I Publius: Keeping one step ahead of change
Sometimes, just when you think that something is inviolable and will go on forever, in the blink of an eye things change, big time. In some cases, the change occurs because of a single development and in others it can be a combination of factors.
For example, take the end of communism in the Soviet bloc. I think that it is fairly well known that our CIA blew it. We had so-called assets all over the world. We had submarines close to real or imagined enemies. We were using spy satellites. But everyone was caught completely off-guard when whole Iron Curtain collapsed.
I often wonder what we are getting for our money when the CIA and collateral agencies ask for billions of dollars for more assets, more gadgets, or more technology. Today we might ask the same question in the case of AIG, GM, Chrysler, and a lot of banks. Where are our tax dollars going and for what reason?
People had expected that the Soviets would be in power for a long time to come and poof, they were gone. In the end, a repressive state cannot stand. On the other hand, the past several years have certainly proven that the Russian people don’t do well with too much freedom. Now it’s not communism but good old fashioned dictatorship. So it’s a combination of customs, history and ineptness. If the CIA couldn’t foretell the end of communism, isn’t that a part of the budget we might want to look at?
Change is all around us. Take the case of American newspapers. Some editors, like Rex Smith, my partner on The Media Project on WAMC and the editor of the Albany Times Union, tell you that they did see it coming. They just had the timetable wrong. Who would have ever thought that great institutions like the New York Times and the Boston Globe would be in trouble, virtually overnight? In retrospect, it looks quite obvious.
The intervening variable is the Internet. There are now more people reading newspapers than ever before. The younger ones are reading them on their computers and iPhones before they are out of their pajamas.
There used to be an old saying asking, “Why buy the cow when the milk is free?” I can’t remember what that was in reference to but it certainly applies to newspapers. Ads on the Internet don’t generate the same kind of money as print advertising. The problem of course, is not only the cow but the golden goose. By no longer buying newspapers (even NPR dropped their subscriptions) people are endangering the whole news gathering operation.
A paper that has to lay off reporters doesn’t have the same resources it once had. The worse things become, the less news gathering takes place. Anyone who thinks that bloggers (with very few exceptions) are any match for professionals just doesn’t know what they are talking about.
So, what to do? The first thing is to remind all newspaper publishers that leveraging purchases is not always healthy and the new technology may cause the bubble to burst. The second is to envision that sooner or later, the model may change. Like public radio, at least some newspapers may become not-for-profit institutions. Another possibility is we will have to find a way for those who read newspapers on the internet to pay, as in “a penny a peek.” Finally, look for niche newspapers. The Wall Street Journal is not free on the Internet.
Here’s another casualty of the internet — a lot of travel agents. To be sure, there are some left but for the most part, people book their travel themselves online. The airlines even offer Internet-only special fares. Just a few years back, you’d call your travel agent and she or he would make all the arrangements and get a cut. Those days are over.
The point is that things do change and that those who can stay ahead of the new developments will benefit greatly. People who don’t buy cheap stocks now will be kicking themselves in a few years. America will have to build cars. If Ford is doing better than the other two big guys, buy Ford stock. Ditto real estate. There are some tremendous bargains out there now. This is the low, as in buy low, sell high. Just don’t forget that I told you so. It won’t be too long before our dollar will be further devalued by all the money we are borrowing. Inflation will follow. What you have left in your 401(K) money market accounts should be shifted to stocks soon to catch the wave.
Originally Published in the Berkshire Eagle, 3/21/09