Business friendly, that's the watchword

Click image for full Chan Lowe/Sun-Sentinel cartoon.

No liability for lying

Mitt Rmoney (R-safe harbor from lies) has spent much of his life approving statements that may or may not be true but which excuse themselves from liability if they turn out to be true. Here's an example from current Bain dealings:

These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those in such forward-looking statements.

Here's another:

This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995.  These forward-looking statements generally can be identified by phrases such as TI or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import.  Similarly, statements in this release that describe the Company's business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements.  All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.[emphasis added]

A third:

Because such forward looking statements contain risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward
looking statements.

There are many, many more, of course. Bain's various companies are involved in a lot of deals.

Since Mitt never worked under Sarbanes-Oxley (that we know of), he didn't actually sign these statements, but his cavalier attitude toward making shit up shows in practically every statement he ever makes, for example, this piece of pettifoggery:

According to the candidate's mythology, Romney took leave of his duties at the private equity firm Bain Capital in 1990 and rode in on a white horse to lead a swift restructuring of Bain & Company, preventing the collapse of the consulting firm where his career began. When The Boston Globe reported on the rescue at the time of his Senate run against Ted Kennedy, campaign aides spun Romney as the wizard behind a "long-shot miracle," bragging that he had "saved bank depositors all over the country $30 million when he saved Bain & Company."

In fact, government documents on the bailout obtained by Rolling Stone show that the legend crafted by Romney is basically a lie. The federal records, obtained under the Freedom of Information Act, reveal that Romney's initial rescue attempt at Bain & Company was actually a disaster – leaving the firm so financially strapped that it had "no value as a going concern." Even worse, the federal bailout ultimately engineered by Romney screwed the FDIC – the bank insurance system backed by taxpayers – out of at least $10 million. And in an added insult, Romney rewarded top executives at Bain with hefty bonuses at the very moment that he was demanding his handout from the feds.

Mitt is a gee-whiz liar to the core. He believes his business and his god entitle him to say whatever he needs to say.

Name your poison

Click image for full Jim Morin/Miami Herald cartoon.

Corporatism run amok

Once the business of America was business. If you had to pin it down to one company, that company was General Motors. No more. GM is broke. Manufacturing is passé.

The business of America is now the Wall Street shell game, and the exemplar company is Goldman Sachs. Who needs the percentage gains of factory automation when you can have the multipliers of leverage?

The bankers are so determined to profit at our expense that they refuse to admit their preponderant responsibility for the financial crisis that we taxpayers have promised to pay their way out of:

[T]he bankers’ testimony showed a stunning failure, even now, to grasp the nature and extent of the current crisis. And that’s important: It tells us that as Congress and the administration try to reform the financial system, they should ignore advice coming from the supposed wise men of Wall Street, who have no wisdom to offer.

I'd go even further than Krugman in critiquing the organization of our economy: We need to drastically lower the rewards available from Wall Street. The financial titans' role in arbitraging all enterprises to the same level of profitability can be slower and less complex without harming the real economy. That would make it more understandable, more predictable, and safer for the rest of us, whom they unconscionably stick with the exorbitant bill for their never-ending high life. It would also push bright and creative people into fields that actually build real economic growth.

We've lived off our post-WWII assets as long as we can. It wasn't good to fund consumption out of capital, but we did it - with the consequences now all around us.

We need to kill Wall Street as it exists today.

One panel Keynes

The simplest, most obvious fact that Republicans have to blind themselves to in order to remain blissfully ignorant of economics that acknowledges the incompleteness of the free market.

Click image for full Matt Davies/Journal News cartoon.

Answering machines

Xerox and Kodak called. They want their trademarks back, too.

Click image for full Mike Keefe/Denver Post cartoon.

GOP fetishes

Tim Pawlenty sticks with failed Republican fetishized positions. Of course, Republicans think a tax cut can solve any problem.

But that's old news. The funny part is the constant refrain of small business this, small business that. Republicans don't really care about small business. They use it for protection from the true accusation that they are in the pocket of big business - and have been for many decades.

This is a case of a Democratic formula backfiring. Sometime around the 1970s, Dems wanted to reassure voters that they were in fact in favor of a strong economy, but they had been hammering big business so hard since the Great Depression that they had to make a distinction about which businesses deserved their help and advocacy.

Republicans quickly saw the advantages of this market positioning. After all, only a narrow niche of voters would ever find big business to be warm and fuzzy, and they already knew the GOP was buttering their bread.

Elite media loved and love this formula, too. Every economic downturn brings out formulaic stories about how many jobs small business creates. The better studies, though, show that small business does not create net jobs at anything like the scale of big business.

What you'll notice if you look closely at actual policy, as opposed to dishonest GOP marketing, is that Republican goals always help big business and leave a few crumbs for small business, much as their tax cut policies do for the very wealthy vs. the middle class.

At bottom, the Republicans' single most important policy position is tax cuts. The rest is just marketing. They don't really care whether a tax cut will solve a problem, economic or otherwise. They only care to lower their patrons' taxes.

In the end, we're back to the old news. The chant of "small business" is only about helping big business.

Would you buy a new car from this man?

Loans are available!

Click image for full David Horsey cartoon.

Perils of Putin

This is why I have no money invested in Russia. Even if there's enough accounting transparency that you can tell you made a profit, in the kleptocracy of Vladimir Putin you can't cash out. Hu Jintao? Barely better, if at all.

Duhbya flattered Putin - no judgement.

Man's inhumanity to humanities

The parlous state of the economy is only the news hook for this story.

University humanities departments have been suffering for a long time, whether times are fat or slim. My sister the English professor makes sure I don't miss that fact, but I'm sure the New York Times has previously reported on it, too. In this mercantile and mercenary age, learning for the sake of learning, which is in fact learning for the sake of being a better and more fully realized and capable human being, is just so squishy and old-fashioned.

An intemperate question: If we're failing to educate young adults in the humanities and we're failing to teach them enough math and science for the technology we have and that that we want to have, what are we teaching them?

My career in private industry suggests this answer:

• Not enough writing to be clear on any topic - often not enough to be grammatical
  
• Not enough math to understand the limits of business metrics - particularly not enough statistics to grasp the fuzziness and error built into the firmest looking number
  
• Not enough literacy to connect on much beyond superficialities
  

Instead, we're teaching spreadsheets and PowerPoints - oh, and instant blind assent - as if they were business. But marketing, plenty of marketing, in our perpetual attempt to convince customers that what we're offering is actually better than it really is.

We've lost sight as a society of vital cultural values such as citizenship, consciousness of the impact of our own society, and empathy for one another. Reading a novel won't directly make a better widget, so many of us won't consider doing it, as if all there is to being human is grasping and getting. Perhaps this is why so many Americans have abased themselves so far as to favor the instruments of torture in Bushist policy.

But I have a humanities degree, so what do I know?

Click image for CCA 2.0 license from Wikimedia Commons.

How many seats

If we as a nation own more than a third of Citigroup, it should go without saying that we get to appoint the board chair. The question I have is how many other seats do we get on the board? And, no, Robert Rubin doesn't count.

I'm not happy with strictly proportional allocation, which understates the importance of our capital infusions. I'm looking for one less than a majority, thus chair plus six other seats on the board of 15.

Who should be kicked off? Start with the inside directors, Win Bischoff, Vikram Pandit, Richard Parsons, and Bob Rubin. They royally screwed up; this is known in my plebeian circles as accountability. But no:

Under the deal, a majority of Citigroup's independent directors will be replaced. Pandit and Chairman Richard Parsons will retain their positions.

The idiots in charge of the asylum are not in the mood for justice. They and their diluted (deluded, too) investors still feel entitled:

"Will Citigroup be run for the shareholders, or is Citigroup going to be run for public policy goals or some other purpose?" asked Michael Mayo of Deutsche Bank.

Uh, dipshit, we are the shareholders.

The truth is that these guys couldn't find their well-fed asses with both hands. (Don't they have people for that?)

"We do not think [the Citi brand has] been permanently damaged. We still have a very strong brand globally," [Ned Kelly, head of global banking for Citigroup,] said. "Clearly when you're in the spotlight, there's going to be some negative impact. But it's had no economic impact."

They're still dithering about their brand, when anyone with two brain cells to rub together can tell that the bank's survival is what's at stake.

They still think these times are normal, that their membership in the elite will protect them from justice. Self-perpetuating and mutually defending elites are a big part of what's wrong with the economy, the media, the government, and America in general. My proverbial pitchfork says they're wrong.

Future of news, if any

"Networking, Ad Revenue and Reinvention", by my blog friend Newscoma on the new site NewsTechZilla, which she shares with a partner, has me thinking about the parlous future of the news business. It costs money to find out the facts, and yet hardly anyone is willing to pay for it.

Reader unwillingness to pay is not new. Advertisers pay the bills, not readers, and they always have (where 'always' means 'in my lifetime').

Goodbye paper

One future we all know: Paper's over. No point discussing it.

As soon as advertisers figure out that they can get into just as many eyeball-deploying wallets on line as they get from dead trees, the whole expensive process of distributing inky gray newsprint to every suburb will immediately become too uneconomical to continue. I've read a daily newspaper for more than 40 years, but I dropped my Boston Globe subscription last fall. I feel like a sponger sometimes, but I was tired of recycling unopened papers.

Newspaper advertisers have been overpaying for years, anyway, and that wasn't going to go on forever. When I do get a paper, the first thing I do is to recycle the circulars. Sooner or later, the sponsors are going to figure that out. A little time watching a conveyor at a newsprint recycling plant should be enough.

The demise of paper has one consequence that newspapers have long realized: Video and audio clips are now part of the newspaper, just as text is part of news sites descended from TV such as CNN.com. One of the New York Times's chief competitors is in fact CNN.

Slice and dice

Once you're on line, though, the viewport of a news site is different from a newspaper. Why would a local paper even try to compete with the New York Times in national and international coverage? Truth is, local papers haven't been competing with the NYT forever (same definition). Part of my childhood, I read the Knoxville News-Sentinel, whose idea of international coverage was four one-paragraph blurbs - lead paragraphs off the wires - twice a week. They outsourced their national coverage to the AP and UPI or, preferably, the other Scripps papers. Nonetheless, the Sentinel pretended to cover all the news.

On line, local papers are learning not even to pretend. The MetroWest Daily News only puts local content on line. National stories without a local tie? Maybe they make the dead tree edition, maybe not. On line, the Nov. 5th headline was "MetroWest voters help elect first black president".

Why should they pretend? Their readers are already on line, where they can easily get far better and more complete coverage. As Newscoma puts it, quoting Vibinc:

Readers can get the AP feed ANYWHERE.

What's happening is the end of the vertical integration of news-gathering. Very few organizations will have the profits to compete at all levels and in all general interest areas. Really, how many national newspapers do we need? There will be some larger regional newspapers, too. The LA Times and the Chicago Tribune may have to settle for regional, though at worst the LA Times's potential region is pretty damn huge.

Location, location, location

Everyone else is going to need a niche where they can be the big dog. Some of those niches are going to be verrry small. Current well-reputed semi-national papers such as the Globe had better have terrific, detailed, and much more easily navigated sports coverage. If they don't, sites will spring up to cream off those highly motivated readers. (Hmm, business idea?)

Local coverage is a vital competitive advantage for professional reporters. Instead, newspaper consortiums are hollowing out. Community Newspaper Co., now owned by Gatehouse Media, has done this in an attempt to capture economies of scale. The problem is that Gatehouse and their predecessors have interpreted that as calling for staff cuts. They can always pull in a story from the next town over, as they do in the weekly I still subscribe to (and used to write for). Problem is, their readers want to read about their own town, not what the school committee did about mold in their elementary school.

At the bottom end are the amateurs and semi-pros who report news. Maybe they report about quilting. Or maybe they actually cover the police and fire reports in their towns. Some of them with an extreme tolerance for boredom, occasionally punctuated with real drama, may even cover the meetings of local political boards. All of these topics are valuable to someone, which is why Gatehouse Media is suing the Globe over its knock-off of Gatehouse's local aggregation pages.

Unfortunately, it appears that the subversives at the Globe who are trying bring it into the blog age don't have enough executive buy-in to get convenient links from the front web page. I'm no newbie, but I still have trouble finding the new media and had to search to find Your Town. In fact, the Globe site overall needs much better organization. CNC, unbelievably, is ahead.

It could be that the Globe executives are still pushing paper and that they want their site to be hard to use. If so, they've succeeded, though that word is an oxymoron in this context. They're only cutting their own throats.

Paying

Like 'Coma, I don't know how to pay for it. Only the Wall Street Journal has succeeded at getting revenue from on-line subscribers, and that's because of its special and tax-deductible specialty as the indispensable business paper. Even the New York Times, America's number one national general interest newspaper, failed with TimesSelect.

I'd like to think that a micropayment system might work, but I just don't believe it. No one wants to read with the meter running. (Micropayments would be a far better solution to email spam, as Bob Metcalfe long ago argued in the departed dead tree edition of InfoWorld.)

Ad it all up

That means we're stuck with advertising. Web browsers make many wicked annoying ad types possible. The Globe now pops up ads when you click a link. I kill them as fast as I can. Pop-unders are hardly better. But the worst ad type is a hijacking ad; the Minneapolis Star Tribune pops up borderless ads with transparent backgrounds. Try to click a link under the ad pane and you get jerked over to a commerce site that you're probably not interested in since you were trying to click something else. In fact, the Star Tribune probably gets to charge its sponsors more money because they generated a click-through, even if that does border on fraud.

There are going to be product placements, too. When I used to still be willing to watch all the fluff on CNN TV, about half the stories felt like placements to me. The conscientious sites will label ads. Many others won't.

Futurepress

Crystal balls are notorious producers of bullshit. This one may be no exception.

Print media already serve a market segment rather than everyone who wants news. Most people don't read much if they can avoid it. They'd rather see pretty pictures. Print-oriented news sites that descend from newspapers need to recognize that not everyone wants to read, and they should serve those who do want to read. No doubt, they still need to be visually attractive and easy to use, both for their core customers and to attract new ones.

Print media companies will not be virtual corporations, though sometimes they will look like them. Instead, they will have their niches, and they will aggregate everything else. Each day will be a rap track that samples heavily from other sources. Assigning rights and payments will be a matter for lawsuits, evolving markets, and eventually statutes.

To this point, news aggregators mainly suck. Most aggregation sites are automated, ugly, and hard to navigate. I use the blog aggregator BlogNetNews, but the learning curve there is steep, and their rankings are easily manipulated. Technical problems will be solved, not by magic but first by proprietary software and then by open source. Or maybe open source will get there first, last, and only.

The sites that the aggregators aggregate will have all sorts of sizes and specialties. The advertisers will determine which ones survive as businesses and which are left to hobbyists. If I claimed I could tell in advance what type of organizations would be best suited for the new environment, well, I might be the Bernie Madoff of new media.

One thing that will be especially hard to judge is the relationship of one site to others. Do you share traffic, or are you competing for the same traffic? With this post, I want to share NewsTechZilla's traffic. Since I'm not working this subject every day, that's probably fine with my blog friends, but what if I did want to poach on their preserve? Is building a larger conversation more important than hosting the conversation? It will depend...

The answer will affect how much link-sharing sites want to do. The Globe links to me, primarily I'm sure because I asked early. They'll get stingier later. Most of the Globe site, in fact, is already verrry stingy with links, which is one of the reasons I suspect that their business people really don't understand how doomed their current business model is. (Or maybe their owners at the NYT are making them, as a hedge. Except that the NYT does not encourage its commenters to link, either.)

My suggestion for a rule: If you have even one order of magnitude more traffic, link away. You'll help the little site, and its owner will be grateful. (Against that, CNN used to give me links, and I constantly bit the hand that fed me.)

The new media winners will be good enough that they can link freely to interesting and vivid one-offs without losing their readers to the linked site. Their readers will continue to trust them to find - and sometimes, to re-report - nuggets that would otherwise wind up buried in the avalanche of mostly crappy content. Chances are, for example, if you won't help your commenters link to their blogs or whatever, you don't have enough confidence in the uniqueness and quality of your content to build a permanent audience.

I don't make the news

What's the upshot for reporters and columnists? The generalist days are probably gone, and this is a loss. Both reporters and columnists need areas of special expertise. Don't blame me; I'm just calling it as I see it.

Tom Friedman and Bill Kristol have been superficial or wrong so many times that it's a wonder they still have jobs that don't involve upselling French fries. Many political bloggers do a better job without expense accounts, though of course you have to find them. That will be the future role of op-ed editors.

Reporters need forensic accounting or business experience or foreign studies or public administration or something else that will permit them to do much more than rewrite press releases. They need math and science. (Sorry!) Because so many of us crazy semi-pros and amateurs are willing to spend Sunday afternoon writing analyses like this, reporters need knowledge that is rare, and English usage is not rare enough.

Reporters will need one integrated skill that columnists are supposed to have: the willingness to call bullshit and make it stick by deft display of facts. They don't need a visible point of view; there's plenty of that for free. But the jejune, faux balanced story structure pioneered by Time Magazine of thesis-antithesis-superior shrug is not going to cut it.

Reporters will need to be able to write short. Yeah, I still need to figure that one out. But at least I gave you cut-lines.

Update (1/5): One classic example of expertise that takes one slice of news stack and owns it is Nate Silver's 538.

Free market solves another problem

Text messaging is wildly overpriced relative to its negligible cost to providers. Nonetheless, their oligopolistic pricing goes up in lock-step. Why hasn't this so-called free market opened the door to a price-cutting entrepreneur?

The real problem that markets such as this intend to solve is how to remove money from your wallet and transfer it to the executives. (You thought the shareholders mattered? Ha.) And this market is vigorously solving that constant problem!

One reason that phone companies are against net neutrality is that they've been there before. It would be much easier for a provider like MCI from the early days (say, 1978) to piggyback on existing networks and undercut prices. As they say in economics, there would be much lower barriers to entry and thus to a return to competition, however briefly.

Class war's over, money won

Even though the greed of business tycoons got us into this economic crisis, under Bushism the big percentage losers are the union workers, who lose $8,000 in wages and a similar amount in benefits. While Wall Street and CEO-level multimillionaires were reaping most of the rewards of boom times, the UAW was already making concessions. Now, they're back in the race to the bottom.

Don't be surprised when non-union car-makers respond with their own wage cuts. That's the point of Bushist Republicans.

Someone in the media ought to try to write the story of the negotiations. And when I say "negotiations", I mean the moment when the Bushists said, "I am altering the deal. Pray that I don't alter it again."

Secret ballot card check

Businesses and their wingnut allies are frantic that the Democrats may enact card check as a means of authorizing collective bargaining by a union. They say that their concern is to prevent coercion of workers, but there's a little more detail: Their concern is to prevent union coercion, while leaving the field open for management intimidation and coercion.

In fact, card check has been the law of the land previously without the world coming to the end the Chamber of Commerce fears if those people gain more power. Still and all, the secret ballot is anti-coercive, and its loss could be a bad aspect in what is on balance a good idea.

Why not have both? If the state of Oregon can conduct its secret ballot elections by mail securely, why can't unions conduct their elections by mail in a way that avoids management intimidation but retains the secret ballot?

(h/t R. Neal at KnoxViews)

Greed works

... for a while.

Click panel for full Ruben Bolling cartoon.

Trillion-dollar transfer payment

Henry Paulson estimates the newest bailout to have a price tag as high as $500,000,000,000. Yup, half a trillion dollars. But, even with that staggering number, you have to remember how well the Bushists estimated the cost of the misadventure in Iraq. Larry Lindsey got fired for saying $200 billion, and that's a small fraction of what will be the total cost in the end.

We need to call this what it is: The government is going to spend perfectly good money (for now!) buying utter crap. It will be the most massive short-term transfer of wealth in the history of the world. Of course, since it's happening under the Republicans, it's a transfer from all of us - poor, rich, middle class - to the wealthy investor class and large businesses, with a few crumbs for everyone's 201k.

And get this: Paulson refuses to consider any reforms whatsoever!

Paulson rejected Democrats' calls to include tighter regulations, corporate reforms or limits on executive compensation as part of the measure, [Rep. Brad] Sherman [(D-CA)] said.

This necessary but unjust largesse should be paid for with openly confiscatory taxes on those whose profits led us to the edge of the precipice. The alternative is revolution.

Price of everything, value of nothing

I could be in the air right now. Southwest had a seat on the flight at 11:00, several in fact. I was there at 10:45, physically ready to make a miracle 20-minute connection despite a concourse change. Those seats were undoubtedly empty when the plane departed.

Instead, I'm sitting in BWI waiting for the 12:25 flight after a bad Starbucks mocha latté. Why am I still here?

The exchange at the counter went like this.

"Could I get on this flight?"

"Yes, I think so. Oh, you'd need an upgrade at some cost."

"How much?"

"Let's see. Seventy-six dollars."

"You know that makes no sense."

"Yes it does. You booked one-week advance purchase."

What I thought was that she had been working in the industry too long if she thought it made sense. The woman behind me, flying on a free ticket, was pleased to get a free upgrade, too. She was also amazed that I couldn't get on the physical plane.

Southwest shares a pricing model with most other airlines. Each seat is assigned a particular price, and when they're gone, they're gone. In essence, the Wanna Get Away seats are on priced as if they're on a different airplane. To get onto the ­Anytime airplane, I would have had to pony up another $76, and this particular 1:25 wasn't worth that much to me.

What's wrong with that? Southwest set the rules and their price for an exception, and I wasn't willing to buy one. The market worked!

As if. Those empty seats were wasting assets, and now they're wasted. There was value to be provided to me, and there was demand for it from me. Instead, Southwest derived zero marginal revenue.

Here's an idea. I'm offering it free, since I have no way to derive benefit from it.

Some canny, economically literate airline will enhance their bottom line with a cross promotion with eBay. They can set it up however they like - auctioning the seats as the clock winds down would best match eBay's business model. But shrinking the upgrade price automatically as time ticks down would be easier to implement. Say, 15 minutes before flight time, when absent tickets become stand-by tickets by rule, $20. Ten minutes, $15. Five minutes, $10.

For $20, I would have upgraded. I'd be better off. Southwest would be better off. The market missed this opportunity.

Sure, there are start-up costs. The eBay cross-promotion should cover those and provide a tidy profit, too. But business, which free market true believers generally account as rational, has to be smarter.

Missing the point

When a pundit hears that Wal-mart is propagandizing its workers in favor of Republicans, who will continue their penury, his main concern is what, the damage to American democracy? Nope, he thinks it's bad business.

Consumer protection racket

No, not Ralph Nader.

Egregious laxity with your credit card information? No fine if you'll agree to auditing! Don't do it again, big fella.

Ironclad rule: Republicans are not watching out for anyone in your income class. You're not a CEO, are you?