Audit Notes: Journal Register, Clinton and ‘can’t find workers,’ AP flop

The bankrupt company's owner isn't doing well itself

Read Martin Langeveld’s super-sharp take for the Nieman Lab on what the Journal Register bankruptcy means and what might be behind it:

But it’s now clear that the “stacking of digital dimes” to replace digital dollars hasn’t happened fast enough. And if there actually was an Alden-led strategy at Digital First to truly capitalize on the combination’s clout through new mergers and acquisitions, it failed…

In any event, in that comment on Doctor’s post, I suggested the alternative: It’s a not a roll-up but a mop-up, a way to cheaply buy the remaining assets, sell the hard assets that can be sold, squeeze the last profits out of those that can’t, and call it a day. (Pretty much what Mitt Romney and Bain Capital would do about one-third of the time when they couldn’t make the deal roll up.)

With a second bankruptcy in the works, I believe that’s what it’s now come to at JRC, MNG, and Digital First. While Warren Buffett may see value in acquiring newspaper assets, Alden seems more interested in squeezing the mop, rather than investing in any more.

Langeveld notes that JRC owner Alden Global Capital has recently had poor overall results and that its funds under management have plunged. And he reports that Alden has been bailing out of those investments, calculating that its newspaper holdings have dropped from roughly $750 million last summer to $300 million today.

— The Washington Post’s Dylan Matthews has a nice fact-check of a Bill Clinton whopper in Wednesday’s speech that perpetuates the “employers can’t find workers” meme:

One of the few outright false statements in Bill Clinton’s speech last night was his claim that unemployment remains high because workers just don’t have the right skills. “There are already more than 3 million jobs open and unfilled in America,” he said, “Mostly because the people who apply for them don’t yet have the required skills to do them.” The overwhelming weight of the research says this isn’t what’s happening.

Granted, Clinton is hardly alone in thinking that a “skills mismatch” — that is, a gap between the skills employers want, and the one unemployed people have — explains a lot of the jobs crisis. Nobel laureate Michael Spence, for instance, has espoused this view on occasion. This interpretation is opposed by Keynesians who insist that high unemployment is an outgrowth of low demand, and that if the economy as a whole were firing on all cylinders, unemployment would fall in turn…

The third study, by Jesse Rothstein of the University of California at Berkeley, found, like Lazear and Speltzer, that unemployment rose about the same amount across all education groups. He also tries to figure out whether wages have increased. If employers are having a hard time finding skilled workers, they should increase their wages. Did they? No — not even for new job postings, and not even if you correct for changes in the number of people employed by each industry due to the Recession:

— But boy does the Associated Press fall flat on its face in fact checking the Obama and Biden speeches. By my count, seven of the AP’s “fact checks” are bogus, including this one:

BIDEN: “After the worst job loss since the Great Depression, we’ve created 4.5 million private sector jobs in the past 29 months.”

THE FACTS: This seems to be a favorite statistic, because many speakers at the convention cited it. But it’s misleading — a figure that counts jobs from when the recession reached its trough and employment began to grow again. It excludes jobs lost earlier in Obama’s term, and masks the fact that joblessness overall has risen over Obama’s term so far.

As well, in the same 29 months that private sector jobs grew by 4.5 million, jobs in the public sector declined by about 500,000, making the net gain in that period about 4 million.

Uh, that’s not misleading, and it’s not cherry-picking, either. Biden specifically said “in the past 29 months,” and it’s true, as the AP admits. And it would be ridiculous to blame the Obama administration for jobs lost in the financial crisis it inherited, which is why it makes more sense to measure from the beginning of the recovery than it does from the beginning of the administration

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum. Tags: , , , ,