The truth and Twitter, part 2: Truth Default Swaps

newspaper

The truth will not be verified.

On January 28, 2009, a group of journalists and media professionals gathered in New York to talk about how the new social media were changing the field.  The conversation was abuzz with Twitter, which was creating fascinating new possibilities for breaking and sourcing stories.  Yet the same technology responsible for social media was killing off the newspapers by destroying their revenue base, and the rot was moving up the media’s trunk to broadcast and cable news.  No journalist’s job was safe now. The issue, said Jay Rosen, one of the panelists, was that no one knew how we were going to pay for “verified truth.”

This month, the Ann Arbor News will complete its transformation into “AnnArbor.com,” a Web-based news organization and community platform that brings together traditional journalism, digital media, and freelance bloggers.  The paper itself will be printed twice a week, on Sundays and Thursdays.  This is a first in the country for a market its size.

How AnnArbor.com intends to verify truth is not clear, but their constituents appear to have other concerns:  as of noon on June 27, 2009, the site’s “feedback forum” showed that “print the newspaper” had received 209 votes (more than any other category), while “ensure that all paid content is reviewed for accuracy” came in fifth at 80, and “investigate/analyze local issues” came in much further down the line at 21.

Perhaps some people prefer to go about verifying their own truth, on their own time, rather than trusting an institution to do so.  Social media is, after all, a DIY culture.  People who care most of about the accuracy of what they believe have always looked for news in multiple places:  papers, on-line, television, etc.  Some even read books (paper and Kindle).

At the 140 Characters Conference on June 16 and 17, Moeed Ahmad of Al-Jazeera gave a short presentation on how they used Twitter during the Gaza War of late 2008.  He discussed how they are working on a method to verify Tweets, by creating a table format for the feeds, including a column for each entry stating whether or not it was “verified.”  In the mayehm of the Iran uprising, the major news organizations in the US have started posting pieces from YouTube and reader-contributers, noting that the organization isn’t responsible for the content.  It’s the only compelling content that can be found; if you don’t post it, your competitor will.

What if reading the news became like swimming on a beach with no lifeguard?  I don’t think this is what will happen, but just consider the possibility.  Think about truth as a risk proposition:  what I believe should inform what I do, and therefore what I do is only as good as what I know.  Bad info = bad action.  This is not new – people always have worked very hard to create ways to mitigate the risk of believing things.

To deal with this risk, we create truth:  value-based, self-interested calculations about events that make sense to people and mitigate the dangers of belief and action.  Some of us construct that “sense” with a lot of external research (fact checking, asking friends, etc.).  Others rely on their internal “sense” of “The Truth” (moral codes, principle, etc.).  Still others mix these processes or switch from one to the other when it’s convenient.

Twitter doesn’t change the way we go about trying to verify truth in everyday life, nor will it stop us from needing to do so.  Rather, Twitter speeds up the capture and dissemination of information, magnifying both the potential gains and risks of believing something we read.

In a hyper-competitive world of individually-based incentives, motives, and pay-offs, Twitter allows people to become more risky.  Social media allow us to believe that we have dispersed the risk of belief through crowd sourcing, and in turn, we’re less worried about acting on the wrong information than not acting on the latest information.  Crowd sourcing creates something like “truth default swaps,” in which risk is carved up and transferred to so many people that it seems to disappear.

This works for a while, probably most of the time, but mistakes happen.  To wit:  the New York Daily News appears to have reported Farrah Fawcett’s death about a half hour before it actually happened, though it appears their reporting was accurate, if out of time.  Fortunately, the Daily News‘ slip in time did not involve the firing (alleged or real) of nuclear weapons.

On October 28, 2008, Blythe Masters, one of the young turks at J. P. Morgan who was involved in creating the mechanisms and structures of credit default swaps in the 1990s, addressed the Securities Industry and Financial Markets Association’s annual meeting.  She emphasized that “it is important to distinguish between tools and their users.  We need to remember that innovation has created tools for managing risk.”  Masters’ point was that people in the industry behaved as if they had eliminated risk, instead of recognizing that risk never truly went away.

The issue for journalists and citizens alike in the age of social media is similar.  In a world where information is flowing much more quickly than anyone’s ability to verify it, will we use the new technology to manage the risk of belief or ignore it?

Either way:  The truth will be derived.


Notes and Credits

This is the second of three posts on Twitter.  In the third and final installment, truthandrocketscience will get its own twitter account.  Also, I am a big fan of lifeguardless beaches.

The newspaper pictured at the top of the posting was generated with the Fodey.com newpaper generator, which I find especially useful when mixing up a new batch of truth.

The panel on January 28 was hosted by MediaBistro, a professional service organization for journalists.  The panel was called “Journalists and Social Media:  Sources, Skills, and the Writer,” and it featured Jay Rosen of NYU and his PressThink blog, Shirley Brady of BusinessWeek.com, Andy Carvin of NPR, and Rachel Sklar of The Daily Beast and other media endeavors.

Apart from the 300 or so people who have “voted” on the AnnArbor.com site, there are approximately 99,700 other Ann Arborites who have not yet registered their preferences (this grants that each of the votes is a unique individual, which is most likely not the case).  Perhaps they are reading the Detroit Free Press, on paper.   Or freep.com.

Further:  One might interpret the general interest in “print[ing] the newspaper” at the top of the feedback poll as a desire for all that old fashioned newspapers represented, which would automatically include “verified truth” and local investigative reporting.  But one would have to ask and explore more deeply to figure it all out.

My interest in the Ann Arbor News is partly personal.  I lived in Ann Arbor from 1988 to 1996, during which time I was a graduate student in political science.  Besides reading the News, I once appeared in the paper, in a photograph of Gulf War protestors in December of 1991.  I saved the paper that day, but somewhere along the way in moves around the upper Midwest and finally to New York, I lost it.  But every Christmas, when I unwrap the creche to put beneath my tree, I look at the the shreds of a 20-year old Ann Arbor News page and remember my days there.

The story of Blythe Masters and the group at J.P. Morgan who created the credit derivatives that figured so prominently in the financial crash of 2007-08 has been documented (and verified) by Gillian Tett of the FInancial Times, in her book, Fool’s Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe (Free Press, 2009).  Tett quotes Masters’ SIFMA address on p. 250.  It’s a gripping book that also has the best explanation of all the different complex securities that were part of the story:  credit default swaps, collateralized debt obligations, asset-backed securities, etc.  Tett was interviewed about the book by Terry Gross for Fresh Air.

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4 Comments

Filed under credit default swaps, ideas, journalism, media, risk, truth

4 responses to “The truth and Twitter, part 2: Truth Default Swaps

  1. Pingback: Defining Integrated Science Education and Putting it To Test

  2. John – Good post. I’m intrigued by the News’ effort to crowdsource fact-checking; but again, there will always be a demand for good journalism. The means by which it is distributed (and paid for) will change and is changing…but this should never be confused with the allegation that “journalism is dying.” newspapers represent one form of it; the Web represents its future and we’re still inventing that.

  3. jaredcormier

    Here is a TED talk you might like

  4. @Jared — thanks for that link. I will check it out soon. I like Clay Shirky’s work — have you read his book Here Comes Everybody? Really great.

    @Marcia — I don’t think AnnArbor.com is trying to crowd source, but I do think people there will miss the paper (and all that papers stand for, as I mention in the notes to the posting). I agree with you that journalism is really transforming, and I look forward to seeing what the future holds.

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