*****Why Mainstream Media Wants The Congressional Insider Trading Story To Die*****

This entry assumes you have seen last Sunday’s 60 minutes about insider trading in congress (if not, click ‘60 Minutes’ Blows Lid Off Congressional Insider Trading to watch video).  It is one of the best pieces of ‘60 minutes’ investigative reporting in years.

An example of Washington insider trading

Let’s start out with a blatant example of Washington insider trading to show how bad the problem.

The failure of Bear Stearns and Lehman brothers in 2008 were POLITICAL decisions.  In other words, insiders in Washington knew, before anyone else, that the government would let those two firms fail without bailing them out.  Was this insider information used to profit from the collapse of these two firms?  Hell yes.  Just read this Bloomberg article explaining how Bringing Down Bear Began as $1.7 Million of Options.

Bringing Down Bear Began as $1.7 Million of Options
By Gary Matsumoto - August 11, 2008 16:16 EDT

Aug. 11 (Bloomberg) -- On March 11, the day the Federal Reserve attempted to shore up confidence in the credit markets with a $200 billion lending program that for the first time monetized Wall Street's devalued collateral, somebody else decided Bear Stearns Cos. was going to collapse.

In a gambit with such low odds of success that traders question its legitimacy, someone wagered $1.7 million that Bear Stearns shares would suffer an unprecedented decline within days. …

Whoever placed the bet used so-called put options that gave purchasers the right to sell 5.7 million Bear Stearns shares for $30 each and 165,000 shares for $25 apiece just nine days later, data compiled by Bloomberg show. That was less than half the $62.97 closing price in New York Stock Exchange composite trading on March 11. THE BUYERS WERE CONFIDENT THE STOCK WOULD CRASH.

``Even if I were the most bearish man on Earth, I can't imagine buying puts 50 percent below the price with just over a week to expiration,'' said Thomas Haugh, general partner of Chicago-based options trading firm PTI Securities & Futures LP. ``IT'S NOT EVEN ON THE PAGE OF RATIONAL BEHAVIOR, UNLESS YOU KNOW SOMETHING.''

`Lottery Ticket'

The 57,000 puts that traded March 11 at the $30 strike price and the 1,649 that traded at $25 were collectively worth about $1.7 million, Bloomberg data show. Each put is equal to 100 shares of stock.

``That trade amounted to buying a lottery ticket,'' said Michael McCarty, chief options and equity strategist at New York-based brokerage Meridian Equity Partners Inc. ``Would you buy $1.7 million worth of lottery tickets just because you could? No. Neither would a hedge fund manager.''

During the next four days, New York-based Bear Stearns unraveled in the swiftest investment-banking failure in Wall Street history. …

Schwartz and officials at the SEC declined to comment for this stor
…
On March 11, when the Fed said it planned to make up to $200 billion available through weekly auctions and for the first time lend cash in exchange for debt that included the devalued mortgage-backed securities that contributed to the credit seizure, one or more unidentified traders requested the Chicago Board Options Exchange list the even deeper out-of-the-money strike at $25.
…
Bankruptcy Put

… on March 14, the CBOE listed a series of put options with less than five days to expiration. The lowest strike price, $5, was more than 90 percent out-of-the-money in what options traders refer to as a ``bankruptcy put.'' Bear Stearns slumped 47 percent that day to $30 in NYSE trading.

The out-of-the-money Bear Stearns puts point to a raid, said Baker, who's now a securities lawyer whose clients include companies that have filed complaints over naked short selling.

The $25 Bear Stearns puts, and others obtained March 14 involving the right to sell 630,000 shares at a strike price of $5 by March 22, were ``bizarre,'' according to Haugh, the PTI partner who spent 18 years as a CBOE options-market maker.

`One Tick'
…
``In just one tick, the company's share price lost nearly all its value, a steeper drop than Enron's right before its de-listing in 2001,'' said 63-year-old Olagues, referring to the bankruptcy of Houston-based energy trading company Enron Corp. ``I've never seen a stock perform like that in my life.''
 
Olagues, who was an options market maker at the Pacific Exchange and then the CBOE from 1976 to 1984, said … he has found options transactions that convince him BEAR STEARNS WAS THE VICTIM OF INSIDER TRADING.
…
``I would stake my reputation on that,'' he said.
...
``NOBODY PREPARES FOR THE STOCK GOING FROM $57 TO $3 IN JUST TWO DAYS,'' he said.
…
Big Bets
…
Gail Osten, a spokeswoman for the CBOE, declined to say WHO placed the order for the options.

``Nobody in their right mind would buy that put UNLESS YOU KNEW WHAT WAS GOING DOWN,'' said Ray Wollney, Olagues's partner at Truth in Options. On Friday, March 14, a total of 6,303 of the March $5 Bear Stearns puts traded.

…
Options bets that looked irrational on Friday proved brilliant on Monday, when the shares traded between $3 and $5. By Wollney's calculations, the traders who spent $35.8 million on the deep out-of-the-money puts reaped an estimated $274 million windfall from the plunge in Bear Stearns.

Peter Chepucavage, a former general counsel for compliance at Nomura Securities and onetime SEC lawyer, said the Bear Stearns bets were neither smart nor lucky.

``When you buy $5 strikes when the stock is trading over $50, you either have to be manipulating, OR YOU HAVE TO HAVE INSIDER INFORMATION,'' said Chepucavage, who's now with Washington-based Plexus Consulting.
…

(For more on this insider trading, watch this video)

The lack of action by the SEC and the lack of coverage by the media in the face of this obvious financial fraud (especially those $5 Bear Stearns puts ), more than anything else, helped me realize how corrupt the US government and media had become.

Correct reaction to Sunday's ‘60 minutes’ story

Below are two videos which show the correct reaction to Sunday's ‘60 minutes’ story.  Their worth seeing because of how starkly they contrast with the handling of the story by the rest of the mainstream media.

DOUBLE STANDARD: Congress Can Legally Trade On Insider Information While Wall Streeters Go To Jail (Business Insider)

CNBC Gets It: Congressional Insider Trading Outrage Prominent On Business Network


Context of these two videos:  These two videos are from business news networks whose audience is likely to have already heard about last Sunday’s ‘60 minutes’ (which means they didn’t really help spread the story).  They are also unfortunately the exception in the news world.  As I pointed out last entry, while blogs and non-mainstream media are exploding with outrage, higher rating news networks and major newspapers (ie: New York Times) are ignoring the story… or worse (see below).

The INCORRECT reaction to Sunday's ‘60 minutes’ story

The Wall Street Journal has chosen not to stay silent on the ‘60 minutes’ story, publishing a single opinion piece titled Congress’s Insider-Trading Non-Scandal.  The title alone should be enough to understand what’s wrong with this.



Let’s take a look at the incorrect reaction to Sunday’s ‘60 minutes’ story.  The Wall Street Journal reports about Congress's Insider-Trading Non-Scandal.

(Compare this article to the videos above to fully appreciate its “integrity”)

NOVEMBER 16, 2011
Congress's Insider-Trading Non-Scandal
The scandal isn't what they do with their own money, but what they do with ours.
By, HOLMAN W. JENKINS, JR., columnist

[<<< corrupt bastard]

… PUT US IN THE CATEGORY OF THE NONPLUSSED TO MILDLY CONTEMPTUOUS OVER THE NEWEST FUSS. Congressmen and their staffs AREN'T INSIDERS in the classic sense, working for companies and holding a fiduciary duty to shareholders. …

…
In Sunday's now-famous ‘60 minutes’ report, based on a book by the Hoover Institution's Peter Schweizer, the term "insider information" is used even more loosely. With apologies to our friends at CNBC, we'll call it the CNBC effect. …

CBS and Mr. Schweizer are taking excessive advantage of the audience's naiveté [SEE THIS? If you are outraged by the ‘60 minutes’ reporting, it is because you are NAIVE]. …

…
A few studies purport to show that Senate and House Members earn more than average on their stock investments, BUT THE RESULTS ARE UNCONVINCING. MORE PERSUASIVE IS RECENT WORK SUGGESTING THAT CONGRESSMEN UNDERPERFORM THE MARKET [Later in this blog entry, I will show how this "recent work" is a case of genuine academic fraud] for all the reasons that most active traders do…

Context of WSJ article:  Unlike of other mainstream media like New York Times, the Wall Street Journal has disproportionally large amount of business men/women readers.  These business people are highly likely to hear about last Sunday’s shocking ‘60 minutes’ piece, either through emails or conversations with their fellow workers.  This opinion piece is a laser guide bit of disinformation aimed at these individuals, and its purpose is kill the congressional insider trading story by convincing them that there is no scandal (making them unlikely to watch last Sunday’s ‘60 minutes’ or learn about congress’s corruption).

Furthermore, beyond being insulting and misleading (attacking '60 minutes’, calling people naive for being upset, etc), the column above is also fundamentally dishonest in its attempt to downplay congress insider trading.

Wall Street Journal Dishonesty

The WSJ article’s dishonesty is best captured in the phrase blow:

“A few studies purport to show that Senate and House Members earn more than average on their stock investments, but the results are unconvincing. More persuasive is recent work suggesting that congressmen underperform the market”

Let’s take a closer look at studies which the WSJ calls “unconvincing” and “More persuasive”.

1)  The “unconvincing” “studies”:

This refers to two extensive studies by 4 college professors (Alan J. Ziobrowski of Georgia State University, James W. Boyd of Lindenwood University, Ping Cheng of Florida Atlantic University and Brigitte J. Ziobrowski of Augusta State University):

A)  A 2004 study titled Abnormal Returns from the Common Stock Investments of the US Senate which showed that US Senators' stock portfolios annually outperformed the market by 12%.  (peer-reviewed and published in the Journal of Financial and Quantitative Analysis)
B)  A 2011 study titled Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives which found that the investments of House Representatives outperformed those of the average investor by 6 percent.  (peer-reviewed and published in the journal Business and Politics)

These two studies are credible, peer-reviewed (independently fact checked) scientific proof that congress engages in insider trading.

2)  The “more persuasive” “recent work”

This refers to a paper by two Harvard graduate students (now assistant professors), Andrew Eggers and Jens Hainmueller, titled Political Capital: The (Mostly) Mediocre Performance of Congressional Stock which found that, between 2004 and 2008, congress underperformed the market by 2 to 3 percent annually and therefore wasn’t insider trading.  The project funded was Harvard's Institute for Quantitative Social Science (IQSS), with which both authors are affiliated.  (NEVER PEER-REVIEWED OR PUBLISHED) 

First off, this “more persuasive” paper has never been peer-reviewed (independently verified) or published.  While the two “unconvincing” studies have both successfully been through a long peer-reviewed process where their findings are checked by multiple independent parties, Andrew Eggers and Jens Hainmueller haven’t even been trying.  Instead they just continually update their paper (at least 7 versions so far) so that it appears “new”.

Second, there are reasons to suspect the integrity of the paper's conclusion.  In all their work, Andrew Eggers and Jens Hainmueller appear primarily concerned with convincing readers that congress is corruption-free, discrediting the "previous widely-discussed academic study" which suggest otherwise, and preventing anti-insider trading legislation from passing (“it’s not needed”).  There are also other issues: its findings defy common sense, the arguments/theories it advances are bizarre (congressmen knowingly make losing investment to please donors), etc…  Furthermore, the paper is authored and paid for by Harvard, where the corruption runs deep (See *****The Subversion Of Economics*****), especially academic prostitution (accepting money in exchange for authoring papers/studies supporting a "desired" conclusion).

Consider how wrong this is: The Wall Street Journal, ignoring last Sunday’s ‘60 minutes’ and two peer-reviewed studies, is promoting the unverified work of two Harvard graduate students, calling its suspect conclusion “persuasive”.  There is no innocent explanation for this.

The WSJ’s dishonesty in this case isn’t a harmless mistake that can be overlooked.  The paper authored by these two Harvard graduate students happens to be a genuine work of academic fraud (see below).

Exposing some Harvard Fraud

It takes little time and effort to debunk Political Capital: The (Mostly) Mediocre Performance of Congressional Stock by Andrew Eggers and Jens Hainmueller.  A simple look through the various drafts of this the Harvard paper is enough to destroy its credibility.

Various version of this Harvard paper:
March 27, 2009
April 1, 2009
April 9, 2009
July 16, 2010
September 12, 2010
October 14, 2010
June 15, 2011

A quick glance through the links above shows that these two happy Harvard graduate students have been having a lot of fun with their numbers.  For example, what happens to the figures for Table 1: Top 50 Members by Number of Stock Holdings between April 1, 2009 and April 9, 2009 is particularly ugly.

However, it is what Andrew Eggers and Jens Hainmueller did between July 16, 2010 and September 12, 2010 that destroys confidence in their work:  They rigged their data to drastically alter their conclusion. 

I will let their work speak for itself:  (if links go dead, they will replace them)

Political Investing: The Common Stock Investments of Members of Congress 2004-2007
July 16, 2010

Data used:
4 years (2004-2007)
68,346 transactions
3,132 unique companies

Conclusion:
We find that the Congressional portfolio performs about as well as the market; the EXCESS RETURN is an insignificant minus .4 percent [in the period 2004-2007]

Political Investing: The Common Stock Investments of Members of Congress 2004-2008
September 12, 2010

Data used:
5 years (2004-2008) [increases 1 year (+25 percent)]
111,101 transactions [increases by 42,755 (+63 percent)]
2,581 unique companies [decreases by 551 (-35 percent)]

Conclusion:
… members of Congress are poor investors: we find that that the Congressional stock portfolio in this period underperforms market indices by 3-4% per year.

… even at the market peak in 2007 the Congressional portfolio was about 10% below the market on a cumulative basis since the start of 2004. 

The purpose of this bit of Harvard fraud is clear: Andrew Eggers and Jens Hainmueller aim to reassure Americans concerned and keep them blissfully unaware of what crimes are going on in the halls of Washington DC. Just read their Executive Summary:

Executive Summary of Political Capital: The (Mostly) Mediocre Performance of Congressional Stock Portfolios, 2004-2008.
…
OUR FINDINGS MAY BE REASSURING TO CITIZENS CONCERNED ABOUT CORRUPT BEHAVIOR IN CONGRESS. Members of Congress may turn their political positions into capital gains in isolated instances, but THE OVERALL POOR PERFORMANCE OF THEIR STOCK PORTFOLIOS SUGGESTS THAT SUCH SELF-SERVING BEHAVIOR IS NOT WIDESPREAD. … CITIZENS SHOULD BE HAPPY …

Anyone calling to this academic fraud “persuasive” is either corrupt or criminally incompetent.

Why the mainstream is either ignoring or trying to kill this story

So why is the mainstream ignoring this story (ie: New York Times) or trying to kill it (ie: Wall Street Journal)?  The short answer is: TO HIDE THEIR GUILT.

By raising awareness of congressional corruption, Last Sunday's '60 minutes' also exposes two of mainstream media's big sins.

1)  The failure (year after year) to inform Americans about the corruption of their congress

Washington insider trading has been going on for decades.  IT WASN'T A SECRET.  Blogs and alternative media have been covering it for years.  For example, Minyanville reported that Insider Trading Laws Do Not Apply to Members of Congress ten months ago.

Insider Trading Laws Do Not Apply to Members of Congress. No, Seriously.
By Justin Rohrlich Feb 17, 2011 1:50 pm

And not only are Senators and Congressmen immune, their aides are, too.

On March 8, Galleon Group founder Raj Rajaratnam will stand trial on insider trading charges …

However, if Rajaratnam had been a US Senator rather than a $7 billion hedge fund manager when he made the trades in question, there would be no criminal proceedings at all. Believe it or not, the Securities and Exchange Act does not apply to members of Congress, according to Craig Holman, legislative representative at government watchdog group Public Citizen.

“Any inside, non-public knowledge they gain can be acted upon,” Holman tells Minyanville. “SOME OF THE STORIES ARE JUST… BREATHTAKING.”

Surprised? You may be even more surprised to learn that congressional staffers and lobbyists are also exempt from insider trading regulations.
…
CONGRESSIONAL INSIDER TRADING IS NOT A NEW PHENOMENON; a handful of media reports have surfaced over the past several years, but, as Holman says, THE STORY "NEVER REALLY STUCK.”
…

The reason why the congressional insider trading story "never really sticks" should be obvious.  Just look at the mainstream media’s reaction to last Sunday’s ‘60 minutes’:  the silence of the major news organizations like the New York Times, the Wall Street Journal hit piece above, etc…  How is a story supposed to “stick” if all major media either ignore it or attack it?

THINK ABOUT IT:  The rampant Washington insider trading shown on ‘60 minutes’ (the criminal trading shown in the video at the beginning of this entry) has been going on for decades.  Clear as day fraud happening again and again, year after year.  This Washington corruption simply would not be possible without an equally corrupt mainstream media, willing to look away again and again, year after year.

2)  Convincing Americans that “congress is an honest institution”

Not only has the mainstream media ignored congressional corruption for decades, it has also actively published/broadcast stories which suggest the opposite: congress is an honest institution.  This subtle propaganda works because (or as long as) people trust mainstream media.  The result is that most Americans have an unnaturally favorable of view of congress and are shocked by the reality (last Sunday's '60 minutes').

This constant portrayal of "congress is an honest institution" hasn’t ended.  Below is a short clip from NBC Nightly News with Brian Williams which was aired Thursday.  Four days after the damning expose on '60 minutes’, this is the story about congress that NBC Nightly News chose to cover:

NBC Nightly News with Brian Williams: Naughty or Nice? Senate Gets Secret Santa


Implications of video clip:  Congress is so corruption-free that the only news worthy story to be found is this ridiculous “Senate Gets Secret Santa”.  (After all, if there were reports of rampant corruption in congress, the honest mainstream media have covered that instead, right?)  The underlying message is the same as in the fraud Harvard paper above: "There is no corruption in congress. Citizens should be happy." 

Context of video clip:  The timing of this “congress is honest” NBC Nightly News segment is no accident:  It is declaration that the congressional corruption revealed in ‘60 minutes’ is non-story.

Unless the uproar created by last Sunday's '60 minutes' dies down, it will quickly become obvious that mainstream media is just as (if not more) corrupt then congress itself.  That is why mainstream media wants this story to die so badly.

The media corruption revealed by last Sunday’s ‘60 minutes’

In order to hide the ugly reality (last Sunday's '60 minutes'), the mainstream media publishes/broadcasts so many untruth that it can’t be called lying anymore: It amounts to a “false reality”.  The unreal “Senate Gets Secret Santa” segment is an example of this.

This is far from the first time NBC Nightly News broadcast a "false reality" (“congress is honest”) to kill an undesired story.   Last year, when 60 minutes did a powerful segment on the heartbreaking unemployment in Silicon Valley (Oct 24), NBC Nightly News responded with its own segment titled turning mid-life crisis into opportunity (Nov 10) which showed that losing your job isn’t that big a deal.  (See 60 minutes (Reality) VS Nightly News (Propaganda) for more on this)

Also, it isn’t just stories by ‘60 minutes’ that NBC Nightly News tries to discredit.  For example, KTRK-TV/DT broke the story last year about a man boarding a plane with loaded gun in carry-on (Dec 17) suggesting a complete breakdown of the nation’s airport security.  Three days later, NBC Nightly News aired expanding ranks air marshals mind unfriendly skies (Dec 17) about what a great job the TSA is doing in keeping America safe.  The way NBC Nightly News shamelessly misleads Americans, telling them “everything is fine” in the face of terrible problems, is amazing.

The “false reality propaganda” extend beyond news networks

Never covered in the media is the fact that all major commercial television networks collaborate with the government to incorporate the “right messages” (propaganda) into the story lines of popular, prime time programs (family guy, Beverly Hills 90210, etc)) (See how the White House and the media package government propaganda as entertainment).

The gap between the reality and what is shown on popular televisions shows is particularly bad.  Here are three examples:

1)  US hospitals in television medical drama like “Private Practice” are portrayed as being the envy of the world.  The reality is that US hospitals that can't get their hands on a growing list of routine and life-saving drugs.  Government price controls have created a national drug shortage which is escalating.  (The shortage of cheap cancer medications is particularly obscene.)

2)  In television crime dramas like "Castle," all forensic testing (DNA, etc…) is done within days, if not hours.  The reality is that police often wait months, even years, to get fingerprint results or gunshot residue tests (see Backlogged files hamper law enforcement and Forensic delays put justice on hold).

3)  In television crime dramas like "CSI," the nation's morgues are staffed by highly trained medical professionals equipped with the most sophisticated tools of 21st-century science.  The reality is extremely different.  Read Medical Examiners In America: A Dysfunctional System and be astounded at how bad the situation really is.  (Late last year, a doctor in a suburb of Detroit autopsied the body of a bank executive pulled from a lake -- and managed to miss the bullet hole in his neck and the bullet lodged in his jaw.) 

Have you ever watched a TV series where congress filled with rampant corruption?  Or a TV series showing the US government co-operating with and selling weapons to drug dealers? (The US government has been doing both (it is the biggest scandal plaguing the Obama administration. See *****Update On Growing Gunrunning Scandal*****).  Most Americans have no idea how badly their understanding of the world has been distorted…

What Comes Next in the '60 minutes' insider trading scandal

This process by which shocking stories about government corruption (like last Sunday's ‘60 minutes’) are killed off is best explained by Gary Webb’s article, the mighty wurlitzer plays on, which describes how his "Dark Alliance" series was discredited.

First some background:  Gary Webb was award-winning investigative reporter (1990 Pulitzer Prize) who focused on government and private sector corruption.  His 1996 "Dark Alliance" series was a piece of investigative reporting as shocking as last Sunday’s ‘60 minutes’ (CIA involvement in drug trafficking during Iran-Contra).

…
With the help of recently declassified documents, FBI reports, DEA undercover tapes, secret grand jury transcripts and archival records from both here and abroad, as well as interviews with some of the key participants, we will [Dark Alliance] show[ed] how [in the 1980s] a CIA-linked drug and stolen car network -- based in, of all places, the Peninsula -- provided weapons and tons of high-grade, dirt cheap cocaine to the very person who spread crack through LA and from there into the hinterlands.
…

The first reaction to any major undesired news report (like Dark Alliance) is dead silence.  This will normally kill off the (making it “quickly withers and dies, like a light-starved plant”)

…
After four months of writing, rewriting, editing, and reediting, my editors pronounced themselves satisfied and signed off.  The first installment of Dark Alliance appeared simultaneously on the streets and on the Web on August 18, 1996.

THE INITIAL PUBLIC REACTION WAS DEAD SILENCE.  No one jumped up to deny any of it.  Nor did the news media rush to share our discoveries with others.  The stories just sat there, as if no one seemed to know what to make of them.
…

… Customarily, IF THE REST OF THE NATION'S EDITORS DECIDE TO IGNORE A PARTICULAR STORY, IT QUICKLY WITHERS AND DIES, LIKE A LIGHT-STARVED PLANT.   With the exception of newspapers in Seattle, some small cities in Northern California, and Albuquerque, Dark Alliance got the silent treatment big time.  NO ONE WOULD TOUCH IT.
…

However, sometimes undesired stories (like Sunday's ‘60 minutes’ reporting) are so powerful that they manage to spread via the internet and other alternative media despite mainstream news blackouts…

…
But no one had counted on the enormous popularity of the Web site.  Almost from the moment the series appeared, the Web page was deluged with visitors from all over the world.  …

Once Dark Alliance became the talk of the Internet (in large part because of the technical wizardry and sharp graphics of the Web page), talk radio adopted the story and ran with it.  For the next two months, I did more than one hundred radio interviews, in which I was asked to sum up what the three-day long series said in its many thousands of words.  …

… This was about the time I realized the wind speed of the shit storm I had kicked up.

The rumbles the series was causing from black communities was unnerving a lot of people.  College students were holding protest rallies in Washington, D.C., to demand an official investigation.  Residents of South Central marched on city hall and held candlelight vigils. … Black civil rights activists were arrested outside the CIA after sealing off the agency's entrance with yellow crime scene tape.  The story was developing  a political momentum all of its own, and it was happening DESPITE A VIRTUAL NEWS BLACKOUT FROM THE MAJOR MEDIA.
…

… and that is when the mainstream media is forced into attack mode.

… the way the mainstream press finally did respond to Dark Alliance … [was] … something columnist Alexander Cockburn would later describe in his book White Out as "ONE OF THE MOST VENOMOUS AND FACTUALLY INSANE ASSAULTS...IN LIVING MEMORY."

…
Ultimately, it was public pressure that forced the national newspapers into the fray.  Protests were held outside the building by media watchdogs and citizens groups, who wondered how the Los Angeles Times building by media watchdogs and citizens groups, who wondered how the Times could continue to ignore a story that had such an impact on the city's black neighborhoods.  In Washington, black media outlets were ridiculing the Post for its silence, considering the importance the story held for most of Washington's citizens.

When the newspapers of record spoke, THEY SPOKE IN UNISON.  Between October and November, the  Washington Post,  the New York Times and the Los Angeles Times published lengthy stories about the CIA drug issue, but spent precious little time exploring the CIA's activities.  Instead, my reporting and I became the focus of their scrutiny.  After looking into the issue for several weeks, the official conclusion reached by all three papers: MUCH ADO ABOUT NOTHING.  No story here.  Nothing worth pursuing.  The series was "flawed," they contended.  …  [ie: WSJ’s Congress's Insider-Trading Non-Scandal is a preview of what’s to come]

… the attacks from the other newspapers had taken the wind out of my editors' sails.  Despite the advances we were making on the story, the criticism continued.  We were being "irresponsible" by printing stories … suggesting CIA complicity without any admissions of "a smoking gun."  The series was now described frequently as "discredited," EVEN THOUGH NOTHING HAD SURFACED SHOWING THAT ANY OF THE FACTS WERE INCORRECT.  …

…
The funny thing was, despite all the furor, the facts of the story never changed, EXCEPT TO BECOME MORE DAMNING.  But the perception of them did, and in this case, that is really all that mattered.  Once a story became "discredited," the rest of the media shied away from it.  Dark Alliance was consigned to the dustbin of history, viewed as an Internet conspiracy theory that had been thoroughly disproved by more responsible news organizations.

…
Do we have a free press today?  Sure we do.  It's free to report all the sex scandals it wants, all the stock market news we can handle, every new health fad that comes down the pike, and every celebrity marriage or divorce that happens.  But WHEN IT COMES TO THE REAL DOWN AND DIRTY STUFF -- stories like [congressional insider trading,] Tailwind, the October Surprise, the El Mozote massacre, corporate corruption, or CIA involvement in drug trafficking -- THAT'S WHERE WE BEGIN TO SEE THE LIMITS OF OUR FREEDOMS.  In today's media environment, sadly, SUCH STORIES ARE NOT EVEN OPEN FOR DISCUSSION.
…

If the last Sunday’s ’60 minutes’ doesn't quietly fade away, expect a lot more dishonest reporting like the Wall Street Journal column above. 

The difficultly killing the congressional insider trading story this time

The presidential election is complicating mainstream media silence the congressional insider trading.  Part of the effort to keep Americans constantly in the dark involves making sure big news makers don't talk about undesired topics and sidelining news makers who do.  Since the biggest newsmaker is the president of the United States, the mainstream media always aggressively winnows the presidential election field down to “status quo” candidates, those who don’t talk about unnecessary things (like congressional corruption).  However, this election cycle there is a republican candidate talking about the congressional insider trading whose candidacy refuses to die:  Ron Paul.

Ron Paul Slams Congressional Insider Trading


Ron Paul also speaks out on a number of other subjects not covered by mainstream media.  For example, he is one of the few people in the country speaking out against the killing of American citizen Anwar al-Awlaki as part of a program under which American citizens far from any battlefield can be executed by their own government without judicial process.  (As a blogger writing about government corruption, I do not like this “unreviewable power to kill any American”)  It will be impossible for the media to keep ignoring issues like these if President Paul is giving speeches on them.

Mainstream media has been trying very hard to kill Ron Paul’s candidacy.  He has become a walking media blackout (See *****The Extraordinary Lack Of Coverage Of Ron Paul*****): wherever he goes, the media does not follow.  The media dismisses Ron Paul, no matter how well he does in straw polls, or how much money he raises, or how he consistently outpolls “front runner” candidates.  As the Atlantic Wire reports, this Ron Paul media blackout has been officially confirmed.