Midterms and Monopolies with David Dayen (Episode 56)

Date: 4 Oct 2018 | posted in: Building Local Power, Podcast | 0 Facebooktwitterredditmail

In this episode, Stacy Mitchell, ILSR’s co-director, chats with author and journalist David Dayen. David is the author of the acclaimed book Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud, which was named the winner of Studs and Ida Terkel Prize. David is also the Goodman Fellow at In These Times and a contributing writer to the Intercept and New Republic

David’s work focuses on the underlying policies that allow the big and powerful to rig the economy and get away with it. He’s great at shining a light on corruption and connecting the dots between systems of injustice and people’s everyday experiences — whether that’s paying exorbitant airline ticket prices or losing a home to foreclosure.

Stacy and David discuss:

  • how candidates are talking about corporate concentration on the campaign trail,
  • the ten-year anniversary of the financial crisis and what today’s reporting about it is getting wrong,
  • bringing local control back into politics,
  • how we ended up with a two-tiered criminal justice system that’s soft on fraud, and
  • what makes a good story for investigative journalism.


J.D. Scholten is running in a farm state and he is really looking at issues of big agriculture, monopoly power in the farming sector… issues that are really very immediate for Iowa families, particularly farmers. So, that’s a way to bring these issues to a very direct and immediate level. When you’re talking about family farm financing, when you’re talking about the systems by which seed monopolies or livestock monopolies make it difficult for the livelihoods of family farmers. That’s a way to really bring those messages [around corruption and corporate power] into focus.

Stacy Mitchell: Hello and welcome to Building Local Power. I’m Stacy Mitchell of the Institute for Local Self-Reliance. The 2018 midterm elections are just weeks away and they’re taking place against a backdrop of unprecedented corporate power and widespread corruption. We have Wall Street banks that are rewriting the rules for how we regulate banks for their own benefit. We have Jeff Bezos emerging as the richest person in the world with a net worth of around 160 billion dollars, even as median wages for ordinary people haven’t budged in more than two decades. We have private tech companies that are profiting from our immigration policies. Everywhere it seems the structural imbalance of power is becoming ever more apparent and deeply troubling.

One journalist who has been working tirelessly to shine a light on injustice and corruption is my guest today, David Dayen. What I love about David’s work is that it isn’t just about bad actors, it’s about the underlying policies that allow the big and powerful to rig the economy and get away with it. With the election coming up, I was eager to get David on the show to see if he sees any signs of hope in what candidates are talking about on the campaign trail. I also want to ask him about being an investigative reporter, how he looks for stories and what makes a good story. David is the author of a really terrific book that if you haven’t read you should. It’s called Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud. It came out in 2016. And it’s the winner of the IDA and Studs Terkel prize. David is also a contributing writer to the Intercept and New Republic and he is the Goodman Fellow at In These Times. He lives in Los Angeles. David, welcome to Building Local Power.

David Dayen: Well, I think, in our assessment of the crisis, and I’m not necessarily talking about myself, but talking about sort of the dominant media retrospectives that you were just talking about, it once again leaves out those who were most powerfully affected by it. I don’t think you can get a good picture of whether we had a successful recovery, whether the crisis was avoidable, whether the debts were preventable if you’re not talking about the 9.3 million American families who happened to lose their homes either through a foreclosure or some other transaction after the collapse of the housing bubble.

This is just fundamental to what actually happened after the crisis. I felt like that part of it has always been sort of left to the side, we get these swashbuckling narratives about central bankers and regulatory officials and CEOs plotting together to save the financial system. It’s a nice story for Andrew Ross Sorkin but what about the millions of people who were really hit hard. And so, at In These Times, as part of my retrospective, I talked to one of the people that write me every day practically. Someone who’s still fighting to save their home after a very dubious attempt at foreclosure. This is something that is ongoing, the financial crisis hasn’t ended for many, many people who are still locked in battle with their banks, who are trying to take their homes away under somewhat dubious circumstances.

So, I don’t think you get a full picture without that. And if you add that in, I think you see the crisis as a truly tragic event. One that failed to stand by the millions of people who bore its front, it failed to allocate losses equitably. Banks ended up bouncing back very quickly. Homeowners and people who lost their jobs struggled for years and years and years in ways that we still see affecting our economy today. So, I think that the financial crisis is a cautionary tale about who really matters in a recession.

Stacy Mitchell: Do you think our politics would be different today if homeowners were at the center of, homeowners were the people we bailed out and if the bankers went to jail, do you think we’d be in a different situation right now?
David Dayen: Absolutely I do. I think that the financial crisis and the aftermath and the lack of accountability on those who perpetrated the crisis and the lack of support for those who through little fault of their own were devastated by it, created and reinforce a sense of unfairness within the economy, and this notion that the game is essentially rigged for powerful and influential people and the interest. Certainly that was exploited by Donald Trump during the 2016 election campaign. Certainly that was exploited by forces that align with the tea party. And certainly that led us down this road where rather ironically, many of the same Wall Street interests that profited off the financial crisis are now in regulatory positions with an opportunity to benefit from it.
Stacy Mitchell: As you look at the landscape for this upcoming midterm election, do you see any signs of hope on this front? Do you think there’s more conversation about sort of the structural imbalance of power and ways that, I mean, are candidates talking about the sort of fundamental problems in the economy and who gets to make decisions in a way that’s different from previous elections or do you feel like this is kind of more of what we’ve seen in the past?
David Dayen: Well, I would say that corruption writ large is and has been over the last decade a potent political issue. Democrats are certainly taking up that mantle this time. It was actually democrats that invented the term drain the swamp in 2006 after abuses involving Jack Abramoff were very dominant in the K Street Project and Tom DeLay and all of these episodes of official corruption. It was Nancy Pelosi came up with the term drain the swamp and of course, Donald Trump used that to his benefit in 2016. I think we’re seeing a reversal of that in 2018. The true test is whether that progresses from a campaign slogan and a way to talk about the political parties into a program for reform.

So after 2006, there were some mild reforms, mostly around disclosure of lobbying activities. Obviously it did not eradicate corruption in any meaningful way thereafter. This time around, there is what is known as a democracy reform task force that the House of Representatives has put together in a kind of a blueprint for the kinds of things that they want to do if put into power and there are some lobbying reforms. They’re kind of attacking it more broadly. They’re talking about voting rights within the context of that. They’re talking about money and politics within the context of it.

John Sarbanes who is sort of the leader on the house side of this effort has talked about things that I think might be interesting to you and your listeners around bringing local control and individual control back into politics. So they have this thing called, I think at some point they call it democracy bonds or things like that, which would be sort of $100 that you would get tax free. It would be sort of a refundable tax credit that you could give to any political candidate and it would be matched at the government level I think a six to one match. So, instead of having to go after Goldman Sachs or Amazon or some giant pack, you could string together thousands of people, get the hundred dollar democracy bond from them and get a government match on that and fund your campaigns that way, which would bring millions more people into the process, literally every American citizen would have an opportunity to donate, which today that’s reserved for, a very small number of people actually donate to elections.

So, I think that’s kind of an interesting concept to democratize election funding really in some way. Obviously, I don’t think Donald Trump’s going to sign that. But if you look at a change in the balance of power of a number of years, maybe that’s something that could break this kind of vicious cycle of corporate power begetting political power.

Stacy Mitchell: Are there any particular races that you’re keeping an eye on that you think really sort of illuminate these issues around corruption and corporate power?
David Dayen: I can think of a couple. I’m heading out to Iowa next week to follow the campaign of J.D. Scholten. J.D. Scholten is a candidate running in Iowa’s, I believe it’s the third or actually fourth congressional district in Iowa. He’s running against Steve King who is notorious for his immigration statements. But it’s interesting that he’s, you know, Scholten is running in a farm state and he is really looking at issues of big agriculture, monopoly power in the farming sector and agriculture and those kinds of issues that are really very immediate for Iowa families, particularly farmers.

So, that’s a way to bring these issues to a very direct and immediate level. When you’re talking about family farm financing, when you’re talking about the systems by which seed monopolies or livestock monopolies make it difficult for the livelihoods of family farmers. That’s a way to really bring those messages into focus. So, that’s one example I can think of.

There are some other races around the country where you’re seeing this, but I will say that in general, there’s been kind of a nationalization under Trump of the political realm, and to the extent that a corruption message is playing or an anti-corporate message is playing, it’s filtered through Trump and the Trump Organization. At least on the Democratic side, that’s kind of where they’re looking to leverage the unpopularity of Trump and to play up the ways in which he’s personally enriched himself, how he’s enriched other corporate interests through policymaking, which I think is a realistic way for people to connect to these issues. But it is limited to that frame in most contexts, not all but in most contexts.

Stacy Mitchell: It’s really interesting about the Iowa race, I’m going to look forward to reading your reporting on that. It’s interesting to me that we’re seeing more candidates who at least in the primaries and some of the ones I’m thinking about didn’t make past the past the primaries, but people who really were out in rural areas and red places sort of running on an anti-corporate power agenda in a way that seemed to energize a lot of people and offer some hope of a different sort of electoral map maybe.

One of the things that really struck me as I was looking back through your reporting before this interview is it just, I kind of all of a sudden had this aha moment that you write a lot about law enforcement basically. You know, this sort of lack of law enforcement for so called white collar crime. I was thinking about, I heard an interview with Senator Elizabeth Warren recently and she has got just a really strong stance about corporate criminals. These folks on Wall Street or the CEOs and what they get away with and what kinds of punishments they really deserve, to be removed from their offices or to face other kinds of penalties for things that they do.

Rohit Chopra, who as you know is a member of the FTC, he’s an FTC Commissioner, there are five commissioners, he’s a fairly new Commissioner there, a Democrat. He did a memo back in May that’s all about the fact that government enforcement agencies including the FTC don’t really sufficiently enforce the law in the sense that they, if a company breaks the law the penalties are minor, and so minor that they often just go out and break the law again. We see this with things at the FTC, orders that they’ve given to Google and Facebook where the fines are so minuscule that it doesn’t really matter at all, it’s just spare change to these companies. We see it with Wells Fargo, I can’t even keep up with how, I mean, Wells Fargo just seems to break the law like on a grand scale and then turn around and break the law again. I mean, it just goes on and on.

And so, I’m just curious like, is this like law and order framework? Is this something that maybe the Democratic Party might pick up? Do you think that this is something, sort of corporate law and order that we ought to talk about more and ought to be a more central theme?

David Dayen: I don’t think that I am necessarily arguing for wholesale, more punitive treatment of people who break the law in a general sense. I think in general, America is an over-incarcerated country that usually takes people who are accused and convicted of minor offenses and really throws the book at them. It’s the dichotomy of people for example, convicted of low level drug offenses getting years and years put in prison and the spectacle of banking officials not even indicted in any real way for the sins of the financial crisis. It’s that dichotomy that I think is really the problem. It’s not necessarily that I lust for bankers to be thrown in jail necessarily. It’s that I think that the unfairness of that split in the system, that tow-tiered kind of nature of our criminal justice system is a social problem. It’s a problem that will ultimately lead to unrest and lead to demagoguery.

It’s something that policymakers must guard against by pursuing equal justice under the law. And if that means less time for lower level offenses and more time for those who create giant financial crises that affect millions, then so be it.

Stacy Mitchell: What do you think of the term white collar crime? I mean, I feel like maybe this is just sort of what it’s come to mean, but I just feel like we should sort of banish it because if it feels to me that evokes this idea that there aren’t any victims, that it’s just stuff that, it’s numbers on paper kinds of things and not really something that has any impact.
David Dayen: What we’re really talking about is fraud. I mean, if you’re talking about millions of fake documents that are produced to be used in foreclosure cases because otherwise, the evidence doesn’t exist to prove that financial entity owns a loan, you’re talking about fraud, that’s a fraud upon the court. If you’re talking about millions of fake accounts created by Wells Fargo in order to show growth to investors in terms of their selling of accounts to numerous people, you’re talking about fraud. It’s fraud upon investors, it’s obviously a fraud when you sell an account presumably in the name of a customer who doesn’t know about it. I think the fraud frame is far more potent because it happens to be accurate.
Stacy Mitchell: That’s interesting. Yeah, I like that language. I also want to ask some about monopoly power. You’ve been covering, you’ve been one of the early journalist covering concentration as it’s emerged more as a political issue and there’s been more visibility to just how concentrated the economy has come and what the problems are with money, the impacts on people’s wages, on small businesses and so on. And I’m curious just how you think this is, what you’ve seen in the time that you’ve been covering that issue and whether you feel like this is moving more into the broad political conversation and if not, sort of how do we make this something that’s more at the forefront of people’s minds when they think about who they’re going to vote for and what they want their candidates to do?
David Dayen: Well, I think it’s been difficult to make that leap from the very technical arguments that you hear when you hear about anti-trust law and concentration and competition policy into making that real for people. There are I think very simple ways to do that. You can really take any industry and you can apply it to how it affects an individual in their life and the things that they go through on a daily basis. One that I like to use, and you know, it may be doesn’t affect everybody but is the example of the airlines.

So, everyone who’s flown in the last 10 years recognizes that either they’ve gotten a lot bigger or the ability for them to fit into the seat is a lot or treacherous and the experience of flying has become one that was actually seen as luxurious in the 50s and 60s to where today, it’s an absolute sure and drudgery to get yourself onto an airplane, squeeze into that seat, be nickel and dime for everything, any kind of amenity that gets you out of the misery of flying, whether it’s a larger seat or ability to put your bags in the overhead bin. And also you’ve seen just non stop delays, cancellations of flight, little computer glitches that cost thousands of connections to be missed.

And that is a subset of the concentration in the industry. We went from eight major airlines to four in a relatively short period of time. Deregulation in the 1970s facilitated this concentration. And now we have this situation where there are four airlines that control 80% of the routes and they move together in terms of the amenities they provide, in terms of the fees that they charge. They are essentially one airline because they do not differentiate really on quality or price in any meaningful way.

That’s something that anyone who has tried to book a flight or take a flight can immediately book into. It’s very obvious what’s going on. I think those types of parallels, those types of ways to connect to people are available very broadly across sectors of the economy. When you talk about this in terms of the standard anti-trust law argument, of consumer welfare and whether there are efficiencies gained by mergers and things like that the eyes of your audience are going to glaze over but if you talk about it in terms of what people are experiencing, it becomes very clear, yes, my cable company is terrible because they don’t have to provide me with good service because they’re the only game in town. Yes, the experience of flying is pathetic. Yes, everywhere I go on the internet I’m stalked by targeted advertising that seems to be coming right out of the words and experiences that I provide on Facebook or my email every day, and that’s because my data is being sold to every advertiser under the sun.

Everyone has this experience. So if you can just sort of connect that to concentration, I think that’s the way that you build a critical mass.

Stacy Mitchell: You’re listening to David Dayen, one of the preeminent muckraking journalists of our time. I’m Stacy Mitchell with the Institute for Local Self-reliance. We’ll be right back after a short break.

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The cable companies are widely hated as are the airlines. And boy, gosh, I’m in a small city, which is really awful if you have to fly. My nephew a few weeks ago was getting on a flight from here to go home and his flight was oversold or canceled anyway, he didn’t have a seat and the next time they had a free seat for him was six days later, which is just astonishing. Those kinds of experience, I guess I’m, people feel the awfulness of Time Warner or American Airlines.

But what about monopolies or companies that have a lot of power that generally have a pretty enjoyable consumer experience. I’m thinking of Amazon, of course, which we do a lot of work on. How do you think we get there because and I think that’s a harder thing. I think partly because people are so in this consumer frame of mind, and I guess one of my strategies has been to remind people that they’re also producers of value and that their role in the marketplaces broader and that they’re also citizen that I’m not sure that’s a little bit maybe roundabout and harder to reach people with. Curious how you think about those, the friendly monopolies.

David Dayen: Yeah, it’s difficult because Amazon, as you know, has based a lot of their business model on this notion of consumer friendliness, of doing everything for the consumer. And of course, our anti-trust laws are focused on consumers and the consumer experience when that is in fact the limiting frame when you’re talking about the aggrandizement of power and the ability to use that power in ways that are disfavorable. So, yeah, it’s a bit of a turn that you have to make, but there are, I think examples out there. I mean, if you look at something like what Amazon did to Birkenstocks for example, where they wanted Birkenstocks to sell on the Amazon platform and Birkenstocks said no, that didn’t make financial sense to us. And so Amazon said, okay, well, suddenly, a bunch of counterfeits to Birkenstocks started showing up on the Amazon platform and it was almost like a blackmail situation to get Birkenstocks on there. And finally, they relented.

That’s something that I think anyone who is a worker of any kind can understand, like what if the thing that you did was being forced to be sold in one particular store, the thing that you produce or the service that you provided with the threat of undercutting your business and putting you essentially on the street if you didn’t comply. I think there are ideas like this out there that point to sort of a very American concept of fairness that we’ve gotten away from I think a little bit. But it is in some way, at the heart of this notion of American values, that if you work hard, play by the rules, that whole thing, that you should be able to make your way through. Companies like Amazon prevent that in fundamental ways. I think you have to make more of a values based argument but you can use the specific details specific examples and connecting on this concept of fairness and values I think that can bring it through.

Stacy Mitchell: Yeah, that makes a lot of sense to me. One of the other monopolies I want to ask you about because you’ve reported on and it’s actually a monopoly I get a lot of email about which is Ticketmaster. Ticketmaster is putting a lot of independent music venues out of business or really squeezing them to the margins, and having a lot of others effects as well. Give us a little bit of an overview of what Ticketmaster is, how they got to be so powerful and kind of what the issues are.
David Dayen: Right. Well Ticketmaster is a ticket broker, right? They sell you the tickets for particular venue. Initially, Ticketmaster was not aligned with artists or with venues or anything of that nature. However, in 2010, Ticketmaster merged with Live Nation. Live Nation is really the umbrella company at this point, Ticketmaster sort of merged with them. Even before that merger, Ticketmaster controlled about 80% of the ticket market.

That continues to be true today but the difference is that Live Nation is a concert promoter. Live Nation owns 200 venues and Live Nation manages about 500 or so artists. So, think of the vertical combination here. You have the company selling the tickets is the same company that owns the venues, the same company that owns the artists. What’s going to proceed from that? Well, it’s pretty obvious. The artists are only going to play at the venues owned by their management team. They’re only going to have their concerts promoted by that same company. They’re only going to sell those tickets exclusively with Ticketmaster instead of a competitor.

This lack of choice within the economy inevitably plays itself out in fees. I mean, anyone who’s ever bought a ticket knows that there’s a ridiculous amount of fees that Ticketmaster and Live Nation add to their concerts. There’s even more interesting stuff around the resale market. There was sort of a nominal competitor to Ticketmaster called StubHub which did a lot of resale through scalping essentially that is secondary market for tickets. And StubHub actually has about 50% of that market. But number two is an exchange called ticketsnow.com, which is owned by Ticketmaster. So now Ticketmaster is getting into the resale game. What you can see is that if you go to Ticketmaster looking for a ticket and it’s not available to concert sold out or whatever, they will steer you to TicketsNow without disclosing that they own TicketsNow.

There are other ways in which resellers kind of look like they’re coming directly from the original venue when in actuality they’re marked up resale seats that are done through the auspices of Ticketmaster. So, you see Ticketmaster sort of expanding into the secondary market now in addition to having total, near total control of the primary market for ticket sales.

There was a very interesting Government Accountability Office report that came out about all of this and more back in May. There are some members of Congress, Bill Pascrell being probably the biggest one, he’s a congressmen from New Jersey who has talked about really breaking up this ticket monopoly and making it obsolete.

Stacy Mitchell: I have to look up the GAO report, and nice thing that some members of Congress are talking about this because I really, I mean, I get emails from musicians and performance venues regularly who are on the losing end of this and it just is such a scandal that you have this company with so much power and whose merger as I recall with Live Nation, you know, when those two companies came together, I don’t remember that really getting a lot of scrutiny at the time.
David Dayen: Obama’s anti-trust agencies waved it through. It could very well be because the brother of the chief of staff to President Obama, Rahm Emanuel, his brother sat on the board of Live Nation.
Stacy Mitchell: Right. Oh dear.
David Dayen: The other thing I wanted to mention is that, you know, I talk about StubHub as being a competitor in the secondary market and having 50% of the resale market. Lest you believe that StubHub is some upstart, it’s a subsidiary of eBay. So, even the upstart competitors to the dominance of these platforms often are large companies themselves. We’re seeing that now in the tech or the online advertising world where the numbers three creeping up to fight the Facebook Google duopoly over online advertising is Amazon. They’re building their business and trying to break in to that duopoly. So is that a good thing or is it just giants wielding swords against one another while the little guy suffers?
Stacy Mitchell: Yeah, I think that’s right. Let me ask you how, you do a lot of muckraking investigations of all kinds. And I’m curious like how you find stories, and when you’re out there looking at things, like what makes a good story, something that you want to pursue that you think is worth telling?
David Dayen: They come in a variety of ways. Certainly if you have somebody who has a story to tell that’s unique or novel about how they were personally affected by some circumstance, whether you’re talking about the banking sector or the technology sector whatever, that’s a great place to start. I have a piece coming that’s sort of a way we live now piece about a guy who’s essentially a trader but a new kind of trader. He buys and sells gift cards. He is doing this in a way that is only enabled by the fact that Walmart does not really police their gift card policies in a way to prevent fraud. It’s enabled this guy to undergo his business, but this guy ends up telling me, “I think what Walmart’s doing is really bad.” And I go, “Well, you know you wouldn’t be able to do what you do this trading of cards without Walmart being lax in their policies?” He says, “I know. I think people are being ripped off.”

So that’s interesting, right? Here’s someone that’s sacrifice their entire sort career path that they’ve laid out in a weird way for themselves because they’re whistleblowing essentially on a large company. So that’s an example obviously, whistleblowers are people I deal with on a semi-regular basis.

Obviously, there are groups out there that are doing great work that sometimes you just want to elevate, whether it’s the Institute for Local Self-Reliance which I’ve certainly partnered with on the numbers stories. I certainly get a lot of leads from people who are on the ground and doing that work. Sometimes things are just sort of lying in plain sight. I’ll give you an example. So now, Mick Mulvaney has taken over the Consumer Financial Protection Bureau. There hasn’t been a whole lot of enforcement in the year or so that Mulvaney has been in charge. He’s the head of the Office of Management and Budget under Trump. And since he’s taken over, CFPB has pretty much shut down the enforcement.

There were a number of enforcement actions that came out in somewhat rapid succession over a one or two month period. And in just reading those press releases, I noticed that they would give a top line number for the penalty and then say, for whatever circumstance the offending company wouldn’t be able to pay that. And so we’re going to allow them to pay a smaller amount. I saw this in the press releases over and over and over again. So I connected those things together and did a piece about what I called the Mulvaney Discount been given to these financial bad operators who, the claim was they couldn’t afford to pay these large fines.

Sometimes the story is right there in front of you and no one has picked up on it and it’s up to you to just run with it.

Stacy Mitchell: Yeah, the importance of actually reading the press releases that the CFPB and other government agencies are putting out there, right?
David Dayen: Stone once said that all the great stories are there, you just got to go dig them out and read the fine print. He spent hours and hours and hours and government agencies just reading the Federal Register and reading government reports that were created and building his stories that way. There’s a lot of value to that.
Stacy Mitchell: How did you first get into journalism?
David Dayen: Well, that’s an interesting story. So, I started my career in media and television actually. I was a producer and an editor for entertainment based television, nonfiction sometimes, documentaries, things like that. History Channel, Discovery Channel. Pretty much any channel I think you would name, I’ve probably done some work in one place or another. It was a long career, it was a 10, 15 year career.

But around 2002, 2003, I heard about these things called blogs, political blogs, and became interested in them. After a year of sort of lurking and reading and maybe commenting decided that sounds like fun, I’ll start my own. And so I would go to work and edit some television and set something off to render, which is creating effects or something like that, and then go over to my laptop and start blogging a little bit and then back and forth and back and forth. If you were a political blogger in 2004 or 2003, you were part of a pretty small group in a way that is not certainly true today. There was a way to get noticed. There was a way to move forward at that time. It was sort of a moment in time. And that’s what I did. I wrote at some of the larger sites where you could post diaries, places like Daily Kos and got to know people through that community and in that world. Started writing group blogs and things like that.

Eventually took a job at a group called Fire Dog Lake, which is no longer with us, but at the time, was somewhat influential. And I ran their news desk for a few years. And when that was over, I decided to spin out and do freelance writing on my own. And because of the years of being involved in that community and people that I knew graduating up into traditional journalism had the contacts to be able to make that work. All through that time, I was still editing TV, right up until 2015 actually, I was still doing that. 2016 actually was the last bit of TV that I made. It was a circuitous route to say the least but one that has been rewarding.

Stacy Mitchell: Do you find that journalism and sort of online reporting and blogging, I mean, what kind of changes stand out to you over that history?
David Dayen: Well, the blogs have certainly dissipated as a political force in the way that they were throughout the Bush administration, the early Obama administration. Concentration has a lot to do with that. Google and Facebook becoming a duopoly in terms of online advertising made it impossible to run an independent blog and get the kind of promotional support through advertising to make it work financially for you. So, most people who were blogging were doing it as labors of love and that wasn’t a sustainable model. And then, of course, traditional journalism came in and took a lot of the people who were doing great blogging work out and started their own and sort of overwhelmed the system.

The changes in the internet more generally played a role. Why go to a blog if you can go to social media and get 100 different opinions from virtually everybody on any topic. There’s been massive changes I would say in the ecosystem of journalism and independent journalism specifically. Whereas at the time that I sort of got interested and involved, there really was a pathway where you could go from being a blogger to being a journalist. I would say that that pathway is far more narrow if not closed today. I don’t know what a 22 year old wanting to break into journalism is supposed to do with this point. I don’t know that journalism school and given the struggles of traditional journalism is the typical internships or whatever, I don’t know that that’s the way to go. I certainly don’t think blogging is the way to go or building a social media presence. It can be very trying since there’s so much competition. I wonder about that and I wonder how young people are going to break into this industry.

Stacy Mitchell: Yeah, so much of it about the wide open web becoming, kind of collapsing into these handful of really walled private arenas and the consequences so widespread. Do you have a reading or watching recommendation for listeners? It can be anything. It doesn’t have to be related to the topics we’ve been discussing.
David Dayen: I’m wrapping up a book called Crashed by Adam Tooze, who’s a professor at Columbia University, which I think more than any other really gets at the heart of the failures of the stewards of both the financial system and the governmental apparatus charged with regulating the financial system. What happened before 2008 and after 2008 to really transform the world in fundamental ways.

It’s interesting that reviewers in the United States have picked up on a very narrow section of Crashed, this small portion where it talks about how the Federal Reserve used these large swap lines with other central banks to make sure that they had liquidity and dollars. It’s an episode that in some ways looks favorably upon what the Federal Reserve did and the rescue efforts. And all the US reviews talk about that almost exclusively. When in reality, if you read the whole book, it’s a very long book, it’s about 600 pages, it really savages elites both in the United States and around the world with allowing the crisis to occur, of failing to see the warning signs, of patching it up in such a way that restored the system rather than overhaul it and engendering the kind of populism that sort of came out of frustration with the way in which the bailouts and rescue of the financial system was conducted.

So Crashed a really, really great book. Set aside some time, it’s a long read, but it’s certainly worthwhile.

Stacy Mitchell: That’s great. We’ll put a link to it on the show page and everyone can check it out there. That’s terrific. David, thank you so much for your time today. This has really been a great conversation.
David Dayen: Absolutely. It was a pleasure and thank you for all the work that you do on Local Power and you’ve really done some tremendous stuff. So I appreciate it.
Stacy Mitchell: Thank you for tuning in to this episode of Building Local Power. You can find links to what we discussed today by going to our website, ilsr.org and clicking on the show page for this episode. That’s ilsr.org. While you’re there, you can sign up for one of our newsletters and connect with us on social media. If you like this podcast, please consider sharing it with your friends. This show is produced by Lisa Gonzales, Zach Freed and Hibba Meraay. Our theme music is Funk Interlude by DysfunctionAl. For the Institute for Local Self-Reliance. I’m Stacy Mitchell. I hope you’ll join us again in two weeks for the next episode of Building Local Power.


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Photo Credit: JBSA

Audio Credit: Funk Interlude by Dysfunction_AL Ft: Fourstones – Scomber (Bonus Track). Copyright 2016 Licensed under a Creative Commons Attribution Noncommercial (3.0) license.

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