Category: Propaganda

Ignore the government mandate that created a duopoly. Scream MONOPOLY!

I haven’t posted on Monday’s long-anticipated decision from the Justice Department on the proposed Sirius-XM merger because I didn’t have much to add to the announcement. (It’s also not the final hurdle, so over-analysis, to say nothing of celebration, would be premature.) But Steven Pearlstein’s column is worth dissecting.

The latest example of a government bailout of a troubled industry has nothing to do with Bear Stearns. It is, instead, the Justice Department’s decision to give the green light to the merger of the satellite radio companies XM and Sirius.

It’s already clear that his position will be staked on rhetoric rather than principles. While it’s good to know that from the beginning, it’s bad economics. The goal of Pearlstein’s idea of competition is not to discover winners and losers other winners, but to pick the correct winners and losers. As he makes clear, that means consumers must win and businesses must lose.

For the past several years, these two companies have been competing so hard for talent, distribution channels and customers that neither has been able to turn a profit, and probably wouldn’t have for years. Consumers have been the big winners, with great programming at affordable prices.

Any cursory look at financial results demonstrates that consumers aren’t winning in a vacuum. At least with respect to Sirius, its cash flow is improving. This matters to a growing company more than bottom-line profitability. But why should we expect such an acknowledgment from a business columnist?

All that is about to change now that the Bush administration has concluded that we’ll all be better off if these heretofore fierce rivals are allowed to stop competing and concentrate instead on reducing costs, paring down their combined offerings and finally delivering profit to their shareholders.

This reveals the problem in Pearlstein’s analysis. In setting up the satellite auction that led to the creation of Sirius and XM, the government decided that exactly two competitors was the best approach. It depended on an assumption that two could compete effectively. It ruled out the possibility for a third (or fourth or fifth or …) to compete, possibly encouraging a different development of the market. It ignored the idea that human involvement might take it in a different direction than the ideal world envisioned by the sages at the FCC. And now that reality has messed with the centralized planning, the only response is to knew what it was doing, facts be damned. That’s not convincing.

More importantly, what new innovations in the business will arrive if the combined companies don’t need to waste resources on two ’80s channels, two popular country channels, or two channels carrying C-Span? I trust competition with other competing forms of entertainment to drive the outcome because I don’t pretend to know what is best.

Pearlstein disagrees, going so far as to analogize a combined Sirius-XM to a combined Coke-Pepsi. Yet, I don’t drink either, so I’m fairly certain humans don’t need them to live. Perhaps the availability of alternatives to non-necessities puts pressure on those evil, profit-maximizing corporations. Instead, Pearlstein deems it reasonable to argue that consumers should have ideal conditions for any and all requests. Anything that helps the corporation must, by definition, harm the consumer. It must be regulated, if not stopped.

He uses interesting logic to get there:

… You would particularly want … vigilance in the case of a government-sanctioned duopoly, which is how the Federal Communications Commission viewed XM and Sirius when it granted only two licenses for satellite radio.

This irrational faith in the wisdom of government planning is matched only by his absurdity in arguing that Sirius and XM might develop substitutes for each other if forced to compete.

It makes no allowance for the possibility that, if you force the two companies to compete, XM might come up with a morning host who is funnier and more outrageous than Howard Stern. Or Sirius, lacking a Major League Baseball offering, might take a chance on World Cup soccer or college lacrosse and tap into a whole new audience that nobody knew existed. The prospects for that kind of innovation will be greatly reduced after XM and Sirius merge and the combined company focuses on protecting its existing hit channels rather than creating new ones to displace them.

As if college lacrosse will compete with Major League Baseball. Pearlstein looks at the possibilities (allegedly) eliminated from a merger while ignoring the tangible benefits customers already receive. He also dismisses the notion that the possibility that customers will leave if the channel lineup bores them won’t be an incentive to innovate. He ignores that “free” radio is already following the exact path he fears satellite radio will take and ignores the innovations that satellite radio has given and can continue to give as a combined company. (Uncensored Howard Stern counts as an improvement, as does national access to sports broadcasts.) But why worry about details when this story can just be twisted into another screed concluding that the Bush Administration wants to screw the proletariat at every opportunity?

The FCC should immediately match the Department of Justice’s decision and let the merger proceed.

(Disclosure: I’m a Sirius shareholder and customer. I’ve been an XM shareholder and customer in the past. I also desperately want XM’s Major League Baseball with Sirius’ Howard Stern. Economics and free market competition are still the reasons I support the merger.)

It’s not a “deal” if I don’t get to refuse.

Harold Meyerson’s column in today’s Washington Post is propaganda. It is so obviously biased in its consideration of facts and creation of myths that any other conclusion is impossible. Any essay that begins with this:

Putting together everything we’ve learned over the past 10 days about high finance in Manhattan, one thing is clear: If Eliot Spitzer had saved all the money he apparently paid”Kristen” and her co-workers at the Emperors Club, he could have bought Bear Stearns.

… derives from a partisan ever-interested in stuffing the events of the day through to his predetermined conclusion. In Meyerson’s case, that’s always some derivative of how government must act more, control more, and protect more. His political mind is one giant Care Bear Stare at the problem du jour.

Today, he’s concerned with workers.

The key lesson Americans need to learn from today’s troubles is how to distinguish faux prosperity from the genuine article. Over the past hundred years, we’ve experienced both. In the three decades after World War II we had the real thing. Led by our manufacturing sector, productivity increased at a rapid clip and median family incomes rose at a virtually identical rate. The value of the American work product grew significantly and that value was shared with American workers.

That value that’s shared with workers is generally referred to as a salary. Unless workers have stopped receiving salaries for the work they do, this argument is sophistry. Meyerson isn’t interested in anything more than pushing anti-capitalist, anti-corporate class warfare.

In the broadest sense, the American economy over the past three decades has been powered by ever more ingenious extensions of credit to a people whose incomes were going nowhere, unless they were in the wealthiest 10 percent of the population. There were some limits, as a result of New Deal regulations, on how old-line banks could extend credit, but investment banks and other institutions not legally obliged to keep a certain amount of cash in reserve operated under no such constraints. The risk was that one day, burdened by debt and static incomes, American homeowners would have trouble making their payments and the house of cards would come tumbling down. But what were the odds of that?

His entire argument is built on the italicized statement. To work, he needs both a conspiracy by his enemy class and a lack of self-control within his comrades in arms spending. The former is a pathetic assumption not worth consideration. The latter is worth a simple demolition.

When I bought my house, I had a set income with a projected path of growth. For consistency within Meyerson’s frame, I’ll remove the assumption of growth. I also had a (declining) amount of debt consisting of my car and my education. I took on a fixed-rate mortgage for approximately half the amount a bank would’ve given me in 2005. I’ll also assume what a bank would offer me now is less than what it would’ve offered me in 2005, although it would no doubt still cover my original mortgage with a comfortable margin. My (assumed stagnant) income covered my obligations.

How is “burdened by debt and static incomes” relevant, as opposed to poor judgment and financial forecasting by consumers (and financial institutions)? Meyerson sees only the parenthetical and assumes that amounts to conspiracy. And oppression. The notion is biased.

Meyersons demands are unsurprising. I wonder if he wrote this paragraph first.

Pretty good, it turns out. And out of this debacle emerge two paramount lessons for our highest-ranking policymakers: Regulate the American financial sector, which is now turning to the government for a bailout. And commit the government to doing all in its power to generate broad-based prosperity, through laws enabling workers to bargain collectively, through a massive public commitment to projects “greening” the economy, through provision of universal health coverage and affordable college educations.

The lesson from Bear Stearns is that we need the government to give us broad-based prosperity through a massive public commitment to boilerplate progressive talking points. Yep, further buffering Americans from the costs of their financial decisions is exactly what we need, lest they learn to exercise the self-control Meyerson knows they do not possess because they’ve been conspired against by the goal of oppression executed by our financial elite.

But, if I may, a question. When the government makes a college education more affordable, should it regulate who may study finance, and which branches of finance, since its eventual practice carries the risk of unleashing more evil on workers?

If one bad capitalist indicts capitalism, one bad pundit indicts punditry.

I (obviously) haven’t read everything written on the Fed’s Bear Stearns intervention. No need. Today’s column from E.J. Dionne is the most intellectually dishonest piece possible, relying on a skewed, limited set of the facts. There’s too much to excerpt and comment on to fully highlight its idiocy, but this is close to a summation:

But in the enthusiasm for deregulation that took root in the late 1970s, flowered in the Reagan era and reached its apogee in the second Bush years, we forgot the lesson that government needs to keep a careful watch on what capitalists do. Of course, some deregulation can be salutary, and the market system is, on balance, a wondrous instrument — when it works. But the free market is just that: an instrument, not a principle.

Dionne mistakenly assumes that the American economy is a free market. It is among the freest on Earth, but it is not free. The free market is a principle. The American economy is an instrument.

It is an instrument for Wall Street tycoons who like corporate welfare. It is also an instrument for people like Dionne:

So now the bailouts [ed. note: this isn’t a “bailout”] begin, and Wall Street usefully might feel a bit of gratitude, perhaps by being willing to have the wealthy foot some of the bill or to acknowledge that while its denizens were getting rich, a lot of Americans were losing jobs and health insurance. I’m waiting.

If the “wealthy” who will be “asked” to foot some of the bill had no financial interest in (i.e. shares) or transactions with Bear Stearns, why is it her responsibility to pay more for the Fed’s actions? As a response to corporate welfare not benefiting her? And what if she already acknowledges that a lot of Americans were losing jobs and health insurance? Not that acknowledging that matters to anything; why does it matter?

Believing welfare is a dangerous policy for government is a principled stance. Believing that corporate welfare is a dangerous policy for government is a stance that serves as an ideological instrument for further regulating the American economy away from the free market.

Those who can, do. Those who can’t pretend that doing isn’t doing.

Bob Costas switched from enjoyable to insufferable a long time ago. He’s risen to rank one notch below Joe Buck, who qualifies as so self-righteous that I mute my television during his broadcasts, whatever the sport, teams, or scenario. Costas demonstrates this further with these comments:

”Today, I saw on ESPN a poll about which Western Conference teams would not make the playoffs,” Costas said. “Well, 46 percent said the Denver Nuggets, which has zero percent influence on anything. No reasonable person who cares about the NBA should care about that. Who has the time or the inclination to do this, even if you’re sitting on your computer? Why would you weigh in on it?”
…

”I understand with newspapers struggling and hoping to hold on to, or possibly expand their audiences, I understand why they do what they do,” Costas said. ‘But it’s one thing if somebody just sets up a blog from their mother’s basement in Albuquerque and they are who they are, and they’re a pathetic get-a-life loser, but now that pathetic get-a-life loser can piggyback onto someone who actually has some level of professional accountability and they can be comment No. 17 on Dan Le Batard’s column or Bernie Miklasz’ column in St. Louis. That, in most cases, grants a forum to somebody who has no particular insight or responsibility. Most of it is a combination of ignorance or invective.”

What bothers Costas — and he’s not alone — is Internet and talk radio commentary that “confuses simple mean-spiritedness and stupidity with edginess. Just because I can call someone a name doesn’t mean I’m insightful or tough and edgy. It means I’m an idiot.

“It’s just a high-tech place for idiots to do what they used to do on bar stools or in school yards, if they were school yard bullies, or on men’s room walls in gas stations. That doesn’t mean that anyone with half a brain should respect it.”

I don’t find his view of bloggers and blog readers/commenters particularly insulting. This is primarily because I do not care what his position is. He’s engaging in the denial behavior all dinosaurs engage in. Pretend that “they” aren’t as qualified because some majority of their numbers are casual and less-informed. Ignore those among “them” who are qualified and ignore those among your own who are not qualified. It’s too common to cause any indigestion.

What I do find insulting is the implicit idea that only media’s gatekeepers are competent enough to figure out which comments on teh Internets are worth absorbing and which are garbage.

The Internet is a large experiment in merit. Popularity doesn’t mean quality and quality doesn’t mean popularity. Big deal. The opportunity to learn and grow and develop is there for those who wish to try. But only the fool imagines that it’s a revelation that there’s wheat and there’s chaff. Any glance through the hallowed halls of mass sports media shows this.

Link via Baseball Think Factory via Baseball Musings.

Poorly¹ chosen words assist big government.

Congress is always looking out for us:

The Senate yesterday approved the most far-reaching changes to the nation’s product safety system in a generation, responding to recalls of millions of lead-laced toys that rattled consumers last year.

Lawmakers still have to resolve key differences between the Senate bill and a similar measure that passed the House in December. While the Senate version is considered by consumer advocates to be tougher, both contain provisions that would require retailers and manufacturers to be more vigilant about product safety.

The biggest change is likely to be a better-staffed Consumer Product Safety Commission, with more enforcement power. Both bills would boost funding for the agency, which had a budget of $63 million in fiscal 2007 and just less than 400 employees, fewer than half the number it had in 1980. The Senate bill, which passed by a vote of 79 to 13, would increase the budget to $106 million by 2011. The House’s version would increase it to $100 million.

This strikes me as more of the same in Washington. Government sets the rules. The rules fail. The government blames the failure on the market and insufficient government size. It’s self-fulfilling and people fall for it. Beyond that, I don’t have much to say on the specifics.

Rather, I want to focus on how we get to these situations. Consider the Washington Post’s headline of the article discussing this legislation:

Senate Votes For Safer Products

I know headlines need a hook in a small space. That doesn’t matter. This is pathetic. This is how government programs begin and perpetuate and grow. Who could possibly argue against this bill to those who will make up their mind on this superficial information? I might as well argue for the routine kicking of puppies.

When discussing policy solutions, we need to identify the narrow problem(s) we wish to address because the law of unintended consequences loves broad solutions. Instead of the title offered, the Post should’ve used something like this:

Senate Votes for Further Product Safety Regulation

That’s still unacceptably imperfect. I’m not a professional. But at least it’s closer to the truth than the simpleton’s solution the Post offered.

¹ I’m assuming the words are chosen poorly. That’s an assumption. I leave wide-open the possibility that such words are chosen deliberately for their propensity to encourage bigger government. Hence the propaganda tag on this entry.

The Great Diversion. Wait, look over there!

I suspected going in to today’s essay by Charles Krauthammer that it was little more than propaganda for John McCain. I was right, but I’m going to ignore that, at least initially. First, Krauthammer has to knock down Barack Obama. Referring to Hillary Clinton’s 3 a.m. ad:

After months of fruitlessly shadowboxing an ethereal opponent made up of equal parts hope, rhetoric and enthusiasm, Clinton had finally made contact with the enemy. The doubts she raised created just enough buyer’s remorse to persuade Democrats on Tuesday to not yet close the sale on the mysterious stranger.

The only way either Clinton or John McCain can defeat an opponent as dazzlingly new and fresh as Obama is to ask: Do you really know this guy?

I think the ad was ridiculous because I’m willing to question the attacked and the attacker. Krauthammer thinks it was “brilliant”. But I understand that not all voters care enough to question beyond the superficial. Analyzing it further would be a digression.

The problem here is familiarity, as suggested. However, I’m familiar with Clinton and McCain. They’re both despicable, career power-seekers. If forced to vote among the three remaining candidates, I’ll take my chances with the unknown and count on the checks-and-balances built into the system. We’ve survived bad presidents before. We’re surviving one now. I just wouldn’t willingly vote for one.

Note: If the Constitutional checks-and-balances fail and President Obama is dangerous, individuals like Mr. Krauthammer who blindly supported their erasure over the previous seven years must answer for their culpability in the matter. It will happen at some point, whether it’s President Obama, President (Hillary) Clinton, President McCain, President (Jeb) Bush, or President (Chelsea) Clinton. Dumping the eventual failure solely on the bad president’s character may be politically useful, but it’s factually repugnant.

After a space-filling bit about Sen. Obama transcending race, Krauthammer goes in for the kill:

The Obama campaign has sent journalists eight pages of examples of his reaching across the aisle in the Senate. I am not the only one to note, however, that these are small-bore items of almost no controversy — more help for war veterans, reducing loose nukes in the former Soviet Union, fighting avian flu and the like. Bipartisan support for apple pie is hardly a profile in courage.

On the difficult compromises that required the political courage to challenge one’s own political constituency, Obama flinched: the “Gang of 14” compromise on judicial appointments, the immigration compromise to which Obama tried to append union-backed killer amendments and, just last month, the compromise on warrantless eavesdropping that garnered 68 votes in the Senate. But not Obama’s.

There is truth there, but it’s what makes Sen. Obama the least offensive bad option we have. Remember, I’m not voting for any of the three remaining candidates. But I hope we’re inaugurating President Obama in January, precisely because his record of achieving legislative action is so weak. Limited government is the goal. If we can’t get that naturally, I’ll take the unnatural result of conflict and political weakness. Gridlock is good.

Krauthammer disagrees and makes the pathetic push for McCain:

Who, in fact, supported all of these bipartisan deals, was a central player in two of them and brokered the even more notorious McCain-Feingold campaign finance reform? John McCain, of course.

Yes, John McCain — intemperate and rough-edged, of sharp elbows and even sharper tongue. Turns out that uniting is not a matter of rhetoric or manner, but of character and courage.

I’ll momentarily pretend that a politician – especially one who sponsors legislation to limit a Constitutionally-protected right to free speech in direct conflict to “Congress shall make no law” – possesses character (and courage). How is being on the wrong side of an issue a qualification for the presidency? Clinton made the same mistake yesterday with this:

“Senator McCain will bring a lifetime of experience to the campaign, I will bring a lifetime of experience, and Senator Obama will bring a speech he gave in 2002,” a derisive Clinton said yesterday to the retired military officers at the Westin in Dupont Circle.

Five years into the Iraq mess, Clinton can’t admit her mistake and McCain wants to double-down. When forced to choose among three unacceptable people, I’ll take the guy who theorized sooner why the proposed action was a mistake. In government, a pre-mistake “No” is much more powerful than a post-mistake “oops”. It’s more important when we can’t even get the “oops”.

The number of X chromosomes should not matter.

The push for separate rights based on gender has never been so obvious.

Ten U.N. agencies have launched a campaign to significantly reduce female circumcision by 2015 and eradicate the damaging practice within a generation.

In a statement released Wednesday, the agencies said female circumcision violates the rights of women and girls to health, protection and even life since the procedure sometimes results in death.

That is, of course, a noble goal. But how is permitting encouraging male genital cutting any less worthy? (I’ll get to “health” in a moment.) Do boys not deserve the same respect? Does every boy facing the circumciser’s blade survive his ordeal?

“Today, we must stand and firmly oppose this practice because it clashes with our core universal values and constitutes a challenge to human dignity and health,” Deputy Secretary-General Asha-Rose Migiro told the Commission on the Status of Women where the campaign was launched.

“The consequences of genital mutilation are unacceptable anywhere, anytime and by any moral and ethical standard,” she said. “Often, female genital mutilation is carried out on minors, violating the rights of a child to free and full consent on matters concerning her body and body functions.”

These agencies¹ argue that males don’t require human dignity. They argue that males don’t require their full, healthy bodies. They argue that moral and ethical standards do not fully apply to males. They ignore that unnecessary genital surgery is carried out on male minors. They reject the notion that a male child has an equal human right to free and full consent on matters concerning his body and body functions.

They defend this idiocy with the following note in the press release (pdf):

In contrast to female genital mutilation, male circumcision has significant health benefits that outweigh the very low risk of complications when performed by adequately-equipped and welltrained providers in hygienic settings Circumcision has been shown to lower men’s risk for HIV acquisition by about 60% (Auvert et al., 2005; Bailey et al., 2007; Gray et al., 2007) and is now recognized as an additional intervention to reduce infection in men in settings where there is a high prevalence of HIV (UNAIDS, 2007).

Significant is subjective. The missing word potential before “health benefits” is necessary, since most males have a healthy foreskin with no history of problems when they are circumcised². Very low is subjective. But the key word in that note is outweigh. Who is the appropriate person to evaluate the balance of those two sides? For example, who decides that the inherent risk of death is low enough? These agencies claim that every female must decide for herself from birth, but every male is subject to the decision of his parents until he reaches the age of majority. Females are assumed to be against medically unnecessary cutting until they state otherwise. Males are assumed to be indifferent, at worst, to medically unnecessary cutting until they state otherwise, when it’s too late because a portion of their genitals are already gone forever.

The ten agencies involved place political correctness before principle. They possess no moral or ethical credibility.

¹ The agencies are The Joint U.N. Program on HIV/AIDS; the U.N. Development Program; the U.N. Economic Commission for Africa; the U.N. Educational, Scientific and Cultural Organization; the U.N. Population Fund; the Office of the High Commissioner on Human Rights; the U.N. refugee agency, UNHCR; the U.N. children’s agency, UNICEF; the U.N. Development Fund for Women and the World Health Organization.

² This omission is damning to the intellectual integrity of the agencies.

Prove it.

Senator Clinton makes a bold claim:

Blasting “companies shamelessly turning their backs on Americans” by shipping jobs overseas and railing that “it is wrong that somebody who makes $50 million on Wall Street pays a lower tax rate than somebody who makes $50,000 a year,” Sen. Hillary Rodham Clinton increasingly sounds like one of her old Democratic rivals, former senator John Edwards of North Carolina.

The first half of her statement is boring rhetoric. Corporations are evil, blah blah blah. Empty talking points. Whatever.

The second half of her statement is absurd. She needs to prove it. Show me one Wall Street executive who pays a lower tax rate than somebody who makes $50,000 per year.

No matter what, I will take no solace. If she could fine one, her solution would be to raise the rate on the individual making $50 million. She’d never imagine that she could (ask Congress to) lower rates or simplify the entire tax code.

**********

It’s interesting that the first screen a visitor encounters at her campaign website is a place to give her your information, accompanied by a big red SUBMIT button. Freudian, anyone?

Senator Obama does the same, but he doesn’t ask for first or last name and invites the visitor to LEARN MORE. I won’t pretend that the result isn’t nearly identical, when mentality meets policy, but the marketing difference explains a lot.

The definition of “semantics” mentions political propaganda.

Here’s a headline from yesterday’s New York Times:

Waterboarding Not Legal Now, Justice Dept. Lawyer Says

I opened the article with a twinge of optimism.

Steven G. Bradbury, the acting head of the Justice Department’s Office of Legal Counsel, seemed set to shake up one of the fiercest debates in Washington today by offering a clear and concise statement about the controversial interrogation technique known as waterboarding, which simulates drowning.

‘’There has been no determination by the Justice Department that the use of waterboarding, under any circumstances, would be lawful under current law,’’ he says in prepared remarks for a House hearing today that were obtained in advance by The Associated Press.

Bradbury proffered all the words necessary to reach the conclusion stated in the headline, but only if you’re anxious to accept the assurance you’re looking for at any hint of its existence. Sadly, Bradbury is not stating that waterboarding, or any other torture technique, is illegal. He left open the government’s option to later make the determination of whether or not current law permits torture. (I weep for my country that I must write that sentence.)

Non-answers like this are a fundamental aspect of politics. The Bush administration is only the current, flagrant example. It is why rules restricting government should be as specific and as clear as possible. Such rules should be as extensive as necessary to prevent any uncertainty.

Only waterboarding three detainees is still three human beings too many. The Bush administration is populated by war criminals. They must be prosecuted. And every excuse-peddler in government who helps to support such crimes must be shown the door.

A hard-hitting question or twenty from journalists wouldn’t hurt, either. Lapping up the Bush administration’s persistent line of crap is damaging.

Obfuscation of the Day

New York Governor Eliot Spitzer makes an inarguably incomplete argument regarding the subprime mortgage problem:

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

I wonder if he gave the essay its title – “Predatory Lenders’ Partner in Crime” – or the Washington Post’s editors added it.

Regardless, the only fact he has correct in his sanctimony is that what he’s selling is a tale. Its height is impressive. I can’t wait to see what he shovels when he runs for Congress or President.