March 2009

President Barack Obama has joined the chorus of politicians expressing outrage at the bonuses paid by insurance giant AIG ostensibly using taxpayer funded bailout money.

Various politicians from both parties have proposed levying an excise tax on the bonuses ranging from 35 to 100 percent in an attempt to make up for their own complicity with regard to the bonuses.

Sen. Chris Dodd (D-CT) added an addendum to the bailout legislation that gave an “exception for contractually obligated bonuses agreed upon before Feb. 11, 2009.” And now he claims that he is outraged by these very same bonuses?

Who else is to blame for this mess? Try the Congressmen and Senators who in 2002 passed the Sarbanes-Oxley bill that limited the deductibility of executive pay above $1,000,000 that led to the generous bonus contracts that are now in such ill repute.

Or try Treasury Secretary Tim Geithner who said that he just learned about the bonuses a week ago, but was exposed by AIG CEO Edward Liddy who testified yesterday that Geithner actually knew a week earlier than he admitted.

Maybe we should blame Fed Chairman Ben Bernanke who Liddy said knew of the bonuses three months ago but did nothing.

Then there is Barney Frank (D-MA) who is demanding the names of everyone who received a bonus. What right does he have to this information? Is he planning on making the recipients scapegoats for something his party signed off on? That’s all we need is more government intrusion into our lives. We have seen how well that has worked in the past.

There is ample evidence that virtually everyone involved with the bailout shares the blame for the bonus scandal if that’s what we want to call it. But is it a scandal or is this an example of feigned moral outrage now that these politicians and administration officials have been exposed for approving the bonuses?

Obama said he is willing to take the blame even though he didn’t write the contracts. That’s all well and fine but he ignored the real problem which is the bailout itself. The taxpayers have had to continue to pour money into AIG and they are still losing tons of money and there is no end in sight. The bonus issue is a small part of a larger problem. But since the bailouts are a key strategy of the administration to revive select large corporations and the economy as a whole he can’t very well criticize his own strategy so he strikes a populist tone by going after employees and painting them as greedy.

Any more hope and change like this and we will be in real trouble.

The newspaper industry which has experienced declining profits in the last few years leading to bankruptcies and closings in some cities received another jolt of bad news in a new study released by the Pew Research Center yesterday.

In the study just 43% of those surveyed said that losing their local newspaper would hurt civic life in their community a lot. Only 33% said they would personally miss reading their local newspaper if it were no longer available.

Those numbers jump when focusing on regular readers of newspapers to 56% saying that losing their paper would be a significant loss to the community and 55% would miss reading the paper if it disappeared.

Overall though newspapers are not the major source of news for those surveyed. That crown goes to local television stations and their websites with 68% versus 48% that say they regularly get their news from newspapers in print or online.

The real problem for the newspapers though is generational. Just 27% of those born after 1977 read a newspaper the previous day compared to 55% of those born before 1946.

To add insult to injury just 23% of those under 40 said they would miss their local newspaper if it disappeared.

Newspapers are now labeled as dinosaurs in the digital age and in need of a new model if they want to survive in the long term. In some ways this charge is true, but as someone who has grown up reading newspapers, the loss of the printed page would be a personal loss to me. As much as I like reading news online it is impossible for me to read an entire paper online in an efficient manner. Websites are just not laid out for an efficient reading of their entire content. Think about it. Can you read the New York Times cover to cover as easily online as you can the printed product? In the time it takes to click your mouse on every article or every section you could have read or skimmed the printed page in half the time.

Also there are things printed in the paper that can easily be missed when searching a website.

Newspapers are clearly in economic distress. They have been built on a model of high wages for writers and production staff riding the wave of ever increasing advertising rates to pad their bottom line. Those days are gone and the industry must come to grips with it.

Survival will mean making some difficult decisions. Newspapers are heavily unionized. That has to change to bring down labor costs and provide the maximum flexibility in a changing technological world. High paid veteran writers will have to be let go or asked to take substantial pay cuts to keep working. Some coverage should be eliminated. As much as I enjoy the wide variety of coverage in my local paper something half the size would probably suffice since that’s probably all that I really read on a regular basis anyway.

Hopefully the news executives will have the guts to make the tough decisions to save their publications. They would be better off streamlining all at once instead of the piecemeal cuts and layoffs they now employ which is far worse for employee moral and productivity than a one time housecleaning.

Unfortunately with many newspapers owned by those who have been in the business for generations they are likely to continue to move slowly and only ensure the demise of the industry.

The media is all abuzz with the latest blog entry by Meghan McCain on The Daily Beast complaining about what she perceives as the wrongful elevation of Ann Coulter as the face of women in the Republican party.

I can understand McCain’s frustration with making Ann the poster child of the party.  Coulter shoots from the hip and is an equal opportunity offender often making even her most loyal supporters cringe at times.  McCain though is wrong when she tries to disparage Coulter’s popularity at CPAC by saying she didn’t have any real competition.  If McCain had actually ever been to a CPAC before she would have seen that when Ann appears the conference virtually comes to a complete standstill.  I have been in the exhibit hall in years past where you can’t walk anywhere because the crowd around the closed circuit television is so large that they block access to the rest of the hall.  Or when it’s time for her book signing and the line stretches out the door.  It’s hard for McCain to fathom this though since she has only been a Republican for less than a year and even voted for John Kerry for heaven’s sake.

McCain seems more upset that Coulter said during the campaign that Hillary Clinton was the more conservative than her father.  I agree that giving Hillary the nod over McCain wasn’t helpful, but Coulter was just reminding Republicans that a vote for McCain was a vote for a moderate and that he wouldn’t govern that much differently than a Democrat.  Only when he selected Sarah Palin as his running mate did he gain some credibility with the conservatives, and even then they were suspicious.

What I don’t understand is why a smart girl like McCain, she graduated from Columbia University in 2007 is doing picking a fight with a best selling tart tongued author that has a tremendous following.  If Meghan and Ann were to have some sort of face-off Ann would chew her up and spit her out in record time.

McCain should quit picking on those that she can’t win a fight with and making herself look more like her father and  concentrate on her social life that she recently complained about.  There must be a pro gay marriage  male young Republican out there somewhere who would be willing to take a chance.

The Heartland Institute which is based in Chicago is holding their 2nd annual International Conference on Climate Change in Times Square this week.  Attendance at this years conference was estimated to be close to 800 which is double the number that attended the inaugural event last year.

So far attendees have heard from a host of speakers that included the Czech president Vaclav Klaus who has become a celebrity with the skeptics for his strong stand against global warming and the econmic costs of enacting a global cap and trade program.

In the Economics and Politics track the discussion ranged from discussions on the economic impact of energy rationing, the political outlook for cap and trade, morality of energy rationing and the Kyoto protocols.

Myron Ebell from the Competitive Enterprise Institute told the audience that McCain’s loss in November was actually a plus for opponents of cap and trade as he has been a major proponent of the legislation and that several pro cap and trade Senators lost as well and weren’t replaced by Democrats with the same viewpoint.  One of the best talks was delivered by Roy Innis from the Congress On Racial Equality.  Innis who is suffering from Parkinson’s disease said that he hoped that President Obama was correct when he announced the reversal of Bush-era restrictions on embryonic stem cell research and that those suffering from Parkinson’s and other diseases will find relief.  He also recalled a conversation that he had with a woman in Uganda whose child was suffering from malaria who told him that she would rather see her child suffer than see the environment harmed by the increased use of DDT.  It is unfortunate that the people of Africa who are dying from the lack of DDT would believe some spurious claim that it will hurt them more than help them.

In one of the last panels of the day, Tom Tanton of the Pacific Research Institute made the case that we don’t want to follow California’s lead when it comes to environmental legislation.  Tanton estimates that efforts to reduce greenhouse gas emissions will cost the California economy $510 billion at a time when they can least afford it.

The conference has come under criticism by global warming proponents for the lack of scientific experts addressing the attendees,  and in that regard they are generally correct.  But then again even the most novice skeptic at the conference is still eminently more qualified than Al Gore to discuss the issue.