White House Chronicle

News Analysis With a Sense of Humor

Washington Post: Family Adieu

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Part of the problem with dragging the news business into the 21st century is that newspaper people are so damned conservative. That's right, conservative.
 
Most journalists who work in print may be liberal, but we are conservative about our own trade. We like it the way it has always been. Gruff editors hammered into us how it should be, and we have passed the hammer.
 
While magazines experimented with new ways of presenting their wares and developing new voices, especially in the 1920s, newspapers clung to the past. Horizontal layout – the headlines running across the page rather than sitting astride vertical columns – was considered radical enough.
 
Even the sensational papers of William Randolph Hearst and Joseph Pulitzer were sensational within bounds. They pushed the limits of content and veracity, but the concept of the newspaper was unchanged. The carved-in-stone rules of the trade were not challenged — like the one that says headlines must have verbs, and another that says the first line of a headline cannot end with a conjunction or a preposition.
 
The most revolutionary of American newspapers was probably The New York Herald Tribune. In its last decade, even as it was dying a decades-long death from extraordinarily poor management, it became a laboratory for new journalism with certifiable newspaper geniuses like David Laventhol, Eugenia Sheppard, Red Smith, Tom Wolfe, Jimmy Breslin and Clay Felker. Working at the paper was like working for Orson Welles' Mercury Theater: great stuff was going on.
 
The Washington Post has had its share of dazzling reporters and columnists – and benefited from some of its Herald Tribune hires, including Laventhol, who created its much-imitated Style section. I was lucky to have worked for both papers.
 
The Post has shone in the coverage of politics, interpretative foreign stories and big investigative stories. Watergate gets the kudos, but there was good, even great, investigative work before and after that.
 
The Graham family presided over the Post in its golden period from 1954, when it bought its morning rival, The Washington Times-Herald, to 2000 to the present. It never achieved the global recognition that The New York Times enjoys, but it was a close second — and on many days, the Post was clearly the better newspaper.
 
The Washington Post Company, which is controlled by the Graham family and which owned the newspaper, is less of a success story.
 
While other publishing companies grew and prospered, The Washington Post Co. was less successful: After its acquisition of Newsweek in 1961, it faltered as a dynamic news entity, even though the newspaper was hugely profitable.
 
It failed to become a major player in television, athough it owned stations, failed to expand its magazine franchise and missed out on cable TV, which has been so important to the growth of old-line publishers Scripps Howard and Hearst.
 
The company bought and sold many properties on the fringes of its core business, but with little success, except for Kaplan Inc., which was very profitable until the student loan imbroglio.
 
Four years ago the Internet, like an invasive species, began choking the life out of the Post. It didn't know how to respond. It failed to create a credible Web site and watched two English newspapers, The Guardian and the Mail, build up huge Web presences in the United States. Helplessly, it also watched an upstart company, Politico, staffed with Post veterans, take hunks out of its political franchise. As recently as last year, the Post could not establish whether it needed a pay wall.
 
Now the Graham family, headed by Washington Post Co. chairman and chief executive officer Donald Graham, has done something very brave in the egotistical world of publishing. It has admitted: We don't know what to do.
 
Jeff Bezos, the inordinately wealthy founder of Amazon, has bought the paper. Does he know what to do? Nobody knows.
 
Nothing Bezos has done suggests that he either understands or reveres newspapers. But he can afford to be radical and he is not bound by newspaperdom's reverence for the way we used to do it; our conservatism. — For the Hearst-New York Times Syndicate

Who’s Afraid of Regulation? Not Warren Buffett

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So Warren Buffett has bought himself a railroad: Burlington Northern Santa Fe, to be exact. Crafty fellow.

Buffett famously invests in easy-to-understand large companies with a strong competitive advantage that generate cash and above-average return on capital. He has not been dazzled by the computer age. Computers, though, have had a dazzlingly disruptive effect on one of his investments: The Washington Post Company, for which Buffett serves as a director.

By his own account, Buffett finds newspapering scads of fun, connecting with journalists. Because The Post Co. bought Kaplan, Inc., the educational services outfit, Buffett and other Post investors have been spared some of the pain that falling advertising and circulation have inflicted across the industry.

Even as he was enjoying newspapering, Buffett appears to have had his eye on more solid industries. In 2000, he paid $1.7 billion to acquire an 85-percent stake in utility MidAmerican Energy Holdings Company, and later acquired the rest. Now he is paying $26.3 billion to acquire all of Texas-based Burlington Northern Santa Fe.

It would appear that in these investments, these dull industrial cornerstones, Buffett has chosen government oversight over technological vulnerability.

Both utilities and railroads are government regulated and subject to the vagaries of public policy. But they are both necessary, and therein lies Buffett’s comfort factor. Electric utilities are not known for their gyrations, nor are railroads. Indeed, both have been largely shunned by hedge funds because they lack volatility.

Buffett, it would seem, is not balked by government or its impact, through regulation, on whole classes of businesses. Electricity companies are heavily regulated at the state and federal level–and in other ways, including pollution control, fuel mix and return on equity. Similarly railroad safety, service and return on equity are dictated by regulators.

Since the heady days of deregulation in the 1980s and 1990s, despite the conservative dialectic, the electric utility industry, in particular, has discovered regulation by the government to be both a burden and a godsend. Government stifles but it also succors.

Wall Street is conflicted about regulation. While it loves the security regulation brings to electric utilities, gas distribution companies and railroads, which makes their debt an attractive investment, it fears the extension of the government’s embrace to other industries and to itself. Wall Street would love, for example, to see the airlines back under the government’s wing–as would the carriers themselves.

While the political class is consumed with the machinations of Congress, and the activism of President Barack Obama, Buffett is tacitly declaring his apprehension about disrupting technologies: computers and their progeny, like the Internet and wireless communications. Buffet is voting for investments that cannot be moved to China and cannot, by today’s reckoning, be rendered obsolete by technology.

Washington is awash with analysts, pundits, reporters and strategists aggregating and disaggregating, dicing and slicing the smallest morsel of political change. Yet, since the end of World War II, technology has had as much claim on change as politics. The three great political events of this time have been China’s conclusion that communism and capitalism can abide together; India’s final realization that protectionism was holding it back; and the collapse of the Soviet Union. Did the end of the British Empire matter? Not really.

By stealth, technology has been changing the world, wiping out whole areas of endeavor and creating new ones. Thanks to the green revolution between 1950 and 1984, the world has been better fed. Thanks to the microprocessor, we have been gadgetized–from the way we enjoy music to the ease with which we stay in touch by telephone. Thanks to the jet engine, the world has been opened to all who can afford to fly. And thanks to new technologies, medicine posts successes daily.

But it is the computer that has changed everything, for good and otherwise. It is the computer that has robbed us of our privacy, but has put the great libraries of the world at our fingertips. It has made writers of us all, even while undermining traditional journalism.

So while we are parsing electoral tidbits, technology is the real shaping force loose in the world.

If you cannot embrace it, try and get to some safe, predictable high ground, like Buffett. He is known as the Oracle of Omaha for good reason. –For the Hearst-New York Times syndicate