SABEW Demands Ideological Purity, Membership Conducts Maoist “Self-Criticism” Ritual

I did not really have a burning desire to join SABEW. To steal a page from Groucho Marx, I wouldn’t want to join any club that would have SABEW members as members.

The Society of American Business Editors and Writers (SABEW) met in Denver this week. Some months ago I had applied for membership on the grounds that the “Join SABEW” page on their website encourages application from those “writing, reporting, editing or overseeing business, financial or economic news for … online publications”. Given that DeepCapture had won the 2008 Weblogs Award for Best Business Blog, and that I have spent considerable time “writing, reporting, editing [and] overseeing business, financial, and economic news” on this website, I was curious to see if I would qualify within this rubric. Of course my application was denied, and while I considered crashing the party in Denver anyway, I decided against it, already confident that my experience would match George Orwell’s in a conference of British writers, described in his fine 1946 essay, “The Prevention of Literature”:

“About a year ago I attended a meeting of the P.E.N. Club, the occasion being the tercentenary of Milton’s Aeropagitica — a pamphlet, it may be remembered, in defense of freedom of the press. Milton’s famous phrase about the sin of ‘killing’ a book was printed on the leaflets advertising the meeting which had been circulated beforehand.

“There were four speakers on the platform. One of them delivered a speech which did deal with the freedom of the press, but only in relation to India; another said, hesitantly, and in very general terms, that liberty was a good thing; a third delivered an attack on the laws relating to obscenity in literature. The fourth devoted most of his speech to a defense of the Russian purges. Of the speeches from the body of the hall, some reverted to the question of obscenity and the laws that deal with it, others were simply eulogies of Soviet Russia… political liberty was not mentioned… Significantly, no speaker quoted from the pamphlet which was ostensibly being commemorated…

“There was nothing particularly surprising in this. In our age, the idea of intellectual liberty is under attack from two directions. On the one side are its theoretical enemies, the apologists of totalitarianism, and on the other its immediate, practical enemies, monopoly and bureaucracy. Any writer or journalist who wants to retain his integrity finds himself thwarted by the general drift of society rather than by active persecution. The sort of things that are working against him are the concentration of the press in the hands of a few rich men, the grip of monopoly on radio and the films…Everything in our age conspires to turn the writer, and every other kind of artist as well, into a minor official, working on themes handed down from above and never telling what seems to him the whole of the truth… In the past, at any rate throughout the Protestant centuries, the idea of rebellion and the idea of intellectual integrity were mixed up. A heretic — political, moral, religious, or aesthetic — was one who refused to outrage his own conscience. His outlook was summed up in the words of the Revivalist hymn:

Dare to be a Daniel
Dare to stand alone
Dare to have a purpose firm
Dare to make it known

“To bring this hymn up to date one would have to add a “Don’t” at the beginning of each line.”

Orwell’s disappointment in the meek conformity of the writers of his day mirrors DeepCapture’s in the business journalists of our own. A close reading of much of what has passed for business journalism in recent years reminds one of nothing so much as Soviet-era artists dutifully churning out dozens of murals of square-jawed workers striding boldly into the future, or hack reporters extolling the virtues of this or that ball-bearing plant, perhaps criticizing the occasional apparatchik who has fallen from favor with the masters, but entirely incapable of independent thought which questions the system itself, a system in whose benefits those reporters derive modest share.

As will be remembered by anyone who experienced that totalitarian era first-hand (as I did, living in mainland China for 12 months in 1983-1984), this ideological correctness generally expresses itself in a eagerness to confront with pronouncements, coupled with an incapacity to engage in even the mildest form of real debate.  I will illustrate this point by publishing an exchange I had some months back with the SABEW Pooh-Bahs, after I had submitted my application to SABEW wearing my (“2008 Weblogs Award for Best Business Blog”) journalist’s hat.


From: Dare, Donna D. [mailto:[email protected]] Sent: Saturday, January 24, 2009 11:49 AM
To: Patrick Byrne
Subject: Regarding Your Application for SABEW Membership

January 24, 2009

Patrick Byrne, Journalist

Deepcapture, LLC

I regret to inform you that your application for membership in the Society of American Business Editors and Writers Inc. has been denied.

The Membership Committee could not ascertain that your primary career responsibilities fit the criteria for membership.  You may submit evidence to support your application, such as story clippings or audio- or videotape.

Criteria for membership in SABEW (as stated in the organization’s bylaws) is as follows:

Membership in the Society shall be restricted to persons for whom a significant part of their occupation involves writing, reporting, editing or overseeing business, financial or economic news for newspapers, magazines, newsletters, journals, books, press or syndicate services, radio or television, online publications, or other media approved by the board and to teachers and students of business journalism or business media subjects at recognized colleges or universities or other organizations approved by the Society’s Board of Governors.  Members may retain full membership status, after being assigned to another news position at news organizations, even if the new position is not directly involved in business news.

If, in the future, you meet the criteria, we would be happy to reconsider your application for membership in SABEW.

If you wish to appeal this decision, please contact the SABEW office at [email protected].

SABEW did not process (and has destroyed) your credit card information submitted with the membership application on 1-18-09.

Thank you for your interest in SABEW.


Donna Dare

SABEW Membership Coordinator

Ph:  573-882-7862

Email: [email protected]


From: Patrick Byrne [mailto:[email protected]] Sent: Saturday, January 24, 2009 8:00 PM
To: SABEW; Dare, Donna D.
Subject: RE: Regarding Your Application for SABEW Membership

Donna Dare

SABEW Membership Coordinator

Dear Ms. Dare (& SABEW Membership Appellate Court),

I thank you for the courtesy of your response denying my application for membership in SABEW. Respectfully, however, and per your letter, I am writing to appeal this decision on the grounds that the reason you gave in your letter is not, in fact, supported by the bylaws from which you have quoted. The inconsistency can be seen in these two points:

*    In denying my application you wrote, “The Membership Committee could not ascertain that your primary career responsibilities fit the criteria for membership.”

* The paragraph from your organization’s bylaws you have cited in support of this position reads: “Membership in the Society shall be restricted to persons for whom a significant part of their occupation involves writing, reporting, editing or overseeing business, financial or economic news for newspapers, magazines, newsletters, journals, books, press or syndicate services, radio or television, online publications, or other media approved by the board and to teachers and students of business journalism or business media subjects at recognized colleges or universities or other organizations approved by the Society’s Board of Governors.  Members may retain full membership status, after being assigned to another news position at news organizations, even if the new position is not directly involved in business news.”

As one can plainly see, in denying my application your membership committee has referred to “primary career responsibilities” as the standard. This position is not supported by the bylaws you have cited, which instead state that membership will be restricted “to persons for whom a significant part of their occupation involves…” These are clearly two quite different standards.

You have also written, “You may submit evidence to support your application, such as story clippings or audio- or videotape.” Towards that end, I submit the following:

1.      “The Darkside of the Looking Glass” – This online lecture and PowerPoint explanation of settlement failures in our equity system has been downloaded well over 1 million times, including over ten thousand times from IP’s associated with news organizations, and over 30,000 times from IP’s associated with the federal government.

2.      “Deep Capture: The Movie” – This presentation, performed in October, 2007 in front of 800 hedge funds and members of the press, has been viewed over 50,000 times.

3.      The website I founded, , has recently received the 2008 Weblog Award for the #1 Business Blog on the Internet (this is, in fact, the largest blog poll in existence).

4.      My individual writings are organized there as, “Deep Capture: The Explanation”, to which your committee may refer.

5.      Here you will find a selection of over two dozen appearances I have made on CNBC, Bloomberg, and Fox Business.  Some of these relate to my corporate duties, but many of these appearances make little to no reference to those duties, and instead seek my opinions on matters of business and economics.

6.      As you are perhaps not aware, my investigation and exposure of deep systemic problems in our nation’s stock settlement system became the subject of a Bloomberg Special Report that was itself nominated for an Emmy, Long Form Investigative Journalism.

In sum, it is clearly correct to say that “a significant part of [my] occupation involves writing, reporting, editing or overseeing business, financial or economic news for … newsletters, … radio or television, online publications…” For this reason, I respectfully challenge the membership committee’s decision and reasoning, as elaborated upon above.

Of course, I am not blind to the possibility that the content of my reporting (much of which is critical of other members of SABEW) is what discomfits the members of the Membership Committee. However, I have reviewed the bylaws of your organization and find no evidence of an ideological standard which applicants must meet. Please inform me if I am in error on this point.

Until then, I remain,

Your humble servant,

Patrick M. Byrne, PhD



From: Kevin Noblet [mailto:[email protected]] Sent: Monday, January 26, 2009 9:01 AM
To: Patrick Byrne
Cc: Donna Dare
Subject: RE: Regarding Your Application for SABEW Membership


Donna forwarded your message to me. In SABEW’s view, not all business blogs qualify as news publications just as all writing and editing doesn’t qualify as journalism. From its standpoint your activities and those of DeepCapture seem closer to corporate public relations, and SABEW isn’t open to PR professionals _ or of course to retail business executives.

I hope this makes the decision clearer.

Donna also had forwarded me Judson Bagley’s message and I responded to him along similar lines.


Kevin Noblet

Secretary and Membership Committee Deputy Chair


From: Patrick Byrne
Sent: Monday, January 26, 2009 4:36 PM
To: [email protected]
Cc: Donna Dare
Subject: RE: Regarding Your Application for SABEW Membership


Respectfully, could you explain how DeepCapture is “corporate public relations”? We are performing analyses on data that no one else has obtained; these analyses are requested by national news organizations and numerous congressional reps, senators, and various other federal bodies; our  analyses of flaws in the nation’s settlement system have become fodder for numerous congressional demands of the SEC; our publication of secretly-recorded tapes of journalists planning a cover-up, and our unearthing of emails documenting the relationships among hedge funds and journalists, are apparently of strong interest to many others in this profession (judging from the volume of traffic we get from news organizations).  Clearly, the vast majority of DeepCapture’s activities have precisely 0 to do with my corporate day job as a “retail business executive.”

Is this truly the fig leaf behind which your organization is going to hide? Why not write into the bylaws a rule which demands ideological purity? It would save all this back-and-forth at least.




Then, as no answer was forthcoming (or ever came), I then sent this:


From: Patrick Byrne
Sent: Wednesday, January 28, 2009 1:23 PM
To:[email protected]
Cc: ‘Donna Dare’
Subject: RE: Regarding Your Application for SABEW Membership

Dear Kevin,

Here is some more of that “corporate public relations” you don’t want to miss. This one is from Mark Mitchell.

Strange Occurrences, and a Story about Naked Short Selling




Now the truth is, I did not really have a burning desire to join SABEW. To steal a page from Groucho Marx, I wouldn’t want to join any club that would have SABEW members as members.  That said, I thought it would be interesting to find out if a profession which professes a commitment to toleration and pluralism would display the same commitment it asks of society, or would it respond, as SABEW ultimately did, like apparatchiks threatened by the possibility of criticism? I confess that my interest was pretty negligible, so confident was I in the likely result, but I did think it a box worth checking off.

As I mentioned, this past week the SABEW conference in Denver went on without me. Something occurred there, apparently unscripted, which reminds me of the aftermath of Jim Cramer’s appearance on Jon Stewart’s The Daily Show. In any earlier age Cramer’s exposure there would have meant his disappearance from public life and, possibly, the tarnishing of his network beyond recovery, but ours is an age in which shame and accountability are wholly absent (as P. J. O’Rourke wrote, “If you say a modern celebrity is an adulterer, a pervert and a drug addict, all it means is that you’ve read his autobiography.”) Since that night, Cramer has publicly spun his appearance along the lines of, They say we could have done more to see this coming, and in the future we’ll try harder, apparently banking on the fact that many people did not see, or will not remember, what really happened: Jon Stewart dismembered Cramer not for “not trying hard enough”, but instead, for taking part in crimes such as stock manipulation, and for relying upon shill journalists in his schemes to cheat the public. Those are two quite different things, and in any sane world, Cramer would not be permitted to rewrite history so effortlessly.

By press accounts, this past week’s SABEW Denver conference saw the apparatchiks employing the same kabuki dance, the same confessions and self-criticisms directed to the wrong issues. On April 27, this Reuters story appeared (“Did the Watchdog Forget to Bark?” ) describing the scene:

The opening panel at the Society of American Business Editors and Writers annual meet in Denver addressed an interesting question: Did 9,000 business journalists blow it when it came to ringing the alarm bells on the financial meltdown?

The five SABEW panelists — The New York Times’ business editor Larry Ingrassia, Columbia Journalism Review critic and former Wall Street Journal reporter Dean Starkman, personal finance columnist Jane Bryant Quinn, Emmy-winning former ABC News investigative reporter Allan Dodds Frank and Greg Miller, a professor at the University of Michigan — agreed that the financial press could have done more. Newspapers, wire services, magazines and television stations could have been more aggressive…”

On that same day The Colorado Independent (“A Center for Independent Media”) wrote, “Business Reporters Confess News Sins While the US Economy Collapsed“.

“In a windowless room at the Westin Hotel in downtown Denver, leading business journalists and editors explained how the media “blew it” in covering the economic meltdown. They admitted, on one hand, to falling under the sway of free-market ideology and celebrating risk-taking financial leaders and, on the other, to missing the complex story of the rupturing system by only reporting it in parts and to almost no effect for the past decade.

Although not planned as confession, the discussion, which kicked off the annual conference of the Society of American Business Editors and Writers (SABEW), quickly descended into an unburdening, with the panelists taking turns voicing their own explanations and excuses for the failure. Former Wall Street Journal managing editor and current chief Paul Steiger moderated the impromptu journalistic penitence.

‘We drank the Kool-Aid,’ said Jane Bryant Quinn, personal finance columnist for Bloomberg and Newsweek. ‘We believed that free markets were the best kind [of markets].’ She said it had become ‘unfashionable’ over the last three decades to write about regulation, so they didn’t.”

Apparently, as far as SABEW’s membership is concerned, the events of recent months reflect only a lack of being suitably “aggressive”, of not “hav[ing] done more”, and, as always, of having been taken in by “free-market ideology.” Those are the issues over which SABEW members now wring their hands, it being apparently unthinkable (just as it is with Jim Cramer) that some of their membership deeply transgressed all notions of journalistic ethics by growing so close to favored hedge fund sources that they became shills (e.g., Bethany McLean), and when their sources committed crimes, those journalists threw the credibility of their publications into denying, downplaying, masking, and apologizing for that crime (and now, on the basis of little evidence and no investigation, prematurely declare it resolved, as Floyd Norris did yesterday).

In Capitalism, Socialism, and Democracy, Joseph Schumpeter wrote, “Capitalism stands its trial before judges who have the sentence of death in their pockets. They are going to pass it, whatever defense they may hear.” Schumpeter neglected to mention that to this same jury, the possibility that the enforcement of regulation has been compromised due to the subversion of the mechanisms of enforcement, from the exchanges to the regulators to the politicians to, most disturbingly, the intellectual class itself (in particular, those who count themselves members of SABEW), is a possibility which that jury finds unthinkable, quite literally, and in the purest Orwellian sense.

If this article concerns you, and you wish to help, then:

1) email it to a dozen friends;

2) write SABEW’s Donna Dare and Kevin Noblet ([email protected] and [email protected]) asking them to make explicit the ideological policies to which SABEW demands its members conform (and please post as a copy of your email to them in the comment section below);

3) go here for additional suggestions: “So You Say You Want a Revolution?

(draft only)

  1. Patrick,

    This is one of your best contributions.

    What is most astounding is that the final reason given for the rejection of your application is your supposed status as a public relations man for Overstock. This from a group of ignoramouses who view their role as nothing more than providing a soapbox for various corporate big shots and “legendary investors” to spout generalities in support of their business and trading strategies.

    All of SABEW is nothing more than a public relations organization for big business and hedge funds. Expecting any SABEW member to have uncovered in advance the huge economic collapse is exactly the same thing as expecting a corporate PR firm to uncover fraud and malfeasance within the corporation that is paying their salaries. It just isn’t part of the job description.

    All of SABEW missed the crash not because they were “blinded by faith in free markets and derugulation”. They missed it because they long ago abandoned even the most basic and fundamental training they received back in Journalism 101, and, instead, substituted what they learned as cheerleaders.

  2. Patrick, you’d be interested to know that when this blogger (see below) ranked estimated IQ’s by intended major, journalism ranked very near the bottom of the ladder for degrees not offered by vocational schools…
    Bottom line is, you just don’t belong…

    Journalists tend to shy away from stories that require analytical skills to investigate and comprehend as they are ill equipped to deal with them. Unfortunately, the world has grown increasingly technical and complex, rendering traditional journalists increasingly irrelevant.

  3. Brilliant piece of writing. Of course they wouldn’t let you in. Your talent would so outshine their literary and journalistic shortcomings that you’d be an embarrassment to them. Can’t have that. Their mantra: “Dare to be mediocre.”

  4. Dr Byrne,

    I am reminded of a great quote from the late Col. John Boyd. You may not be familiar with Col. Boyd; but I am sure you are familiar with some of his work, as his OODA loop has permeated the business world. The story and work of John Boyd is not just that of a great strategist, but it is also an inspiring tale for any maverick who challenges conventional wisdom. This passage, from Robert Coram’s “Boyd: The Fighter Pilot Who Changed the Art of War”, illustrates perfectly the difference between yourself and the rest of the Deep Capture team on one hand, and the likes of SABEW and its members on the other:

    “Tiger, one day you will come to a fork in the road,” he said. “And you’re going to have to make a decision about which direction you want to go.” He raised his hand and pointed. “If you go that way you can be somebody. You will have to make compromises and you will have to turn your back on your friends. But you will be a member of the club and you will get promoted and you will get good assignments.” Then Boyd raised his other hand and pointed another direction. “Or you can go that way and you can do something–for your country and for your Air Force and for yourself. If you decide you want to do something, you may not get promoted and you may not get good assignments and you certainly will not be a favorite of your superiors. But you won’t have to compromise yourself. You will be true to your friends and to yourself. And your work might make a difference. “To be somebody or to do something. In life there is often a roll call. That’s when you will have to make a decision. To be or to do? Which way will you go?”

    The likes of SABEW have chosen to be somebody; the image of journalists. They are poseurs with a dangerous sense of self importance, who have been phoning it in for the last 15 years.

    You, Dr. Byrne, you have chosen to do something at life’s roll call. I thank you for that.

  5. SABEW rejects journalist who writes for website voted Best Business Blog. Sabew needs to learn how to read. They also need to amend their bylaws, to say, a business journalist is whoever we decide is one.

  6. FDIC Insures $4.7 Trillion in Deposits with a $13.6 Billion Deposit Insurance Fund.

    Think about it. You hold your cash with banks and your stock with brokerages and they take your money and stock and treat it as their own. They even lie to you, selling your shares, then still sending you a brokerage statement that make believes they are still there.

  7. DCN,

    I know Boyd and I have Coram’s book. Marvelous biography of a great man.


    Thanks for the kind words. I enjoy yours as well. I cannot wait until we have a social media component to DeepCapture, for folks like you.


  8. SABEW appears to be a pen (no pun intended) for sheep and swine.

    We all know that the swine are unwell lately, don’t we?

  9. Patrick,

    Perhaps they don’t want you in the membership because they are a corrupt organization and you can’t be a Made Man. The defining moment for SABEW was Dan Colaruso showing the type of journalism that they practice: biased, debased and vendictive. “We have barrels of ink…

    Their error is that you would put a trustworthy person in the group and they could use that to show that they weren’t corrupt. They twist their own rules to exclude you when it would be to their advantage to include you. They didn’t do any research into Deep Capture or they would have found that their reasons they gave were false. They found the articles about their various members who in an honest organization would be purged. This is another example that self-regulation doesn’t work.

    You make them uncomfortable. If Colaruso and his ilk think that they have accomplished something by excluding you, they are sorely mistaken. And it is all documented right here.

    When you were trying to warn people about the systemic risk that threatened the economy, Colaruso was trying to “crush you”. These particular writers didn’t just miss the causes of the meltdown, they were anxious to cover them up. If they hadn’t been aware of what was going on, they would not have tried so hard to discredit you and keep your message from being heard. The irony is that with the failing economy, many of the members are losing their jobs.

    There are journalists who have done a commendable job. Lucy Komisar and Pam Martens have been very vocal about the players and the risks. They are encyclopedic in the amount of information that they have uncovered and made public.

  10. Patrick et al could this be one of the smoking guns that are out there for our cause?

    Why The SEC Needs Investigation

    By Edward Manfredonia

    May 2nd, 2009

    [Policing Wall Street]

    The Securities and Exchange Commission (SEC) has been investigating illegal short sales in stock and the manipulation of the media by short sellers.

    Yet, the SEC itself needs careful investigation to expose how the SEC’s own several transgressions led us into the mess on Wall Street. If the Barack Obama Administration launched a website to invite whistleblowers to submit information, including documentation about the SEC’s coverups, so much information would flow that the site would crash within a few hours.

    Some background: A short seller is someone who sells stock of a publicly traded corporation without actually owning the shares of the publicly traded company. Short selling of a stock has become a topic of importance since the collapse of Bear Stearns in March 2008; the harbinger of the current financial debacle.

    Currently, the SEC has asked for comments regarding the short sale of stock and has a deadline of June 29, 2009 for comments. Yet, had the SEC always been diligent in its work, much of the problems we face today on Wall Street might have been prevented.

    My background includes being a trader on Wall Street many years ago as most readers of my column know. In 1999, I collaborated with a reporter named Gary Weiss, as a major source, for an article “Scandal on Wall Street,” that appeared in the April issue of Business Week. Afterwards Weiss seemed blinded by the light. We later had a falling out over some not-factual reporting that he did; this is a topic for a different column.

    While we were working on the 1999 article, in September 1998, we had frequent meetings in his office at Business Week. I was present on numerous occasions when Weiss received increasingly desperate sounding telephone call from a man named Manuel Asensio, a notorious short seller.

    Read the rest of the article here

  11. A (relatively) good thing that comes from a crisis is the ability to determine the character of individuals and organizations. Only under stress do we demonstrate our true nature.

    Some people when stressed use a technique to label their critics with the defect that they themselves possess. Calling you a “PR Professional” demonstrates what they really believe about themselves.

    Out of one side of their mouth they claim “we missed the crisis, we have to try harder”, out of the other side “we don’t want anyone who might actually help us try harder”.

    It reminds me of when I watch business TV – one commentator talks about how “the game has new rules”, another talks about how “we need to build confidence”. It doesn’t take a genius to understand they’re saying “we need to build a new confidence game”.

    Keep up the excellent work.

  12. Patrick, The only question I have at this stage is WHY have we not had any journalists fess up. The short term impact on news articles on securities prices is unrefutable. While I am sure that many journalists have been “captured” by their information sources ala Bethany and Chanos I mean she was handed a career making scandal on a silver platter re Enron however it seems” pay to print” HAS to be going on only because its almost impossible to detect without someone spilling the beans. I suspect it is almost as prevelant as insider trading yet except for the Buisiness Week article front running case almost a deacade ago there has been zero happening in terms of enforcement actions.

  13. One clear solution is to start your own “society”. SOJI or The Society of Journalistic Integrity. One bylaw should cover membership. “Print the truth and back it up with reliable sources!!”

  14. Gentlemen:
    STOP using the term NAKED SHORT SALE. Immediately! Purge it from yout public lexicon. Why?
    (1) people’s eyes glaze over: if you have to explain it, it doesn’t work
    (2) It serves the obfuscator’s purposes

    START using the term: COUNTERFEIT STOCK. People understand that.

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