JPMorgan Chase announced Jan. 24 that Jamie Dimon, the company’s chairman and chief executive officer, will earn $20 million for 2013, amounting to 74 percent more than he earned the year before. This was done even though the investment bank paid out more than $ 20 billion in regulatory fines last year and laid off 4,000 employees. The story in the New York Times posted on the day of the announcement called 2013 a year of “bruising legal setbacks” for JPMorgan and concluded with a quote from Boston University professor of law Cornelius Hurley: “It doesn’t reconcile for JPMorgan to be paying out billions in fines while its CEO’s compensation is nearly doubled. You usually get fired for that, not rewarded.”

As of Feb. 2, a majority of the 181 comments from readers had agreed with Hurley; they expressed rage at JPMorgan’s conduct, specifically, and Wall Street’s in general. The fact that not one executive on the Street had been criminally charged did not escape their notice, either. Among the more noteworthy comments were these:

• “He got a raise? He should be doing time as one of the architects of the Great Recession.”
• “Shame on them. Shame on us for letting it happen.”
• “The fines are chump change. Too big to fail, too big to break up, too big to indict.”
• “Another victory for the big banking robber barons.”

But a week later, one of journalism’s heavyweight business reporters weighed in with a column titled “Accounting for a Big Raise in Pay for JPMorgan’s Chief.” Written by Pulitzer Prize winner and best-seller author (“Den of Thieves”) James Stewart, currently also a professor of business journalism at Columbia University’s Graduate School of Journalism, it offers explanatory justifications for Dimon’s payday, primarily from experts on executive compensation at business schools, coupled with a touch of “understanding” at the outrage from, well, the common folks in Anytown, U.S.A.

“I can totally understand the populist backlash,” said Christopher Armstrong, associate professor of accounting at the Wharton School. “This level of pay is difficult for the average person to wrap their heads around. But there’s a lot to be said for pay for performance.” (JPMorgan managed, despite the fines, to show a profit of $18 billion on close to $100 billion in revenues for 2013.)

Armstrong’s condescension toward the “average person” misses the key element of the outrage. “Average” Americans may not know that Dimon’s compensation equals approximately that of 450 “average” American families. They do understand, however, that it strikes many as “obscenely excessive, “given Dimon’s contribution to the general welfare of our citizens. And even if they may not get their heads around the level of his pay, they don’t want him and similar Wall Street hustlers to get their hands around it.

The comments on the New York Times story about the announcement of Dimon’s pay suggest either that “average” persons have infiltrated the ranks of the newspaper’s readership, or that some readers had not yet been exposed to professorial justifications in Stewart’s column, such as (Dimon’s) “package seems to be structured the right way,” by David Larcker, a Stanford University Business School expert in executive compensation.

At the conclusion of his column, Stewart concedes that the “right way” in rewarding Wall Street executives lavishly could be approached another way: “Ultimately, the dismay over Mr. Dimon is probably about something deeper than any one person’s pay.”

That “probably” is a deliciously placed red flag. Stewart proposes that the dismay may arise from a “deep disconnect between Wall Street and Main Street.” You betcha, but how did that disconnect come about – and who benefits from it? And who suffers?

Matt Taibbi’s Jan. 30 column in Rolling Stone (“Jamie Dimon’s Raise Proves U.S. Regulatory Strategy is a Joke”) gets much closer to why much of the press and its readers denounced Dimon’s raise as a “moral obscenity.” They see it quite correctly, he wrote, as “another example of the serial coddling of Wall Street’s habitually overcompensated executive class.”

His conclusion makes for a much sharper and broader indictment than the vague “disconnect” hinted at by Stewart: “(Attorney General) Eric Holder and (President) Barack Obama still haven’t caught on. They decided last year to make a big show of punishing JPMorgan Chase as a symbol of bank corruption, then forgot to punish the actual people who oversaw the bank’s misdeeds. This is like trying to rein in a class bully by halving his school’s budget. It doesn’t work. Crimes are committed by people, and justice has to target people, too. Or else the whole thing is a joke, as we found out last week.”

That’s precisely what “average” people understand, and it’s what fuels their rage, including their rage at their self-imposed helplessness. When the citizens in the Tacoma, Wash., area read about four car dealers who manipulated the odometers of 75 cars by rolling them back, they also learned that these men not only had to pay restitution of several hundred thousand dollars, but received prison sentences of up to two years. Odometer tampering, it seems, is a serious crime.

A unit of JPMorgan engaged in manipulative techniques to “obtain payments at above market rates” for electricity. The Washington Post described how the scheme worked: “JPMorgan allegedly bid minus-$30 per megawatt hour in the final hours of the day, then would jack up prices for the first hour or two of the next day to $999 per megawatt hour. The going rate at that time, between midnight and 2 a.m., averaged about $12 per megawatt hour.”

The result for of this scheme, in California primarily but also in the Midwest, was that regional electricity grid operators and their customers got stuck “paying tens of millions of dollars at rates far above market prices.”

A $400 million settlement, requested by the Federal Energy Regulatory Commission, was imminent, sources told the Washington Post. But unlike in the cases of those Washington State car dealers, criminal indictments and prison sentences were not.

What many average and above-average Americans have figured out from stories about crime on Main Street and crime on Wall Street is this: on Main Street, if you commit the crime, you go to jail. On Wall Street, if you commit a “regulatory lapse,” your firm pays the fine. Members of the money- and prestige-obsessed aristocracy, with degrees from the Harvard Law or Business School or the Wharton School, live under one system of justice; the rest of us live under another.

“Justice for all, but you get the justice you pay for” might replace the words now in the Pledge of Allegiance. Not all citizens are happy about that. Among the comments in the New York Times story about Dimon’s good fortune were these two:

• “Comes a revolution.”
• “Time to man the barricades?”

Even in the New York Times, some of the natives are restless.

Editor’s note: This is a preview of a story that appears in the winter 2014 print issue of Gateway Journalism Review.

When the St. Louis Beacon and St. Louis Public Radio cinched their deal to merge their two newsrooms in December, they stepped right into the front lines of how old and new media are re-imagining journalism.

The combined news organization (http://news.stlpublicradio.org), which will have a hefty three dozen-plus editorial employees, promises not only to alter the nature of journalism in St. Louis, but it also will chart new pathways for media entrepreneurs around the country  exploring ways to make their startups sustainable.

“If we get it right,” Beacon founding editor Margie Freivogel said early last year, “we have the beginning of a blueprint of how to create a vigorous news organization that serves a region and takes advantage of the assets of public media. I think it’s a very important possibility.”

Freivogel will be editor of the combined news operation.

Jan Schaffer is the executive director of J-Lab, “a journalism catalyst that funds new approaches to journalism, researches best practices and shares practical insights gained from years of working with news creators and news gatherers.”

Editor’s note: In his role as media relations coach, the Kirkwood School District has hired Tripp for previous consulting work. He was not retained for this incident.

No other way to put it: St. Louis television station KSDK (Channel 5) really messed up in their attempt to expose school security flaws.

On Jan. 16, Channel 5 sent people to five area schools to check on security. One of them was Kirkwood High School.

The Channel 5 staffer was able to get in to the school unchallenged. He did, in fact, uncover what appears to be several flaws in the Kirkwood system.

But that’s where the good ends. After finally checking in at the office, and leaving his name and phone number, he disappeared.

School officials were concerned. They called the number on his phone, but it went to a voicemail. On the voicemail, he identified himself as being from Channel 5. So the school called Channel 5 for confirmation. But the station would not confirm or deny he was with the station, despite Kirkwood saying they would have to initiate a lockdown if they could not confirm his employment.

One source says Channel 5 claimed they did not want to confirm or deny because they were concerned Kirkwood might tell other school districts what they were doing and spoil the project.

In any case, Kirkwood initiated the lockdown.

When it was finally confirmed the person was a Channel 5 employee, the lockdown was ended. But not before it did considerable damage to Channel 5.

Social media was buzzing with angry parents and students complaining about Channel 5’s effort. Channels 2 and 4, NPR, the St. Louis Post-Dispatch and several other national news outlets picked up the story.

It appears to have caught Channel 5 off-guard.

When the story actually aired Jan. 16, there was a terse, half-hearted apology. Then, the station played hero showing all the flaws they found.

But the backlash continued on social media as hundreds of comments, mostly against Channel 5, were posted.

Channel 5 made a serious mistake at this point by not issuing a more detailed heartfelt apology on Friday.

So the anger continued and festered until finally, on Sunday, anchor Mike Bush read what sounded as if it were a sincere apology without excuses.

Media outlets are very good when they try to put organizations’ feet to the fire. Most, like Channel 5, aren’t very good when it’s its own feet.

Have they learned their lesson? Only time will tell?

Will it affect the ratings with so many threatening to boycott the station? Perhaps, though over time, people tend to forget.

Finally, Channel 5 should remember it will be judged mostly not on what it did wrong, but how it handled the situation. In this case, they fumbled around for three days before finally recovering the ball.

* * *

This is the statement I posted on Channel 5’s Web site Jan. 17. It was the statement they SHOULD HAVE issued that day and is not dissimilar to the final apology they ended up airing (though they did not even try to remind people that some good may have come out of this as well):

KSDK Channel 5 suggested statement:

At Channel 5, our goal is to make a positive difference to people in our viewing area. To that end, we would first like to apologize to the people of Kirkwood, especially, Students, Parents and Staff at Kirkwood High School. Yesterday, we entered the high school to discover security leaks, which, in fact, we found. Unfortunately, after making the discoveries, we let the ball drop. Because of Kirkwood’s inability to confirm that a Channel 5 employee was the person testing their school security, they chose to lock down the high school. We understand this was not only an inconvenience but emotionally traumatic to many. We are very sorry for this. We should have immediately identified ourselves to authorities. This would have enabled us to present our findings without putting people through the lockdown experience. We pledge to try to do better planning going forward. At the same time, it is important to our community that Channel 5 (as well as other media in our area) continue to conduct investigative reporting. Sometimes exposing people or situations through investigative reporting is the only way to make things better for all of us in the region. We stand by that commitment as well. So we hope the community, especially Kirkwood, knows that we are sincerely sorry for what we put people though due to our lack of communication. We also hope we have helped make Kirkwood High School safer for students, staff and visitors because of the security flaws we revealed.

Mike Shipley, news director (or whomever)

* * *

Here are some sample (angry) social media comments:

Sara Edmundson Schwabe: “Little late. I guess when they didn’t get the reaction they wanted they apologize.”

Jane Thornquist Bogetto: “ ‘On behalf of NewsChannel 5, we recognize your concern and value your input in regards to our story on school safety. The lock down at Kirkwood High School was never our intent, and we are very sorry for any anger or inconvenience this may have caused.’ This is the email response I got from KSDK along with a request for my contact information so that a manager can call and talk to me about my concerns. Inconvenience?!!! What I want is for the station to express on air some responsibility for the trauma the incident caused. Had the station acknowledged that the reporter was on assignment when the district called the lockdown would not have happened.”

Patty Collins Brennan: “They apologized last night, except the apology had a ‘but’ in it. That nullifies it for me. I had two kids there, and they were scared.”

Sharon Crnko: “This was so wrong on so many different levels. Nick just dropped by and was still upset. A’s at Westchester and when he got the phone message, he called the school and ask if they were locking down too. He went and picked her up early. Even the parents that don’t have children at the high school were affected. I thought I read it is a felony to cause panic in a public place. What a world! Pretty soon there won’t be a news station or radio station that’s worth listening to. I know I’m finished with KSDK.”

William Entrikin: “First off, apologize to Kirkwood High School and the students whose education was interrupted in your quest for ratings. Second, pay the city of Kirkwood for the expense they incurred for the massive police response. … Finally, fire the producer who came up with this idea. When did it become a news stations responsibility to safeguard students’ safety? May a group of parents come down to channel 5 to test your safety protocol? Did you think for one minute what Kirkwood has been through?”

Jennifer Steinbruegge Wilton: “Where terrorizing families and interrupting school days come first! I hope Kirkwood School District and the city of Kirkwood are filing charges. This is the equivalent of setting off a fire alarm as a prank.”

Mark Wiley: “KSDK, this is a poor attempt to justify an action that, at best, was ill-conceived. As a parent of a student at Kirkwood High School, I find this “test” inexcusable. I received a message reporting a lockdown at the high school, as did my wife. We believed our child was under immediate threat and waited with anxiety for some word that everything was OK. Your ‘drill’ has lost my viewership; there are plenty of local news options run be organizations with a conscience.”

Lynn Wiseman Merritt: “Come on, Channel 5! Do you people have kids? Do you realize what a parent feels when their child’s school is on lockdown? Very poor reporting and investigating.”

Tracy Sinner: “Nice attempt to spin this in a way that makes you look less irresponsible. … Hopefully the correct actions are taken against not only this reporter but the news director and others who approved this ‘story’ as well. Numerous attempts were made to contact this individual at the phone number left at the school to no avail. And, as other news outlets were reporting the lockdown, you chose to stay silent on both your website and news channel. Furthermore, you have yet to apologize to all the students, staff and parents who were terrorized for more than an hour.”

In every newspaper, on every cable news channel and on news websites, the “bridge scandal” swirling around New Jersey governor and potential 2016 Republican presidential candidate Chris Christie has been getting top billing. His administration, according to a Page 1 story in the New York Times, “ordered revenge closings of traffic lanes at the George Washington Bridge.”

That’s bad, all right, especially since it impeded medical emergency vehicles trapped in the ensuing traffic jams and may have contributed to the death of one person.

These unforeseen consequences from an act of political revenge should not go unpunished. Should they, at the same time, become so much the focus of the media that the kind of scandal they create drives other kinds of scandals from the front page of public attention? That is what the scandals similar to the one involving Christie have done (and continue to do) in a culture fascinated by, and fixated on, political and entertainment personalities.

But scandalous behavior does not have to involve violence, sex or money. It may be the passage of a bill that deprives thousands of school children of lunch provided by the state or federal government. Proposal and passage of such a bill is indecent behavior. It is scandalous.

One story getting less attention is one about an ongoing absence of good-paying jobs: “Job growth tumbles in December (2013), employers add just 74,000 to payrolls,” was the headline in the Los Angeles Times.

Bad economic news may not make a scandal in the classical sense, but millions of citizens are affected – and the effect is devastating and permanent.

Politicians from both parties told Americans that creating jobs at home is “our job No. 1.” Why have they not been held accountable for not pursuing and delivering on the goal they promised?

The Obama administration pledged to “change Wall Street” after the 2008 financial crisis. But despite the fact that “millions of people have lost their homes; whole communities have been devastated … the government does not have the ability or the will to prosecute the executives responsible for abuses that contributed to these disasters.” (Paul Starr, “Why the Democrats did so little to change Wall Street,” in the New Republic, July 12.)

IRS tax data revealed “the rich getting richer and staying richer” and “the poor, poorer and staying poorer” between 1987 and 2009 in a groundbreaking study by five economists in 2013.

By now, in many newsrooms and television studios, such “non-scandal” scandals often get the “yada yada yada” treatment made famous on Seinfeld.

Instead, our celebrity besotted-culture demands juicier and fresher scandals, preferably involving a “personality” or “public official” or “star.”

Christie will do. So pundits are already talking (and will be talking in the days ahead) about the upshot of his scandal: Can he still become the first full-figure presidential candidate since William Howard Taft – who weighed in at about 340 pounds – to run successfully for the office?

Presidential candidates (Chris Christie, Hillary Clinton) trying to get into the act (and possibly Rick Santorum, too)