Greenwald Leaves Guardian, Leaving Team Snowden's Future in Doubt

Glenn Greenwald -- the prominent journalist and columnist -- is leaving the Guardian to form an independent news site, and there's a wonderful irony to the news that he will be striking out on his own.

"Because this news leaked before we were prepared to announce it, I'm not yet able to provide any details of this momentous new venture, but it will be unveiled very shortly," Greenwald said in a statement. After making himself a household name by exposing the true reach of the National Security Agency, Greenwald had his big news -- and it's certainly a major announcement -- scooped by a disgruntled associate. Dare we speculate an unhappy editor at the Guardian?

After a spectacular run at the British newspaper, during which Greenwald delivered a series of bombshell scoops about the NSA, the Brazil-based journalist has now decided to form his own news site, which he says has secured major funding and will cover everything from politics to sports to entertainment. That development represents an intriguing turn in a story that has been as much about the media as it's been about U.S. intelligence. With his outspoken left-wing politics and platform as a columnist, Greenwald was an unlikely person to emerge as the primary reporter on a story about the NSA's misdeeds. His involvement caused many observers to question the objectivity of the Guardian's coverage and exposed the deep tension at play in today's media world between establishment outlets and reporters, and a new breed of journalists willing to make their political ideals and opinions a central part of their reportage.

Though details on the new venture remain sparse, it appears Greenwald will now be creating an outlet free of these burdens. So is this the day when the Fifth Estate broke through to the mainstream?

In a statement to BuzzFeed's Ben Smith, Greenwald says that he is aiming to create a news outlet with the sensibility that has made him one of the world's most prominent -- and often controversial -- journalists. "My role, aside from reporting and writing for it, is to create the entire journalism unit from the ground up by recruiting the journalists and editors who share the same journalistic ethos and shaping the whole thing -- but especially the political journalism part -- in the image of the journalism I respect most," he told BuzzFeed. Greenwald added that his site has already begun hiring editors and reporters and described the venture as "a general media outlet and news site."

As the news business has struggled to adapt to the Internet, an online transparency movement has emerged to challenge mainstream news organizations' stranglehold on the business. Outfits like WikiLeaks have tried to democratize the news, while writers like Greenwald have fomented a growing skepticism toward centralized power -- regardless of whether it resides in newsrooms or governments. Long before he began writing about the documents leaked by Edward Snowden, his columns presciently foresaw the dangers of the American security state. Alongside other privacy rights activists, he emerged as a powerful voice for civil liberties, the dangers of government surveillance, and government transparency. At the Guardian, a highly respected newspaper that put the enormous resources of a global news organization at his fingertips, Greenwald has both helped reinvigorate its online presence and come to embody the divide between the old and new school of journalism. Is Greenwald an impartial adjudicator of facts? Is he an activist looking to discredit state power? These are questions the Guardian never fully resolved.

Nevertheless, his departure comes as a huge blow to the paper. Its partnership with Greenwald and stories based on the Snowden documents yielded a huge bump in online traffic and helped establish the paper's presence in the United States, which represents a key component of the Guardian's push to become a truly global news outlet. "We are of course disappointed by Glenn's decision to move on, but can appreciate the attraction of the new role he has been offered. We wish him all the best," a Guardian spokesperson told BuzzFeed.

"My partnership with the Guardian has been extremely fruitful and fulfilling: I have high regard for the editors and journalists with whom I worked and am incredibly proud of what we achieved," Greenwald told Buzzfeed. "The decision to leave was not an easy one, but I was presented with a once-in-a-career dream journalistic opportunity that no journalist could possibly decline."

With Greenwald launching his own outlet, it remains somewhat unclear whether the Guardian will continue to have access to the Snowden files. Greenwald has repeatedly emphasized that he and another journalist involved in the story, Laura Poitras, retain control over the documents. Over the course of the revelations, Greenwald has published stories in a wide range of outlets around the world, and he may very well continue to publish some stories in the Guardian, at least until his new outlet is up and running.

The funding for the project reportedly comes from eBay founder Pierre Omidyar, but more important is the fact that someone with serious cash on hand is willing to back a crusading, independent, left-wing journalist. It's a remarkable turn of events -- one indicative of the impact the Snowden documents have had in changing the conversation about surveillance and state power -- that Greenwald now finds himself with the backing to launch an ambitious news organization.

Just how much that conversation has changed will be revealed by what approach Greenwald adopts. Will he create a WikiLeaks-style depository for secret documents? Probably not. Will he create an outfit that will go much further in exposing government secrets than his current employer? Probably. Over the course of the Snowden leaks, an intense debate has played out among Internet activists over the degree to which the Snowden files should be made public. They have often criticized newspapers for not going far enough in revealing the NSA's activities. Here's one response from Greenwald to that charge:

Now Greenwald will be the one assuming that risk. How far he chooses to push the envelope on transparency will go a long way in determining what kind of news outlet he decides to build.



What Happens to the Global Economy if the U.S. Defaults? 'Not Much,' Say Some Economists

Predictions about the potential effects on the global economy of a U.S. default have verged on the apocalyptic. This weekend, World Bank President Jim Yong Kim characterized the possibility as "disastrous" for both the developing world and developed economies, while International Monetary Fund Managing Director Christine Lagarde argued that a default "would mean massive disruption the world over." Financial leaders speculate that a failure to raise the debt ceiling could trigger higher interest rates, stalled growth, or even a global recession reminiscent of (or worse than) the one caused by the collapse of Lehman Brothers in 2008.

But not all economists are ready to jump on that bandwagon (which is not to say that they necessarily sympathize with the GOP's vocal camp of "default deniers"). Some maintain that a partial, or technical, default (meaning the government would pay some of its debts late) would be short-lived, if still potentially catastrophic. And others argue that the consequences of such a default would be much tamer than headlines suggest.

Analysts at the London-based global research firm Capital Economics, for instance, assert that speculation about the effects of U.S. default "is surely overdone," adding that "the fall-out should be limited and far less severe than that which followed the collapse of Lehman Brothers" so long as the default does not reflect the U.S. government's "fundamental inability to pay."

"The crucial difference is that the US government would still be a going concern, with all the tax and spending powers of a sovereign state," the firm wrote last week. "Once the politicians reach a deal, there is no doubt that the US could return to servicing its debts as usual. What's more, whereas the failure of Lehmans came out of the blue, global policy-makers and market participants still have some time to prepare for a potential US default." While Treasury yields and borrowing costs would almost certainly rise, they argue, this would not necessarily hurt the global economy.

China and Japan, which respectively hold $1.28 trillion and $1.14 trillion in U.S. Treasuries, have voiced concern over how a default could impact their considerable investments. But Capital Economics' Andrew Kenningham told Foreign Policy that even they "would not be too badly affected provided the U.S. government does pay in full in the end." He added: "The renminbi value of reserves [held by the People's Bank of China] is always changing in value in response to exchange rate movements and the mark-to-market value is always changing in response to movements in bond yields. So a rise in yields and accompanying fall in prices for a portion of these reserves, for a short period, would not have an out-of-the-ordinary effect."

Roger Altman, a former deputy secretary of the Treasury Department, has similarly argued that a short-term default would do minimal damage. "We're not likely to see more than a passing impact on the economy or on financial markets," he told Bloomberg earlier this month. "There's nothing historical to suggest that however ugly and noisy and frustrating this situation is, that there will be any permanently lost output, any permanently lost growth, or incomes or asset values."

It's still an unpopular position: In a recent IGM poll that asked whether a U.S. default would cause "severe economic harm," only one out of 36 economists -- Pinelopi Golberg of Yale -- replied that such an outcome was unlikely (provided that a default were reversed within a week). 

And that's the key takeaway: The shorter the default, the more limited the damage. The real threat to the global economy would be a prolonged default that plunges the United States into another recession. This is the outcome that most concerns global leaders -- but one that seems unlikely (though not impossible) to analysts at Capital Economics.

At the World Bank and IMF meetings this weekend, Asian bankers and traders were reportedly nonplussed by the threat of default, with one banker remarking, ""The prevailing view in the market is that someone in Washington will blink and this will all blow over." And if they don't blink? The key question will be just how long Washington's warring factions stare each other down.