Thursday, February 26, 2009

American Right Holds It's Own Hostage

Interesting article on CQpolitics online relayed to me yesterday by a friend.

Shortly after Arlen Specter and two other centrist Senate Republicans struck their deal with Democrats and the White House on the economic stimulus package, Specter was approached in the GOP cloakroom by one of his colleagues.

“ ‘Arlen, I’m proud of you,’ ” the second senator said. Specter declined to say who the lawmaker was, but he recounted the rest of their conversation this way: “‘Are you going to vote with me?’ I said. He said, ‘No, I might have a primary.’ And I said, ‘You know very well that I’m going to have a primary.’”

That brief encounter clearly illuminated the position moderates hold in the ranks of the Senate Republicans these days — weighing their ideological inclination to find common cause with President Obama against the political risks and rewards of such dealmaking, both for themselves and for their party.

My friend David Amerikaner narrowed the list down to ten names, all male, up for reelection in 2010: Bennett (UT), Bunning (KY), Burr (NC), Coburn (OK), Crapo (ID), Grassley (IA), Gregg (NH), Isakson (GA), Shelby (AL), Vitter (LA).

Good place to start. I'm going to throw out Bunning (already facing primary challenge) and Coburn (known anti-government activist) off the top of my head. This leaving Bennett, Burr, Crapo, Grassley, Gregg, Isakson, Shelby and Vitter.

Bennett: While I know (from personal experience) politicians do not always believe their own rhetoric, I think this statement from Bennett in a Huffington Post article rules him out:

"We have a very, very clear model, because we passed a stimulus package in the last Congress -- bipartisan. Republicans voted for it. Democrats voted for it. It didn't work," said Sen. Bob Bennett (R-Utah), who led financial-industry bailout negotiations for the GOP.

Bennett argued that the last plan "was based on economic analysis of past recessions and past problems and not the depth and seriousness of this one. We saw personal income spike up as a result of the stimulus we put into the economy, and the economy was stimulated not at all."

For Bennett, the plan failed because high debts and the dire economic outlook persuaded people that they should save their money or pay down loans rather than spend. "When you're having an economic crisis, whether you're a company like General Motors or a bank like Citi or an individual, you do what you can to pay down your debt. That's what was done with the last stimulus package. That's the rational thing to do."

Burr: Not only did Obama win his state, Burr just saw Liddy Dole lose reelection by 9 points. Furthermore, his favorables are under 50 points. However, Burr has not ventured against conservative orthodoxy in his time in the Senate often. I doubt the GOP would want to further weaken an already weak candidate (see Arlen Spector). Plausible candidate.

Crapo: Won 99 percent of the vote in his reelect in 2004. It has been rumored that he's a candidate for GOP leadership in the Senate. Popular back home, doubt anybody takes him on. I'll rule him out.

Grassley: Although he got the Obama Administration to move a $69 billion AMT patch into the stimulus bill, I doubt he is the one in question. A weekend hog farmer who visits all 99 counties in Iowa every year, a viable primary challenge is not in the cards here.

Gregg: Interesting candidate here. Gregg abstained for a cloture vote when deciding on whether to take the Commerce position. That aside, he is popular with conservatives in New Hampshire. Considering the changing dynamics of the state I doubt Gregg is worried about a primary challenge from the right in an open primary system. I'll rule him out.

Isakson: Isakson is fairly conservative but has taken some moderate steps here and there (ie. the bailout and immigration). His ridiculous amendment that would have done little else than put money in realtor's pockets showed he was at least willing to play ball. No primary challenger has announced, yet there have been rumors of it happening. Strong candidate.

Shelby: Originally elected as a Democrat from Alabama to the US Senate. Shelby is now questioning Obama's citizenship (seriously?!?!). Shelby has a $13.4 million war chest (the biggest of any incumbent on the board for 2010). Doubt he is concerned with a primary challenge.

Vitter: Extremely worried about a primary challenge (voted against HRC for State as a result). His track record is ridiculously conservative, so I doubt he would even contemplate voting for the stimulus bill.
My best guess: Isakson.

Wednesday, February 25, 2009

On Octo-Mom

My friend Lindsey Horvath recently published an article at the Huffington Post regarding Nadya Suleman (aka Octo-mom). My thoughts below:

I think Miss Suleman has been an easy target for our society at large to blame for being irresponsible. America has been angered at the current state of affairs engulfing our country and our personal lives -- our troops are still in Iraq, the worst financial crisis in 80 years, surging insecurity regarding one's job, etc. -- and while we blame failed politicians, bankers and variuous corporate shenanigans for these massive issues, our search for solutions defies simple explanations.

Thus we turn back to Miss Suleman. Her circumstances are essentially of her own choosing, and has resulted in her own personal government bailout of sorts. While this story would be a media sensation in any news cycle, it has gained greater prominence due to external cultural and economic difficulties.

Anytime a woman decides to bear a child society must support her decision -- not necessarily for the mother's sake but for the child's future. However, I believe a financial test for fertility treatments is not against the goals of feminism, and would actually provide incentives for woman to better gauge if they can provide for a new life's well-being.

In regards to the matters of feminism, I think it is essential for woman's groups to be pushing for greater financial literarcy with women. I'm not sure if this would have helped Miss Suleman all that much, yet -- thanks in large part to the previous generation of feminists -- as women increase their financial earnings they need the tools to empower themselves to be more responsible for the lives of their children, family and their own personal future.

Tuesday, February 24, 2009

Small, but Needed Step, to Greater Government Transparency

In a significant step towards greater government transparency -- and how our taxpayer dollars are being spent -- the stimulus bill requires government agencies to report disbursed monies via an optional RSS feed.
For each of the near term reporting requirements (major communications, formula block grant allocations, weekly reports) agencies are required to provide a feed (preferred: Atom 1.0, acceptable: RSS) of the information so that content can be delivered via subscription.
Real time reporting of how money is allocated will provide advocate organizations greater ammunition to push for a more effective, productive use of government resources -- and our tax dollars. I fully expect this development to create a few firestorms in the blogging world... which will consequentially be covered by radio, broadcast and print media outlets.

Hat tip: Steve Rubel

Tuesday, February 17, 2009

The Newspaper are Dead... Long Live the Newspaper

It is no secret the Gray Lady is facing serious financial difficulties. Just 18 months ago The New York Times Co. had a market cap of $2.7 billion -- it is only $542 million today. While the Times motto is "All the News That's Fit to Print", their business model/plan is best summarized by their debt rating -- junk. The Times's financial difficulty is epitomized with the fact a share of the The New York Times Company costs less than the Sunday edition of the New York Times.

Newspapers across the country are facing a similar financial problems. Their content is in demand by consumers -- google major local events and the local print stories almost always appear first -- yet they have lost their monopoly of delivering information on demand (before the Internet one could not pull up a radio interview or TV newscast whenever/where ever one desired).

Warning: Wild Speculation

Perhaps the best business model for the local established media would be for television stations to buy out and merge with local newspapers?

Government litigation/regulation, once again (see federal government anti-trust cases against IBM and Microsft -- it wasn't the litigation that ended their monopolies... it was the firms failure to innovate), has failed to keep up with the technological advances in the marketplace and this time threatens to destroy the 4th estate. If this issue sounds familiar, recall the contentious ideological battles in the last 30 years over the concept of "cross-ownership". The "progressive left" has fought any attempt to lift this restrictions claiming it would place too much media power in too few hands, increase media layoffs and therefore reducing the quality of local news coverage and stiffle local democracy. As Amy Goodman wrote in a 2007 article:
The problem facing Martin and his big media friends isn’t that newspapers are unprofitable; it’s that they are simply not as profitable as they used to be. This is in part because of the Internet. People no longer have to rely on the newspaper to post or read classified ads, for example, with free online outlets like Craigslist.

The media system in the United States is too highly concentrated and serves not the public interest but rather the interests of moguls like Rupert Murdoch and Sumner Redstone, who controls CBS/Viacom. Media corporations that will benefit from Martin’s handout are the same ones that acted as a conveyor belt for the lies of the Bush administration about weapons of mass destruction in Iraq. We need a media that challenges the government, that acts as a fourth estate, not for the state. We need a diverse media. The U.S. Congress has a chance to overrule Martin and the FCC, and to keep the newspaper-broadcast cross-ownership ban in place. It should do so immediately, before the consolidated press leads us into another war.
While I agree it is in the American public interest to have "media that challenges the government, that acts as a fourth estate," I simply do not see any other way to ensure the survival of local media outlets other than consolidation. Two ideas that have raised to address the financial difficulties of local newspapers have been government subsidies (horrible idea for very obvious reasons) and establishing local non-profit trusts (sounds good, yet I doubt this actually works + who is going to subsidize the entities... rich local elite who do not want negative press coverage).

The viability of local news coverage depends on increasing the efficiency with which local news is produced and distributed. Breaking up existing "cross-ownerships" or preventing further consolidation does nothing to address this fundamental reality. The "progressive left" needs to come up with better arguments than demonization of MSM to argue against the repeal of the "cross-ownership" rule and come up with realistic, viable solutions to save local media outlets.

A Possible Solution: Repeal "Cross-Ownership" Regulations

Although my prediction of four daily newspapers by the end of Obama's first term may be a bit aggressive, their is little doubt that an unprecedented number of daily newspapers will cease publication in the next four years. Newspapers have seen their two sources of income (advertising and subscriptions) massacred by the combination of the Internet and recession (esp. the collapse of the real estate and automobile industry). Significant job loses are inevitable. The daily print newspaper model is dead -- and the income from an outlet's Web site is not nearly enough to sustain current news operations.

Consolidation with local TV stations may offer the best opportunity to preserve as much journalistic talent and reporting as possible. Unlike newspapers, local TV stations income stream is far more stable than newspapers. While local TV news broadcasts have seen advertising and audience share drop, their core income stream is far more reliable long-term than print and has not fallen nearly as much.

Like all firms in any sector, newspapers are going to need need to innovate, to adapt -- and many are. Numerous print reporters are already filing video along with the written story to enhance the effectiveness of the piece on the Internet. Local televisions stations are now posting written news stories on the front page of their Web sites without a produced news clip. The delivery mechanism of these two media genres is rapidly merging -- and they are competing with each other for SEO rankings and an increased online readership.

I fear if "cross-ownership" regulations are not removed many daily newspapers will cease publication. The quality of local news coverage will be greater if the remnants of the daily newspaper are allowed to merge with local TV stations than simply go online as a shell of their former selves. In the aggregate local news coverage will be greater if consolidation allows for increased efficiency in news gathering.

Friday, February 13, 2009

The People's Republic of Santa Monica

One would think if you were going to subsidize social services for the homeless and mentally-ill woman you would look to minimize costs not related to the service to maximize outreach. This basic logic apparently does not exist with the public policy makers in the city of Santa Monica.

In 1973 the city purchased a mixed-use building a block away from the Santa Monica pier with ocean views. Since then the building has been used by nonprofits to provide services to the homeless and mentally-ill woman. One would think if the city sold this property they could use the proceeds to find a building that is not in a prime commercial real estate area to increase the center's size and scope of reach. Not in Santa Monica however:
More than 35 years after purchasing a mixed-use building on scenic Ocean Avenue, City Hall is preparing to lease the property for affordable housing.

The City Council is expected tonight to authorize the City Manager to negotiate and execute a lease with OPCC and allocate $100,000 to the nonprofit homeless service provider for architectural, legal and consulting purposes...

City Hall purchased the 19-unit property at 1614-1616 Ocean Ave. in 1973, leasing the rent-controlled spaces to residents and OPCC's Daybreak Day Center, which offers social service programs to homeless and mentally-ill women. About seven units are currently vacant to make way for future building rehabilitation.
Taking the merits of the program aside, is it really in the best interests of taxpayers to be subsidizing ocean front views for the homeless?

Is Santa Monica the only city in the state not to face a budget crisis?

Thursday, February 12, 2009

But if You Ask Really, Really Nicely They May Stop!

The federal American government has spent more than $1,500,000,000 in taxpayer dollars since 1996 in abstinence-only until marriage sex education.

On one side of the debate we have Derek Dye the Abstinence Clown (the video is absolutely unreal -- and paid for by your tax dollars!), Sarah Palin and the Pope; on the other side we have the American Psychological Association, the American Medical Association, the National Association of School Psychologists, the Society for Adolescent Medicine, the American College Health Association, the American Academy of Pediatrics and the American Public Health Association. Hmm...

The hypothesis we can "educate" teenagers to go against their fundamental primordial drive is fairly ludicrous to begin with. No surprise then that the evidence reveals abstinence-only sex education fails to reduce teen pregnancy, STD or the proclivity of teenagers to explore their budding sexual desires.

From global warming to the Big Bang (seriously!) to this it is clear science played a back seat to ideology and political gain in the George W. Bush administration.

Thanks for e-mailing me the Derek Dye the Abstinence Clown story Kaner.

Wednesday, February 11, 2009

End the "War on Drugs"

Unfortunately, I do not expect American public policy makers to come to terms with the absolute fact that the "War on Drugs" has been a colossal failure of epic proportions any time soon. Although the "War on Drugs" has resulted in:
  • $49 billion spent per year by local, state and federal agencies -- money that could have been going to education, health care, etc.;
  • 80 percent of the increase in the federal prison population was due to drug convictions between 1985 and 1995;
  • somebody getting arrested every 17 seconds for violating a drug law (for cannabis alone its ever 38 seconds);
  • more than half of all sentenced federal prisoners are drug offenders; and
  • 17 percent of State prisoners and 18 percent of Federal prisoners committed their crimes in order to obtain drug money.
The only winners in the "War on Drugs" are criminal enterprises and politicians who appease public sentiments (I'm looking at you Rahm Emanuel, Eric Holder, Joe Biden, Ronald Reagan (for increasing mandatory sentences) and essentially the entire GOP/American Right). While these costs are relatively hidden to the American public and media outlets, the disastrous consequences are very apparent in Mexico.Here is just a taste from a blog post at Cato-at-Liberty:
Mexican soldiers are being killed and beheaded, and police officers are being assassinated (warning: violent content)... For more on this topic, click here, here, or here.
More recent evidence from the Washington Post:
After a long, controversial career, Brig. Gen. Mauro Enrique Tello Quiñones retired from active duty last month and moved to this Caribbean playground to work for the Cancun mayor and fight the drug cartels that have penetrated much of Mexican society. He lasted a week.

Tello, 63, along with his bodyguard and a driver, were kidnapped in downtown Cancun last Monday evening, taken to a hidden location, methodically tortured, then driven out to the jungle and shot in the head. Their bodies were found Tuesday in the cab of a pickup truck on the side of a highway leading out of town. An autopsy revealed that both the general's arms and legs had been broken.

The audacious kidnapping and killing of one of the highest-ranking military officers in Mexico drew immediate expressions of outrage from the top echelons of the Mexican government, which pledged to continue the fight against organized crime that took the lives of more than 5,300 people last year. Military leaders, who are increasingly at the front lines of the war against the cartels, vowed not to let Tello's death go unsolved or unpunished.

The underlying problem here for Mexico is simple; their isn't a damn thing they can do to address the root cause of the violence -- demand from American consumers. As America pumps in billions of dollars to cut off supply chains the money to be made from the drug trade is increasingly found not necessarily in producing the stuff -- it is in getting substances across the border.

Their is a full on war going on south of our border. One that CANNOT be won. The question we must ask ourselves is what is it going to take for our country to wake up and demand real change.

Tuesday, February 10, 2009

The New Newsweek

I commend Newsweek for revamping their magazine in light of their recent and projected subscription losses. Details per the New York Times article:
"'If we don’t have something original to say, we won’t. The drill of chasing the week’s news to add a couple of hard-fought new details is not sustainable,'" per John Meachem, Newsweek's editor...

"Newsweek loses has to try something big...

'Mass for us is a business that doesn’t work,' said Tom Ascheim, Newsweek’s chief executive. 'Wish it did, but it doesn’t. We did it for a long time, successfully, but we can’t anymore.'

Thirteen months ago, Newsweek lowered its rate base, the circulation promised to advertisers, to 2.6 million from 3.1 million, and Ascheim said that would drop to 1.9 million in July, and to 1.5 million next January...

Starting in May, articles will be reorganized under four broad, new sections — one each for short takes, columnists and commentary, long reporting pieces like the cover articles, and culture — each with less compulsion to touch on the week’s biggest events. A new graphic feature on the last page, “The Bluffer’s Guide,” will tell readers how to sound as if they are knowledgeable on a current topic, whether they are or not.

Saturday, February 7, 2009

"The Problem with Socialism is that you Eventually Run Out of Other People's Money"

The title of this blog posts is one of the best quotes from Margaret Thatcher. The market economy is far more efficient than government at allocating resources and identifying investments in a cost-effective manner. When government grows as a percent of GDP it crowds out the true engine of American society -- entrepreneurs -- to the detriment of future economic growth.

The forthcoming cover story for the February 16, 2009 edition of Newsweek declares "We Are All Socialists Now." Key passage:
Whether we like it or not—or even whether many people have thought much about it or not—the numbers clearly suggest that we are headed in a more European direction. A decade ago U.S. government spending was 34.3 percent of GDP, compared with 48.2 percent in the euro zone—a roughly 14-point gap, according to the Organization for Economic Cooperation and Development. In 2010 U.S. spending is expected to be 39.9 percent of GDP, compared with 47.1 percent in the euro zone—a gap of less than 8 points. As entitlement spending rises over the next decade, we will become even more French.
This is an extremely alarming trend. Politicians, in my experience and perspective, are far more concerned being viewed as "doing something" to address perceived problems than actually solving them. An incredible amount of money is wasted and misallocated by government bureaucrats. When firms fail they go out of business. When firms stop being competitive they lose market share to competitors. Entrepreneurs and businesses thus have powerful incentives to continually look to innovate, increase productivity and seek creativity ideas and solutions. The largest incentive for government bureaucrats is to protect their turf and budgets.

Furthermore, these figures only add to my firm belief George W. Bush was by far the worst President in the history of our republic. Beyond that fact that he did not produce one significant piece of legislation in regards to public policy (Medicare Part D? the education bill? Please...) his assault on liberty was simply stunning:

1. Iraq. If misleading the public and resorting to fear tactics to drive our nation into a war of choice was not bad enough, this misadventure saddled our nation with an incredible debt that only adds to our future massive financial liabilities with the retirement of the baby boom generation.

2. The Patriot Act.

3. Implicitly condoning torture as an acceptable interrogation tactic.

4. Allowing government to grow as a percent of the economy PRIOR to the financial meltdown:
5. Failure to prevent the extent of the financial meltdown. As 43 claimed he was a man who favored less government and the virtues of free trade (despite the steel tariffs in his first administration, allowing the Democratic Party to push Fannie and Freddie to take increased risk with the goal of increasing the home ownership rate, etc.). Consequentially, the ideology that he claimed to adhere to, and aided by his incredibly high disapproval ratings, has has led many to question the virtues of the free market and provided greater credence to the belief that government can and should "solve" people's problems.

edit: Per an op-ed from John Taylor, professor of economics at Stanford and originated of The Taylor Rule:
My research shows that government actions and interventions -- not any inherent failure or instability of the private economy -- caused, prolonged and dramatically worsened the crisis.
6. Bailouts. The government had to prevent the complete meltdown of the financial sector. However, the rush to approve TARP and the failure to have any kind of transparency was simply stunning.

7. Failure to reform long-term entitlement spending.

I'm probably missing a few more. So much for 43's belief that "the advance of liberty is the path to both a safer and better world."

Wednesday, February 4, 2009

Political Tone Deaf Award (Bailout Nation)

This week's political tone deaf award goes to House Speaker Nancy Pelosi spokesman Brendan Daly who, when asked why 11 Democrats did not vote for the "economic stimulus package" when it was on the House floor last week, stated:
The speaker has said many times that the members are representative of their district. Many of the districts are more conservative, and they campaigned on fiscal responsibility, and we understand that.
When relaying remarks to media outlets a press spokesperson must not only deliver a comment that advances the narrative of the article -- they must provide a quote that will be seen by listeners, readers and/or viewers as authentic while enhancing the long-term brand perception of the organization within targeted audiences.

Daly completely fails in this regard. Although he is being authentic he is damaging the political brand of the Democratic House leadership by being honest on the reality that "liberals" or "progressives" are simply not fiscally responsible. While this quote is not going to change any swing voters minds in the 2010 election cycle it is important to ALWAYS stay on message to ensure the strength of the political brand long-term.

If the leadership of the Democratic Party wants to expand the scope of government involvement in the economy they better get a grip on their PR flacks.

A better statement from Daly would have been:
The speaker has said many times that the members are representative of their district. She respects the diverse views within the Democratic House caucus and will continue to work with the entire caucus to address the massive challenges that confront our nation.
I like this statement better for a number of reasons:

1. This statement does not damage the public's image of the Democratic Party or the rebranding campaign from the word "liberal" to "progressive."
2. Although she seems accepting of the votes against the "economic stimulus package," their is a subtle threat in the latter part of the statement that members shouldn't get too comfortable voting against her on legislation.
3. I included the line "diverse views within the Democratic Party" from a branding perspective... to contrast the ideological purity current being enforced within the GOP. It is important for swing voters (moderates and independents) to see the Democratic Party as open to diverse ideologies to find solutions to the problems of America.

Tuesday, February 3, 2009

The People's Republic of Great Britain

While America debates the merits of a $800 billion economic stimulus bill (I do not support the current incarnation that just passed the house), Great Britain appears to be seriously considering enacting Soviet style 5-year economic development plans. Per The Times of London:
Parts of the United Kingdom have become so heavily dependent on government spending that the private sector is generating less than a third of the regional economy, a new analysis has found...

Across the whole of the UK, 49% of the economy will consist of state spending, while in Wales, the figure will be 71.6% -- up from 59% in 2004-5. Nowhere in mainland Britain, however, comes close to Northern Ireland, where the state is responsible for 77.6% of spending, despite the supposed resurgence of the economy after the end of the Troubles...

The state now looms far larger in many parts of Britain than it did in former Soviet satellite states such as Hungary and Slovakia as they emerged from communism in the 1990s, when state spending accounted for about 60% of their economies.
If that was not frightening enough apparently some large private sector employers are considering adopting a 3 day work week.
The prospect of the three-day week returned to haunt Britain yesterday as it emerged that ministers are considering paying firms to cut hours in order to survive the recession...

Major firms such as JCB have already downed tools for one day a week and are considering moving to a three-day week, with state help, if the recession gets worse. The firm's chief executive, Matthew Taylor, said that he is pressing Lord Mandelson, the Secretary of State for Business, to introduce compensation for workers if their hours are reduced.
This is incredible. Their is a reason why the command and control government economic policies of the Soviet Union, India under the license raj and pre-Deng Xiaoping failed -- private individuals and firms are significantly better at allocating resources and creating wealth than government bureaucrats.

Not only is the extent of government involvement in the economy of Great Britain disturbing, these programs are essentially destroying the future of the British economy. The Labour Party is stealing the wealth of future generations of Britains to preserve their political power. The next generation is going to be so crippled by government debt that they will be forced to pay exorbinant taxes just to maintain a decent credit rating. With the average total fertility rate (the average number of children that would be born to a woman over her lifetime) at only 1.90 (where 2.1 is required to maintain the current population), not only will the next generation of Brits have to financial support a larger proportion of pensioners as a percent of the total population -- they will have to pay off for the reckless financial decisions of the this generation.

Advice to any citizen of Great Britain under the age of 40 -- GET OUT WHILE YOU STILL CAN!!!

Hat tip to Reason's blog Hit & Run and Mike Shedlock's blog Mish's Global Economic Trend Analysis.

Monday, February 2, 2009

The Audacity of Hope

The triumphant victory of Nicolas Sarkozy in May 2007 over the Socialist Party candidate Ségolène Royal was suppose to be a template for the GOP to keep control of the White House. Clearly it did not quite work out like that. While Sarkozy was able to distance himself enough from Jacques Chirac, McCain could never really distance himself from Bush due to concerns over losing the core religious conservative vote. Big mistake on team McCain, yet that is ancient history.

Per Ben Smith's blog at Politico, Royal is now claiming credit for Obama's victory.
"Yes, I inspired Obama, and his team copied us."
Really? Smith goes on to state "she claims that Obama learned the uniquely French concept of 'win-win' from her campaign." Now that is truly audacious.

I understand why foreign politicians are acting like teenage groupies at a Led Zepplin concert trying to connect their brand to Obama -- he is incredibly popular right now -- yet this is ridiculous. Segolene, the reason you lost is because your ideas are tired, they will not work and the French public -- even though they are incredibly liberal and pro big government -- did not trust you to turn around the economy.

A little advice Segolene... you should worry more about your credibility as a public official and developing competent public policy ideas more than demanding "credit" for Obama's victory. Just saying...