A Happy and Blessed New Year in 2009

On the eve of a new year, I leave my best wishes for 2009:

• To President-elect Barack Obama--Best Wishes as you embark on a perilous journey. The miracle of the Presidency is that most who have held the office grew into it and rose to meet the challenges of the day. Here's wishing and hoping you join that illustrious crowd.


• To the New York Yankees--Best Wishes on your quest to buy the National League Central Division


• To the battered global financial markets--here's wishing that you bottom out quickly and start the process of rebuilding economies around the world


• To leaders of the new Congress, that they may be touched, as Mr. Lincoln said, by better angels of their nature to put the interests of the nation ahead of regional, parochial and partisan goals


• To those around the world living under the yoke of tyranny and oppression, that 2009 may mark the time when they began to breath the air of free men


• And to all bloggers and readers--a happy and healthy New Year.

Happy New Year!

The Broadsheets' Broad Decline

Continuing their long climb down the ladder of success, newspapers have been replaced by--you guessed it--the Internet--as the second most popular source for news. Television for the moment remains the leading news source for most people.

This according to a new survey by the Pew Research Center for People & the Press.

The findings, as reported by Media Post News, are interesting:

• 40% of the survey's respondents say they stay current on world and national events via the Internet, as opposed to 35% who keep up with events through a daily newspaper
• The 40% mark is up a startling 16% increase in one year, from 24% in 2007
• For newspapers the long-term trend is a death spiral: The Internet's share has tripled from 13% since 2001, while newspapers have dropped almost 25% in the same period.
• While television continues to take home the gold medal as a news source, its share of news hawks continues to plummet as well--70% in 2008, but down from 82% in 2002
• The percentage of 20-something respondents who claimed that TV was their primary source of news dropped in one year from 68 to 59%

A couple of dynamics drive these trends. First, the use of the Internet as a news source continues to grow because it allows us to disintermediate the information process.

On TV and in newspapers we're pretty much stuck with whatever the anchorhead tells is we need to know today, or whatever the assignment editor feels is important for us to know. On the Internet, we as news gatherers decide what's important to us. We've removed the mediator from the process.

Second, readers and viewers who are clearly centrist or right of center appear to be tuning out and rejecting the left-leaning news mandarins who are no longer satisfied with reporting the news, but who want to conform the news to their own world view.

The fact that the most coveted demographic in media is migrating to the Internet means that advertisers dollars will continue to follow them. That means less money for newspapers and TV, fewer metropolitan dailies, fewer and leaner news operations, and an even less desirable news product.

As an old newsie, and someone who remembers the sound of 12-year old paper boys flinging the afternoon paper on the front steps, that's a bit sad. But in the end it is the continued democratization of information, and that's a good thing overall.

Just thought you might like to know.

The Real Torture is Carl Levin Himself

You would think Democrat Senator Carl Levin of Michigan would have his plate full arranging a helping handout for the auto industry in his state. But you would be wrong. Sen. Levin has released his “report” on the Bush Administration’s alleged torture policy. As with all ideologues, Sen. Levin fails to let the facts get in the way of a good piece of fiction.

The narrative is as tedious as it is fallacious: Pres. Bush and senior officials blessed the abuse, first by denying Al Queda operatives the rights of uniformed combatants guaranteed by the Geneva Conventions, and later by rewriting the definition of torture.

If you’re one of those poor souls with the back of his car plastered with anti-Bush bumper stickers, you’d probably drink a cup of this Kool-Aid. But here are the facts:

The CIA and field commanders in the theaters requested some guidance from the Administration on what was allowable, not the other way around as Hans Christian Levin would have you believe.

The so-called smoking gun “torture memos” on which Sen. Levin hangs his case were legal documents by the Justice Dept. that explained the legal boundaries of interrogation. They were not policy memos on how to torture prisoners, as Sen. Levin and the leftover ‘60s crowd would have you believe.

The most aggressive interrogation method used in the war on terror has been “waterboarding,” of which we hear so much, but in reality was used on only 3 prisoners

As a direct result of this action, U.S. forces were able to finally nail Khalid Sheikh Mohammed, the mastermind behind 9-11

For a long time, maybe 3 or 4 years, whatever the U.S. knew about Al Qaeda came only from the KSM interrogations, admits no less a source than Vice President Dick Cheney

The current Administration has already been investigated by nonpartisan panels 12 times! Every single investigation cleared senior officials of any charges that the Bush Administration sanctioned abuse. Every single one!

What's also interesting is that Sen. Levin did not release his "report" in his capacity as the Chairman of the Senate Armed Forced Committee, issuing his news release on private stationary rather than Senate letterhead. Perhaps the Senator's support on the Committee for taking up valuable time on a witch hunt when Members' consituents on Nov. 4 told them it was time to move on was less than unanimous.

Mr. Levin’s endgame may be to stage a Stalinist show trial of senior Administration officials, the Wall Street Journal opines in a Dec. 19, 2008 editorial. President-elect Obama, who campaigned as a “post-partisan” candidate would do well to run, not walk, away from this stinker.

But the real tragedy in all this may be Carl Levin himself, who has become a parody of a reformer. If he’s successful, we’ll see the CIA return to its Carter-Clinton era function as an international-relations think tank, rather than an agency possessed of real bullets to fight hard for actionable intelligence that can protect America.

Just thought you might like to know.

Undoing the Democracy of Wealth

It will be interesting to hear the final retailer numbers for the about-to-conclude holiday shopping season. Especially interesting will be the numbers for high-end retailers trying to hawk overpriced merch in a down economy.

The Center for Media Research says that luxe marketers are changing their sales tactics. This according to a recent Wharton Marketing Conference in Philadelphia.

According to the Center's report:

• 2009 will be the worst year on record for marketing luxury goods


• Out are marketing campaigns aimed at making 16-year-olds want that to-die-for luxury handbag


• Out are marketing campaigns aimed at nouveau riche Russians flush with petrodollars


• Out is pandering to the conspicuous wealth of the Persian Gulf

What's in? Pampering the richest and most loyal of customers. The Center quotes a representative of one luxury goods manufacturer: 50 percent of their sales come from just 5 percent of their customers.

So after an unprecedented period of economic expansion and wealth creation, we're entering a period where wealth will be where it's always been--concentrated in the hands of a few. There was something democratizing to see members of what used to be the middle class driving tricked-out SUVs, checking time on their Rolexes, or stopping for a quick shine on their Guccis.

In a future where government will control more and more of the capital, and private industry in various sectors--finance, healthcare, manufacturing--will become more and more dependent on government for that capital, we may not see these days again.

Just thought you might like to know.

Merry Christmas

In those days Caesar Augustus issued a decree that a census should be taken of the entire Roman world. (This was the first census that took place while Quirinius was governor of Syria.) And everyone went to his own town to register.


So Joseph also went up from the town of Nazareth in Galilee to Judea, to Bethlehem the town of David, because he belonged to the house and lineage of David. He went there to register with Mary, his bethrothed, who was with child. While they were there, the time came for her to have her child, and she gave birth to her firstborn son. She wrapped him in swaddling clothes and placed him in a manger, because there was no room for them in the inn.


Now there were shepherds living out in the fields nearby, keeping watch over their flocks at night. An angel of the Lord appeared to them, and the glory of the Lord shone around them, and they were struck with great fear. But the angel said to them, "Do not be afraid. I bring you good news of great joy that will be for all the people. Today in the town of David a Savior has been born for you who is Christ the Lord. This will be a sign to you: You will find a baby wrapped in swaddling clothes and lying in a manger."


Suddenly a great company of the heavenly host appeared with the angel, praising God and saying, "Glory to God in the highest, and on earth peace to those on whom his favor rests."

Luke 2: 1-14

Merry Christmas!

Responsibility

The media are alive today with stories of how developers now want a piece of the TARP bailout funding. Presumably these are the same developers who built tidy fortunes over the last five years due to the cheap money the Federal Reserve kept pumping out and the same creative lending that is now in some small part responsible for the economic mess in which we find ourselves.

Banks. Investment banks. State governments. Automobile manufacturers. Now developers. Where does it end?

There used to be an entrepreneurial spirit in this country. A spirit of risk taking that separated us from other peoples. People accepted the consequences of their behavior. Failure was not fatal. Thomas Edison failed many times in his attempted inventions before he hit it big with the incandescent light bulb and other creations. One of the most brilliant men I know failed more than once with companies before he founded one that had lasting success.

Now we line up for the government to feed us, put a roof over our heads, pay our medical bills, educate us and put us through college and take care of us in our old age. We've given up responsibility for ourselves to government.

Edmund Gibbon once said of ancient Athens, "In the end more than they wanted freedom, they wanted security. When the Athenians finally wanted not to give to society but for society to give to them, when the freedom they wished for was freedom from responsibility, then Athens ceased to be free."

As a nation our goal was once the preservation of our freedoms as brilliantly articulated by FDR:

• Freedom of speech


• Freedom of religion


• Freedom from want


• Freedom from fear

We seem to have lost our direction, wanting instead, as the Athenians did, freedom from responsibility. And we turn to a massive, largely ineffective federal bureaucracy to be responsible for our care and keeping--cradle to grave.

But there will a price for this. As Gerald Ford said, "A government big enough to give you everything you want is a government big enough to take from you everything you have." Including your self-respect, your money, and yes, your freedom.

Just thought you might like to know.

Unintended Consequences

A new survey from Synovate Motoresearch says that only a third of those surveyed would consider buying a domestic automotive product. That's down from the not-so Big Three's current market share of 47%. Yikes.

The poll was taken earlier this month after Detroit bigwigs Nardelli, Mullaly and Waggoner parachuted into Washington with their tale of woe.

Synovate says they're seeing consumer opposition to the auto industry bailout not going down but going up. This is the opposite of what you'd expect after two months of incessant media coverage and scare tactics telling us that letting Ford, GM or Chrysler fail would result in a second Great Depression.

It seems to me to be the law of unintended consequences: When the three car CEOs flew to Capitol Hill on private jets (they couldn't even jet pool) the die was cast.

Even Rick Waggoner slumming it the second time around in his hybrid Escalade couldn't change the image in the mind of the American public of pampered CEOs for whom life will go on very nicely whether they get your money or not.

Their problem is that the louder they cry poor mouth the less anyone wants to do business with them. Why should I put tax money down on a bad bet? And why should I buy a Ford, Chevrolet or Chrysler if the company may be out of business in 9 months? The law of unintended consequences.

For the record I own and drive two domestic products: a full-size pickup truck and a spiffy little convertible. They're ove ten years old. Never had lick of trouble with either one of them. Great vehicles. Love 'em. I suspect most owners feel the same way about their domestics.

But apparently what the Big Three have done in their assault on the taxpayers is to convince their most loyal customers that putting their money on Detroit is a sucker's bet.

Just thought you might like to know.

Socialized Manufacturing

It looks like Uncle Sugar at some point will be bailing out the Big Three auto makers, just like he took care of the banks. Before we all rush out to buy our hybrid Cadillac Escalades, here are a few things to remember:

• Just a day before the Big Three CEOs raced their private jets to DC to testify how broke they were, a new car assembly plant opened in the Midwest. Too bad for Messrs. Mullaly, Nardelli and Waggoner that it was a Honda plant. Chrysler, Ford and GM may whine about the rough shape of auto manufacturing in North America, but the facts don't support them. Honda obviously sees a reason to invest hundreds of millions of dollars here.


• The Big Three have crafted the image that they represent the auto industry in the U.S. But the Big Three should really be the Big Nine. Because in addition to Chrysler, Ford and GM, six other companies make cars here, from econobox manufacturer Kia to luxe maker BMW and including such marques as Toyota, Honda Nissan and Hyundai. So auto manufacturing is alive and well in North America.


• These Big Six employ thousands of workers, buy parts and supplies from vendors, and above all pay taxes. How ironic that Detroit, which could not beat them in the boardroom or beat them in the showroom, now wants their tax dollars (and yours) to subsidize three failing companies.


• The Big Three would like you to think that their troubles are tied to the current recession and the credit crunch. But anyone old enough to have voted for or against Jimmy Carter knows that the problem with Detroit goes back to at least 1974 and is fairly simple--Ford, Chrysler and GM don't make the cars that Americans want to buy. Period.


• Ford, Chrysler and GM have had 35 years to figure all what their customers wanted. Instead of looking down the road like Honda or Toyota in terms of product development, they managed their businesses quarter-to-quarter in order to maximize short-term shareholder value and drive up corporate bonuses. Perhaps no American industry has a such a record of short-sightedness.
• Maybe the hottest hole in this hell is reserved for the cigar chompers that have run the UAW for 70 years. If the suits managed quarter to quarter for 70 years, the union bosses managed pay envelope to pay envelope. A succession of these stiffs stole a page out of Lenin's playbook and played the class warfare card to justify their exhorbitant demands. Their selfishness would make Samuel Gompers look like Mother Teresa. Even as the Big Three get ready to expire, the union refuses to budge on any wage concessions, knowing that their bought-and-paid-for Congressional concubines will rescue the three companies without any contributions from the union.
• Messrs. Mullaly, Nardelli and Waggoner whine that their labor contracts put them at a competitive disadvantage with the other six companies who manufacture here. But Americans have always been willing to shell out more cash for overpriced, but popular, brands. Ask anyone with teenage kids.


• This bailout may even be unconstitutional because it violates the equal protection clause of the constitution. Why should the government decide that Chrysler or the Big Three should survive but another car company, or another industry, fail? Former Lehman Brothers employees are still asking that question.

Bailing out the so-called Big Three amounts to social engineering on the part of the government, something at which it has no skill. Take one look at our failing education system or Freddie Mac and Fannie Mae and tell me why we should let the government run auto manufacturing (make no mistake, when you pay for it, you own it), healthcare, or any other private industry.

Just thought you might like to know.

A Day That Will Live in Infamy

Today is the 67th Anniversary of the Attack on Pearl Harbor by armed forces of the Empire of Japan. Some facts about the attack:

• The attack began at 7:55 local time on a quiet Sunday morning just like this Sunday morning


• The attack came in two waves: an initial wave of 183 planes and a second wave of 167 planes


• The imperial armed forces had put some thought into this: they included a fleet of midget submarines that launched specially modified torpedoes that could wreak their havoc in the shallow Hawaiian waters


• When it was done, the results were devastating to the United States:


• 21 of 96 ships had been destroyed, many of the others severely damaged


• A gun magazine exploded aboard the USS Arizona, when the ship was struck by a torpedo. It went down in 9 minutes taking the lives of nearly 1,200 men


• Of the nearly 400 aircraft at the three nearby air bases--Hickam, Wheeler and Bellows--almost half had been destroyed and over 150 of the remaining 200 were damaged, a near wipeout


• There were 3,648 casualties, including 2,400 deaths--a death toll not seen again on American soil until the terrorist attacks of Sept. 11, 2001


• The next day, Dec. 8, 1941 United States President Franklin D. Roosevelt asked the U.S. Congress for a Declaration of War on the Empire of Japan.


• Admiral Yamamoto, the mastermind of the Japanese attack, had been educated at Harvard University. There he closely studied the character and makeup of the American people. His warning to his fellow brass when they were planning the attack: They'd get one chance at taking out the Americans. For the attack to be successful would have to be complete and overwhelming. It wasn't.
• It was a devastating blow--but not a knockout punch.


• The Japanese attack failed to destroy the American aircraft carriers which were out to sea at the time of the attack. As we know know, aircraft carriers became the critical piece in the Pacific War.


• All but 3 of the 21 American ships sunk that Sunday were quickly refitted and sailed again under the American flag.


• Within a couple of years the tide in the Pacific had turned.

Just thought you might like to know.

Inaugural Facts

As the nation gets ready to swear-in its 44th president, here are some facts about the first 43 chief executives:

• Abraham Lincoln was the first president to include African Americans in his inaugural parade.
  
• It wasn't until Woodrow Wilson's second inaugural parade in 1917 that women were allowed to participate.


• Thomas Jefferson was the first president to walk to his inauguration; Warren G. Harding was the first to ride in an automobile to his.


• The very first inaugural address, by George Washington in 1793 was the shortest of any of the presidents'--135 words. They got longer from there. William Henry Harrison's was the longest--8445 words. Harrison's presidency was ironically the shortest, lasting little over one month.


• James A. Garfield was the first president in 1881 to have his mother attend his big day; William Howard Taft's wife was the first First Lady to take part in the inaugural festivities in 1909.


• John Kennedy and Bill Clinton were the only presidents to have poets participate in the inauguration: Robert Frost for Kennedy and Maya Angelou and Miller Williams for Clinton.


• Calvin Coolidge is the only president to be sworn in (1925) by an ex-president (William H. Taft, appointed Chief Justice of the U.S. Supreme Court in 1921). Lyndon Johnson is the only president to ever have been sworn in by a woman (U.S. District Justice Sarah T. Hughes.

• The first inauguration to be photographed was James Buchanan's in 1857. The first to be broadcast on radio was--ironically--"Silent Cal" Coolidge's in 1925. The first to be televised was Harry Truman's in 1949 and the first to be streamed live on the Internet was Bill Clinton's second in 1997.

Just thought you might like to know.

Choice or Coercion?

Democrats in the new Congress pledge passage of the so-called Employee Free Choice Act. The bill would amend the National Labor Relations Act to eliminate secret ballots among workers seeking to unionize.

For the last 70 years the NLRA has provided a framework of industrial democracy that is second to none in the world. But organized labor says the law needs to be changed because management intimidates workers and uses the election process as a way to fire union organizers. Union bosses want to replace secret ballots with a "card check" process which they say would be more transparent.

Companies oppose the plan because it would involve more government interference in the private sector and would increase cost at a time when the economy is very fragile.

A few thoughts from this former union member, organizer and negotiator:

• In a Zogby poll union members by the stunning margin of 84% to 11% said that employees should have the right to vote whether to join a union


• Despite Big Labor's claim that secret ballot elections limit unionization, unions last year won a full two-thirds-66%- of the elections they called


• Despite the claim of labor bosses that employers can use the ballot process to intimidate workers into voting against union representation, fewer than 3% of union elections end up with employees fired for organizing the shop


• No less than the U.S. Supreme Court 40 years ago (the liberal Warren Court) said that the card check process is "admittedly inferior to the election process."


• Rather than management intimidating union organizers, the federal courts have found that it is the union bosses who sometimes use the card check process to bully workers into joining a union.


• When the Democratic congressmen who will once again approve this bill in the new Congress met to elect their leadership following the November election they voted in secret--the very same right they now seek to take away from workers.

I'm all for pro-worker legislation. But not a bad bill that would only result in swelling the coffers of union bosses without having any noticeable effect on the lives of working men and women.

Just thought you might like to know.

The Great Depression Revisited?

While there are some similarities to the Great Depression of the 1930s and our current economic problems, there are also some significant differences. [For a good understanding of the economic policies that contributed to and helped prolong the Great Depression, see Amity Shlaes' "The Forgotten Man," published by HarperCollins in 2007].


A previous post discussed some of the similarities. But here are some of the signal differences that make the two events quite dissimilar:

1. Unemployment in October 1929, the start of the Depression, stood at 5%. Within five years the unemployment rate was 23.2%. A staggering 364% increase in joblessness. We've not seen anything to even suggest we're in for that kind of job loss.


2. In October 1929, the Dow Jones Industrial Average was 343. By November 1934 it closed at 93--a long, precipitous 73% drop. Free markets will periodically reset and correct themselves. But a confluence of events during the Great Depression put the economy into a free falling death spiral from which it took years to recover.


3. In 1929 the Federal Reserve System was still in its infancy and its eventual role in managing the nation's money supply was yet to be defined. Today, the Fed has significant experience as a central bank and money manager, and has played a key role in stopping the bleeding in the current recession.


4. The government's answer to the Great Depression was the New Deal--public policy that combined central economic planning, government largesse, and massive government public works spending. Currently, the government's response has been largely to intervene in the financial and industrial sectors but only for the purpose of maintaining the viability of those sectors as free enterprise. One of the things that helped prolong the Depression was the government's direct intervention in the industrial sector, competing for capital with private enterprise and further weakening job growth and productivity.

There are also many misconceptions that remain about the Great Depression. One is that President Herber Hoover was a laissez-faire Republican who tried nothing to slow the Depression. Although he was not the interventionist that FDR proved to be, Hoover was the consummate technocrat who believed that the federal government had a role to play assisting "Main Street." His earlier accomplishments included spearheading successful federal flood relief efforts in the South and water projects in the West. As U.S. Commerce Secretary he oversaw the expansion of the Department.

Actually, Hoover did attempt to intervene in the economy. He raised taxes and signed the disasterous Smoot-Hawley Tariff Act--both very un-Republican things to do. Raising taxes confiscated valuable capital at the time the private sector needed it most to pay bills, hire labor and invest. Smoot Hawley ignited a global trade war that closed foreign markets to U.S. manufacturers, putting yet more people out of work. But a case can be made that much of FDR's New Deal, rather than solving the Depression, actually prolonged it.

Another misconception is that World War II pulled the nation out of the Depression. Actually, two reliable economic indicators, the Dow Jones Industrial Average and the unemployment rate never returned to pre-Depression levels until 1953--20 years after the inauguration of President Roosevelt.

Just thought you might like to know.

The Great Depression Revisited?

There has been a lot of commentary in the news over the last several months comparing our current economic turmoil to the Great Depression of the 1930s. There are a number of similarities to the two situations. But there are also a number of significant differences.

For a terrific second look at the Great Depression you could not do better than picking up a copy of The Forgotten Man, by Amity Shlaes. Liberals today want to blame 20 years of financial deregulation (under both Democrat and Republican presidents, by the way) for our current woes. Conservatives want to blame liberal tendencies to use the free market for social engineering (think Freddie Mac and Fannie Mae).

Writing about the Depression, Shlaes says that "...neither the standard history nor the standard rebuttal entirely captures the reality of the period." The same can be said for the current recession.

Other similarities between the two periods:

• Both were preceded by a severe downturn in the financial markets
• The downturns in each case were preceded by several years of terrific growth--the "Roaring '20s " and the "irrational exuberance" of the early to mid part of this decade
• Both downturns were fueled by overuse of leverage--margin trading in the 1920s and a variety of no money down mortgage products, designed to put people who might not normally qualify for loans into homes and fueled by the Federal Reserve's cheap money policy.

However, there are also a number of significant differences that make the current situation vastly different from your grandfather's Depression. But these are facts for another day.

Just thought you might like to know.

I'm OK, You're OK--if You Can Believe Me...

The Josephson Institute is a Los Angeles-based think tank, the mission of which is "to improve the ethical quality of society." The Institute's 2008 Report Card on the values and conduct of young people is out, and if you thought our biggest education problem was declining math and science test scores, think again.

The Institute surveyed some 30,000 high school students across the country. Some results:

• 30% of the kids surveyed said they had stolen from a store in the past year


• Nearly 65% said they had cheated on a test in the past year


• A quarter of the respondents even 'fessed up that they lied on a couple of questions on the survey

The survey documents many other ways kids lie and cheat their way to the top of the class. But here's the kicker: 93% said they were satisfied with their personal ethics and character!

Hey, educators, principals, school board members: you might want to rethink that moral relativism thing.

Just thought you might like to know.