Archive for the ‘Media and the Press’ Category.

Who Is Important to NBC News

I almost never watch the network news, but I happened to be in the room when NBC News had a year in review video where it paid tribute to famous people who passed away in 2012.  The people they chose were incredible -- probably 85% entertainers and sports figures and 15% government / military figures.  And that is NBC's world.   I vaguely remember there may have been one exception, but essentially there were no producers, no scientists, no inventors, no business people.  Not even someone like Carroll Shelby, a business person who also had a place in pop culture.

Some Predictions I Made in 2007

Blogging has been light during the holidays, but here are some predictions I made back in 2007 I feel pretty good about (note these were made a year before Obama was elected)

What I will say is that folks who have enthusiastically supported the war should understand that the war is going to have the following consequences:

  1. In 2009 we will have a Democratic Congress and President for the first time since 1994.
  2. The next President will use the deficits from the $1.3 trillion in Iraq war spending to justify a lot of new taxes
  3. These new taxes, once the war spending is over, will not be used for deficit reduction but for new programs that, once established, will be nearly impossible to eliminate
  4. No matter what the next president promises to the electorate, they are not going to reverse precedents for presidential power and secrecy that GWB has established.  Politicians never give up power voluntarily.  [if the next president is Hillary, she is likely to push the envelope even further].  Republicans are not going to like these things as much when someone of the other party is using them.

1.  The prediction was 100% correct, and in fact even went further as the donkeys gained a filibuster-proof majority in the Senate, at least for a year.  Though the war likely had little to do with the outcome, which was driven more by the economy

2.  Dead-on.  Five years later Obama still blames the deficit on Bush.  This is no longer true -- Obama has contributed far, far more than Bush to the deficit -- but the Republicans' fiscal irresponsibility during their tenure have robbed them of any credibility in criticizing Obama

3.  Mostly true (and usually a safe bet with government).   Tax increases were deferred for four years due to an economy I had not foreseen would be so bad, but they are coming.  At the time, it seemed logical to blame a lot of the deficit issues on war spending.  Today, though, 1.3 trillion is barely 8% of the debt and is almost trivial to more recent money wasting activities.

4.  Absolutely true.  In spades.  The only thing I missed was I thought Obama might be less likely to go overboard with the whole executive authority and secrecy thing than Hillary, but boy was I wrong.  Obama has absolutely embraced the imperial presidency in a way that might have made Dick Cheney blush.  Accelerated drone war, constant ducking of FOIA and transparency, increased use of treason laws to prosecute whistle blowers, claiming of power to assassinate Americans on the President's say-so, accelerated warrant-less wiretapping, using executive orders to end-run Congress, etc. etc.  And I never guessed how much the media which so frequently criticized  Bush for any expansions in these areas would roll over and accept such activity from a President of their party.

Government Influence Over the Media

From Walter Olson

According to the New York Times, French Socialist president François Hollande demanded and received the dismissal of the editor of Le Figaro, the country’s leading conservative newspaper. If that sounds impossibly high-handed, consider the background, as reported in the Times:

The publisher, Serge Dassault, is a senator from [ousted President Nicolas] Sarkozy’s political party [and thus opposed to Hollande]. But Mr. Dassault also heads a major military contractor, and there was widespread speculation that [Figaro editor Étienne] Mougeotte’s ouster was meant to put the Dassault group in good stead with the new president.

For an American reader, it would be natural to turn the page with a murmur of thanks that such things don’t go on in our country. Don’tbe so sure:

[Since-convicted Illinois Gov. Rod] Blagojevich, Harris and others are also alleged [in the federal indictment] to have withheld state assistance to the Tribune Company in connection with the sale of Wrigley Field. The statement says this was done to induce the firing of Chicago Tribune editorial board members who were critical of Blagojevich.

Read the whole thing.  He has an interesting story about Ted Kennedy passing legislation to force a change in ownership of the Boston paper most consistently critical of him.

Maybe Another Reason To Vote Romney

OK, there are lots of reasons to get Obama out of office.  The problem is, that for most of them, I have no reasonable hope that Romney will be any better.  Corporatism?  CEO as Venture-Capitalist-in-Chief?  Indefinite detentions?  Lack of Transparency?  The Drug War?   Obamacare, which was modeled on Romneycare?  What are the odds that any of these improve under Romney, and at least under Obama they are not being done by someone who wraps himself in the mantle of small government and free markets, helping to corrupt the public understanding of those terms.

So I am pretty sure I cannot vote for Romey.  I really like Gary Johnson and I am pretty sure he will get my vote.  Republican friends get all over me for wasting my vote, saying it will just help Obama win.  So be it -- I see both candidates undertaking roughly the same actions and I would rather that bad statist actions be taken in the name of Progressives rather than in the name of someone who purports to be free market.

To test my own position, I have been scrounging for reasons to vote for Romney.  I have two so far:

1.  Less likely to bail out Illinois when its pension system goes broke in the next few years

2.  I might marginally prefer his Supreme Court nominees to Obama's

That is about all I have.  Stretching today, I have come up with a third:

3.  If we have a Republican in the White House, the press will start doing its job and dig into the facts about drone strikes and warrant-less wiretapping.

You know the press are in full defense mode protecting their guy in office when the only press that reports on the ACLU's accusation about sky-rocketing wire tapping under Obama are the libertarians at Reason and the Marxists at the World Socialist Web site.  Four years ago the New York Times would have milked this for about a dozen articles.  It may take a Republican President to get the media to kick back into accountability mode over expansions of executive power.

Evidence We Are Winning the War on Poverty

Over the last few days I have heard the same radio commercial three times, trying to raise awareness about hunger and poverty.  A little girl's voice says that when she goes downstairs and looks in the refrigerator, she does not see any food.  I too aspire to eliminating hunger from the world, but if our poor have electricity, refrigerators, and two-story houses, we must be doing something right.

Savage Austerity

It seems very popular to publicly declare, even continually reiterate, that there is a trend without actually, you know, showing the trend data.  I won't declare this to be a media trend, but this summer we were plagued with news reports about the drought "trend" when in fact no such trend exists in the US data  (NOAA data from this article). Something similar holds for the supposed British austerity.  Here is British government spending in real dollars (via here)

Summer of the Shark, Toyota Edition

A couple of weeks ago I discussed media coverage of summer temperatures in the US in the context of the crazy 2001 "summer of the shark" panic, where the media took a below-average year for shark attacks and played it up with constant coverage into the work shark attack year ever.

In 2010 we had another summer of the shark, this time with the fears over Toyota sudden accelerations.  We even were treated with an OJ-White-Bronco-like real-time video of some moron in a Prius who supposedly couldn't find the brake peddle for scores of miles on an LA freeway.  I expressed skepticism immediately that there was really a hardware / electronics problem behind the accelerations, and wondered whether the US government's ownership of Toyotas competitors might not have something to do with all the Senate hearings and government attention.  Eventually, the NHTSA and other government agencies determined there was no flaw with the Toyotas, that the sudden acceleration was merely due to operator error (ie jamming a foot on the wrong peddle).  This happens a lot, as it turns out, and I remember Walter Olson once found a stat that a huge percentage of sudden acceleration cases that make it to court seem to involved people over 70 or under 20.

ABC led the parade on this particular shark attack.  They used "safety experts" who were actually in the pay of plaintiff's lawyers, without disclosing this conflict of interest.  They actually tampered with their tested Toyotas and claimed they replicated the "spontaneous" acceleration:

It is hard to spot the lowest behavior in the affair so far, but that honor can arguably go to ABC and the lengths to which it went to pretend it had recreated the problem.  In fact, they had to strip three wires, splice in a resistor of a very specific value and then short two other wires.  They made it sound like this is something that could easily happen naturally  (lol) but this is an easy thing to prove – and inspection of actual throttle assemblies from cars that have supposedly exhibited the sudden acceleration problem have shown no evidence of such shorting.  So the ABC story was completely fraudulent, similar to the old Dateline NBC story that secretly used model rocket engines to ignite gas tanks.   Its amazing to me that Toyota, acting in good faith will get sued for billions over a complex problem which may or may not exist in a few cars, while ABC will suffer no repercussions from outright fraud.

Basically ABC proved that if you bypass a potentiometer with a resistor, you can spoof the potentiometer setting.  Duh.  The same hack on a radio would cause sudden acceleration of your volume.

So, given some time and reflection, eventually the rest of the journalistic community has brought some accountability to ABC by publicly shaming them for this shoddy journalism.  Ha ha, just kidding.  They just gave ABC and its reporter one of their highest awards for the story

Congratulations to Brian Ross, America's Wrongest Reporter, for winning a coveted Edward R. Murrow Award honoring his coverage of the Toyota unintended acceleration story. The award, oddly, is for "Video Continuing Coverage" rather than "Fostering Global Panic Based on Bullshit Story." Still, a Murrow is a Murrow, right? Let's go to tape.

Ross, you will recall, was one of the driving forces behind the Runaway Toyota Panic of '10, which was later determined by NASA and the National Highway Traffic Safety Administration to have been largely the result of idiots stepping on the accelerator when they intended to step on the brake, and of other idiots talking about it on TV. Ross was one of those idiots. For some reason, ABC News submitted four of Ross' Toyota reports to the Radio Television Digital News Association for award consideration.

One report they didn't submit was the one where Gawker caught Ross staging footage to make it seem like a Toyota was accelerating out of control when it was in fact parked with the emergency brake on, doors open, and someone stepping on the gas. We're told by an ABC News insider that, even though it didn't nominate that segment, the network "acknowledged and owned that mistake" in its awards submission. Good for them! Now let's see them acknowledge and own these mistakes from the segments it did submit. For instance:

In two of the winning reports, Ross quoted safety expert Sean Kane criticizing Toyota and insisting that there were cases of unintended acceleration that "couldn't be explained by floormats," which Toyota had recalled in 2009 after some mats became stuck under gas pedals. What he didn't report was that Kane was being paid by plaintiff's attorneys who were suing Toyota over unintended acceleration cases, and so had a financial incentive to argue that there was more to the Runaway Toyota scare than just floormats. Indeed, in other ABC News segments that the network didn't nominate, Ross showed Kane saying—again without disclosing his relationship to plaintiff's attorneys—"We clearly think that Toyota has a larger problem on their hands that involves the electronics with these vehicles." That position—that electronics were involved—was later eviscerated by the NASA/NHTSA report, which found "no electronic flaws in Toyota vehicles capable of producing the large throttle openings required to create dangerous high-speed unintended acceleration incidents."

Time Magazine Trumpets Another Creepy Non-Trend

Time channels Game of Thrones for its cover

Global Warming Ate My House

This has already made the rounds but I can't resist mocking an HBS professors whose classes I assiduously avoided when I was there.  Her house was hit by lightning.  Apparently, this was not the fault of poor lightning protection for her house, but was due to your SUV:

I am not a climate change scientist, but I have come to understand that I am a climate change victim. Our daughter took the lead investigating destructive lightning in Maine. She found that the NASA Goddard Institute estimates a 5-6% change in global lightning frequencies for every 1 degree Celsius global warming. The Earth has already warmed .8 degrees Celsius since 1802 and isexpected to warm another 1.1-6.4 degrees by the end of the century. Maine's temperatures rose 1.9 degrees Celsius in the last century and another 2.24 degree rise is projected by 2104. I learned from our insurance company that while the typical thunderstorm produces around 100 lightning strikes, there were 217 strikes around our house that night. I was shocked to discover that when it comes to increased lightning frequency and destructiveness, a NASA study concluded that eastern areas of North America like Maine are especially vulnerable. Scientists confirm a 10% increase in the incidence of extreme weather events in our region since 1949.

This is one of those paragraphs that is so bad, I put off writing about it because I could write a book about all the errors.

  • The 5-6% lightning strike estimate comes from one single study that I have never seen replicated, but more importantly comes from running a computer model.  Though it may exist, I have found no empirical evidence that lightning activity has net increased with increases in temperature
  • The world has warmed about 0.8C over the last century or two. Congrats.  Infinite monkeys and Shakespeare and all that.
  • We could argue the forecasts, but they are irrelevant to this discussion as we are talking about current weather which cannot be influenced by future warming.
  • Her claim that Maine's temperature rose 1.9C in the last Century is simply absurd.  Apparently she got the data from some authoritative place called nextgenerationearth.com, but its impossible to know since in the few days since she published this article that site has taken down the page.  So we will just have to rely on a lesser source like the NOAA for Maine temperatures.  Here story is from 2009 so I used data through 2009

Annual Averages in Maine:

Oops, not a lot of warming here, and certainly not 1.9C.  In fact, there has not even been a single year that has been 1.9C above the average for the century since the early 1900s.  And 2009 was a below average year.
Well, she said it was in summer.  That's when we get the majority of thunderstorms.  Maybe it is just summer warming?  The NOAA does not have a way to get just summer, but I can run average temperatures for July-September of each year, which matches summer within about 8 days.

Whoa!  What's this?  A 0.3-0.4C drop in the last 100 years.   And summer of 2009 (the last data point) was well below average. Wow, I guess cooling causes lightning.  We better do something about that cooling, and fast!  Or else buy this professor some lightning rods.
And you have to love evidence like this

I learned from our insurance company that while the typical thunderstorm produces around 100 lightning strikes, there were 217 strikes around our house that night

What is this, the climate version of the Lake Wobegone Effect?  If all our storms are not below average, then that is proof of climate change.  Is this really how a Harvard professor does statistical analysis?  She can just look at a sample and the mean and determine from that one sample that the mean is shifting?

Finally, she goes on to say that extreme weather in her area is up 10% from some source called the Gulf of Maine Council on Marine Environment.  Well, of course, you can't find that fact anywhere on the source she links.  And besides, even if Maine extreme weather is up, it can't be because of warming because Maine seems to be cooling.

This is just a classic example of the observer bias that is driving the whole "extreme weather" meme.  I will show you what is going on by analogy.  This is from the Wikipedia page on "Summer of the Shark":

The media's fixation with shark attacks began on July 6, when 8-year-old Mississippi boy Jessie Arbogast was bitten by a bull shark while standing in shallow water at Santa Rosa Island's Langdon Beach. ...

Immediately after the near-fatal attack on Arbogast, another attack severed the leg of a New Yorker vacationing in The Bahamas, while a third attack on a surfer occurred about a week later on July 15, six miles from the spot where Arbogast was bitten.[6] In the following weeks, Abrogast's spectacular rescue and survival received extensive coverage in the 24-hour news cycle, which was renewed (and then redoubled) with each subsequent report of a shark incident. The media fixation continued story with a cover story in the July 30th issue of Time magazine.

In mid-August, many networks were showing footage captured by helicopters of hundreds of sharks coalescing off the southwest coast of Florida. Beach-goers were warned of the dangers of swimming,[7] despite the fact that the swarm was likely part of an annual shark migration.[8] The repeated broadcasts of the shark group has been criticized as blatant fear mongering, leading to the unwarranted belief of a so-called shark "epidemic".[8]...

In terms of absolute minutes of television coverage on the three major broadcast networks—ABCCBS, and NBCshark attacks were 2001's third "most important" news story prior toSeptember 11, behind the western United States forest fires, and the political scandal resulting from the Chandra Levy missing persons case.[11] However, the comparatively higher shock value of shark attacks left a lasting impression on the public. According to the International Shark Attack File, there were 76 shark attacks that occurred in 2001, lower than the 85 attacks documented in 2000; furthermore, although 5 people were killed in attacks in 2001, this was less than the 12 deaths caused by shark attacks the previous year.[12]

A trend in news coverage <> a trend in the underlying frequency. If these were correlated, gas prices would only go up and would never come down.

Media: Turning Isolated Bizarre Incidents into National Trends

Teens ditilling hand sanitizer

By the way, why is it so easy for the media to see, say, back room abortions as a symptom of prohibitions on abortion but not see stories like this in the same light.

Totally Irresponsible

I am seldom surprised at NBC's behavior -- after all, this is the network that ran the exploding pickup truck story, only to admit later that it put model rocket engines in the fuel tanks to ignite the cars during simulated crashes because the they weren't catching fire on their own.

But NBC's editing of the Zimmerman 911 tapes to make them more inflammatory really sets a new low.  The country was practically on the verge of race riots, with groups actually posting dead-or-alive bounties for Zimmerman, and NBC purposefully edited the tape from neutral to incendiary?

Diversity in Journalism

Because its important to have a diversity of skin pigment and reproductive plumbing in our intellectual mono-culture.

Update:  Wait, wait!  We aren't a mono-culture!  For example, some of us think Ralph Nader would make a great President and voted for him and some of us think Ralph Nader would make a great President but we didn't vote for him because we thought he was unelectable.  That's some real diversity.

Journalistic Ethics

This is an interesting story on the AP and journalistic ethics

The Associated Press purchased an advanced copy of the book. It is set for release on Nov. 15.

Let's start with the second paragraph.  It's a lie, pure and simple--and the papers that reprinted the stories know it.  Giffords didn't sell any "advanced copy" of the book.  The book is strictly embargoed so that she can control the timing of the media stories that surround it.  Bookstores, however, have copies locked up in storage rooms so the copies can all be put on the shelves at the same time.  Someone stole one of those copies...or perhaps stole a proof text from the publisher...and then sold it to the Associated Press.

Rather than admit that they illegally purchased and then printed excerpts from a stolen copy, the Associated Press lied and said that they "purchased an advanced copy of the book."  That would be a big story by itself, but the newspapers that have contracts with the AP didn't want to blow a good story, so that meekly reprinted the lie.

What's worse is that the AP not only stole Giffords' book and disrupted the timing of her planned roll out...they botched the story and made Giffords issue a denial. ...

...faced with an ambiguous quote in a stolen book and no chance to verify it, the AP did just what they teach you in the ethics classes in Journalism school...they ran with the most tantalizing, headline grabbing interpretation and then made Gabby deny it.  Nice.

The Onion, September, 2001

Ten years ago today, we were arguing over whether it was appropriate to even hold professional football and baseball games, much less enjoy ourselves in any way, in the aftermath of 9/11.

No one even contemplated trying to deal with it humorously.  Heck, I am not sure I have seen many attempts even a decade later to do so.  But just days after 9/11, the Onion published an amazing issue dedicated to 9/11.  It was funny without being disrespectful of the victims, and in many ways still on point.  They should have had a Pulitzer for it.  The articles are archived here.

What Liberal Reporters Used to Do

Lefties are struggling with the concept of a libertarian doing a good deed (in this case, Radley Balko's great journalism leading to the release of Cory Maye.

Here is the real problem for the Left:  This is exactly the kind of story -- a black man  railroaded into jail in Mississippi -- that leftish reporters used to pursue, before they shifted their attention to sorting through Sarah Palin's emails.  A lot of investigative journalism has gone by the wayside -- in Phoenix, it has really been left to independent Phoenix New Times to do real investigative journalism on folks like Joe Arpiao, as our main paper the Arizona Republic has largely fled the field.

Newsweek Has Totally Lost It

Newsweek has for a number of years been the poster child for the lost traditional media trying to find its way in the digital age.  Tina Brown was supposed to have been the brilliant media mind brought in to save Newsweek, but if anything she has made Newsweek even more of a joke.

Her major focus seems to be to use Newsweek as a platform for self-promotion, beginning in her first issue when she used the cover to promote her upcoming women's conference and stroke her friend Hillary.  This week, she gives the cover over to promoting her biography of Lady Diana with a concept that People Magazine would probably have passed on -- what would it have been like if Diana were still alive.  Seriously.  This is how far this magazine has fallen, trying to envision how the recent Royal Wedding would have been any more of a circus for the rich and over-dressed had Diana been in attendance.

But I probably would not have bothered to blog about it had it not been for this cover I saw in the airport.  Check out the horrible zombie Diana.  Jeez, is this a real story or a preview of Left 4 Dead 3?  Pre-order now and get custom DLC including the solar-powered chainsaw and the zombie Lady Di.  (You may have to click to enlarge to see the full horror).

Pray I Don't Alter It Any Further

So a bunch of bloggers agree to write for the HuffPo, a profit-seeking venture, for free.  The HuffPo gets bought by another profit-seeking company, though this one is less successful in shrouding its financial goals in a cloud of feel-good progressivism.  So the bloggers get mad.  But instead of just quitting, they are actually suing the HuffPo for back wages under the Fair Labor Standards Act.

A few observations:

  • I blog for free at Forbes.  It's not like the arrangement was hard to figure out.  They get some free content, I get some exposure and a bit of cache from being associated with Forbes.   Seemed like a good deal to me.  When it ceases to be so, I will quit.
  • The fact that everyone agreed to the deal in advance and it was completed by both parties to their mutual self-interest is NOT a defense under the Fair Labor Standards Act (FLSA).  I have employees who beg to work for free all the time (e.g. they have a disability arrangement that allows no outside income).  I have to tell them no.  Any defense from the HuffPo will come through convincing a court that the writers were somehow exempt or not actually employees.
  • This same problem arises with internships as well as in my work.  In short, people sometimes value non-monetary aspects of jobs that are not given any credit in the FLSA.  My son would love to have a good summer job and for the right one would work under minimum wage for the experience.   Even the experience of showing up on time, functioning in an organization, working in a hierarchy, etc.  are important skills those outside of the work force gain from obtaining.  (In an interesting parallel to this, probably the most important skill I am gaining at Forbes is simply writing to a regular weekly deadline.  It's harder than it seems from the outside).

In short, I would say that these folks are utterly without personal honor for filing the suit, but in the current state of labor law they potentially have a case.  How sad that would be.  And what would be next?  A class action suit by product reviewers at Amazon for back wages?

CBS Anchor Suggestions

These were the suggestions I made 6 years ago to replace Dan Rather.  Some of the names are a bit dated, but I think many would have worked out as well as Couric.  I think the last suggestion is, if anything, even more timely.

Improve ratings approach #1:  Finally get rid of the pretense that anchors are journalists rather than pretty talking heads.  Hire Nicollette Sheridan, or maybe Terri Hatcher.  Or, if you feel CBS News deserves more gravitas, in the Murrow tradition, how about Meryl Streep?

Improve ratings approach #2:  Go with comedy.  Bring in David Letterman from the Late Show to anchor the evening news.  "Tonight, we start with the growing UN oil for food scandal.  Uma – Anann.  Anann – Uma."  Or, if you want to segment the market differently, how about Tim Allen and the CBS News for Guys.  Or, if CBS wants to keep hitting the older demographic – what about Chevy Chase – certainly he already has anchor experience from SNL.

Improving Credibility Choice:  No one in the MSM really has much credibility left after the last election, but there is one man who would bring instant credibility to CBS News — Bob Costas.  CBS should hire him away from NBC, like they did with Letterman.  Make him the evening news anchor.  Heck, if Bryant Gumbell can make the transition to the news division, certainly Costas can.

Become the acknowledged liberal counterpoint to Fox:  Hire Bill Clinton as anchor.  Nothing would generate more buzz than that hire, and he is at loose ends anyway (and think about all those wonderful business trips away from home…)  If Bill is not available, try James Carville.  I might even have to watch that.

Let the public decide:  Forget making a decision, and just create a new reality show like ESPN’s Dream Job to choose the next anchor.  Each week the 12 finalists can be given a new task.  In week one, they have to pick up incriminating evidence about the President at a rodeo.  In week 2, they have to forge a believable set of documents from the early 70′s, and survive criticism from about 10,000 bloggers.  They can kick one off the island each week based on the viewers votes.

Get Down In The Mud With The Rest Of Us

I wanted to leave Glendale's proposed $100 million subsidy of the purchase of the Phoenix Coyotes hockey team by Matthew Hulzinger behind for a while, but I had to comment on something in the paper yesterday.

The Arizona Republic, which is an interested party given that a good part of their revenues depend on having major sports teams in town, had an amazing editorial on Tuesday.  Basically, it said that Goldwater, who has sued to bock the bond issue under Arizona's gift clause,  needed to stop being so pure in its beliefs and defense of the Constitution and that it should jump down in the political muck with everyone else.

I encourage you to read the article and imagine that it involved defense of any other Constitutional provision, say free-speech rights or civil rights.  The tone of the editorial would be unthinkable if aimed at any other defense of a Constitutional protection.  Someone always has utilitarian arguments for voiding things like free speech protections -- that is why defenders of such rights have to protect them zealously and consistently.  The ACLU doesn't get into arguments whether particular speech is right or wrong or positive or negative -- it just defends the principle.  Can't Goldwater do the same?

My thoughts on the Coyotes deal are here and her.  Rather than dealing with the editorial line by line, which spends graph after graph trying to convince readers that Darcy Olsen, head of the Goldwater Institute, is "snotty,"  here are some questions that the AZ Republic could be asking if it were not in the tank for this deal

  • How smart is it for the taxpayers of Glendale to have spent $200 million plus the proposed $100 million more to keep a team valued at most at $117 million? (several other teams have sold lately for less than $100 million)  And, despite $300 million in taxpayer investments, the city has no equity in the team -- just the opposite, it has promised a sweetheart no-bid stadium management deal of an additional $100 million over 5 years on top of the $300 million.
  • The Phoenix Coyotes has never made money in Arizona, and lost something like $40 million last year.  Why has no one pushed the buyer for his plan to profitability?  The $100 million Glendale taxpayers are putting up is essentially an equity investment for which it gets no equity.  If the team fails, the revenue to pay the bonds goes away.   The team needs to show a plan that makes sense before they get the money -- heck the new owners admit they will continue to lose money in the foreseeable future.     I have heard folks suggest that the Chicago Blackhawks (Hulzinger's home town team) are a potential model, given that they really turned themselves around.  But at least one former NHL executive has told me this is absurd.  The Blackhawks were a storied franchise run into the ground by horrible management.  Turning them around was like turning around the Red Sox in baseball.  Turning around the Coyotes is like turning around the Tampa Bay Rays.  The fact is that the team lost $40 million this year despite the marketing value of having been in the playoffs last year and having the second lowest payroll in the league.  The tickets are cheap and there is (at least for now) free parking and still they draw the lowest attendance in the NHL.  Part of the problem is Glendale itself, located on the ass-end of the metro area  (the stadium is 45 minutes away for me, and I live near the centerline of Phoenix).
  • If taxpayers are really getting items worth $100 million in this deal (e.g. parking rights which Glendale probably already owns, a lease guarantee, etc) why can't the team buyer use this same collateral to get the financing privately?  I have seen the AZ Republic write article after article with quote after quote from Hulzinger but have not seen one reporter ask him this obvious question.  I have asked Hulzinger associates this question and have never gotten anything but vague non-answers.  A likely answer is what I explained yesterday, that Hulzinger is a smart guy and knows the team is not worth more than $100 million, but the NHL won't sell it for less than $200 million (based on a promise the Commissioner made to other owners when they took ownership of the team).  Hulzinger needed a partner who was desperate enough to make up the $100 million the NHL is trying to overcharge him -- enter the City of Glendale, who, like a losing gambler, keeps begging for more credit to double down to try to make good its previous losses.
  • Glendale often cites a $500 million figure in losses if the team moves.  Has anyone questioned or shown any skepticism for this number?  My presumption is that it includes lost revenue at all the restaurants and stores around the stadium, but is that revenue really going to go away entirely, or just move to other area businesses?  If your favorite restaurant goes out of business, do you stop going out to eat or just go somewhere different?
  • We hear about government subsidies to move businesses from other countries to the US, or other states to Arizona, and these tend to be of dubious value.  Does it really make sense for Glendale taxpayers to pay $400 million to move business to another part of the Phoenix metropolitan area?
  • Why do parties keep insisting that Goldwater sit down and "negotiate?"  Goldwater does not have the power to change the Constitutional provision.  Do folks similarly call on the NAACP to "negotiate" over repeal of Jim Crow laws?  Call on the ACLU to negotiate over "don't ask, don't tell"?  This may be the way Chicago politics works, with community organizers holding deals ransom in return for a negotiated payoff, but I am not sure that is why Goldwater is in this fight.  The Gift Clause is a fantastic Constitutional provision that the US Constitution has, and should be defended.
  • Jim Balsillie offered to buy out the team (and move it to Canada) without public help and to pay off $50 million of the existing Glendale debt as an exit fee.  Thus the city would have had $150 in debt and no team.  Now, it will be $300 million in debt and on the hook for $100 million more and may still not have a team in five years when, almost inevitably, another hubristic rich guy finds he is not magically smarter about hockey and can't make the team work in Arizona.   Has anyone compared these two deals?  Private businesses cut losses all the time -- politicians almost never do, in part because they are playing with house money (ours).

Taking Local News Too Far

Perhaps this is just a pet peeve of mine, but I really hate it when local news organizations try to find a local angle to a huge international story.  This headline from the Arizona Republic today is a good example:

No injuries reported to workers in Japan employed by Arizona companies

A Difference Between Republicans and Me

Both I and most Congressional Republicans want to defund NPR.  Republicans want to do it because they perceive it as a government-funded liberal partisan voice;  I want to do it because broadcasting is simply not a role for government.

But note -- Republicans who want to count coup on NPR out of spite and frustration should recognize that defunding it could very likely make NPR a more, rather than less, potent leftish voice  (insert Star Wars quote "if you strike me down.... yada yada).  NPR's government funding is all that is really keeping it in sight of the political center.  Pull that funding and it will be free to tack left - in fact, this likely will be an imperative given its likely sources of additional private funding it will need.

All of which is fine by me, but I think the Republicans are expecting an Air America-type crash and burn, and I think they are mistaken.  There is a lot about PBS and NPR that are vital and unique -- their supporters are not wrong about that -- which I think will make them viable private (though still non-profit) entities.

Local Paper Continues Its Relentless Campaign for Sports Team Subsidies

Several days ago, I wrote how our local paper, the Arizona Republic, was engaging in a coordinated campaign to get the city of Glendale to subsidize the private purchase of our professional hockey team with a $200 million bond issue.  The logic of this is mainly to save the previous $180 million bond issue the city unwisely issued several years ago to build an arena for this same hockey time as well as the sweetheart commercial real estate deals it has cut adjacent to the stadium.   All in all, the city proposes to spend a cumulative $380 million of public money to hold on to an asset valued by third parties at $ 116 million.  And through all of this spending, taxpayers will end up with not a dime of equity in this asset.

At the time, I thought the campaign had been relentless, going on day after day with both editorials and news articles making cases to subsidize the team, and hammering the Goldwater Institute for actually questioning the legality of transaction.  I mean God forbid anyone would actually interpret the Arizona Constitution "gift clause" that says governments in the state cannot give money to private businesses as potentially barring Glendale from giving money to a private investor so he can buy the hockey team.

But when I called the campaign relentless, little did I know it would continue day after day through the rest of the week.  Every day we get a new article that is basically an editorial in disguise, with the opposing position, if included, down around paragraph 25.   Today's is just a masterpiece of such yellow journalism, which includes no opposing viewpoint at all, and includes this classic gem that is almost a caricature of itself:

Rick Myers and his wife have worked as part-time ticket-takers since 2004, the year after Jobing.com Arena opened and they visited for the first time.

"This arena is not brick and mortar, ice and air-conditioning. This arena is a family," he said.

Craig Van Kessel, a disabled military veteran, agreed.

He said six months after getting a job with the team, when he had major surgery, his co-workers called, sent cards and offered help. The team also donates prizes each year for a Western Amputee Golf Association tournament that Kessel helps organize.

If the team leaves, he said, it affects "us little people."

John Minor, a guest services employee, said he counts friendships among the fans he meets at the arena, while Kyle Olson, director of arena events, said he's taught his toddler to howl like a coyote.

Can I barf now?  Seriously, if you were doing a caricature of bad anecdotal arguments for a typical concentrated-benefits-diffuse-costs government program, could you do any better than this?  We are talking about $200 freaking million dollars here.

Nowhere in any of its editorials or news articles acting as thinly veiled editorials does the AZ Republic reveal that it is an enormously interested party to the transaction.  The Sports Section sells papers, and the presence of an additional major league franchise adds a hard to measure but most definite contribution to the paper's bottom line.

Postscript: The key issue that spurred this is that the city's bond issue is facing higher than expected interest costs.  The city and the AZ Republic are trying to lay the blame on this on Goldwater for stirring up bad karma.  But in fact there are at least six factors for why bond interest rates might be higher:

  • The major bond ratings agencies recently put the city of Glendale on a credit watch list
  • Sales tax revenues that pay for the bonds are way down in AZ and Glendale
  • The city is investing $200 million in a $116 million dollar asset without getting any equity
  • The city has a history of failed bond issues, as evidenced by the previous $180 bond issue they are trying to bail out with this one
  • There is a general sense of wariness nationwide in government finances being overdrawn that may be spilling over into the bond market
  • A local think tank has raised legal questions about the deal — legal questions that turned out to be correct in a parallel case.

Incredibly, our paper has spend over a week harping on just one of these, which to my mind seems the most trivial.

Postscript #2: And by the way, this team is in bankruptcy.  Where is the plan for how that will be avoided in the future?  Won't we be in the same spot five years from now, just with twice as much bond debt?

Is the Media Pro Big Government?

I have never really liked to wallow much in the accusation and counter-accusations of media bias.  But I am coming around to the hypothesis that the media is neither liberal or conservative but has a big government bias.  Recently, as in this article, the Arizona Republic (our daily paper) has been going after the Goldwater Institute for opposing what amounts to a $200 million subsidy to a buyer of our hockey team.

The short story is that after the city of Glendale blew a bunch of money for a hockey stadium in the desert, it turns out hockey is not very popular here (surprise).  So the team went bankrupt, and threatened to move.  To keep it from moving, the city of Glendale wants to throw more good money after bad and subsidize the new buyer.   Goldwater is challenging the subsidy as illegal under AZ law.

As I noted in the previous article, third parties value the Coyotes at $117 million.  So with this new bond issue, they will have run up $380 million in debt to keep a $117 million asset in town.  Further, they will have basically paid the entire purchase price of the team (and more) without getting a drop of equity in return.  All they get is the right to charge for parking around the arena, which is currently free.  This at first makes some sense (though the value of the concession is never mentioned) but in fact it is ludicrous as well.  The entire reason for the subsidy, supposedly, is to protect the mall/apartment/office complex around the stadium that the city cut sweetheart deals with developers to make happen.  So now they are going to charge for parking -- what is going to happen to all those businesses they supposedly are doing this for when their customer's parking is not longer free?

Anyway, the Republic editorialized against Goldwater on Sunday (in an editorial titled "Back off, Goldwater Institute") saying that they were hurting taxpayers because if the new bond issue and team sale fails, then there won't be any revenue to pay the old bond issue.  Its hard to figure how this is any different from doubling down at the roulette table in hopes of making back one's past losses.  And, Goldwater opposed the first bond issue too.

Now, the Republic has editorialized again, this time in a nominally news article.  They argue that by pointing out the potential illegality of the subsidy, Goldwater is messing up their bond interest rates.  I kid you not:

As Glendale prepares to sell bonds to finance its Phoenix Coyotes deal, the interest rates the city obtains make a big difference in how much debt Glendale would take on.

Team buyer Matthew Hulsizer says investors are demanding high interest rates due to nervousness among bond buyers about a potential Goldwater Institute lawsuit over whether the city is illegally subsidizing a private business. Glendale maintains it's on firm legal ground.

This is exactly the line the paper took in its Sunday editorial.  Now they are giving an interested party the ability repeat it in a supposed news article.  The author deliberately puts Goldwater on the spot and in the center of blame

Late Monday, Hulsizer questioned whether the Goldwater Institute wanted the team to stay.

"If they do indeed want the team to stay, then wouldn't they want the city to be able to complete financing at the best possible rate?" he said in a statement to The Arizona Republic.

He asked, if the Coyotes left Glendale, what Goldwater's plan was for the city to pay off its construction debt on the arena and for businesses nearby to survive without hockey customers. The city spent $180 million to open the arena in 2003.

Why in heaven's name is it Goldwater's problem that an earlier bond issue they actively opposed as a bad idea might turn out to, you know, have been a bad idea?  The article goes on and on this way, quoting other people of the same point of view. Goldwater doesn't get a quote until paragraph 24 or so, where Darcey Olson who heads the Institute says

She said Glendale has "unlimited options" to avoid a Goldwater lawsuit. "For instance, Hulsizer could get a private loan to buy this team like most businesses do," she said. "They finance their investments not on the backs of taxpayers but take the risk privately where it belongs."

The evidence of the article that Goldwater is shaking the very pillars of Wall Street is that the city expected one set of interest rates, but the market was giving them higher rates

Glendale officials in December hoped for a roughly 6 percent interest rate.

Todd Curtis, portfolio manager for Aquila Tax-Free Trust of Arizona, said he expected to see a 5 to 5.5 percent interest rate after Moody's Investors Service in mid-February gave the Coyotes bond sale a fairly high rating.

More than a week ago, Curtis was hearing of proposed rates around 7 percent.

Of course, they present no evidence as to why this might be. We are left to assume it is because Goldwater is somehow creating unfair bad vibes. Except then we get this oh-by-the-way near the end of the article:

Moody's and Standard & Poor's raised worries in February about the city's debt levels. As a result, Moody's downgraded several city bond ratings and Standard put the city on a watch list, though the city's ratings remain high.

Also, Glendale pledged to cover the Coyotes bonds with sales taxes, a revenue stream hurt during the recession. The city in its preliminary bond statement points out its sales-tax base is strong.

OK, lets check the reporter's decision-making here.  We have five facts

  • The major bond ratings agencies recently put the city on a credit watch list
  • Sales tax revenues that pay for the bonds are way down
  • The city is investing $200 million in a $116 million dollar asset without getting any equity
  • The city has a history of failed bond issues, as evidenced by the previous $180 bond issue they are trying to bail out with this one
  • A local think tank has raised legal questions about the deal -- legal questions that turned out to be correct in a parallel case.

So our lede is that it is all about the fifth one, just because millionaire Matthew Hulsizer, who is set to feed at the public trough to the tune of $200 million, says its so?

Ask yourself, what is the first section of the paper many folks look at?  The sports page?  An extra professional sports team adds a hard to quantify but definite amount to the paper's bottom line.  The AZ Republic clearly recognizes this and is all-in for any taxpayer subsidy that is required to keep this important part of their business running.

Walter Duranty is Alive and Well

From the WSJ, about a recent "documentary" on PBS's Newshour

Mr. Suarez's report, by contrast, is like a state propaganda film. In one segment, an American woman named Gail Reed who lives in Cuba tells him that the government's claim of its people's longevity is due to a first-rate system of disease prevention. He then parrots the official line that Cuba's wealth of doctors is the key ingredient. What is more, he says, these unselfish revolutionary "foot soldiers" go on house calls. "It's aggressive preventive medicine," Mr. Suarez explains. "Homes are investigated, water quality checked, electrical plugs checked."...

As to doctors checking on water quality and electricity outlets, the PBS reporter might be surprised to learn that most Cuban homes have no running water or power on a regular basis. This is true even in the capital. In 2006, Mr. Botín says, a government minister admitted that 75.5% of the water pipes in Havana were "unusable" and "recognized that 60% of pumped water was lost before it made it to consumers." To "fix" the problem, the city began providing water in each neighborhood only on certain days. Havana water is also notoriously contaminated. Foreigners drink only the bottled stuff, which Cubans can't afford. In the rest of the country the quality and quantity of the water supply is even less reliable.

This is particularly ironic since, at the same moment this show was airing, state department reports leaked by Wikileaks revealed that the Cuban government banned the showing of Michael Moore's "Sicko" in Cuba, despite the film being wildly propagandistic in favor of the Cuban government.  Why?  Because the portrayal of the Cuban medical system, as in Mr. Suarez's PBS report, was so unrealistically favorable that ordinary Cuban citizens would immediately recognize it as BS.

More on Coyote's Media Theorem

Back in January, I wrote about both ethanol and the stimulus bill, observing:

I have decided there is something that is very predictable about the media:  they usually are very sympathetic to legislation expanding government powers or spending when the legislation is being discussed in Congress.  Then, after the legislation is passed, and there is nothing that can be done to get rid of it, the media gets really insightful all of a sudden, running thoughtful pieces about the hidden problems and unintended consequences of the legislation

My emerging theorem about the media is that they want to be on the record as having predicted problems with legislation, but that for leftish legislation they personally support, they defer their most insightful analysis until after the law has passed.  That way, their favored legislation gets on the books, but they are also on the record as having spotted potential problems and can make the argument later that they were not rubes or useful idiots.

We are seeing this yet again, as the New York Times questions some obvious flaws with the Dartmouth health savings data (ht Insty)

Of course, the article misses the most obvious point -- while the Dartmouth data was certainly used to try to sell Obamacare, nothing in the actual legislation does anything to capture these supposed potential savings.  The $700 billion in waste number is more of a sort of happy thought that lets politicians sign the ridiculously expensive bill while pretending that some mythical savings are somehow available in the future through unidentified mechanisms to pay for the program.