First, some background. Last Thursday, Keller remarked to an audience at CUNY Graduate School of Journalism when asked about Fox News. Keller called viewers of Fox News “among the most cynical people on planet Earth,” before adding “I cannot think of a more cynical slogan than ‘Fair and Balanced.’” The next day, NY Magazine writer Gabriel Sherman asked via Twitter “Wonder if Keller’s comments trashing Fox News will hurt his reporters’ ability to cover Fox and Ailes.”

This was the subject of Kurtz’s piece in The Daily Beast, the heart of which is excerpted below:

I emailed Keller to ask whether those strong words could suggest a biased approach to Fox, which has had more than its share of complaints about the Times’ coverage (and that of other news organizations as well).

“First of all,” he responded, “the question of whether Times reporters can write fairly about Fox is answered by the fact they do it, over and over. Tim Arango, Dave Carr, and Brian Stelter have set the standard for fair, tough, incisive coverage of Fox, its business, and its on-air personalities.

“As far as I can tell, they are professionally indifferent to that fact that Fox maintains a stable of commentators who make a good living bashing the Times.”

Kurtz gives Keller somewhat of a pass, pointing out that the beat reporters at The NY Times most likely don’t want their work to be seen as having a similar viewpoint as that of the NYT‘s editorial page, just as the reporters on the news side of Fox News probably wouldn’t want to be viewed as sharing the same opinion as Glenn Beck or Sean Hannity for example.

But it’s more that that. Keller oversees all of the editorial output at the NY Times. So it is not unreasonable for those at Fox News to wonder whether one of Keller’s writers could now write anything positive about Fox without thinking about how it might affect his or her standing with the guy at the top of the masthead. Further, if Michael Clemente, Fox News’ SVP of News were to claim that readers of the NY Times were among the “most cynical people on earth,” or came out and attack the very subjects that his reporters are covering, there would likely be criticism.

It is also not unfair to say that Keller’s comments puts his media reporters in somewhat of a precarious and compromising position by speaking so candidly about as controversial a subject as Fox News. At the very least, it will lead people to scrutinize their stories more closely. Last year David Carr and Tim Arango wrote a lengthy profile of Fox News chief Roger Ailes for the NY Times that was seen by most as fair and accurate. NY Times other media writer Brian Stelter seems willing to share his own nuanced opinions about Fox News via his Twitter feed.

The crux of the issue may be that Fox News now seems more comfortable in it’s own political skin, defending its news side coverage as objective, while admitting that most of their prime time hosts lean right. Has the NY Times come to grips with the political bent of its editorial team? Regardless, Keller’s comments are certain to fuel public perception that the NY Times is at odds with Fox News. This isn’t an issue of a cable news outlet taking a shot at a competitor for being “fair and balanced”. The NY Times news reporters cover Fox News, which puts Keller’s comments in a different light. Nor is this an opinion issue; Fox News’ prime time lineup sell a lot of soap ripping the NY Times on a nightly basis, but they are the equivalent of the NY Times op-ed team of Gail Collins, Frank Rich, and Nicholas Kristof ripping Fox News. It seems fair game for the participants of the opiniotainment racket to take shots at one another. But this seems more like a “news on news” battle, one that appears to ratchet up with each passing week.

When reached by Mediaite, NY Times‘ Media editor Bruce Headlam had no comment on Keller’s statements or Kurtz’s piece. Keller’s critique of Fox as a news organization is well within his field of expertise, and many Fox News detractors will see his comments as not just substantive, but accurate. Slate’s Media reporter Jack Shafer doesn’t have a problem with Keller’s comment and its affect on objective reporting, telling Mediaite “I care about accuracy and fairness, both of which are more easily measured than objectivity.”

But Keller can’t have it both ways: he can’t criticize one news organization for a predisposition without coming clean about his own paper’s political leanings. And while Headlam refrained from commenting on any repercussions, it will likely make his job harder. Thanks boss!

Taking up residence next to Palin doesn’t even approach violating her legal right to privacy. She has no legal right to blind eyes looking at her property from an adjoining property or even from the street. If McGinniss didn’t live next door, he’d be completely within his rights to interview Palin’s neighbors about her. In fact, he’d be remiss if he didn’t grill them about her…Compared with the journalistic investigation that I assume McGinniss has commenced of his subject, sharing a property line with her is trivial. Right now I’ll bet that McGinniss or a research assistant is combing the complete Palin paper trail of court filings, property records, tax assessments, and official documentation of her governorship and mayoralty, including e-mails.

Subsequently, it will likely not surprise anyone that Andrew Sullivan is on team McGinniss. To put it mildly. Here is Sullivan’s reaction to this month’s Harper’s Bazaar Bristol Palin feature:

I’m not sure there’s a single word of truth in this profile – apart from the notion that her parents never talked to her about sex or abstinence, even as she shared a room in their house with her boyfriend. The phoniness is, apparently, inheritable. C’mon, Levi, McGinniss needs you.

C’mon Levi! Commence the Wasilla summer-long three ring circus.

But the reasons vary greatly. Here’s a look at some of the post-suspension reaction:

Former CNN anchor Daryn Kagan now runs DarynKagan.com, contributes to Oprah’s satellite radio channel and more. In a blog post “ESPN Blew It,” she makes her case against the suspension:

The difference is Hannah isn’t some little girl, she’s a well-respected peer and colleague. I promise you ESPN would not have suspended Kornheiser if he made a comment about John Kruk’s weight or if he thought Mike Golic wore an ugly shirt. Besides, Tony is hired to do opinion. That’s his job! You’re suspending him for the very thing you’re supposed to pay him for.

She argues that ESPN could have used this opportunity as a learning moment, and to laugh it off by all sides. “I mean have you seen Tony Kornheiser?” she wrote. “I’m a huge fan of his PTI show, but really, someone who looks like Tony commenting on anyone’s appearance? That’s the softest toss for a punch line ever.”

> Update: Some people definitely do agree with the suspension, including Toure, Rachel Sklar and Spud at Inside Cable News.

Slate columnist Jack Shafer had a different reason for arguing against suspension, and the sub-head says it all: “He may be a rotten bastard, but his ESPN bosses are idiots for suspending him.” Shafer’s column details past cases of Kornheiser’s on-air bitterness and vindictiveness, before looking for the real reason for ESPN’s response:

The fact that ESPN has suddenly taken to punishing Kornheiser for being an oozing bag of pus and venom raises more questions about the network than it does about the employee. I suspect that the network didn’t object strongly to Kornheiser’s critique of Hannah Storm’s red go-go boots and Catholic-school plaid skirt…What’s probably appalled ESPN is Kornheiser’s literary reference about Storm being “a Holden Caulfield fantasy at this point,” a reference that probably went over the heads of 99 percent of his listeners.

The Big Lead, which broke the story yesterday, was quick to express surprise after what seemed like a shift in the way ESPN dealt with potentially embarrassing situations within its company:

ESPN must loosen up. (We thought this problem had been solved over the last year – the network had come a long way from the early 00’s – but apparently not.) Why can’t it have its top talent – Bill Simmons, Tony Kornheiser, etc – making commentary about the media? Colin Cowherd opened his show today talking about Mike Wilbon’s silly take on Tiger. Is he going to be suspended next? The more restrictions you place on your talent, the easier it is to lose them when it’s time to re-sign them.

And The Sporting News‘ Dan Levy thought Kornheiser’s original apology Friday would suffice: “I wasn’t surprised when Kornheiser apologized, but frankly, I’m surprised that the apology wasn’t enough.”

One interesting side story here is that, because of the Two Tony’s factor – Radio Tony Kornheiser and TV Tony Kornheiser – we’ll get to hear from the ESPN host every day of his suspension. He’ll continue his radio show, separate from ESPN and the locale where he originally made the comments in question. Will he react to the reactions? He may have a thought or two about Shafer.

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Hilton even throws some cutting, Jack Shafer-like criticism about the interplay of media and economy into the mix: “It seems the recession has stopped Men’s Health from hiring new headline writers because we’ve seen all this shiz before!”

In a statement to Mediaite, Men’s Health editor-in-chief David Zinczenko defends the cover.

Zinczenko: ”The newsstand coverlines are a tool that help us reach the maximum number of guys possible, on promises we know we’ll fulfill every issue. For many magazines, certain cover subjects — from lines to celebrities — are an important part of their newsstand branding. But for the 80 percent of readers who get our subscriber copies, the lines are totally different and reflect the breadth and depth of our reporting with the 12 million readers we serve each month. Rest assured — it’s this originality and reporting rigor that’s made us the biggest men’s magazine brand in the world.”

The repetition of cover subjects is a bit excessive. Six-pack abs and dressing for more sex are of course topics of perennial interest, but apparently, 1,293 is also the precise number of sexy women confessing what they want in bed required for newsstand branding, year after year.

Still, Zinczenko’s point about alternate subscription covers is a valid one. The subscription cover, below, is totally different, though it replaces sexy women’s yearnings in bed with 1,293 money, fitness, sex, and nutrition tips:

Also: here’s the cover to this issue’s free bonus tech guide. Apparently, what sexy women want in bed is Sennheiser HD 800 headphones.

Mystery solved! $1400, though?

(h/t Perez Hilton)

“Given how desperately we want to believe in a human god, it didn’t take much peddling from Team Tiger for us to accept Woods as a modern deity…And we ate it up….So now that the “real” Woods has been revealed as a wild bone-daddy who behaves more like your out-of-work, alcoholic brother-in-law than an object of worship, we feel cheated.”

– Slate’s Jack Shafer explains what’s really behind the world’s fascination with the Tiger Woods‘ Sherman McCoy-like debacle. He also notes that the reason we can’t get enough of the Salahis is because “they do in maximum what we do in miniature every day.”

“If Murdoch bothers to say something, it’s almost an even bet that he’s lying.”

- Jack Shafer, in the aftermath of Rupe’s declaration that he’s banning the Google, reflects upon Rupert Murdoch’s tendency to behave like a politician when it comes to his media businesses.

Some further examples of Rupe’s tendency to say one thing and do another, courtesy of Shafer:

• Upon taking over the New York Post in 1976 from Dorothy Schiff, he assured all that “the political policies [of the Post] will stay unchanged.” We all know where that one went.
• He claimed that a “special committee” would maintain the Wall Street Journal‘s “editorial independence” but then ignored it to drive out the old editor and install a new one.
• As evidence that Murdoch doesn’t really think he’d win a fair-use suit against search engines for displaying snippets of his newspaper copy, consider the fact that he hasn’t filed one. (I’ll bet that Murdoch’s lawyers have advised him against filing a fair-use lawsuit against the search engines because it could backfire, expanding fair-use rights rather than limiting them.)

Really, the most amazing thing about this decades-long trend is not only that we all continue to jump on every contradictory edict to be issued from the mouth of Rupe, but also that at some point along the way Murdoch hasn’t opted to use this talent for “jawboning” in a run for some sort of political office.

To get a genuine picture of what a war on the press looks like, you can’t fan the pages of Nexis for grouchy things George W. Bush, Bill Clinton, or even Richard Nixon said about reporters, newspapers, and networks. You’ve got to go back to the 1930s, when President Franklin D. Roosevelt raged against the press like noisy clockwork.

– Slate’s Jack Shafer taps his contender for the ‘which President hated the press more’ parlor game that has been going on in media circles of late.

If the goal of the White House was to white noise any other news reporting out of the news cycle with their ‘war’ on Fox than I think, at this point anyway, their decision must be considered an unmitigated success! Of course, there appears to be another Somali pirate debacle on the horizon so perhaps we’ll get a temporary breather.

Both succeeded in segmenting the market with semi-independent divisions that were once unique and distinct but that have since faded into one, much to the confusion of consumers. Both have dramatically dumped once-valuable properties. Both have allowed divisions to operate like independent fiefdoms at the expense of the company’s greater financial good. Both have established cultures of privilege for top employees, and both appear to have woken up to their problems too late.”

– Slate’s Jack Shafer comparing the fate of Condé Nast, in the wake of yesterday’s shutterings, to that of that other overreaching, reality-ignoring American powerhouse, General Motors. Next up: Graydon Carter and Anna Wintour fly to Washington in their private jets to beg for a bailout! (Perhaps it isn’t merely a coincidence that Time opened an office in Detroit…maybe they’re also aiming to take notes.)

The last such report before this week’s Observer piece might have been the most notable, and it occurred almost exactly one year ago — with Obama comfortably ahead in the polls — when Howard Kurtz of the Washington Post wondered in a column titled “The Drudge Retort” if Drudge still had “huge clout” or if his influence was “overstated.” Always the trend piece killer, Slate’s Jack Shafer decided to mitigate and debunked these claims in “Don’t count Matt Drudge out,” first by revealing the demise argument’s straw man — Drudge was never as influential as his detractors say, according to Shafer — and then, by critically evaluating his strengths and weaknesses, but praising his longevity:

Drudge endures, while imitators and newly minted Web stars fade, for a variety of reasons. He works incredibly hard. He cares about his site. He appears to have no interest in working for somebody else, and his entrepreneurial vigor makes the site come alive.

In his column, Kurtz quoted heavily from Greg Sargent of Talking Points Memo, who had recently studied Drudge’s stamp on cable news, concluding that his influence was declining. In his rebuttal, Shafer also cited recent Drudge critics like Media Matters and Chris Cillizza‘s The Fix, before giving a history lesson by digging up Frank Rich‘s 1999 claim that Drudge was history.

So one year later, what new evidence has the Observer introduced that could make this trend piece stick? The piece begins by acknowledging that the White House has kept an eye on Drudge, especially during the health care debate, citing the website’s 1.1 million daily visitors “each of whom refresh the page about 15 times in a 24-hour period.” But never discount opinions from established newspaper editors.

Peter Barker of the Washington Post and Jonathan Weisman of the Wall Street Journal don’t read Drudge anymore! They prefer The Huffington Post. And Bill Keller of the New York Times says he hasn’t heard anyone, anyone mention Drudge “in ages.” Apparently to a journalist, when other more important journalists no longer care, then Drudge is done for, his influence squashed. And if he’s not quite gone, there are quite a few question marks to indicate uncertainty: “Are the days of Drudge over? Has Matt Drudge lost his edge?” Just putting it out there!

“Maybe he was just a fad—digital-age hula hoop,” says Keller. Ah, yes, the blog as a fad. Unfortunately, it’s the kind of fad that began in 1997 and continues with almost no overhead costs and consistent readers.

To be sure, the Report could not exist without the mainstream media. And if Matt Drudge finally decides it’s time to go on a permanent vacation, and his heart is just not in it anymore, then the Observer will have called it. But that gamble hardly seems worth a feature.

As for the sources so eager to pronounce the site dead, when you occupy the top spot, it’s common to receive criticism from those gunning for you from below — it’s called throwing rocks at the thrown. But it’s always uncomfortable to watch Kings and Queens like the Times and Post aim their rocks downward in a defensive, knee-jerk fit. And over a decade later.

UPDATE: The Columbia Journalism Review has a new feature for September/October 2009 with a very similar thesis as the Observer‘s Drudge Report article this week. The piece, entitled “Drudge Has Lost His Touch” (no question mark), makes a much more elaborate and conceptual case that can be read here. Are you convinced by either of the latest entries in the Drudge Is Dead canon? Sound off in the comments.

That, of course, was before A.I.G. F.P., led by Joseph Cassano, became, as Lewis puts it, “the most receptive dumping ground for new risks created by big Wall Street firms.” It was also before practically everyone who worked there barely escaped a pogrom once A.I.G. turned into a $182.5 billion taxpayer liability.

Perhaps the biggest clue of what was to come was the unit’s DNA. A.I.G. F.P. was created in 1987 by alumni of the Beverly Hills junk bond giant Drexel Burnham Lambert, which was forced into bankruptcy amid scandal three years later and whose leader, Michael Milken, was indicted on 98 counts of racketeering and securities fraud. If Drexel were the first Friday the 13th movie, A.I.G. F.P. was one of those sequels in which Jason returns more powerful and hellish than ever.

Lewis does not provide an especially new answer to the question he poses at the outset: What exactly caused A.I.G.’s downfall? But he does present a nuanced look at the trading unit most people now realize was the culprit. (He also suggests, oddly but provocatively, that Eliot Spitzer, as New York’s hyper-kinetic attorney general, may have hastened the crisis by forcing the resignation of A.I.G. kingpin Maurice “Hank” Greenberg, who was arguably the only person who understood how the crazy-quilt financial company he put together really worked.)

What’s especially noteworthy about Lewis’s article is that F.P.’s money managers spoke to him; stunningly, they claimed no one else in the media had come knocking. And they all insist that there was no fraud at the unit – just a bad manager (Cassano) who made disastrous financial investments he may or may not have understood. For the record, as it were, Lewis granted most of them anonymity, but that doesn’t seem to be a problem; the whole crackdown on anonymous sources – “anonymice,” as Slate’s Jack Shafer calls them – seems increasingly like debating how many angels can fit on a pinhead, given the parlous state of the newspaper industry.

Considering the mess newspapers find themselves in, the remarkable thing about Lewis’s take is that it ran at all. It’s no small relief to find important financial stories like this in one of the glossiest of glossies. And for that we might thank the late Condé Nast Portfolio, strange as that might seem. (Disclosure: I was, depending on how you counted, Employee No. 2 or 4 at Portfolio, where I lasted 18 months.)

Today, Vanity Fair has perhaps the best magazine stable of financial writers around – besides Lewis, its roster includes Bethany McLean, Bryan Burrough (who, with John Helyar, wrote Barbarians at the Gate), and Michael Wolff, who understands business more deeply than most media writers. That agglomeration of talent is no accident.

Even though Portfolio was shuttered recently, Si Newhouse and other higher-ups at Condé Nast had at one point thought there was a big enough hole in existing coverage that it wagered – and lost – at least $100 million. That conviction got people’s attention inside as well as outside of 4 Times Square.

Graydon Carter, VF’s editor in chief, was never one to wonk out when it came to financial stories. Yes, Vanity Fair has over the years provided a steady stream of often very knowing business articles, but, clearly, Carter didn’t see that as a big part of his mandate; some of the business writers on his payroll told me that he was an especially hard sell. (Similar complaints were leveled at the New Yorker’s David Remnick, who was described to me as bored by business stories back when Portfolio was being hatched.)

Then along came Portfolio, which billed itself early on as “the Vanity Fair of Business.” Ferociously competitive, Carter set about shoring up VF’s business coverage. He also stocked up on prominent financial writers, grabbing McLean from Fortune and Lewis from Portfolio.

Now, with economic news front and center, VF has a formidable lineup churning out some of the best long-form business journalism around. McLean had a similarly sophisticated piece on Fannie Mae a few months earlier.

That may not be Portfolio’s only legacy, but even if it were, it’s a pretty good one.

Jim Impoco is a New York-based writer and a former editor of the Sunday Business section of the New York Times and deputy editor of Portfolio. This is the first of occasional posts on Mediaite about the financial press. Please send tips or comments to jimpoco@mediaite.com.