Romney's Tax Reboot

One oddity of this Republican Presidential primary season is that front-runner Mitt Romney has had by far the least inspiring tax plan. That changed yesterday when the former Massachusetts Governor took a dive into the deep end of the tax reform debate with a proposal that includes a 20% across-the-board cut in income tax rates. Now we're getting somewhere.

The rate cut follows the Reagan formula of applying to anyone who pays income taxes. The current 35% tax rate (set to rise to 41% in 2013 including deduction and exemption phase-outs) would fall to 28%, the 33% rate to 26.4%, the 28% rate to 22.4%, the 25% rate to 20%, the 15% rate to 12%, and the 10% rate to 8%.

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As an economic matter, this is the most effective kind of tax cut because it applies at the margin, meaning the next dollar of income earned. A mountain of economic research shows that a marginal-rate cut does far more than tax holidays or targeted tax credits to change the incentives to invest and hire workers, and thus provides the most economic lift.

This is especially true because the vast majority of businesses in America today aren't corporations. They're sole proprietorships, partnerships or Subchapter S firms whose profits are "passed through," as the jargon goes, to the owners and are taxed at the individual rate. These noncorporate firms account for over half of all business income, according to IRS data. By lowering their taxes and making the rates permanent, Mr. Romney's plan would do much to make the U.S. more job and investment friendly.

By contrast, President Obama's proposal yesterday (see below) to cut the corporate rate to 28% from 35% wouldn't apply to this "pass-through" business income. It would thus favor big corporations at the expense of smaller businesses that file as individuals and would see their marginal rate rise to 41% or more under Mr. Obama's plan to raise individual tax rates.

Mr. Romney has already proposed a cut in the corporate tax rate to 25% from 35%, and by adding the cut in the business pass-through rate to 28% he is proposing the more ambitious and far more economically potent reform.

The Obama campaign will attack his plan as favoring the rich, but it would do so even if Mr. Romney proposed no tax cut. Now Mr. Romney will have a better response because in return for cutting rates he says he would also close loopholes and deductions that have become shelters from high tax rates.

Mr. Romney made the mistake yesterday of distinguishing between deductions for "middle-income families," which he said would be preserved, and for the "top 1%," which he said would be on the table. This sounds like a pollster's bad advice. It merely plays into Mr. Obama's class-war theme when Mr. Romney should be stressing growth. But at least Mr. Romney says all deductions would be on the reform table, including those for mortgage interest, state and local taxes and health care.

The Romney campaign is also shrewd to say it will assume some dynamic revenue feedback from his marginal-rate cuts. This does not mean that the tax cuts will entirely "pay for themselves" right away. It does mean that it can safely assume that his proposal would recapture about one-third of the revenue loss from the rate reductions through more investment and economic growth.

That's a defensible and conservative estimate based on historical experience with rate reductions. Tax revenues soared after the Reagan 1981 tax cuts (the Gipper cut rates across the board by 25%) and the Bush 2003 rate reductions. The 2003 investment tax cut was expected to lose revenue, but the gain in jobs and business activity produced $786 billion more in revenue from 2003-2007.

Economists Greg Mankiw and Glenn Hubbard, who are both advising Mr. Romney, have done studies documenting the feedback effects of marginal-rate tax cuts. So has Harvard's Martin Feldstein, among others.

All of this should also help Mr. Romney politically, if he makes the case well and with confidence. Conservative voters who have wondered if he is one of them can now see a tangible proposal that will be a governing priority, not merely a pledge to fight for reform some day. It gives him something to fight for beyond his business biography.

The Romney proposal will also provide a tax contrast with Rick Santorum. The Pennsylvania Senator favors a top tax rate of 28% but he also wants to triple the child tax credit to $3,000. He'd have a hard time credibly doing both without blowing up the budget because the tax credit has almost no revenue feedback effect. It's a social gesture with little or no impact on economic growth.

Meanwhile, on corporate taxes, Mr. Romney's tax cut applies to all companies equally. Mr. Santorum would cut the rate in half for most companies, except manufacturers would pay 0%. This is a form of industrial policy that would have every company lobbying to qualify as a manufacturer and would defeat the tax neutrality that is a main goal of tax reform.

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Now that he has the right policy, Mr. Romney's main challenge will be selling it without apology. He has resisted tax cuts for individuals lest he be criticized for helping the rich, and he sometimes sounds guilty about his own wealth. But voters will sense if Mr. Romney doesn't believe what he says or if he shrinks from making a forthright case for it.

The only way to defeat Mr. Obama's politics of envy is with the politics of growth and rising opportunity. Voters don't really care about a candidate's wealth as long as they conclude he has a plan to increase theirs.

By Tim Carman,

Last month, McDonald’s devised a plan to wedge itself into the dense flow of self-promotion and micro-conversations that constitute Twitter. The fast-food giant had hoped to introduce some of the real-life farmers and producers who supply McDonald’s with potatoes, beef and other products under the organizing hashtags of #MeetTheFarmers and #McDStories.

But within the hour, the company had a social-media disaster on its hands. Tweeters quickly hijacked the #McDStories hashtag to offer their own anecdotes and propaganda, some of it attacking McDonald’s long history of selling cheap meat to Americans, millions of patties and nuggets a day.

One person, under the Twitter handle @MichelleVegan, wrote, “McDonalds scalds baby chicks alive for nuggets.” The Twitter feed for Vegan.com chimed in: “My memories of walking into a McDonald’s: the sensory experience of inhaling deeply from a freshly-opened can of dog food.” Then, of course, PETA entered the fray with a photo of a coil of pink goop, implying that McNuggets were made from “mechanically separated chicken,” an allegation that McDonald’s immediately denied.

Regardless of the veracity of those claims, the episode underscored a new truth: Meat eating is not the simple pleasure it was in previous generations, and not just for those frequenting fast-food joints.

Even as millions of Americans continue to gobble down gourmet burgers, dry-aged steaks, chef-driven charcuterie and bacon-wrapped everything, they’re regularly forced to consider the potential consequences of their actions. Environmentalists want us to think about the greenhouse gases that meat production creates. Humane advocates want us to consider the suffering of animals. Doctors want us to ponder the health implications. And the medical community would like us to understand the potential fallout — otherwise known as antibiotic resistance — of pumping farm animals full of drugs.

It’s as if America has become schizophrenic about meat: As the reasons to reduce or eliminate meat consumption increase, so do the sources of particularly tasty morsels of animal flesh.

Washington is the prime example. In recent years, the Expense-Account Steakhouse Capital of America has practically become the center of the burger universe. We can secure a premium patty in countless outlets, including Shake Shack, Elevation Burger, Good Stuff Eatery, Ray’s Hell-Burger, Big Buns Gourmet Grill, Thunder Burger & Bar and BGR: The Burger Joint. Shall we count the number of barbecue outlets that have opened in the past few years, too? Does this sound like a sign that Washington, home to some of the most well-educated people in the country, has absorbed the message on meat eating?

“We’re schizoid, as a culture, on meat eating,” notes writer Michael Pollan, who has grappled with this own internal conflicts on the consumption of animal flesh. “We love the taste and what having lots of meat has always signified — status, wealth — but at the same time it’s hard to overlook the high cost of meat-eating: to the environment, to the workers, to the animals and to our own health. It’s no wonder we’d be conflicted.”

Hit men, click whores, and paid apologists: Welcome to the Silicon Cesspool

It’s tough being a journalist, especially if you’re covering technology and living in Silicon Valley, because it seems as if everyone around you is getting fabulously rich while you’re stuck in a job that will never, ever make you wealthy. What’s worse is that all these people who are getting rich don’t seem to be any brighter than you are and in fact many of them don’t seem very bright at all. So of course you get jealous. And then you start thinking maybe you could find a way to cash in on this gold rush. But how do you make gobs of money when your only marketable skill involves writing blog posts?

This is the conundrum, but lately I’ve been thinking of a business plan that sounds like it could work. First you establish yourself as an “influencer” by posting a lot of noisy stuff on a blog and building an audience. Then you need to “monetize” your influence. You tell all the VCs in the Valley that you are starting an “angel fund,” and you ask each one to give you, say, $500,000. They go along because (a) $500,000 is pocket change to these guys — so small, in fact, that they don’t care if they lose every penny of it; and (b) you’re an influential hack and they don’t want to piss you off; and (c) they figure you can maybe write nice things about their portfolio companies, which would be especially useful if/when one of their portfolio companies gets caught up in some scandal; and (d) if any independent journalists write something critical about one of the VC’s portfolio companies, you can can use your influential personal blog to savagely attack those journalists and try to discredit them.

So you raise $10 million or $20 million, and now you’re an “angel investor.” Step two is you go around to startups and tell them you’d really like to invest in their companies. Not big investments — maybe $100,000. They don’t need your money; they can raise money from anyone. But the value you add is that you’re an “influencer” and can be helpful when it comes to getting good press or offsetting bad press. (See paragraph above.)

You might think of this as a new kind of PR, only you’re way meaner and more effective than a PR flack, and instead of getting paid in billable hours, you’re taking payment in angel-round equity, which in a few years should be worth 10-100x whatever those billable hours would have been worth.

In fact this is a new version of an old racket that used to be practiced in the tech space by guys who called themselves “independent analysts.” Their deal, back in the day, was this: “Pay seven figures a year to buy a corporate subscription to my newsletter and I’ll say nice things about your company, and when the press needs a quote, I’ll be there to puff you up. Or, don’t buy a subscription and I will bash you relentlessly.” Most big companies paid up and considered it a cost of doing business.

Well, this is the model I was thinking about, but it turns out someone beat me to it — it’s called CrunchFund, and in the past few days we’ve seen the machine in action, and it is indeed a beautiful thing.

This started when Nick Bilton of the New York Times posted an item criticizing Path, which had been caught up in a firestorm when it emerged that Path had been uploading entire address books from people’s iPhones. Bilton made the legitimate point that it’s now become a routine for Valley companies to do something sleazy, get caught, then quickly apologize and get hailed as heroes by the Valley for the quality of their apology. (It’s all about being able to fake the sincerity, as George Burns once said.) Bilton’s point was that Path didn’t just grab those address books by accident. They did it on purpose. It probably took weeks of programming. To just say, “Whoops! Sorry!” seems a bit disingenuous.

Anyway — Path comes under fire, and guess who rides to the rescue? Michael Arrington, who runs CrunchFund, an investor in Path, launches a blistering critique of Bilton himself, comparing him to a pit bull who attacks a dog that is already lying on its back, defenseless, saying that Bilton’s column was “a safe way to do business, but not very noble.”

Almost before you could stop throwing up in your mouth at the idea of Michael Arrington accusing a Times journalist of being less than noble, Arrington’s partner at CrunchFund, MG Siegler, weighed in with his own attack in which he basically said Bilton is a nice guy who was either too lazy or too busy to do a good job. From this Siegler leaps off into a long diatribe about how most tech reporting is utter bullshit written by idiots who are all in a hurry to chase page views.

So: Path comes under fire, and straight away, the paid hit men – Arrington and his sidekick, Matty the Angry Chihuaha — spring into action to smear Bilton and try to discredit him.

I’ll give them this much. They’re good at what they do. Siegler especially is a nasty little ankle-biter who has developed some level of expertise in launching ad hominem attacks. He did one on me a while back. Then he did one on Josh Topolsky at The Verge.

Now it’s Nick Bilton’s turn.

Thing is, just last October Arrington was praising Bilton as a superhero tech journalist and “our number one desired hire” when Arrington was at TechCrunch. Even funnier is that in that post Arrington was “reporting” that Bilton had been offered “$1.5 million+” to leave the New York Times and join CBS/CNET. Thing is, that wasn’t true. And, Arrington had been told, explicitly, by people at CBS/CNET that his numbers were incorrect. Yet he went ahead and ran the story anyway, knowing his numbers were wrong.

Yet now Arrington and Siegler have appointed themselves the watchdogs of tech journalism, eager to point out the irresponsible and inaccurate reporting that they see all around them. This might ring a little less hollow if they hadn’t been such egregious violators themselves, and if they weren’t writing this stuff to protect the people they’re in bed with financially.

Siegler also went after Ryan Tate of Gawker, who had criticized Path’s CEO, Dave Morin, for saying, a while back, that Path didn’t collect personal data from users.

Siegler says Morin was telling the truth — because Path didn’t start collecting data until after Morin had issued that denial. In other words, when Morin said Path didn’t collect data he didn’t mean they would never do it, just that they weren’t doing it right then.

Nice, right?

But of course Ryan Tate is the bad guy here. He’s the nasty, unethical, irresponsible sleazebag in this situation — not the CEO who said he didn’t collect data right before he started doing exactly that.

From this Siegler transitions into a rambling hand-wringing essay about how tech journalism has become so sloppy and terrible because you have all these bloggers who don’t really know anything and they’re just trying to generate page views by writing something that isn’t necessarily true but will get people to click.

What makes this so hilarious is that Siegler is by far the biggest click-whore in all of tech blogging, a guy whose only real skill, in fact, is the kind of page-view-chasing he now derides.

Siegler is constantly mocked by readers as a laughable troll – a mean-spirited, egomaniacal buffoon who is not very bright but thinks he’s the smartest guy in the room, and who, in all of his manic blogging, has left a string of cock-ups and false “scoops” behind him.

Last year he generated lots of traffic for TechCrunch with a “scoop” about the Amazon Kindle Fire. He said he’d actually used one — but then he got almost every fact wrong, including the name of the product. Later, he defended himself by saying that, yes, his original post got the facts wrong, but in a later “update” (that’s blogger-speak for “correction”) he fixed all that. So there.

Then there’s the post in December where MG got into his Angry Chihuahua mood again and thought he’d uncovered some kind of huge conspiracy when he accused Google’s Android chief, Andy Rubin, of deleting a tweet. A few days later Siegler had to recant (sans apology, of course) when it turned out that, um, nope, Rubin hadn’t done that. Of course there’s a simple way to avoid bonehead moves like this — you do the reporting before you publish the accusation, not after.

Then there’s the case where Matty got all upset and threw a tantrum like some kind of junior high school kid because Google+ wouldn’t let him use a profile photo in which he’s giving the finger. His stock in trade is the rant where he declares that “XYZ is dead!” (this week it’s tech journalism) or “If you think XYZ, you’re a fucking idiot!”

Yet now he thinks it’s wrong to go chasing clicks and page views with sensationalized garbage. How odd and inspiring it is that Siegler’s profound change of heart should happen after Path, a company in which CrunchFund has invested, is getting criticized.

Arrington and Siegler can try to play journalism police all they want, but the fact is they have turned themselves into hacks for hire and as such have lost all credibility. They’re not the only ones working this racket. Now we have PandoDaily, a new tech blog crated by their TechCrunch pal Sarah Lacy and funded by CrunchFund and a bunch of other VCs and angels whose companies PandoDaily aims to cover.

PandoDaily is working the same deal as CrunchFund. You “invest” in our site, and now we’re business partners, so at the very least you’ll have a friendly media outlet whose “influence” you can call upon.

These folks will say they never promised any special treatment to the VCs when they went around with their hands out asking for money. Maybe that’s true. But I have talked to people on the other side of those transactions and this is definitely what the VCs were thinking when they were writing the checks.

The line from one VC firm that invested in CrunchFund was this: “A few hundred thousand is a rounding error for us. We don’t care if we never see the money again. It’s so small it doesn’t even effect our results and isn’t even considered material enough to be reported to our limited partners. And it couldn’t hurt to have Mike as a friend.”

Separately another VC recently told me his firm recently had passed on opportunities to invest in some new tech blogs that were proposing a business model he described as “hush money.” Potential investors were being offered “most favored nation” status for themselves and their portfolio companies if they put money into the site.

This is what now passes for “journalism” in Silicon Valley: hired guns and reformed click-whores who have found a way to grab some of the loot for themselves. This is perhaps not surprising. Silicon Valley once was home to scientists and engineers — people who wanted to build things. Then it became a casino. Now it is being turned into a silicon cesspool, an upside-down world filled with spammers, liars, flippers, privacy invaders, information stealers — and their grubby cadre of paid apologists and pygmy hangers-on.

The most delicious part of Siegler’s rant on the tech media is the final paragraph:

The only thing I can offer is the advice to take everything you read in the technology press with a grain of salt. Perhaps several. The likelihood that at least part of it is nonsense is very strong. And stronger by the day.

For once, I could not agree more.

Disruptions: So Many Apologies, So Much Data Mining

Ed Ou for The New York TimesAn Egyptian youth updates a Facebook page with new information about the protesters in Tahrir Square in Cairo.

Last week, Arun Thampi, a programmer in Singapore, discovered that the mobile social network Path was surreptitiously copying address book information from users’ iPhones without notifying them.

David Morin, Path’s voluble chief executive, quickly commented on Mr. Thampi’s blog that Path’s actions were an “industry best practice.” He then became uncharacteristically quiet as the Internet disagreed and erupted in outrage. Amid his silence, he did take the time to reply to the actress Alyssa Milano, who was one of hundreds who questioned Path’s practices. (His reply to her via Twitter contained his personal e-mail address.)

Mr. Morin seemed unconcerned about how people could be harmed by his company’s carelessness. Consider this: Amira El Ahl, a foreign journalist covering the Middle East, said bloggers in Egypt and Tunisia are often approached online who are state security in disguise.

The most sought after bounty for state officials: dissidents’ address books to figure out who they are in cahoots with, where they live and information about their family. In some cases, this information leads to roundups and arrests.

A person’s contacts are so sensitive that Alec Ross, a senior adviser on innovation to Secretary of State Hillary Rodham Clinton, said the State Department was supporting the development of an application that would act as a “panic button” on a smartphone, enabling people to erase all contacts with one click if they are arrested during a protest.

Mr. Morin eventually did bow to pressure with an earnest apology on the company’s blog. He said that Path would begin asking for permission before grabbing address books and that the company would destroy the data collected.

And with that, the knife fight turned into a pillow fight. Mr. Morin, who declined to comment, was lauded and exonerated for any wrongdoing by his peers in Silicon Valley. On Twitter, he was repeatedly “applauded” and called a “pro.” Christopher Sacca, a prominent angel investor, tweeted to Mr. Morin: “Impressed by how you handled the privacy issue today.”

Some even asked: What’s the big deal anyway?

The big deal is that privacy and security is not a big deal in Silicon Valley. While technorati tripped over themselves to congratulate Mr. Morin on finessing the bad publicity, a number of concerned engineers e-mailed me noting that the data collection was not an accident. It would have taken programmers weeks to write the code necessary to copy and organize someone’s address book. Many said Apple was at fault, too, for approving Path for its App Store when it appears to violate its rules.

David Jacobs, a fellow with the Electronic Privacy Information Center, noted that, once again, an Internet company showed a lack of understanding about the consequences of taking data.

Lawyers I spoke with said that my address book— which contains my reporting sources at companies and in government — is protected under the First Amendment. On Path’s servers, it is frightfully open for anyone to see and use.

The data extraction is even more problematic because it was not protected. Path was mining data and storing users’ address books on its servers, and it was also transmitting the data in “plain text.” This would be like mailing a private letter to someone without the envelope.

Mary Landesman, a senior security researcher at Cisco, says start-ups often do not build apps with security in mind: “Attackers are like electricity, they like to follow the track of least resistance.”

At Mr. Morin’s last job at Facebook, his boss Mark Zuckerberg apologized publicly more than 10 times for privacy breaches.

It seems the management philosophy of “ask for forgiveness, not permission” is becoming the “industry best practice.” And based on the response to Mr. Morin, tech executives are even lauded for it.

E-mail: bilton@nytimes.com

Playing Mix-and-Match With Muscle Moves

By KEVIN HELLIKER

In the fitness studio behind his home, Tony Horton grabbed a chin-up bar and lifted himself, attempting to execute a routine called the gyrating lever. The first part—the lever—came easily enough, his legs rising until his body formed a tight line parallel to the ground.

But when he tried gyrating—twisting side to side—nothing happened. He dropped to his feet and grimaced. "I didn't get it," he said, rubbing his hands. "Not even close."

Alyson Aliano for The Wall Street Journal

Tony Horton on rings at his home in Santa Monica, Calif.

As the star of P90X, a top-selling series of fitness DVDs, Mr. Horton is known as a muscle man who can do 35 pull-ups, knock out 100 push-ups, then climb a rope upside down. But what makes his workouts stand out from the pack may be his commitment to facing his own limitations and struggles.

In a recent interview, Mr. Horton talked freely about his lack of athleticism as an adolescent, about the speech impediment that he overcame in early adulthood, about the modest earnings that confined him to a one-bedroom rental until he was well into his 40s. And, yes, about his inability to execute a gyrating lever, a move so difficult that even Olympics-bound gymnasts find it difficult.

Yet throughout this narrative, the 53-year-old Mr. Horton never stopped effusing determination and hope. "Presently I'm struggling with it," he said of the gyrating lever. "But I'll get it. I'll knock it out."

Beachbody.com, which teamed up with Mr. Horton to devise and lead the workouts, said it has sold more than 3.5 million copies of P90X since its 2005 launch, with Mr. Horton's proceeds large enough for him to buy and renovate a villa in the hills of Santa Monica, Calif. Initially marketed only on radio, Internet and television infomercial, P90X quickly became a word-of-mouth phenomenon. It costs about $140.

In a market teeming with exercise DVDs, P90X stands out both for its degree of difficulty and its honesty about it. Other fitness programs promise dramatic results overnight and with minimal effort, while Mr. Horton warned from the outset that his 12-DVD program wasn't designed for people without a base level of conditioning. At the time a trainer to the stars in Los Angeles, he created a program that required a brutal commitment of time: about 60 to 90 minutes a day, six days a week for 90 days.

In the first P90X workout, viewers endure 12 chest-and-back exercises—mostly pull-ups and push-ups—then hear from Mr. Horton that they'll do all 12 again. The next day's DVD features fast-action aerobics, while day three is devoted to shoulder-and-arm exercises, day four to yoga and so on.

To develop P90X, Mr. Horton became a general practitioner in disciplines ranging from martial arts and strength training to aerobics and yoga. The resulting diversity of his workouts is what gives the X after P90 legitimacy as a symbol for "extreme." Confronting the body with consistently different challenges is a recipe for consistent pain. But the result is a reduced risk of injury and boredom and an increased rate of muscle growth and calorie burning.

Gradually, P90X developed a cult following among bodybuilders, triathletes, professional athletes and anyone else wanting to cultivate a "ripped" figure and a reputation for extreme fitness. Republicans in the U.S. House of Representatives took to doing P90X workouts as a group.

Bust a Move

Jason Lee

A corncob chin-up requires an exerciser at the top of a pull-up to shift his body right, then left.

ADD DEGREES OF DIFFICULTY: Once a student of Tony Horton develops the ability to do a basic pull-up, Mr. Horton tweaks the exercise with new difficulties. The corncob chin-up, at right, requires an exerciser at the top of a pull-up to shift his body right, then left, as if the pole were a cob off which he is eating corn. Then it's time to drop below the bar and pull himself up for another. Many people can't do this routine at first, so with Mr. Horton's blessing they place one foot on the back of a chair for support.

Yet it also became a surprise hit among the obese. Or, in the case of those who sent Beachbody their before-and-after-P90X photos, the formerly obese. How this accidental market came to feel comfortable and confident with an exercise program touted as extreme has everything to do with Mr. Horton's memory of himself as the kid who got beat up at the bus stop.

In an age when other fitness trainers depict themselves as drill sergeants, their workouts as boot camps and their overweight clients as losers, Mr. Horton reserves his displays of toughness for his own stints on exercise mats and pull-up bars. He never berates, ridicules or incites competition among the three people exercising beside him in each video.

In fact, he does just the opposite: He shows them ways to cheat, such as doing push-ups on one's knees, planting one leg on a chair while doing pull-ups and using exercise bands in place of chin-up bars. When one of his exercisers completed a pull-up goal by placing his foot on a chair, Mr. Horton said, "See that—Bobby doesn't let his ego get in the way of his success."

Late last year Beachbody, with no marketing campaign, released P90X2, a five-day-a-week sequel featuring routines, poses and exercises that Mr. Horton learned or created after the launch of the original series. A personal trainer forever in search of new training, Mr. Horton is a magnet for other athletes and fitness fanatics from whom he often learns new poses and routines. On Sunday mornings, Mr. Horton hosts a gathering of athletes on the beach in Santa Monica, many of them younger and more naturally gifted than he is.

Sometimes he modifies or merges existing routines, as when he combines an aerobic move called mountain climber with a yoga pose called Chaturanga. Other times he displays the ingenuity of a kid playing outdoors and just wondering whether a thing can be done. One set on P90X2 calls for balancing on medicine balls—one under each hand and foot—while doing push-ups, a feat that builds strength from the arms and shoulders through the thighs. Beachbody says P90X2 is off to a better start than the first series of videos.

Meanwhile, Mr. Horton is searching for new challenges to offer on future DVDs. As the ultimate exercise in cross training—a strategy proven to reduce injury—P90X has gained a large following among professional and Olympic athletes.

Mr. Horton says that his initial inability to perform such moves is what forces him to learn ways of breaking them down for himself and others. Don't be surprised if, years hence, a late-night infomercial features Mr. Horton performing the gyrating lever, explaining how once he couldn't do it and assuring viewers that he could teach them to do it, if they bought his new DVD.

Write to Kevin Helliker at kevin.helliker@wsj.com

The Washington Post, Recast for a Digital Future - NYTimes.com

ON a Sunday in early December, Marcus Brauchli, the executive editor of The Washington Post, summoned some of the newspaper’s most celebrated journalists to a lunch at his home, a red brick arts-and-crafts style in the suburb of Bethesda, Md.

He asked his guests, who included the Pulitzer Prize winners Bob Woodward, Dana Priest, David Maraniss and Rick Atkinson, along with Dan Balz, the paper’s chief correspondent, and Robert G. Kaiser, a senior writer and editor who has been with the paper since 1963, to help him — and The Post.

He wanted to know how they thought The Post was covering the 2012 election and what might be improved. The paper, they told him, needed to strike a better balance between the ferocious 24/7 news cycle and more ambitious longer-term projects. Newsroom morale was suffering and needed his attention.

The meeting was an unusual gesture from Mr. Brauchli. In the nearly three and a half years since he became the first outsider to run the paper in seven decades, he has often fought perceptions that he is inattentive to concerns of his staff members.

But Mr. Brauchli is acutely aware of the tension that lies at the heart of his mission — a tension being faced not just by newspapers but by media companies in music, film, books, magazines and television. He is charged with maintaining the standards and legacy of a great institution — in this case, the newspaper of Katharine Graham, Ben Bradlee and Mr. Woodward and Carl Bernstein — while confronting the harsh reality that in the digital age, the grandeur is gone.

Mr. Brauchli refuses to be held hostage to the past. “There are a lot of nostalgia-drenched people in the journalism field who look back at what newspapers were and have a fairly static view of what they should be,” he said in an interview. “Just because The Washington Post used to be a certain way doesn’t mean The Washington Post has to be that way in the future.”

The Post faces the same problems as other daily newspapers, whose revenues have sunk as the Web and the tough economy have sapped advertising. But in some ways, its situation is even more daunting. Unlike most other papers with national aspirations, The Post serves a purely local print market, one that for decades had limited competition, and it has depended on local advertisers and subscribers who have since fled to the Web.

Though company managers say privately that The Post is modestly profitable, its newspaper division, which also includes a group of community papers and The Herald of Everett, Wash., reported an operating loss of nearly $26 million through the first three quarters of last year.

Compounding its troubles, The Post’s safety net ripped a giant hole. For decades, The Post could rely on Kaplan — the money-minting, for-profit college and test-preparation business that the company bought in 1984. But Kaplan has been squeezed under the weight of new federal rules that place greater limits on how for-profit colleges can recruit and enroll low-income students.

Once by far the largest and fastest-growing business in the Washington Post Company, Kaplan is now a laggard. Education accounts for less operating income than two divisions that were historically less crucial to its profits, cable and broadcast television, according to the latest financial reports.

That has left the newspaper and the company’s other businesses exposed. The newsroom, once with more than 1,000 employees, now stands at less than 640 people, depleted by buyouts and staff defections. The newspaper’s Style section, once one of the most coveted assignments in American journalism, has shrunk from nearly 100 people to a quarter of that size. Bureaus in New York, Los Angeles and Chicago are gone. There were so many Friday afternoon cake-cutting send-offs for departing employees last summer that editors had to coordinate them so they didn’t overlap.

“The survival of the institution is not guaranteed,” Mr. Kaiser said in an interview before the December lunch. Over the course of his five-decade career with The Post, he has been a summer intern, a metro reporter, a foreign correspondent and the No. 2 to Len Downie, Mr. Brauchli’s predecessor.

“When I was managing editor of The Washington Post, everything we did was better than anyone in the business,” he said. “We had the best weather, the best comics, the best news report, the fullest news report. Today, there’s a competitor who does every element of what we do, and many of them do it better. We’ve lost our edge in some very profound and fundamental ways.”

Last week, the paper announced a fresh round of voluntary buyouts, an effort to cut 20 more positions as managers reckoned once again with the painful reality that The Post was not making enough money to support the staff it employed.

Mr. Brauchli has reacted to the upheaval by overseeing one of the most sweeping and closely watched reorientations of any newsroom in the country. The editors now stress online metrics and freely borrow from the playbooks of more nimble online competitors like Politico and The Huffington Post.

The outcome of their efforts could offer a high-profile case study on how a company can foster an entrepreneurial, digital culture while remaining true to its heritage. But the transformation has been far from easy. There have been tensions in the newsroom and visible fissures between Mr. Brauchli and his own publisher.

The Post has expanded its Web presence by trying to meld what was great about the old Post with new traffic-baiting tricks of online start-ups — creating new, high-minded blogs like Ezra Klein’s “Wonkblog,” along with “Celebritology 2.0” where news about the Kardashian sisters and Justin Bieber can be found. That has many inside the paper starting to wonder if online growth has come at too high a cost.

UNTIL just two years ago, the Washington Post Company was considerably behind many of its competitors in innovating on the Web. Its digital and print operations were even separated by a state line. The Web site’s offices were across the Potomac River in Virginia and run by a different set of managers.

That changed after Mr. Brauchli and Katharine Weymouth, the Post’s publisher, integrated the two sides in the first half of 2009. Journalists whose primary responsibilities are to the Web site now work next to reporters in The Post’s headquarters on 15th Street in downtown Washington. Under the direction of Raju Narisetti, one of two managing editors brought in by Mr. Brauchli, the Post newsroom was reoriented to think about one primary goal: bringing the most visitors as possible to Washingtonpost.com.

Mr. Narisetti, who left the paper last month for a new job at The Wall Street Journal, where both he and Mr. Brauchli had worked before The Post, brought large flat-screen monitors into the newsroom that projected in real time what the most popular stories were online. He installed a new internal publishing system that required reporters to identify Google-friendly key words and flag them before their stories could be edited.

There are 35 different daily reports that track traffic to different parts of the Web site. Editors receive a midday performance alert, telling them whether the site is on track to meet its traffic goals for the day. If it appears that they might miss their goal, editors will order up fresher content.

“I’ve been at lunch, opened up that e-mail and called people and said: ‘Looks like we’re not delivering enough content. What can we put up?’ ” Mr. Narisetti said in an interview before his departure.

Top editors have embraced the view that studying traffic patterns can be a useful way to determine where to focus the paper’s resources.

“Let’s say you’re looking at your local staff, and because of pressures you need to move people. So you’re telling the local editor, here is the data, here are the business needs of our audience,” he said. “And in some cases people have moved an editor into a reporting role, or people have said we are reorganizing these beats so we don’t need four people covering this system. We can have three.”

Traffic isn’t the only factor that editors examine when determining whether to kill or expand a blog. They can look at where online visitors are when they read the site. And if their computers are registered with a government suffix — .gov, .mil, .senate or .house — editors know they are reaching the readers they want. “That’s our influential audience,” Mr. Narisetti said. “If a blog is over all not doing that great but has a higher percentage of those, we say don’t worry about it.”

Post employees are regularly schooled in the lingo of Web traffic. In memos to the staff, Mr. Brauchli is as likely to cite terms like page views, unique visitors and social media referrals as he is to laud a journalistic achievement. At the beginning of the month, he started an e-mail to the newsroom this way: “January was an excellent month for us digitally. We surpassed all our previous records. We beat our monthly records for page views by 9 percent, for visits by 14 percent and for unique visitors by 12 percent.”

He added: “Growing everywhere is a sign that we are adapting effectively to what our readers want.” By one important measure, The Post’s efforts are paying off. Recently, it has averaged 19.6 million unique visitors a month, according to comScore, making it the second-most-visited American newspaper Web site, behind that of The New York Times.

Mr. Narisetti and Mr. Brauchli were close partners in the digital reinvention of the newsroom, but their relationship became tense at times toward the end. In one spat witnessed by reporters in December, Mr. Brauchli confronted Mr. Narisetti in the newsroom over an erroneous blog post that said Mitt Romney was using language from the Ku Klux Klan in his speeches. The item forced the paper to issue an uncharacteristically self-flagellating correction citing “multiple, serious factual errors that undermine its premise.”

In an interview before his departure, Mr. Narisetti was asked if he believed that the newsroom would be the same size at the end of this year. “One thing no editor in any newsroom in this country can avoid saying is that it will be smaller,” he said, adding that if his bosses asked him how many people he needed to put out the paper, “the chances are we wouldn’t say 630 people.”

Despite the emphasis on digital delivery, The Post has continued to thrive by more conventional measures. Mr. Brauchli points to the journalistic distinctions under his watch, including five Pulitzer Prizes, and articles like an investigation into the insurance giant AIG and its role in the economic collapse of 2008.

“The Washington Post doesn’t need to cover everything,” he said. “But what it does cover it will cover well. I think the staff of any newsroom today surely understands that we are in a fast-changing industry, facing constant competitive pressure, significant economic challenges and great opportunities to rethink how we cover things.”

Some who were around when The Post’s mission was to cover everything said they understood how hard Mr. Brauchli’s job was, and they think he did not always get the credit he deserved.

“Whatever you’re going to say about the paper and where it is, it’s a time of convulsion for all newspapers,” Mr. Woodward said. “But you have an absolute first-class news person in charge who really does have the clarity, zeal and drive of Bradlee.”

NO one bears the weight of The Post’s legacy more than Katharine Weymouth, the paper’s 45-year-old publisher and the fifth member of her family to hold that title. Her grandmother was the beloved Post matriarch, Katharine Graham. Her uncle is Donald E. Graham, the former publisher and now chief executive of the Post Company. It is a testament to Mr. Graham’s standing among his employees that despite the difficult times, few hold him in anything but the highest esteem.

Mr. Graham, who graduated from Harvard and was drafted into the Vietnam War, joined the Washington police department before taking a job as a Post reporter. Ms. Weymouth, who grew up on the Upper East Side of Manhattan, attended the Brearley School and then Harvard, had an indirect path to The Post of a different sort. After graduating from the Stanford Law School, she moved to Washington to work as a corporate lawyer.

In 1996, she joined The Post as an assistant counsel and was named publisher in February 2008, right as the Great Recession was getting under way. In one of her first major decisions, she surprised the newsroom by reaching outside the organization for Mr. Brauchli, who had accepted a large payout and resigned from his previous job, running The Wall Street Journal under its new owner, Rupert Murdoch.

In Mr. Brauchli, she saw the kind of leader who could be a strong partner in shaping the company’s business strategy for the next generation. “I think he came in with his eyes wide open,” she said in an interview.

Mr. Brauchli was also willing to take on the undesirable task of paring down the newsroom. “It’s a job that Ben Bradlee didn’t have to do, and that Len Downie only had to do a little bit of,” she said, referring to the paper’s previous two executive editors.

Ms. Weymouth is a careful student of her family’s history, even if she says legacy isn’t something she spends a lot of time thinking about. “I just can’t think like that,” she said.

Her tenure got off to a rocky start. In the summer of 2009, Ms. Weymouth had to apologize after it became public that The Post was planning to charge lobbyists and others for access to exclusive “salons” at her home. Seeking a new revenue stream, the company wanted to create a series of events featuring Post journalists that would attract sponsors. Though magazines host similar conferences all the time, it seemed particularly undignified for an institution as esteemed as The Post. And the blowback was fierce.

Though Mr. Brauchli always understood his job would entail how to put out a daily newspaper and run a 24/7 Web site with shrinking resources, some of his editors have noticed that his relationship with the publisher has cooled.

One veteran newsroom manager said Mr. Brauchli has described “a constant fight” with the publisher over making further cuts. In an act that went largely unmentioned at the paper, Mr. Brauchli refused to accept a bonus one year, this person added.

Though such a gesture, coming as it did when the paper was reducing staff significantly, may have helped lift morale and engender good will, Mr. Brauchli chose not to make his decision public. And when Ms. Weymouth wrote a year-end memo to the staff praising its accomplishments and thanking people by name, his name was curiously absent, leading many staff members to believe that she had snubbed him. In fact, said another person who had seen an original draft of the memo, Mr. Brauchli’s name was mentioned in the first version but he asked that it be taken out. He left the misperceptions uncorrected.

Many at The Post are still trying to adjust to life under a new regime, one in which “Donnie-grams,” congratulatory notes from the chief executive, arrive in your in-box along with spreadsheets on the latest Web traffic metrics, and where the walk-around management style of Mr. Bradlee and Mr. Downie is gone. Employees often fault Ms. Weymouth and Mr. Brauchli for not circulating enough in the newsroom. By her own acknowledgment, Ms. Weymouth lacks ease and rapport with the newsroom. Her uncle Don, she said, “has an amazing knack for names that unfortunately I don’t share.”

On election night in 2008, she brought her young daughter into the newsroom to witness Post journalists putting together the paper that would report on President Obama’s historic election. Reporters and editors, most of whom rarely saw their publisher in the newsroom, were taken aback but impressed with what that said about Ms. Weymouth’s attachment to the paper.

“I hope they see me as a champion of the news. I do my best,” she said. She added that she didn’t visit the newsroom “nearly as much as I’d like,” saying: “You get stuck in meetings, you’re traveling. I’d like to get down there a lot more.”

Mr. Brauchli’s own response to the criticism was similar: “The journalism is where I want to spend my time, and the journalism is where my passion is. But there are a lot of issues that require my attention.”

THIS summer, Reuters tried to poach Mr. Balz, one of the country’s most prominent political reporters. Mr. Brauchli and the national editor, Kevin Merida, were loath to see him go — not just because they were wary of more brain drain but also because of the potential damage to newsroom morale from the defection of such a revered and well-liked colleague.

They flew a young political reporter, Philip Rucker, to Michigan, where Mr. Balz was on vacation and considering the Reuters offer. Mr. Rucker appeared on Mr. Balz’s doorstep carrying a basket with cheese and wine and a book they had made called “Campaign Crescendos: The Election-Night Writings of Dan Balz.” Editors and reporters had signed it, urging him to stay.

He declined the Reuters job.

“To me, The Post was and is a great newspaper,” Mr. Balz said. “Is it a different place today than it was? Sure. But in the end it’s still a great place to do great journalism.”