Plagiarism

Without ever actually using the word "plagiarism," Michael Moynihan in last weekend's Wall Street Journal makes the case that Dominic Sandbrook engaged in a good deal of it in Sandbrook's new book, MAD AS HELL: THE CRISIS OF THE 1970s AND THE RISE OF THE POPULIST RIGHT.

Moynihan, the senior editor of libertarianism's flagship magazine, REASON, says that Sandbrook "shamelessly and repeatedly cannibalizes the work of others...." such as Mark Bowden's book about the Iran hostage crisis of 1979-1981, GUEST OF THE AYATOLLAH (2007).

Such a charge requires putting passages side by side. Sandbrook writes thus:

"At Washington's National Cathedral, bells tolled every day at noon, once for each day of their captivity, while in Lawrence, Massachusetts, churches rang their bells fifty times a day in sympathy."

Bowden had put it thus: "At the National Cathedral in Washington, bells tolled every day at noon, once for each day of the lengthening captivity. In Lawrence, Massachusetts, all of the churches around its city hall sounded their bells fifty times each day at noon to remember the American captives."

To be fair: Sandbrook did a little re-writing of Bowden. He shortened Bowden's sentences in that passage, as a copy-editor might, deleting the arguably unnecessary word "lengthening" in the first of those sentences for example. Still, the similarity is rather too great for comfort. It would have been better to use quotation marks and credit Bowden in the text even if it did mean using that adjective.

Another example? Any book about the politics of the 1970s will have to describe the bicentennial celebrations of 1976. In that context, Sandbrook writes specifically of the Boston fireworks:

"On television, pictures showed girls applauding on their boyfriends' shoulders, fathers lifting their children in the air, a South Boston priest waving an enormous American flag."

J. Anthony Lukacs had described those fireworks in his 1986 book, COMMON GROUND. Thus: "Long-haired girls perched on their boyfriends' shoulders, fathers held children aloft, a priest from South Boston waved a huge American flag."

One gets the feeling, from such examples (Moynihan provides others) that Sandbrook did just enough copy editing to avoid the p word. In that Bostonian scene, this chiefly involved changing the tense from past to present. Also, Sandbrook might say in his own defense that Bowden, Lukacs, and the other sources to which Moynihan refers were all explicitly cited in his footnotes.

The problem remains, though. The borrowing isn't of the usual scholarly sort, but goes to the choice of anecdotes, the physical details thereof, and the adjectives. In order to write a book about the 1970s, it is necessary but not sufficient to read a lot of the stuff that has been written about the seventies. One must think about the subject sufficiently to make it one's own.

Terry Teachout's Essay

In this weekend's Wall Street Journal, there is a piece by Terry Teachout concerning Don Rosenberg, and his (failed) lawsuit against his employer, the Cleveland Plain Dealer.

Rosenberg had been the classical-music critic for that paper since 1992. Fromn 2002 forward he was a consistent critic of the conductor of the Cleveland Orchestra, Franz Welser-Most. He wrote things like, "mediocrity takes up residence ... when Weiser-Most is on the platform." Teachout asks, "At what point does so oft-repeated an opinion become predictable and redundant?"

Intriguing sidebar: Terrance Egger, the publisher of the Plain Dealer, sits on the board of the Cleveland Orchestra.

Rosenberg was re-assigned in 2008. His editor, Susan Goldberg, said Rpsenberg had displayed a "closed mind" on the subject and would no longer be reviewing that orchestra's concerts. In Teachout's words again, "He wasn't fired, nor was his salary cut, but he was reassigned to write about other cultural matters and his byline no longer identified him as the Plain Dealer's classical-music critic."

Painful to the ego, perhaps, but hardly the subject of a lawsuit except in an extremely litigious society. Rosenberg, of course, lives in one of those. The new reviewer of concerts turned out to be a good deal younger than Rosenberg, so he sued the Plain Dealer for age discrimination. As I noted above, he lost.

Teachout asks, of both of the parties, "what were they thinking?" His editors "came off looking like a bunch of spineless small-timers who let the Cleveland Orchestra roll them" and Rosenberg himself comes off as a monomanaic. His editor has a "near-absolute legal right to make him a police reporter should she see fit to do so. This is so obvious that I was stunned when I heard that Rosenberg was suing."

I have to say that this controversy has passed under my personal radar for the two years or so in which it seems to have been ongoing. I'm happy to have received the introduction to it. It does seem ... well ... symptomatic of our days.

In the House of Representatives

The House Financial Services Committee voted 43 to 26 Thursday in favor of a measure sponsored by Ron Paul (R-TX) that would expand Congressional oversight authority vis-a-vis the Federal Reserve.

As the Wall Street Journal rightly noted yesterday in a front page story, this vote was part of a general backlash of "populist anger that Wall Street was bailed out while the public was not." Actually, I think (and hope) that there was more to it than that, but I approve of the backlash, however defined, and so I'm inclined to be happy about this vote.

The problem with central banking isn't the opacity of the bank's operations vis-a-vis politicians or their constituents. The problem with central banking is ... central banking. As an institution, it is inherently misguided. Even if Paul's bill should pass, it will amount to little more than some additional work for the GAO in auditing the Fed. Still, one has to approve of the sentiment.

Greed is not always good, greed does not always work. And the way to limit the dysfunctional consequences of greed is through keeping money real.

Separately, the House this week has amended a bill under consideration designed to reduce the systemic risk that accompanies the failure of large financial institutions. Like, just for instance, Lehman Brothers. The bill at issue is the Financial Stability Improvement Act (FSIA or HR 3996). One of the themes of the bill is the creation of a sort of polluter-pays system for the unwinding of large banks. The cost of the orderly unwind is supposed to fall upon the shareholders and unsecured creditors of the bank, not the taxpayers.

The amendment adopted Wednesday, sponsored by Representatives Miller and Moore (Democrats from North Carolina and Kansas, respectively) is designed to ensure that even the secured creditors of such institutions take a hit. If you follow that link you'll find that this amendment takes up only a page and a half, so it would be easy enough to read through if it were not written in legalistic jargon. The gist of it is that secured creditors of a bank that fails and ends up in receivership will take a haircut, in that in the discretion of the Receiver up to 20% of the secureds claim could be turned into an unsecured claim "as necessary to satisfy any amounts owed to the United States or to the [polluter-pays Fund]."

An intense quarrel has broken out over this amendment in the financial blogosphere. Felix Salmon, for example, weighs in here.

Wall Street Journal front page yesterday

Look at the WSJ front page yesterday. It struck me as the reflection of a very odd news sense. The most newsworthy piece there is the A-head (which is usually their "human interest" story). The A-head involves the anniversary of the fall of the Berlin Wall and manages to bring to light details that are new to me.

But the other three front page headlines are:

1. Business Spending Looks Up (a worthy subject, though it could well have gone into pages 2 or 3).

2. Vatican in Bold Bid to Attract Anglicans (I would certainly have put this further inside -- important as it is to wavering Anglicans thinking of undoing the effects of Henry VIII's rashness.)

3. Mattel Hopes Barbie Facelift will Show Up Younger Rivals (the WSJ has a separate Marketing section precisely for such news items as this. What's with the front page treatment here???)

There were at least six stories breakinbg that morning that would have been more fit subjects for the WSJ (in its older pre-Murdoch days) that any of those. I'll call them "Alt" front page stories. I'll paraphrase them hereafter rather than reproduce them literally as with the italicized headlines above.

Alt1. A bipartisan panel led by Volcker is saying some important things about the debt/equity bias in the corporate tax system. That's at p. A4 here.

Alt.2. The fight over Medicare cuts and how that is feeding into the broader health care debate. Page A8.

Alt.3. Important news from Afghanistan, Karzai Accepts a runoff. That is at A13. Twelve whole pages behind the Barbie news.

Alt. 4. Taiwan's worries about mainland China's military buildup. A16.

Alt. 5. Important angle on the Galleon insider-trading arrests arrest -- connection with McKinsey. This is at C1. To be fair, the front page of the "Money & Investing" section is a pretty important piece of real estate. It is the page to which hardcore readers turn first. Still, it strikes me as more worthy of Page 1 than "Business Spending Looks Up." THAT could have fittingly headlined the C section (not that I intend drastic surgery.)

Alt. 6. US Bancorp's Buying spree continues. Are we seeing the rise of new "too big to fail" institution for the next round of bail-outs. This story raises that important question from the back of the bus. Page C5.

If this kind of news sense is the secret of the WSJ's new success, I fear for us all.

Robert Novak, RIP

The WSJ carried its obituary of Robert Novak, the conservative opinionator who reveled in the nickname "Prince of Darkness," an obit penned by Stephen Miller, on p. A16 of the August 19th edition. It is illustrated with a fascinating old black-and-white photo of RN as a young man, cigarette hanging from lips in I'm-know-I'm-being-photographed style, at a bank of ancient looking telephones. It is an illustration reminescent of old Hollywood movie portrayals of reporters, I cover the waterfront!.

Anyway, the obit says: "Because naming a CIA agent can be a crime, questions soon arose [after a certain notorious RN column] about whether Ms Plame was in the CIA and who had told Mr Novak. in the resulting imbroglio, Mr Novak divulged his sources before a grand jury. A federal investigation ended with...." and so forth.

One page flip away, on A14, there's an editorial, "Prince of Light," honoring Novak. This says, of the same subject: "The Plame scoop was merely another case of Novak doing his job, and he protected his source ... and behaved honorably even as others in the press corps abandoned First Amendment principles to cheer on a special prosecutor willing to throw reporters in jail."

Question, then: What did Novak tell the grand jury exactly? The WSJ says on A16 that he "divulged his sources" while it says on A14 that he "protected his source". Which is it? Even setting aside the stark contrast between the verbs "protected" and "divulged" ... was there only one source or many? The obit uses the word "sources" while the editorial uses the word "source." Could he have "protected" one by divulging another, explaining the odd inconsistency as to quantity there?

Also, is the WSJ now taking the stance that it was wrong for the special prosecutor to put Miller in jail? My memory, for which I claim no infallibility here, is that the WSJ editorial board was among those who were doing the "cheering on" about how terrible was her refusal to disclose her source and how it was right to put her in jail -- a view they now seem to regard as dishonorable.

Generally speaking, conservative folks such as the ones who write for the WSJ editorial page have over the years resisted the idea that "First Amendment principles" have anything to do with the obligation to give grand jury testimony. Or do I have my partisan scorecard mixed up?

Deregulation as a Scapegoat

No debate analysis here. I don't do tactical campaign stuff.

I do want to take a look at the notion, though, broached by Obama, that "deregulation" is the cause of the present Wall Street crisis. I think that a mistaken diagnosis, and reform instituted on such a premise will likewise be mistaken.

The current Wall Street crisis appears to have taught many of our nation’s politicians that every important piece of financial deregulation in the last thirty years has been an error. In this scramble to ‘learn from our mistakes,’ each of several measures – each blameless, and each indeed a forward step for the U.S. and world markets – has come under fire.

I refer for example to: the securitization of mortgages; the abolition of the walls that for decades kept commercial banking apart from investment banking, and that kept both sorts of banks isolated from insurance companies; the exemption of over-the-counter derivatives from a regulatory system designed for standardized exchange-listed products; the abolition of the uptick rule. Of those changes only one, the the abandonment of the uptick rule, can be blamed upon -- or credited to -- this administration. These are all the new “usual suspects,” rounded up when something has gone wrong in “Casablanca.”

In order to think straight about such matters, we might begin by abandoning the label “subprime crisis." Yes, subprime mortgages are inherently risky. That's what the word "subprime" means, after all: more risky than prime. The current troubles may early on have taken the form of a subprime problem, but if it had been only or chiefly that they would have long since have settled down.

What we have is the aftermath of a credit bubble. That bubble burst, which is what bubbles do. The bursting in turn caused an equity bubble to do likewise, because the equities are so leveraged. That, in turn, is inspiring moronic socialistic moves by alleged free marketers.

One key lesson is never learned, however often this sort of drama plays out: that what causes a bubble to burst is precisely the fact that it has been blown. The seeds of the bust are always planted by the boom. Only in October weren’t some of the administration’s admirers complaining that it wasn’t receiving enough credit for the record-high stock market index figures of that time? The Bushies should get exactly as much credit as they are willing to shoulder blame: because the Dow 14,000 of October is one facet and the Dow 11,000 of the following September is another facet of the same fact, the fact of boom-bust psychology.

Question: what is it that markets are good at?

Answer: aggregating information. Any price (whether the price of a barrel of crude oil, a newly manufactured pencil, or a share of equity in a corporation) expresses information. It either does so accurately (and keeps the whole productive system humming) or it does so inaccurately (and throws sand into its gears).
Leonard Read’s famous 60-year-old fable about the price of a pencil makes this point marvelously well.

Let’s observe, while we are so close to the point, that the Securities and Exchange Commission’s decision to impose an emergency ban on short selling was idiotic. Capital markets are obviously less efficient without shorting than they are with it, simply because shorts bring information to the table.

At any rate, every one of the deregulatory moves listed above was a good idea, one that smoothed the flow of information into prices, and so assisted the optimal alignment of incentives throughout the economy.

The risks inherent in subprime mortgages, and in the instruments built from them, are in principle familiar and manageable. Why have they not been managed? Because there are a lot of new restraints on the free flow of information that impeded that risk management task. None of these restraints by itself would have been disastrous, but they’ve had a cumulative effect. Consider the condition of an artery near the heart of an over-eater. It is hard to say which donut is fatal. But in sum, they are. They create the arterial gunk that will block the flow of vital blood/oxygen/information to tissue that needs it.

Gordon Crovitz had a fascinating op-ed piece on this subject in Monday’s [Sept. 22]Wall Street Journal, under the headline, "Information Haves and Have-Nots."

The money quote. "There are now about half as many Wall Street analysts as in 2000. Former New York Attorney General Eliot Spitzer eviscerated the profession with $1.4 billion in settlements and a new mandate for how the industry would be structured, which made the analysts uneconomical....The now-former senior executives at Bear Stearns, Lehman and Merrill must wish they had been able to retain all those star banking analysts."

Another Spitzer legacy that has contributed to our present troubles was his Ahab-like pursuit of Hank Greenberg, effectively kicking him out of the executive suites of the insurance company Greenberg did so much to build -- AIG.
Other issues that contributed to the crisis: a ramping up of insider-trading prosecutions (including a perp walk for Ralph Cioffi and Matthew Tannin in June). The people who are deterred from trading by insider trading prosecutions are being who are … the best informed. The whole idea of criminalizing such trades strikes at the heart of the real function of markets.

Further, there is room for concern that the federal bankruptcy courts have become part of the problem. This March, Judge Posner, of the 7th circuit court of appeals, suggested that bankruptcy trustees need to be reined in, writing: “While the management of a going concern has many other duties besides bringing lawsuits, the trustee of a defunct business has little to do besides filing claims that if resisted he may decide to sue to enforce.”

In particular, trustees have become quite aggressive of late in pressing claims for fraudulent conveyance. The result is that counter-parties to any institution that may even be close to bankruptcy, which may even be rumored to be close to bankruptcy, have gotten very jittery. Why set one’s self up to be the defendant in a lawsuit brought by the next aggressive trustee?

It is a legal climate that encourages “runs on the bank,” and that is what we have gotten.

So the right lessons to draw emphatically aren’t lessons about how deregulation has “gone too far.” Nor are they lessons about the GSEs, or about the greedy golden-parachute-endowed CEOs.

No. The right lessons to draw are that the information arteries in the U.S. market system have become clogged, and after the immediate crisis has passed, the U.S. will have to take up a new metaphorical diet to keep that from happening again.
In the meantime, though: what is to be done? How can the immediate situation best be addressed?

I'll have something to say under that heading tomorrow.

Random thoughts

Went to NYC yesterday. Drove to Stamford Tuesday evening, stayed in a motel, and took the train in Wednesday morning.

I wanted to meet face-to-face with a couple of sources of mine. Telephone and e-mail are both wonderful things, but there is still a powerful need for actual co-presence.

Along the way, I was trying to get internet access on my blackberry. I haven't been able to use it since February. My local T-Mobile outlet is telling me that the area around my home is a dead zone.

But that's wrong. My town isn't the problem. My unit is the problem. Neither in Stamford nor in Manhattan could I get access.

So I'm paying an access fee every month in order to play brick and wake up to a unique alarm. Bah, humbug. I'm gonna have to go back to that outlet.

I read a fascinating story, while on the Metronorth train, about the origin of Tupperware and of "Tupperware parties." It was a Wall Street Journal review of a book on the subject. Here's a link Under the Lid, A Fresh Sales Idea.

"On the Lam" -- a neat idiom

A colleague, for whom English isn't the native tongue, asked me recently about American-English idioms for life as a fugitive.

The one that came to mind was "on the lam." It's an expression I first heard in high school, when I had a supporting role (one of the more-or-less anonymous baseball players) in a production of Those Damn Yankees.

Here's the plot: a middle-aged baseball fan who wants to help the Washington Senators makes a Faustian pact: He'll sell his soul for a great new outfielder for the Senators.

The devil, superbly named "Mr. Applegate," shows up and agrees. His way of effectuating the deal is to make Joe himself that new outfielder, giving him the body of a young ballplayer and making him the new star for the Senators for a season.

But Joe has heard stories like this, and he insists on an escape clause -- he can opt out of the contract on September 24, at midnight.

Of course as September 24 approaches, Applegate devises a plan to keep Joe -- now a sensation as the baseball season comes to an end -- from invoking that clause in time. Two plans, really. One involves the seductress Lola. The other: a scandal. Applegate persuades baseball's authorities that Joe is really "Shifty McCoy," a Mexican ballplayer who took bribes.

The Joe-might-be-McCoy scandal proves enough of a distraction that the 24th passes, and the escape clause has lapsed. Joe is apparently trapped in the contract for eternity. But ... Applegate has other fish to fry. He wants Joe to throw the final game of the season to the Yankees, losing them the pennant, crushing the hearts of Senator's fans, causing suicides etc.

He says that Joe Hardy the suspect ballplayer will suddenly disappear. The headlines will say Shifty McCoy "took it on the lam."

All ends happily. Joe refuses to go on the lam and shows up at the ballpark. Applegate magically turns him back into his pre-contract middle-aged self to be sure he won't be able to do the Senators any good. This also annuls the contract. Despite the creakiness of his restored non-youthful physique, Joe makes the crucial catch. The Senators beat 'those damn Yankees,' the fans are happy, and Joe has his soul back.

Anyway, that's where I first encountered the expression "on the lam." You can see it in a headline of today's Wall Street Journal, in a very different context.

Different newspapers

Here's something my aunt sent me recently in an e-mail. I recycle it in this shameless way because I'm feeling lazy.

1. The Wall Street Journal is read by the people who run the country

2. The Washington Post is read by people who think they run the country

3. The New York Times is read by people who think they should run the country and who are very good at crossword puzzles.

4. USA Today is read by people who think they ought to run the country but don't really understand The New York Times. They do, however, like their statistics shown in pie charts.

5. The Los Angeles Times is read by people who wouldn't mind running the country -- if they could find the time -- and if they didn't have to leave Southern California to do it.

6. The Boston Globe is read by people whose parents used to run the country and did a poor job of it, thank you very much.

7. The New York Daily News is read by people who aren't too sure who's running the country and don't really care as long as they can get a seat on the train

8. The New York Post is read by people who don't care who is running the country as long as they do something really scandalous, preferably while intoxicated.

9. The Miami Herald is read by people who are running another country but need the baseball scores.

What have you been reading?

"Welcome to the helm, Mr. Murdoch"

This summer, News Corp. (the corporate parents of Rupert Murdoch's various newspapers and the Fox broadcasting properties) agreed to buy Dow Jones, the famous keeper-of-stock-indexes, and publisher of the Wall Street Journal. The price tag was $5.6 billion.

Months elapsed, though, between agreement and the closing of the deal. The latter took place earlier this month.

Anyway, the WSJ may have decided to welcome him with a bit of controversy, because November saw a memorable screw-up in a front-page story in which the Journal accused the giant broker-dealer Merrill Lynch of accounting shenanigans, then had to back down, issuing a correction.

On Nov. 2, the Journal alleged that Merrill had participated in transactions with hedge funds designed to cover up and delay the reporting of its losses on collateralized debt obligations. That article's only specific example of one of the supposed off-balance-sheet deals had been a deal in which the broker-dealer allegedly sold mortgage securities to a fund, while providing that the fund would have the right to sell the securities back to Merrill after one year for a guaranteed return. This deal did have the smell to it of the old "Nigerian barge" transactions of Enron scandal memory. Class-action lawsuits by and on behalf of Merrill stockholders have since prominently referenced that publication.

Merrill Lynch's stock price (NYSE: MER) as of the close of business Nov. 1 was $62.19 per share. By the end of trading on Nov. 2, it was at $57.28. Merrill's price continued to fall through two and a half more weeks, closing at $51.81 on Nov. 21.

The following Monday, good news arrived, in the form of a "correction and amplification" by the Journal, in which the paper acknowledged that its Nov. 2 article had been based on incorrect information. The correction focused on the only specific instance the original article had purported to produce -- that sale and buy-back.

In its later note, the Journal said that while Merrill did "propose" such a deal, it was never completed, because "the firm's finance department determined it didn't meet proper accounting criteria." This has a much more hygienic odor, suggesting simply that some risk manager or compliance officer was on the ball.

Murdoch's detractors can say if they like that it was the dispiriting influence of his looming captaincy that created such a gaffe. His admirers can say, "this is the sort of thing that he's coming in to fix!"

Say what you will, it seems like a big black eye to me. And I think it might be time for those of us accustomed to a fix of market-oriented news each morning to switch to the Financial Times.

collegiate gothic

I saw a neat story in the Wall Street Journal of yesterday, written by Catesby Leigh.

It concerns architecture and, in particular, the style known as "collegiate gothic." Despite the proliferation of modernist boxes on campuses, there is still an idea at large that the Ur-college building should have (Leigh's words) "picturesque asymmetries, crenellated towers, elaborate oriels, and eye-catching grostesquries."

The Hogwarts portrayed in the Harry Potter movies is prep school gothic, but it has such crucial features as the limestone and the high-ceilinged halls right.

Anyway, Leigh was writing as part of the Journal's Leisure and the Arts section, praising the architect of new construction on the campus of Princeton University. That architect is Demetri Porphyrios, who is scheduled to lecture on his designs today, in advance of the formal dedication of the new buildings tomorrow.

The new construction came about because Meg Whitman, the president and chief executive of eBay, donated milions to Princeton, and the new buildings, for both classrooms and dorms, were what the college decided to do with it.

The result? a resurrection of collegiate gothic, an "irregularly sloping landscape populated by an architectural ensemble that echoes in the imagination" and so forth.

And some of you thought there'd never be a good reason for a trip to New Jersey. Tsk.

Three subjects

1. Tom Snyder, best known as the star of the Tomorrow Show between 1973 and 1982, passed away, due to leukemia, at age 71, this weekend.

I'll miss him. I'll miss my memories of late nights/early mornings in my dorm at college, staying up to see what guest Tom had, enjoying his laugh. I'll miss Dan Ackroyd's take on Snyder's mannerisms and ... again ... that laugh.

Do I regret his passing because he was a talented guy or just because I regret my own aging? It hardly matters. May the road to heaven rise up to meet him now, and may the wind at his back never be his own.

2. Last week, I described the cartoon caption contest in The New Yorker, and especially one uncaptioned cartoon. It involved a monkey and a typewriter. A scientist is looking at a piece of paper and saying ...

Here are the three finalists. Not in the right order (or with exactly the right words either, because I'm doing this from memory), but, roughly speaking, here they are:

* Bad news, another rejection letter.
* Why don't you re-write it from a third-monkey point of view?
* We'll run this past our infinite number of editors.

It seems to me that the first of those is something of a cheat. There aren't any visual clues (like a ripped-open envelope) that the page is a letter from an outside source. The clues suggest that its a page that just came from the monkey's labors. The second and third of the above answers both work from that premise. And they're both funnier.

I like the infinite number of editors line. What about you folks?

3. The Bancroft family and, accordingly, the board of Dow Jones, the business-news publishing company responsible for the Wall Street Journal, Barrons' and the famous Dow Jones stock indexes, have agreed to sell the company to Fox and Rupert Murdoch.

As with Tom Snyder, I regret the passing. I wish the old WSJ the best of afterlife fates for a newspaper. But, really, consolidation is inevitable and there is no real point wailing or gnashing one's teeth.

The recent demise of the Weekly World News, though ... now THAT was a tragedy. Where will supermarketr shoppers get their Elvis-sightings fix now???

Dow Jones & Murdoch

Since I last mentioned the subject, Rupert Murdoch has taken a big step further toward control of Dow Jones, and with that control of one of my favorite newspapers, the Wall Street Journal.

On July 17, the board of directors of Dow Jones voted to approve a merger at the amount Murdoch has been, $5 billion.

Much of that money would go to the members of the Bancroft family, but some of them still seem hesitant to take it. Perhaps because they feel that by holding out they can get more. Or, just perhaps, due to a sort of status anxiety. When they sell, they'll be just another wealthy family. Until they sell, they're the family with a controlling stake in Dow Jones, which sounds cooler.

Apparently, Burkle (a friend of Bill and Hillary Clinton who appeared for a time willing to compete with Murdoch in an auction) has withdrawn from the picture. But Brad Greenspan still has aspirations.

Or, insead of aspirations, one might want to say "delusions of grandeur." There's little that indicates that he could pull off a coup here. Murdoch will get the prize, though he might yet have to increase the price a bit.

Recently, the WSJ has made cutbacks that I thought ill advised, even a curtailment in the literal size of the papers used for each page. They're in trouble, and it seems clear they're not in a position to remain independent.

Life is tough, and in an internet-dominated world, consolidation among the pulp-and-ink papers that remain is a fact. As the kids say: Deal.

Crazy Eddie

They weren't really insane. If they had been, they would have pleaded it as a defense.

Anybody of a certain age remembers the ads. The television actor who hopped about as if on speed and shouted "Our prices are innnn-sane" was Jerry Carroll. Since everything can be found somewhere in cyberspace, it probably won't surprise you to know that there's a tribute page for thos ads, at this address:

http://pocketcalculatorshow.com/crazyeddie/

When I moved to Bridgeport in 1984, to open a law office, there was a downtown cheapskate electronics store calling itself "Crazy Freddy." I doubt there was any intellectual-property litigation as a result, the knock-off store seems to have failed quickly simply because the whole downtown area was depressed.

Anyway, the founder of the chain was Eddie Antar. By the middle of 1990, the SEC was investigating him and his associates (including his cousin Sam Antar) on suspicion that they were manipulating their books.

Eddie fled, and showed up in time in Israel. He was extradited to the US in 1992, and after four years of legal manuveuring he pled guilty to conspiracy and racketeering and spent seven years in prison.

Why do I bring all this up now? Because Antar has started showing his face in public again. To some degree, at least, he seems to want to rehabilitate his image. This weekend the Wall Street Journal ran an interview with Reformed Eddie, in which he said that although what he did was wrong, the business wasn't entirely a criminal enterprise. Real products were sold, real money was deposited in bank accounts, etc.

He also said that he sometimes runs into a satisfied customer who'll say something like "I bought my first stereo from you!"

One of the cable TV shows will run a piece on Eddie Antar tomorrow evening, I understand.

In the meantime, if you're interested, you can read an entertaining account of the Antar rise and fall here: http://www.acfe.com/documents/antarsample.pdf

Inventions

There's a fascinating column in today's WSJ offering an unexpected glimpse of the 1940s.

Reporter Cynthia Crossen summarizes for us a book published in 1942 by Raymond F. Yates, with the title "2100 Needed Inventions." Crossen uses the book as a way to remind us of how much the world has changed.

Mr. Yates thought inventors should get to work on, for example: "a means of automatically setting pins in a bowling alley that will entirely eliminate the use of pin boys." Such machines appeared about 15 years after Yates' suggestion.

He also thought the world could use "a means by which the essence of tea or coffee can be crystallized so that it can be readily dissolved in hot water." Nestle USA announced the first instant tea only four years later.

Yates said that somebody could make a lot of money with "shaving soap that could be sprayed on the face." Right again.

There was a war on when the book was published, and his book has some military proposals. It also has something rather militaristic-sounding for the home front. "A machine gun that would fire wooden slugs from a cartridge belt for boys who like to play with war toys."

Those would be the boys who would, no doubt, have spare time since they'd no longer needed for setting up pins in the bowling alley. Upon asking for this toy, though, they'd receive the stern admonition, "you'll shoot your eye out, kid."

Consolidation

Ah, the too-muchness of it.

Yes, everybody has understood for some time that the data-and-news market (I hate the term "media") is crowded and low-margin. From this it follows -- and has followed -- that a wave of consolidation is nigh.

But it's nigh no more. It's now.

And the wave crashed in on the shore of Now on April 24, when shareholders for The New York Times withheld 42% of their votes on the question of the re-election of the directors. They knew the directors had a majority of the votes sewed up, and they had no alternative slate of directors to offer. But, led by Morgan Stanley, they wanted to register a protest.

And they did. Forty-two percent is huge under the circumstances. A similar protest led to the resignation of Michael Eisner as head of Disney not long ago.

What has gotten Morgan Stanley (and one of its execs, Hassan Elmasry, in particular) so ticked off about the controlling group of the NYT? Falling profits, a slumping share price, and the dual roles of Arthur Sulzberger Jr., who is both chairman and publisher.

What seems behind Elmasry's campaign for change at the NYT, though, is the expectation that if the company changed its stock structure, it would become attractive to buyers. Not just to people buying small blocks of shares to round out portfolios, but to buyers aiming at control and offering a premium. In short, though not quite explicitly, Morgan Stanley wants the NYT to put itself up for sale.

The Times has so far successfully resisted, and Sulzberger has kept both jobs. Still ... the withheld votes served as a signal to the market.

Then on May 1, the Dow Jones (which publishes the Wall Street Journal) announced that Rupert Murdoch's vehicle, News Corp., had made an unsolicited bid to buy it at $60 a share. That's about $20 more than the level at which the stock was trading before the news.

The controlling group in this case is the Bancroft family, which owns 62% of the stock. If the Bancroft family holds firm, then, Murdoch can't buy a controlling share. It is by no means certain that they will hold firm, although so far (two weeks later) they seem to be.

But the logic of consolidation remains powerful and the offers will keep coming until somebody starts selling. On May 8, Thomson Corporation, a publishing company that provides data, software, etc. to lawyers, accountants, tax consultants, etc. -- and that has its operational headquarters in Fairfield County, Conn., offered to buy the London-based Reuters Group for 8.77 billion pounds (US $17.5 billion). If the combination goes through it could create the world's largest financial news and data concern.

Reuters' management is making nice. It appears that Thomson and Reuters will strike some sort of deal, pending review by several sets of regulatory/antitrust authorities on both sides of the Atlantic. Regulators likely won't just stand in front of this train yelling "stop!" At most, they'll demand some divestitures that will make the resultant combined company somewhat less huge than otherwise. But the wave of consolidation is upon us, and with this third offer in a few days, the sand castles on the shore have started dissolving.