anything.

--Jeff

(To reply, click here.)

(5/22)

To Jeff: Various natural processes are long-term efficient without being short-term efficient, for example the downhill flow of water or the process of natural selection (aka evolution). Complex human processes seem to have similar behavior. Perhaps efficient is being confused with "optimal". The problem with most strategies that attempt to be optimal is that they often have truly horrendous failure cases, which wipe out all their interim or theoretical gains. Democracy has been called "the worst form of government, except for all the rest." It is hardly optimal, and in many cases very inefficient. A dictator could get the graffiti cleaned up and the trains running on time; democracy seems to have a hard time doing such things. But what about the failure case of a less-than-benign dictator or a dictator whose benign intentions diverge from many or most of the desires of the population? An example of short-term efficiency vs. long-term, in terms of human happiness.

That's not to say short-term efficiency is bad, or that we can't improve on raw systems. But it is possible for a strategy to be the best long-term one without exhibiting short-term efficiency.

--Paul Canniff

(To reply, click here.)

(5/23)

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