Monday, July 15, 2013

The Newsroom: Counterpoints and Retrospective (7/14/13)

Oh boy. The Newsroom is back and there is a lot to cover. Let's get right into it.

1. We got shut out of SOPA negotiations because of your American Taliban rant. This affects our company big time!

Atlantis World Media must be a huge company. Not only do they own cable television productions, they also own the cable that transmits their work. This is not without precedent. NBCU is a wholly owned subsidiary of Comcast. And the company I work for is a wholly owned subsidiary of Time Warner, which also used to own cable distribution operations that later got spun off into a separate company called Time Warner Cable.

So it's very plausible that AWM would have an interest in SOPA. But AWM isn't the only player in the game. SOPA was not designed to be a windfall for individual companies. It would create winners and losers at an industry wide level, pitting content creation vs distribution. If they lose their ability to influence, individually as a company, they still have titans like Comcast, Time Warner, Disney, News Corporation, and Viacom in their corner. These kinds of bills are lobbied at an industry wide level. Getting shut out of testimony before Congress is a symbolic snub. There isn't much real downside.

Likewise, there's an array of companies and industries against them, most notably led by internet based titans like Google, Facebook, Cisco, and Microsoft (whose combined market capitalization trumps the media companies by over 5 to 1). One individual company is not going to make a substantial impact either way. In the final analysis, SOPA was killed in committee so really this is a bunch of hoopla over nothing. For a show where their characters are so prescient about how the future unfolds, it doesn't look like CEO Leona Lansing is at the top of her game.

2. Drone strikes are immoral and bad policy.

I'm glad that the show still portrays Will McAvoy, a self described old school Republican, as a defense hawk that old school Republicans are supposed to be. But it's obvious that the show is trying to push it the other way, as more characters are opposed to the drone strikes than in favor. Perhaps this reflects the ideological schism of The Newsroom's peons (who, if they are anything remotely like other newsrooms, are overwhelmingly liberal and Democratic) and McAvoy's Republican leanings, but it's still too soon to tell.

They portray the guest speaker as an inarticulate advocate for drones, but the arguments he makes are real. One other thing I thought was off color was Sloan Sabbath citing package order and unit costs for the Predator but failed to do so for the F-16. The Pentagon does not procure aircraft individually. They procure them in the dozens and hundreds. But the fact Sabbath neglected to mention were the operational costs. It is vastly cheaper to use a Predator drone for a surgical strike than an F-16. It's also vastly less risky.

The other issues surrounding drone use, such as its demoralizing effect on Pakistan, is a bit murkier. The deep state within Pakistan actually allows the stationing of drones within its country, although the people definitely don't like it. The reality is that McAvoy is right on this. And it's better to send a drone to do our dirty job and have civilians killed as collateral than to send US servicemen to do the same thing and have civilians killed by errant bullets or a tense situation. If the show also sheds light on the countless JSOC raids (that kill just as many civilians as collateral), it'll be more consistent. But it's still a bad argument.

National security is of paramount importance to the executive. And they also have the most and best information related to these strikes. As a rule, we have to take it on faith that the executive knows what it's doing. It's too easy to armchair quarterback when nothing is at stake, but for those on the ground and in the air, everything is at stake for them personally, and their jobs revolve around keeping Americans safe. I'd rather trust them than pampered UMC liberals trying to impress their friends at cocktail parties.

3. Occupy Wall Street Girl: The banks are evil and they make money by ripping off their clients.

Obviously I'm paraphrasing the character's exact words, but it really isn't too far off from what she's said. There were two instances she cited, which was Goldman-Sachs involvement in a deal between John Paulson's hedge fund and ACA Financial Guaranty Corporation and Citi's prop desk betting against clients on CDOs that "they knew would fail".

The first instance actually resulted in litigation brought forth by ACA against Goldman-Sachs. And the case was dismissed by a New York appellate court a few months ago. What OWS girl failed to mention is that Goldman-Sachs' clients are not like you and me. They're rich hedge funds and financial corporations who are supposed to know what they're doing. This isn't mom and pop being swindled by greedy banks taking advantage of their ignorance, it's two sophisticated parties engaging in two sides of a deal where one side stands to make a lot of money if they're right while the other takes a bath.

ACA was a bond insurance company who bet that a security comprised of collateralized mortgages would hold up while the opposing party, John Paulson's hedge fund, bet that it wouldn't. Goldman-Sachs doesn't need to inform ACA that Paulson structured the fund because ACA's responsibility is to review the composition of the security and then make a decision one way or the other. In fact, ACA already knows that there is a counterparty betting that the structured deal will fail.

What does it matter if that party also helped structure the deal? ACA is betting that the other party is wrong. If they think that the other party is right, they wouldn't have gone into the deal. You can't bet and then whine when your bet goes south. Or, you can, but nobody will take you seriously. And that's exactly what the New York appellate court said.

The other case isn't very specific, but I guarantee that involves one of Citi's prop desks and parties that might also be clients of Citi's advisement division. Financial organizations (it's not enough to call them banks anymore) are allowed to have prop desks (which make money by using the firm's money), commercial banking operations (which make money by using depositor's money), and wealth advisory operations (which make money by selling advice). It is more than possible that some parties could be clients of the wealth management/advisory operations and also take part in deals where the prop desks are counterparties.

Again, OWS girl is so sure that Citi's prop desk managers knew that the deals they structured would fail, but she fails to mention that the counterparty to Citi's prop desks are sophisticated investors as well. Again, the people they do business with are not average individual investors. They do deals that are valued at least in the hundreds of millions of dollars. Everybody who's doing deals at that point are intelligent, well informed, and know enough to do their due diligence.

4. Occupy Wall Street is gonna fail because there isn't a clear and concise message and they have no centralized leadership.

It's pretty obvious from Neil's dialogue with OWS girl that this is the direction that the show is taking. It's not hard to believe that Sorkin, speaking through Neil, was one of many liberals who had hoped that OWS would prove an effective counterweight to the tea party movement and was disappointed by its ephemeral impact on the public consciousness.

Occupy Wall Street failed because the primary drivers behind it were twentysomethings. And twentysomethings are the least reliable demographic in society. It didn't fail because of lack of clear messaging or leadership. It failed because the people who embodied the movement don't have what it takes to create a lasting political movement. The public collectively shrugged and dismissed them as naive college students. And that's exactly what they were.

5. The New Intro

It's an improvement over the old one. But it still sucks. Sorkin and company need to get past the "we're trying to bring news back to the way it was in the 70s" vibe that their music supposedly embodies. They also need to improve the visuals which is just a bunch of active movement within the newsroom. I have no idea how to make a good intro, but I can tell the good from the bad. And The Newsroom's is still mostly bad.

6. I guess this season is gonna be told in flashback?

They make it pretty clear from the first episode (and the previews for the next) that the show is gonna be told mostly in flashback for this season. I'm glad that they finally had the guts (or at the very least, the shame) to show that their characters were capable of screwing up and not always prescient. But I'm not sure this is the way to do it.

In a TV season, it's very hard to do the story within the story for the entire season effectively. I'm worried that The Newsroom will fall into this trap.

But it's not like it matters for me. I'll still watch it. And I plan to do counterpoints and retrospectives for each episode. So watch the show on HBO. And then come over here for a balanced view.

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