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Jon Talton

Jon Talton, a 30-year veteran financial journalist, is economics columnist for the Seattle Times. He spent seven years as a columnist at the Arizona Republic, and prior to that was business editor at the Charlotte Observer, Cincinnati Enquirer, Rocky Mountain News and Dayton Daily News. As a blogger, he writes the Seattle Times' Sound Economy, as well as his personal commentary site, Rogue Columnist. Jon is also the author of ten novels, including the journalism thriller, "Deadline Man." His new David Mapstone Mystery, set in Phoenix, is "The Night Detectives," coming in May.

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The basics of guerrilla journalism

Our calling is inhabited by three kinds of news organizations.

The Good, the Bad and the Ugly

Clint Eastwood starred in the 1966 Italian Spaghetti Western film directed by Sergio Leone.

Let’s use the Sergio Leone scale:

• The Good are ones that practice serious, aggressive journalism, value business news, encourage constant learning by journalists and believe their readers are smart people. At one time, these were called “destination newspapers.”

• The Bad are those with plenty of sacred cows, where good journalism happens by accident,  the newsroom is full of lazy deadwood, and dominated by a metro culture. As a result, business news is both misunderstood and belittled.

• And the Ugly: Places that actively discourage quality journalism while chasing flavor-of-the-month fads. While the value of the fad is never objectively assessed against, say, investing in quality journalism, questioning it gets you labeled as stuck in the past and unwilling to change. Obedience is valued over skill. Hidden agendas abound. Business news is largely fluff. These institutions think their readers are idiots.

No names here. You know who you are. Indeed, in the life of a newspaper it may go through all these phases. Good places have their blind spots and have been ravaged by cutbacks. Bad and Ugly organizations sometimes commit good journalism. But given the relentless changes of the past 20 years, the landscape is full of Ugly. And your options for finding a job at a better place are constricted today.

Pop quiz: What do you do?

Answer: If you are marooned at Bad or Ugly,
one option is to practice what I call
guerrilla journalism.

Here are some of the basics.

1. Understand your running room. What is the hidden culture and boundaries? Which companies and institutions are sacred cows? What makes a valued employee? How much latitude do you have on suggesting stories?

2. Respect your boss. Understand that he or she faces pressures from above and below. Make your boss’ life easier.

3. Be self-directing and highly productive. Execute the flavor of the month well. This helps buy a bank of trust and goodwill from above.

4. Find mentors. At good newspapers, training and mentoring is in the DNA. Not so at the Bad and the Ugly. They probably hired you for your callowness and seeming malleability. You will be on your own. So push yourself to keep learning. Take advantage of every training opportunity. Even if you have to build relationships with experienced journalists elsewhere, find mentors who help you grow.

“So push yourself to keep
learning. Take advantage
of every training opportunity.”

5. Make dumb stories better. Part of this goes back to point No. 1. How much ability do you have to negotiate with a boss, taking a poor story idea and turning it into something substantive while still giving the boss what she wants. Thus, instead of arguing and being labeled a malcontent who is nostalgic for the past and refuses all-important change (however misguided), you find ways to make ordinary assignments or non-stories better.

6. Always use multiple sources, authoritative voices, and add context. These are the IEDs of guerrilla journalists.

7. Don’t shy away from sacred cows. Write stories that bend over backwards to be “positive” without embarrassing yourself by writing untruths. This will create a bank of goodwill with these executives. Then you can tiptoe into tougher stories and leaven your coverage with serious issues without being attacked for being — gasp! — negative.

8. Become highly proficient with technology, social media and multi-media. None of these are a substitute for serious journalism, but they are shiny objects that captivate the folks that run the Bad and the Ugly. You get extra points and often the latitude and time to tackle the good stuff.

9. Never write fluff. The most brain-dead feature idea can be turned into a decent story if you write well, interview the right people, have great quotes, include tension and stakes, unearth previously unknown information and provide history and context.

“Keep your name out there,
using social media,
attending training,
cultivating relationships
with other journalists.”

10. Go for scoops. Even the Bad and the Ugly understand the value of exclusive new news.

11. Keep your name out there, using social media, attending training, cultivating relationships with other journalists and seeking your employer’s support in gaining a fellowship. This is how you can move to the Good, or at least better.

12. Practice good self-care. Talk quality journalism with others who “get it.” Don’t be put off by editors who shoot down your ideas or say, “We already did that” (sure, 10 years ago). Have a life outside the newsroom. Keep reading quality newswriting and learn from it. Find outlets for your frustration, from friends and lovers who are good listeners to mixed martial arts. Hold to your ethics. Be open without being bamboozled by the fadmeisters.

What are your guerrilla journalism tactics? I’d love to read them in the comments section.





Hack to flacks: PR advice from a cranky journalist

Some of you will go directly into public relations or “public affairs” (I always wanted to be in public affairs, but that’s another story). Others are journalists who will leave mid-career for the “dark side” of PR. The latter used to be a sure shot — journalists had the best contacts, writing skills, etc. That’s less true now as newspapers have died or struggle to survive. The “inside track” you once had might be to a paper that has closed. PR outfits more often choose young and cheap over older and experienced.

I’m still here among the hacks. Every day I get dozens of pitches from PR outfits; almost all go into the trash. The Internet has allowed PR to become a fire hose, mostly of worthless story ideas. Still, a PR professional who really knows her stuff can be a great asset to a working journalist. Let me offer a few tips from my end of the fire hose.

1. Your first words when calling a journalist should always be, “Are you on deadline?” If I’m on deadline, I don’t have time to listen unless you are offering a one-on-one with Warren Buffett.

2. Read a journalist’s writings before making the pitch. It’s easy thanks to the Web. Google or Bing “Jon Talton” and you’ll have a sense of my areas of coverage and interest. It amazes me how few PR people take this simple step.

3. Don’t pitch silly features. One today was based on Lebron James returning to the Cleveland Cavaliers: How about employees who return to their former company? Instantly trashed. See No. 2. I don’t write features or trend stories. I am interested in hard news concerning the Pacific Northwest (or, for Rogue Columnist, Arizona), especially about the economy.

4. Corporate speak,turgid language, misspellings and long-winded releases will likely be trashed.

5. Make personal contact with the journalist. Go for coffee. Get to know his or her interests. Discuss the clients you have that might be of interest. This way, when your email or call shows up, I know who you are. On the other hand, I am not likely to take the time for a one-on-one unless you have companies, think tanks, etc. that fit my needs. Do ask how the journalist prefers to be contacted (for me, email).

6. Understand that even in the glory days of newspapering, the number of worthy stories every day far outnumbered the available staff. It is even worse today. So your pitch will be competing with perhaps a hundred others. And that’s for worthy stories, not the garbage that the fire hose deposits every day.

7. The best pitch remains a simple and clear “Who,” “What,” “Where,” “When” and “Why.” Newsy and unique gets you further.


8. Manage your client’s expectations. The newspaper is not a cheerleader or publicist. Placing stories is difficult. Real news will bring tough questions and a search for other sources and context.

9. When journalists call, be prompt and forthright. The worst thing a company can do is say, “No comment.” That’s waving a red flag in front of a bull. Make top executives available. Have a crisis communications plan in place.  

10. Help the journalist learn. For example, if you are representing a port or a railroad, there’s a ton of information, context and background you can offer. Make sure the client gives you that freedom. Be an honest broker of information. If you are pushing an ideological agenda, this is likely to cause the door to close.

And here are a few tips for journalists:

1. Aggressively unsubscribe from junk PR pitches and lists. 2. If contacted, be polite and professional. Understand that the PR person is under pressure to get results and billable hours. He or she may not have a client who is willing to be effectively represented.

3. Find the diamonds in the rough and cultivate those relationships. One of your best friends on a beat or individual story is the knowledgeable PR professional. He or she can open doors to the newsmakers you want to interview, provide valuable context and background information, and keep you from making mistakes.


4. The immediate pitch might not make the grade, but it also might contain a contact or news that you can use for a larger story down the road.

5. It should go without saying, but it must be said: You don’t date or sleep with flacks working for companies or industries that you cover. So much for public affairs.




Getting punked; getting clarity

Starbucks cups with mortar board Years ago when I worked in San Diego, I covered a company whose chief executive was truth challenged. So when a fax came across (yes, it was that long ago) claiming that the company had triumphed in a dispute with federal regulators I was suspicious.

I called the feds and discovered that the company had in fact lost on something like nine out of 10 counts. I wrote the story. The next day, I was amazed to see that every other newspaper had merely written off the company press release. The CEO called me and with a laugh said, “You caught me.”

If I had only applied the same skepticism when Starbucks announced what appeared to be a ground-breaking partnership with Arizona State University to help its employees with college tuition. Many of the details were yet to come. And I knew that Starbucks CEO Howard Schultz is a master media manipulator. But the basics sounded good and I wrote an online column to complement the main bar. The take was to provide context about how this could be a pioneering move in moving low-paid service workers into higher-paying work thanks to a college degree. I could also bring my first-hand knowledge of ASU President Michael Crow as an innovator.

It wasn’t a terrible column, but as time went on the details showed that there was less than met the eye.

After days of criticism, some of it savage, Starbucks clarified that it would reimburse the tuition only for juniors and seniors. Freshman and sophomores would be eligible to apply for financial aid from ASU. I added this information to another blog post, but I felt as if some damage had been done.

I should have been more careful with my language. I should have laid out what wasn’t yet known. And, yes, I should have told readers that Schultz is a self-promoter, so let’s see if the details of the program meet the initial hype.

If you cover business, you will be lied to. Don’t become cynical. But always be skeptical. It’s part of your pact with the reader.




Midyear opportunities for business journalists

With June 30th, we’ve reached the important mid-year point where you can take stock of myriad yardsticks of performance (this is why your editors wanted you to get your expenses in early). It marks the midpoint in the metrics of many companies that follow the calendar year. It also gives you a chance to see how the local economy is holding up. Bonus: June marked the official end of the Great Recession. Such recovery as we’ve had has been going for five years.

Big Buck Mechanical Bull

The owner of Big Buck Mechanical Bull Ride takes stock of his earnings at the Delaware State Fair. Photo: Lee Cannon

Pay special attention to earnings. How are the past six months of revenues and profits compared with the previous period in 2013? Have they met or fallen short of expectations? Compare them against rivals in their industry group. This is also a time when executives, in the analyst conference call, will give forward guidance for the remainder of the year. Not only is this important for the individual company, it can also give a sense of the overall strength of the economy.

Watch the stock and how it is riding this overheated market. Has it risen at the same pace for the first six months of 2014 at the same rate as last year? If not, why not?

Find out how local employment is holding up at your touchstone companies. Is it bigger or smaller than midyear last year?

You can also use this time of year to check in on how your local and state economy is performing. I used charts from the Federal Reserve Bank of St. Louis’ wonderful FRED database to do an online column showing how Washington state had done through the recovery.  (On the FRED site, click on “categories,” then “U.S. regional data,” and then “states.” Unfortunately, some of the data is not fully up to date.

Jobs training centerJobs remain one of the most important issues. Contrary to media mis-reports, we have not really made up all the jobs lost in the recession. The labor force has grown, so if we keep adding jobs at the recent rate the jobs gap won’t actually close until 2018.

By mid-July, your state employment security department will have at least preliminary data through June. You can report on how jobs have grown, or not, through the first six months and compare it to previous periods. Which counties and metros are winners and losers? Which sectors — and are they high paying or low paying?

This summer, the Commerce Department and Census Bureau should have complete 2013 data on exports and imports for your state and metro. Don’t settle for whether it has risen or fallen. Is the change  significant compared with previous years? Have the state’s top trading partners or leading export products changed? Does your metro and state operate a trade surplus or deficit?

Finally, summer is a good time to check markers you should have laid down at the first of the year — will XYZ Co. be bought? How is housing doing? What about the succession of a new CEO at Acme Widgets? Each of these should give you good fodder for stories.

Summer may seem like a slow time for local business news. Don’t believe it.



When sources say stupid things

Truthiness Defined  Friends don’t let friends write drunk, unless one is at the Algonquin Round Table. But what happens when sources say something demonstrably stupid? Do you put in in the paper or online?

Let me be clear. First, there is an eternal debate about cleaning up quotes to make them grammatical and keep the speaker from sounding like a lout. I tend to say clean ‘em up, unless the grammar usage is contextually critical to the story. Imaging the historic calamity had James Agee “cleaned up” the dialect of the tenant farmers in Now Let Us Praise Famous Men.

Second, there are outright lies or half-truths. Here, journalists are obliged to ferret out and report the actual facts. This is a particular danger in business journalism, where cooked earnings and economic statistics can be thrown out like fairy dust. Don’t let anybody get away with this. Otherwise, you are committing malpractice and doing a terrible disservice to readers, the public record and the information a complex society needs in order function. Remember the late Daniel Patrick Moynihan: “You are entitled to your own opinion. But you are not entitled to your own facts.”

“There are outright lies or half-truths.
Here, journalists are obliged
to ferret out and report
the actual facts.”

Yes, what we do is hard. This is why, as a business editor, I almost never hired anyone who didn’t have at least five years experience as a business writer at a major metropolitan daily.

No, my target today is the hazy zone of the stupid, things that may be said out of ignorance or boosterish bright-siding.

One of the classics is where someone claims that their burg is going to be “the next Silicon Valley.” Earlier this year, I wrote a Seattle Times column about why this is an absurd claim. Even talking about becoming the next major tech center is a stupid statement unless you live in a about 20 metros that already have the essential bones, including tech giants; abundant capital at all stages of company development; major research universities; technology transfer from universities to the private sector; federal laboratories and major research funding; heavy concentration of talent and advanced degrees, patents, etc. You get the idea.

People are entitled to their own opinions It’s like the little downtown markets I’ve seen start up — a nice thing, don’t get me wrong — but inevitably, some speaker announces it will be “like Pike”s Place Market.” They have obviously never been to Pike Place Market in Seattle and seen all the components and decades of civic stewardship that made this wonder possible.

What’s a reporter to do?

Remember, you are a journalist, not a stenographer.

If a prominent newsmaker says something stupid, it’s better to: 1) Ignore it; 2) Follow up and dig deeper about what the person really means, when what they said is so out-of-whack with reality; 3) Focus on the truly newsmaking things the person says, not the bragging or fantasy. On the other hand, if someone of consequence spouts stupidity, sometimes journalists have an obligation to report it and mention the reasons the comment is (to put it kindly) a stretch. Or the comment is revealing and should be reported, as when General Motors CEO Roger Smith proudly said he didn’t know how to use the computer on his desk.

It’s a judgment thing. Use your best.




What’s in your wallet … er, mobile device

At the shooting at Seattle Pacific University, Seattle Times reporters made heavy use of Twitter for news, updates and photos. But business writers need their mobile devices, too. Here are the appsSocial Media tools for journalists I find useful if I have to work on the fly with my iPhone and iPad.

Maybe commenters will offer some other suggestions. What tools do you like best?

  • Twitter and/or Tweetdeck
  • Camera and Instagram
  • The Oxford Dictionary of Economics.
  • The FRED app from the Federal Reserve Bank of St. Louis, an invaluable source of data and charts.
  • Google Maps; Google Earth and Google Translate.
  • The Kdan PDF reader, so you have instant access to those delightful economic reports, etc.
  • Roget’s II New Thesaurus and the Merriam Webster Dictionary.
  • The business beat glossaries from Reynolds.
  • A stock market app.
  • Voice memos and dictation.
  • Evernote, one of the best apps for making notes, reminders, etc. and organizing them.
  • On Apple devices, the Pages and Numbers apps. Pages can easily convert to Word. Numbers can generate charts.

Yes, a good old-fashioned reporter’s notebook is still a must. But these apps will make your job easier when you’re outside the office.





About those ‘negative’ stories…

Business journalists especially face the accusation of being “negative.” Companies want to control their image. Many small outfits have no experience in dealing with the press. Also, more and more, we live in a culture of relentless sales and hype.

Good News Bad News paper gameMany Americans are irrationally optimistic, as Barbara Ehrenreich discussed in her book, Bright-Sided: How Positive Thinking is Undermining America. If I had a dollar for every reader call and email, and every meeting with a flack or top executive, over a “negative” story, I would be long-since retired.

This term has driven me crazy since I was a cub reporter (is that term even used any more?). It is so subjective.

For example, if you write about a lawsuit that a company has hidden in the fine print of its 10-K, is that being “negative” or “positive”? It depends on where one sits. If one is part of the corporate hive trying to keep the stock price up, I suppose the revelation is “negative.” If one is a shareholder, employee, vendor or customer, the knowledge is extremely “positive.”

If only the “negative” news about the starter glitch in GM vehicles had come out sooner.

I say to you again what I have been telling businessfolk for decades: We’re not your cheerleaders or your publicists. It is the mission of a newspaper to report the news and raise hell.

Here are our obligations:

1. To be accurate. If a story has a factual error, correct it promptly.

2. To be as complete as time allows and continue this with relevant follow-ups.

3. To be fair. This includes giving a company or individual that is the story’s focus a chance to tell their side; providing context, comparison and mitigating factors; not to hold back a key fact that the focus of the story doesn’t get a chance to respond to, and to be careful with the language, tone, headline and placement of the story.

Do these things and you will do your duty to readers. I’m positive.



Background, off the record and you

The most authoritative quotes come from on-the-record named sources, preferably senior executives, labor leaders, scientists, economists and workers with direct knowledge of the news.

But there will come times in your career when it’s necessary to used unnamed sources in order to bring some of the most important information to light. While one usually thinks of political reporting — “Deep Throat” — the situation arises frequently in business journalism. Here are three key concepts, and I quote from the NYU Journalism Handbook.

Off the Record Deep Background

Photo: Jessica on Flickr

1. Background. “On background” is a kind of limited license to print what the source gives you without using the source’s name. But most veteran reporters will not use “on background” information until they can verify it with other sources. People try to go “on background” when their information is very sensitive, which is to say, the information is likely to cause a stir. “On background” means the source’s name does not appear in the story. In effect it confers anonymity on your source, but allows you to work with the information the source has provided. Again, it’s best to consult your professor in these situations.

2. Off the record. This restricts the reporter from using the information the source is about to deliver. The information is offered to explain or further a reporter’s understanding of a particular issue or event. (Various presidents have invited reporters to have dinner with the understanding that no information from this meeting can ever be published.) But if the reporter can confirm the information with another source who doesn’t insist on speaking off the record (whether that means he agreed to talking on the record, on background, or not for attribution) he can publish it.

3. Not for attribution. A reporter agrees not to identify a source by name. Identification is provided only by reference to the source’s job or position. That identification must be agreed upon by the reporter and the source, and is almost always given in a way that prevents readers from discovering the source’s specific identity. (There are rare exceptions — when dealing with diplomats and expressing a nation’s official views, for instance.) The reporter should make sure the attribution is accurate and should press the source to allow the attribution to be as specific as possible. For example, a reporter would want to attribute information to “a high-ranking official in the Justice Department,” rather than “a high-ranking law enforcement official,” if the source agrees beforehand.

“With stories where an unnamed source
discusses individuals, be especially
careful about liable and, with
genuinely private citizens,
invasion of privacy.”

The trouble is that these phrases are often confused, even by veteran journalists. So get them straight. And explain each to your source and agree on which it is to be. Experienced, high-level sources are accustomed to this. For example, I recall a “not for attribution” briefing I received from a Treasury secretary once. All I had to do was ask  him how he wanted to be identified (“a high-ranking administration source”). But in most cases, you will need to make the ground rules clear.

Always try to get a source on the record. If you can’t, make sure you know your new organization’s rules for handling off-record sourcing. Often an editor will want to know who the source is.

Be skeptical of people who don’t want their names used. They may merely be afraid or unauthorized to speak on a matter. But some — think of a terminated employee — may have an axe to grind.

Be aware of legal ramifications. What you write can move a company’s stock price or affect its reputation. This can bring, in some cases, legal exposure; this is when a story should be “lawyered.” With stories where an unnamed source discusses individuals, be especially careful about liable and, with genuinely private citizens, invasion of privacy. Obviously you are not bound by any promise if the individual proves to have committed a crime, but this should also be discussed with editors and lawyers.

Always try to find corroboration and other sources to back up what you write, especially the explosive stuff.

And it is useful to tell the reader why you are granting the unnamed source this privilege. The New York Times is especially rigorous about this, even if it says, “because this individual was not authorized to discuss the deal” or whatever.

There’s a school of thought that news organizations should never use unnamed sources. This is naive. Most of the important news you report will require some use of unnamed sources.

And we never give up the identity of sources, aside from the criminal exception listed above — and even this must be weighed carefully in an age of the national security state and its overreach. Be prepared to go to  jail of necessary. It is one of the risks of our calling.



Business journalism for dummies, part 2

In the previous Business Journalism for Dummies post, I laid out some of the basics you need to know if you’re starting out or moving over to business news from metro or features. Now let’s move on to some macro concepts that should inform much of your coverage, even if you’re on the small-business beat.

Shareholders rule. Since the 1980s, the so-called shareholders’ rights movement has fundamentally changed the way public companies operate. For decades before that, people and institutions owned stock for the long haul, making money off dividends. Since then, everything is about keeping the stock price rising. “Owners” move in and out of individual stocks more frequently and expect to see most of their gains from those increased prices.

Warren Buffet Selfie Toledo Blade

An unidentified shareholder takes a selfie with Berkshire Hathaway Chairman and CEO Warren Buffett, left, and Berkshire board member Bill Gates, right.

As a result, the corporate focus is on the short term, not only the next quarter but the next day’s closing price. Companies are under pressure to merge to either increase their market share and eliminate competitors or, if in the target firm, accept the deal and let shareholders pocket the quick payoff. Lax antitrust enforcement has abetted the game.

The result is that fewer cities have hometown headquarters. Industries are more concentrated (think banking, broadcasting, airlines). Top executives’ pay is tied to a rising stock price. Cutting jobs and research and development may be suicidal in the long haul, but they help cut costs in the short-term and that’s the horizon. A company that fails to play by these rules must be very profitable or unique (such as Amazon.com) or it will be targeted by activist investors that want to put it on the block.

Globalization. The world economy is more closely connected than any time since 1914, on the edge of World War I. What happens in Asia, Europe or, in the case of oil, the Middle East, affects even small businesses. Customers are at the end of a 10,000-mile supply chain. With a surplus of labor, the world offers companies the chance to send jobs and entire industries offshore.

Trade. Even midsized companies, and an increasing number of small ones, are engaged in trying to sell goods and services overseas. They face competitors that encounter few if any trade barriers to selling in America, the world’s most affluent large market. On the other hand, they can confront a host of overt or stealth protectionism in overseas markets. Either way, with the United States as a mature market, more companies look overseas for growth. America runs a huge trade deficit — we buy more from the world than we sell it — and this translates into millions of lost jobs at home. At the same time, trade liberalization ensures plenty of cheap stuff for American “consumers.”

China. It has in a relatively short time overtaken Japan to become the world’s second-largest economy in terms of gross domestic product. China is highly complex, so few sweeping statements can be made without numerous qualifiers. The country’s size makes its moves consequentially worldwide. In the 19th century, Napoleon said, “Let her sleep, for when she wakes she will shake the world.” China is now fully awake.

China has become the world’s largest manufacturer and trading nation, displacing the United States from decades in that position. It also has huge problems: the Communist Party’s attempt to hold power; the need to provide jobs to ensure social peace; an aging and increasingly costly workforce; pollution, and the danger of a slowdown and even credit collapse that would shake the world. Business Journalism for Dummies Pt 1

Regulation. Many businesses and industries face regulation from all levels of government and complain about it constantly. Yet they also spend huge sums of shareholders’ money to “capture” regulators (and the courts) to look the other way, accept risky practices as safe or otherwise be lapdogs. They fund PR shops, “think tanks” and academics to peddle the notion that free markets are self-policing and regulation only costs jobs. This dogma and lack of regulatory rigor were behind the costly scandals of 2001 (Enron, etc.) and especially the practices that caused the Great Recession. At the same time, relations between government and big business are cozy, with many corporations enjoying enormous subsidies and tax breaks. Make sure you report on them.

Jobs. Since the turn of the century, the great American jobs machine has been failing. Even now, nearly five years after the end of the Great Recession, nearly 10 million are officially unemployed and many more are under-employed. For example, millions are stuck in part-time work or the “gig economy” when they want full-time jobs. The reasons are complex — the biggest is the huge demand hole of the recession — but the consequences far-reaching. With corporations showing no inclination to substantially increase hiring and advanced automation risking more jobs, things won’t get better anytime soon. The problem manifests itself one way or the other in nearly any story you cover.

Inequality. Thanks to the near-death of unions, decades of tax cuts and legal tax evasion for the rich and corporations, the loss of good manufacturing jobs, globalization and technology, America is more unequal now than any time since the Gilded Age. This is not a meme of “liberals” but an economic reality. It makes it more difficult for average people to start a business or get ahead. It is cutting into the sales of Wal-Mart and the dollar stores. Combined with the jobs crisis, inequality is the most profound issue facing the country.

Energy. I’ve tried to stay away from the high specialties of business journalism, but this is one you’ll need at least a basic grounding in. The global economy runs on fossil fuels and their cost and availability affects everything. When oil prices are above $100 a barrel, they become a drag on growth. Fossil fuels enjoy big subsidies and other breaks from Washington. At the same time, they help cause climate change which brings huge costs. Fracking produces vast environmental damage and a highly explosive oil; tar sands are an environmental nightmare and costly to refine.

Be skeptical of any claims about unlimited supplies of cheap oil. Those days are gone. The only reason fracking plays can raise capital is because oil is relatively expensive.

Alternative, renewable or “green” energy is often oversold. So don’t be a chump. The biggest issue is how much fossil fuels it requires to make the alt energy, an equation known as energy in/energy out (EIEO). Many alternatives require as much or even more energy inputs than they energy they ultimately produce. Hydropower, as seen in the Pacific Northwest, is an alternative with a good EIEO. Some solar may be. Many other schemes are not.

Energy costs are a huge part of any businesses calculus. A fuel spike can send the airline industry into bankruptcy. Fossil fuel feed stocks make all sorts of products from plastics to fertilizer. So know that energy is part of your beat, no matter which beat you cover.

Finance. The American economy’s biggest element is no longer making things. It is “financial services.” Covering banking is another post, but here are some basics. Banking was once boring: taking in deposits and lending them out at a higher interest rate to productive, job-creating enterprises. Now much of the sector is gambling that does little to create jobs and kills many. When it melts down, it can take the entire economy with it, as almost happened in 2008-09.

Finance is more than banks. It includes the shadow banking industry, private equity, hedge funds, venture capital and angel investors. More broadly, it is part of the FIRE (finance, insurance and real estate) sector.

Big companies can raise capital easily and do so through a variety of complex means, from selling bonds to floating securities in the overnight markets. Since the recession, it has been harder for small companies to get bank loans or other financing.

You will run into private equity outfits that buy a local company. There are two types: Ones that “strip and flip,” cutting jobs, spinning off or closing “underperforming” business lines, and reselling the company or taking it public again. This is often a trauma for localities. When the playerz take on too much debt, they often saddle the company with a burden that ensures it ends in bankruptcy court (but they got their profits and fees up front). The other consists of more patient and less destructive investors.

As you realize, business is no place for dummies. But armed with these primers and a hunger to keep learning, you are in the sexiest assignment in journalism. Bon chance.


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