BLOOMBERG, CHINA AND MORE DEVILISH DETAILS

Sometimes professional ethics demand giving the customer what he doesn’t want.

Take, as one dramatic example, the National Football League.  For decades, what the NFL wanted from its medical staff was to “get the player back on the field” as fast as possible.  And for decades, that’s what NFL medicine delivered, until (and for years  after) it became obvious that some players who had suffered concussions were being “rehabilitated” too quickly, leading to repeated brain injuries, some of which were irreversible, and in a few cases, led to incapacitation and suicide.

Starting in the 1980s (I know because, in 1983, for NBC’s pre-game show, NLF ’83, I did the first TV report on the risks of football concussions), a few team physicians started consulting their Hippocratic Oath, and warned the league and its owners that  preventive measures were mandatory.  Thus, slowly, the NFL come around to recording brain activity baselines for its players and comparing them with test results after someone “had his bell rung.”  And doctors and coaches started delivering the news nobody wanted to hear, “you can’t play this week.”

In the news business, professional ethics demand that journalists serve, not just market demand, but their best calculation of the public interest, in deciding what, and how much to report.  This is one reason why news is more than just data collection and distribution.

Data delivered quickly to a proprietary 2-screened terminal has always been what Bloomberg LP’s services are all about. Over the past decade, Bloomberg moved into the news business and acquitted itself well, still providing lots of quick snapshots of financial information, but adding to them perceptive, in depth, reporting on a wide variety of subjects.

The rewards in reputation came quickly; financial rewards did not.  Even worse, from Bloomberg L.P.’s corporate perspective, some of that niche, long-form, expensive,  investigative journalism caused exactly the kind of trouble it should: it pissed off the parties it exposed, most recently the “princelings” of China’s Communist Party elite and the “entrepreneurs” who cut them a slice of the cake in exchange for political protection.

Faced, not just with hostility, but severe cutbacks in orders of the Bloomberg terminals from China, Bloomberg LP did what any unprincipled businessman would do: cut and ran, lopping “dangerous” stories off China distribution of its global news feeds, and more recently, firing their Polk-award winning Hong Kong-based investigative reporter Michael Forsythe.  

This week, the Bloomberg trend back to basic data delivery and out of the news business reached an inevitable conclusion, the firing of, a reported 50 to 100 editorial staff. 

The details of the firings confirm the movement away from editorial credibility that first became visible months ago, when command of Bloomberg’s media division was handed to Justin Smith, who then gave responsibility for Bloomberg TV news to Josh Tyrangiel, and when the news channel started pre-empting new coverage to run infomercials (paid content which often masquerades as journalism).  According to Linette Lopez of Business Insider, “the infomercials are now on Sunday nights from 11:00 pm to 12:00 am, Tuesday to Saturday from 2:00 am to 3:00 am, and Monday from 12:00 am to 2:00 am.”

Smith summed up his “philosophy” of media in his “I’m your new boss” memo to the staff: “Moving quickly is paramount: the faster you move, the more you learn, and the sooner you can optimize for success. Fred Wilson, the VC behind Twitter, Foursquare, Zynga and others, argues that ‘speed’” is the quality he seeks out above all others in digital media entrepreneurs. I agree.”

Speed may good for data distribution, but understanding comes more slowly, and in the real world, and for the journalism which feeds on it, “moving quickly” often means misstepping in the wrong direction.  Events have their own tempo and will not be rushed for some fact-marketer’s convenience.

In the same memo, Smith also asserted, “There will always be a robust market for quality content. No technology will ever erode this demand. It’s our job to keep our standards high as we experiment. Bloomberg was built on accuracy and insight. We must build on this strength.”

And then he hired as his TV guy, Tourangiel, whose only prior experience in that medium was at MTV, fabled “for quality content,” in its news.

Today, Bloomberg News’ long-time editor in chief Matthew Winkler fired dozens of employees in what is not a cutback in resources, but a series of shifts in deployment of resources.  Gone from cultural coverage are the Muse brand and its emphasis on covering books and performances that matter.  In its place there will be heightened coverage of “luxury” pursuits.  It is as if Architectural Digest became Luxe Magazine, or Consumer Reports became the Nieman-Marcus Catalog.

Sports at Bloomberg News will no longer cover actual events, just the financials behind them.

And investigative journalism?  Winkler, is his own memo announcing the firings of several of his top editors and writers, said: “We also have high ambitions for beat and investigative reporting.  Our commitment to the best journalism — both this-just-in and in-depth narratives — has never been greater.”

 

Of course, in the same paragraph he said, that hiring in 2014 would focus on “First Word and Emerging Markets,” both Twittery fast tip and data services.”

 

To be fair, analyst Felix Salmon, blogging for Reuters, called today’s events the latest setback for Winkler, long a respected traditional newsman, and further evidence of the ascent of Smith and Tourangiel, and Tom Secunda, who Salmon said, is “a co-founder of the company, the other Bloomberg billionaire, the man in charge of basically everything which makes money at Bloomberg, [and] the opposite of a romantic press baron: all he’s interested in is profitability.

Salmon continued, “[Secunda’s] only priority is client service, and giving Bloomberg subscribers whatever they want. And it turns out that Bloomberg subscribers, although they definitely want market-moving news ahead of anybody else, are much less fussed about the broad mass of news stories which don’t move markets”

Sure enough: Bloomberg’s clients want data, numbers, trends.  These are the “market movers” who saw a housing boom, with rising numbers of home buyers, rising rates of interest, rising profits for lenders and funders, but stopped searching right there.  They never cared about the lack of economic fitness of many of those buyers, the lack of basic honesty among many of the mortgage-sellers, and the complete divorce from reality that characterized a financial industry (rightfully, alas) confident of its own impunity.

Bloomberg’s bottom line tickers don’t talk about that shit.

So, if Secunda and Smith and Tourangiel really do rule Bloomberg now, it should get out of the news business entirely.  Data dumping, at high speed, with high energy – that’s what they are good for.  Let them make their money that way, just as the NFL spent generations raking in profits from entertaining fans with as the league’s most successful salesman John Madden used to put it, WHAM, BAM, POW, OOF.

Who the hell wants to know about brain damage?

Intelligence is a terrible thing to lay waste, or in Bloomberg News’ own news of the day, lay off.

Selling off the news division is better than selling out the news.

 

Bloomberg News and China

Back in the day, the late 1980s, when China was breaking the bonds of a strictly party-run command economy and was opening up a market-driven capitalist sector, Deng Xiaoping, the top Communist Party leader famously said of his pioneers along the capitalist road: “It doesn’t matter if a cat is black or white; what matters is that it catch mice.”

China’s capitalist cats have prospered in the quarter-century since Deng’s revolution in economic affairs.  They’ve caught a goodly share of world markets, and an ungodly share of Chinese domestic wealth.  And they’ve changed Deng’s motto.  Now, “It doesn’t matter if the cat is black or white, or even if it catches mice.  What matters now is that it’s a family cat.”

Cronyism and family dynasties have so distorted Chinese economics and politics that they threaten to destroy the dynamism of the first generation of Dengism and even more, to shatter the Chinese people’s tolerance of a corrupt Communist party and its egregious “Royal Families.”

But that’s their problem.

Our problem is when China’s me-and-my-family-first elite starts to corrupt our American institutions, like, it would appear, Bloomberg News.

Sunday’s New York Times featured a long examination of Bloomberg L.P. and Bloomberg News’ conflicted interests in China by Amy Chozick, Nathaniel Popper, Edward Wong and David Carr. 

http://www.nytimes.com/2013/11/25/business/media/signs-of-change-in-news-mission-at-bloomberg.html?pagewanted=3&%2359&hp&%2359;_r=0

This latest report follows upon weeks of global coverage, spearheaded by the Times and the Financial Times, of leaks from inside Bloomberg News that the latest investigative report on the nexus in China of great wealth, Party power and family connections, by the Polk Award winning correspondent Michael Forsythe (and Shai Oster) had been spiked by Editor in Chief Matthew Winkler.

In subsequent reports Winkler has denied killing the story, saying it’s “alive” but “isn’t ready” for publication and Forsythe has been fired.

Undermining Winkler’s declaration are reports that he told staff he had killed the story, to keep Bloomberg News from being tossed out of China (which he compared to Nazi Germany). 

The new Times story suggests Winkler was acting to save, not his news presence in China, but Bloomberg L.P.’s market for its data terminals, a significant example of what the Times called, “some troubling developments” for the company.

“The growth of Bloomberg’s terminal sales worldwide had softened over the last several years, and had dropped significantly in the last year in mainland China, a vast untapped market. Bloomberg News’s tough reporting last year about China had prompted officials to cancel subscriptions for the lucrative terminals, frustrating the company’s Beijing sales staff.

Forsythe’s firing, the Times reported, was only the beginning:  “Last Monday, Bloomberg began to lay off roughly 40 people, about 2 percent of its news staff. Coverage of culture and sports would be scaled back, and the investigative unit had losses as well. The signal accompanying the announcement was clear: ‘We must have the courage to say no to certain areas of coverage in order to have enough firepower in areas we want to own,’ Mr. Winkler wrote to the staff.

Until proven otherwise, one area Editor Winkler no longer wants “to own,” is investigative journalism.  What will take its place?  What the Times says “executives on the business side” want is more of what they’ve recently been getting: “short bursts of market-moving news, not prize-winning investigative journalism. …Editors are increasingly asked to send only brief, bullet-point news reports to terminals — easily digestible facts for traders and hedge fund managers.”

The 40 firings from arts, sports and investigative reporting are not part of an overall cutback at Bloomberg News.  Company officials have told the Times, “Bloomberg … would add around 100 newsroom positions next year, many in a division called First Word, which produces a Twitter-like burst of short-form news of market-moving importance. (A spokesman said that even with the recent cuts, the number of employees at Bloomberg News by the end of 2013 would be up from last year.)”

Like Deng’s propagandists, Bloomberg’s insist, their cat is setting its mousetraps with the bait the market bites.  Like America’s other providers of television news, Bloomberg News claim their customers have driven them toward news that is short and crappy.  And they have the chutzpah to claim the proof is that “nobody watches” the real news they won’t show.

All this editorial stress and strain is occurring at an iconic moment: “Your father’s home.”

Torn back to the business he forsook for the 12 years he rule New York’s City Hall, Michael Bloomberg will soon be back at the company, where he faces some critical questions about his venture into journalism. 

Since he left in 2001, Bloomberg news has grown in impact and stature, as has its viewership on television screens as well as those on Bloomberg terminals.  But increased visibility and influence have their consequences, and for Bloomberg L.P. the money-losing tail (News, the Times reported, accounts for roughly 4% of the company’s revenues) is threatening the health of the money-making dog (Terminals, the Times says, bring in about 85% of corporate cash flow).

For years, Bloomberg News gave a limited kow-tow to complaints from Beijing. 

“In early 2011,” the Times reported, Bloomberg News carried stories “on an online movement in China to stage peaceful ‘Jasmine Revolution’-style protests modeled after the uprisings in the Middle East. Angry Chinese officials told top editors in Hong Kong that Bloomberg’s information distribution license permitted it to publish only financial news in China, not political news, according to employees with knowledge of the discussions.

“Editors ordered the article in question deleted from the website, even though the site is global and not China-specific, these employees said. Word spread among Bloomberg journalists in China. ‘A lot of people were angry they would just cave in like that without much discussion,’ one employee said. 

“After the outcry,” the Times coninued, “editors reposted the article to the Bloomberg website, but as of Sunday, it could not be found using the site’s search engine. (It shows up in a Google search.)”

To head off future trouble, the Times said, Bloomberg News found a digital fix: “Managers also created a function called Code 204, which can be appended to some articles to keep them off terminals in mainland China.

But then, Bloomberg published “a report [by Michael Forsythe] about the fortunes amassed by family members of Xi Jinping, which won a Polk Award for foreign reporting…” But, the Times reported, ”Bloomberg paid a price: The purchase of terminals in China all but ceased, the Bloomberg News site was blocked and no residency visas were subsequently granted to its reporters.”

When Forsythe struck again this month.  His story on the political family connections of China’s richest billionaire passed through all the legal and editorial wickets, Bloomberg newspeople told the Times, until it got to Winkler.  And there, until proven different, it seems to have died, and Bloomberg’s Beijing bow-down seems to have reached the head to ground stage.

So,  Mr. Bloomberg, will you return Bloomberg News to its safe and narrow roots: fast financial news as brief as our editors think the market wants it to be?

Or will you continue to grow and burnish the Bloomberg News brand, even at the expense of the terminal business, from which the Times reminds us, some of the latest news ain’t so good. “The total number of terminal subscriptions increased by 23,000 in 2010 and 14,000 in 2011, but only by 1,000 in 2012 and 3,000 so far this year, according to several employees’ estimates.”

Not that all the Times’ Bloomberg financial news wasn’t fit to reprint:  “Still, the company said overall [2013] revenue was on track to rise to $8.3 billion, up from $7.9 billion in 2012 and $3 billion in 2001, when Mr. Bloomberg was still at the company.”

And that’s with China’s 1% mad at Bloomberg.

Maybe there’s a Solomonic solution (yes, it’s also a Murdochic solution) here.  Split the company.  Keep the terminals, keep a financial news division to serve those customers, but spin the TV News channel off.  It may, as the Times reported, lose $100 million a year, but it has a voice and an audience, and I’ll bet could attract a buyer, for whom the prestige and public service would be cheap at that price.

So if the perils of the news business are too great for a businessman like Michael Bloomberg, don’t kill that TV baby, Mike, find it a foster home, whose proprietors might behave like journalists, and blow off governments trying to hide their failures with threats of hacking or economic harm.  The new Bloomberg (or Not) News could be a cat that served not only its master, but the world, by catching a lot of vermin.

 

GETTYSBURG: 150 YEARS LATER

Address Delivered at the Dedication of the Cemetery at Gettysburg
Abraham Lincoln
November 19, 1863

Four score and seven years ago our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal.

Now we are engaged in a great civil war, testing whether that nation, or any nation so conceived and dedicated, can long endure. We are met on a great battle-field of that war. We have come to dedicate a portion of that field, as a final resting place for those who here gave their lives that that nation might live. It is altogether fitting and proper that we should do this.

But, in a larger sense, we can not dedicate -- we can not consecrate -- we can not hallow -- this ground. The brave men, living and dead, who struggled here, have consecrated it, far above our poor power to add or detract. The world will little note, nor long remember what we say here, but it can never forget what they did here. It is for us the living, rather, to be dedicated here to the unfinished work which they who fought here have thus far so nobly advanced. It is rather for us to be here dedicated to the great task remaining before us -- that from these honored dead we take increased devotion to that cause for which they gave the last full measure of devotion -- that we here highly resolve that these dead shall not have died in vain -- that this nation, under God, shall have a new birth of freedom -- and that government of the people, by the people, for the people, shall not perish from the earth.

 

This amazing memorial to the casualties and survivors of the most grievous battle in American history is from beginning to end about a collective entity called the American nation, and its  components, American people.

What was created in 1776, Lincoln says, was a new aggregation of free people joining together for the betterment of all. 

Right here, right now, the President says, the collective nation is in mortal peril, shattered over “Liberty for All.” 

Had the Union Army lost Gettysburg, had Lee been able to threaten Philadelphia, Baltimore or Washington, Lincoln might have had to sue for peace, might have had to accept secession, disunion.  But, because its military losses would not be “in vain,” the whole nation, the notional America God saw from on high, could engender “a new birth of freedom,” this time really for all.

And the identifications crucial to democracy, of people with their government and with one another as citizens, would survive.

He should only see us now.

What would Lincoln think of politicians and media entertainers who decry government, any American government, as an imposition, whose careers depend on alienating citizens from their government, and who work to alienate “their” Americans from other Americans?

What’s happened to our collective, one for all, identity? Freedom once chose national collaboration.  Now people want to be free to choose their own path.  Maybe the biggest questions for today’s American government by, of, and for the people are: What people? Where are they?  How do they conceive themselves, and to what greater idea are they dedicated?

I don’t think, “I’m not gonna get screwed by a) welfare queens b) uppity minorities c) gay people d) ‘illegals’ e) activist judges f) Tea party radicals g) the 1% h) all of the above, and I forgot some,” is a national meme Lincoln would endorse.

Rather, I’m sure, he would worry that the soldiers at Gettysburg, and those in Iraq and Afghanistan, might have vainly died for a society or a state or a populace that is no longer a nation at all.        

 

CLASS WAR AT BOEING

A few years ago, in Taiwan, I stood in front of an abandoned factory with a middle-aged woman who had once been a shop steward there.

“Everything seemed fine,” she told me, “then, one day we showed up to work and everything was locked up and the boss was gone.”  It turned out he and his children and their families had all skipped to China.

“As far as I know,” she told me, “we were making a profit. We were happy. That was one reason it was such a shock.”

Then, she added bitterly, “He left owing everyone in the plant their pay for the last month.”

I asked her what she thought motivated her boss.  “It’s all about money,” she said.  “He can pay workers in China less, and they have no unions there, at least not real unions like here.”  A shop steward to the end.  (Be aware, it takes one to know one.)

Before she took us to her new workplace, in front of her house, where she had a small table from which she sold chewing gum, cigarettes and betel nuts, she added this thought.  “The workers there can’t be as good as we were.  We were trained.  We knew how to work together.  We made him profit.”

She stopped short, her lower lip quivered, then she bit down and said, “Come I’ll show you my ‘shop.’”

The 31,000 union machinists who last week rejected, by a 2-1 margin, a contract offer from Boeing are at least 4 years away from the betel nut table, -- the new contract offer was made not because the old one is expiring, far from it, but because this is the moment when a new project is beginning and the threat of moving it elsewhere can be made.  But they know how that lady felt: overpowered, and cast aside, and helpless to do anything about it.

As Steven Greenhouse in the NY Times said, Boeing “is on course to report record earnings this year and its stock hit a record high this month.”

Just the time, you might think, for a generous company offer to reach their goal of “stabilizing” their costs as they embark on a new B-777X airliner, an assembly line likely to work for a decade or more.  But as Jon Talton wrote in Boeing’s hometown newspaper, the Seattle Times, “Boeing is operating as a multinational company in a ‘shareholder value’ environment created since the 1980s, and in a competitive world. Thus, record profits and high executive compensation are not at odds with trying to drive down costs, including — especially — for labor.”

The name for this, almost never used by any major American news organization, is “class war.”

The only time you do hear the phrase, it is when some rightwing Republican Congressman or radio talker uses it to attack anyone who mentions, much less aggressively analyzes the ever-widening income gap, the criminal impunity bankers, brokers, hedgefunders and their shysters seem to enjoy with the Obama Administration’s market overseers, from the Justice Department to the SEC, and the near total dominance of American politics by big money.  Questioning the rich and how they got their gains, that’s “class war.”  Unmistakable evidence of real class war, the runaway rates of executive compensation billed to stockholders with the approval of rich person-crony Boards of Directors, ownership’s campaign to destroy worker’s access to professionally-managed collective bargaining, the geometric rise in conventional rates for private profit and shareholder return, goes unremarked in the daily coverage of television news, or the big papers like the NY Times and Washington Post, LA Times and Chicago Tribune.  Class war?  What class war?

Driving down compensation for unionized labor was what this take-it-or-we-leave offer was all about.  As reported by The Seattle Times’ Dominic Gates, “The deal would have ended contributions to the employees’ traditional pension plan in 2016, freezing the pension for current employees and eliminating it for new hires. This pension was to be replaced by a company-funded, defined-contribution retirement-savings account.

"The proposal also would have increased employee health-care premiums and copays. Wages would have increased just 1 percent every other year, on top of an annual cost-of-living adjustment.”

The new contract would also require 16 years for new recruits to work their way up to top machinists’ pay, compared with 6 years in the present contract.

The men making the offer included Boeing CEO Jim McNerney, whose last year got a 20% increase in his compensation, to $21.1 million a year, and Executive VP and CEO of Boeing’s Commercial Airplane Division Ray Conner, whose annual compensation was $6.2 million. 

Let me ask you, “You get on an airplane.  You want it to be the one built by a trained workforce that’s been together for years, or would you board the Dreamliner put together by Jim McNerney, Ray Conner and their friends?  Neither McNerney or Conner get their millions for knowing how to put together airplanes.  These guys get paid to know numbers, and power.

Numbers, shrinking for the workers, exploding for executives and shareholders, are just half the story.  The other half also follows the pattern of the departed Taiwan manufacturer.  It demonstrates the free-of-any-values-but money and power management style of our fallen age.  Boeing wants out of Seattle and to escape the International Association of Machinists, and seems to have no compunctions about moving, whatever the costs..

They first signaled that back in 2001, when after 91 years in greater Seattle, 85 as an aircraft manufacturer, Boeing suddenly moved its corporate office and the guys who fill the wide-bottom chairs to Chicago.  Then, last year, after accepting a big package of benefits from the State of Washington to keep the Boeing 787 jetliner project there, Boeing moved most of the 787 work to a new assembly plant in South Carolina, where wage scales are lower, and unions are much, much weaker.

Of course, everyone agreed, the experience and quality of the workers in Washington were much better than what the Palmetto State had to offer, but that doesn’t seem to have mattered then, and another switch to a plant full of newbies making 777Xs isn’t off-putting to Boeing's management today.  Conner greeted his contract’s defeat by immediately putting his company’s future jobs up for bid: “We’re left with no choice," he said with his self-declared “disappointment” hardly evident, "but to open the process competitively and pursue all options for the 777X.”

Those options are mostly the bottom fish of labor compensation and labor rights, America’s Chinas, Sri Lankas and Bangla Deshes. Utah, Alabama, and Texas can’t wait to bid ‘em down.  Rick (Ooops) Perry may not be able to remember the Cabinet departments he wants to kill, but the Texas Governor can, apparently, read a calendar.  He’s been tweeting his Lone Star ass off, touting how cheap and cheesy worker’s lives are kept in his state, since a week before the Machinists’ vote was held.

In Washington there is anger, nicely summed up by the Seattle Times’ Talton: “A wide majority of workers saw an ultimatum, not a negotiation,” he wrote.

“Especially in a time of historic inequality, when 40 percent of working Americans make $20,000 a year or less, these union workers resent being asked to give back gains it took decades of collective bargaining to achieve. Especially galling was potential loss of pensions in favor of inferior 401(k)s while executive retirement packages are princely.

“Union members I spoke with said the vote might have gone Boeing’s way if the company had not made what they saw as extreme demands when it is also booking record profits and a healthy stock price.”

But even more, there is a feeling of defeat.  As Talton put it, “It is difficult to see that the Machinists have much leverage.” 

Larry Brown, the union’s political director, told the Times, “Hopefully Boeing will recognize they went too far and will come back.”

“Richard Aboulafia, an aerospace analyst with the Teal Group in Fairfax, VA,” told the NY Times, Brown might have good reasons to hope: ‘[the Seattle area’s] clear advantages, including an excellent port, a skilled aerospace work force and longtime experience in building sophisticated aircraft.

“’In terms of economics,’ Mr. Aboulafia said, 'it would make absolutely no sense to walk away from Washington because of this rejection, ‘But in terms of psychology, it’s hard to tell what Boeing will do.’”

What Boeing wants to do is clear; still to be decided is where.  But the NY Times reported, “Scott Hamilton, managing director of the Leeham Company, an aviation consulting firm in Issaquah, Wash., said, ‘I think there is going to be great pressure on Boeing to return to the bargaining table, certainly from Governor Inslee and, I would imagine, the whole Washington congressional delegation.’”

The Times reported, there was immediate pressure from the Governor.  But none of it seemed aimed at Boeing.  If jobs go away, the Governor said, it will be because the union said no.

“’It’s a decision that prevented us from winning this tonight,’ said the Governor,  “Minutes after the union announced the rejection of the deal,” the NY Times reported. 

“Shut up and take what you’re offered. You can’t win.” seems to be the economic media meme of the week.  Paul Krugman’s recent NY Times column cites some truly scary analysis from, of all people, Larry Summers.  The man as responsible as anyone for helping the Wizards of Wall Street and the Hopheads of Hedgefunding put the American economy in a ditch, and made himself a multi-millionaire playing hte games he deregulated, says get used to it, the ditch is where we’re likely to stay.

“The case for “secular stagnation” — a persistent state in which a depressed economy is the norm, with episodes of full employment few and far between,” Krugman wrote, “was made forcefully [at] the I.M.F.’s big annual research conference.

“Mr. Summers began with a point that should be obvious but is often missed,” Krugman reported.  “The financial crisis that started the Great Recession is now far behind us. Indeed, by most measures it ended more than four years ago. Yet our economy remains depressed.

“He then made a related point: Before the crisis we had a huge housing and debt bubble. Yet even with this huge bubble boosting spending, the overall economy was only so-so — the job market was O.K. but not great, and the boom was never powerful enough to produce significant inflationary pressure.

“Mr. Summers went on to draw a remarkable moral,” Krugman continued, “We have, he suggested, an economy whose normal condition is one of inadequate demand — of at least mild depression — and which only gets anywhere close to full employment when it is being buoyed by bubbles.”

Krugman then chimed in, adding that even the death spiral of surging household debt that began in 1985 and ran till the crash in 2007, also couldn’t push demand enough to keep the economy healthy.

What can be done to save the economy, to break the unending recession, the high unemployment leaving more households with less income to spend? 

Nothing, was Summers' answer, and krugman agreed.  “As Mr. Summers said, the crisis ‘is not over until it is over’ — and economic reality is what it is. And what that reality appears to be right now,” Krugman parroted, “is one in which depression rules will apply for a very long time.”

Even more remarkably lame are Krugman’s answers to the question, “Why might this be happening?

 “One answer could be slowing population growth. A growing population creates a demand for new houses, new office buildings, and so on; Another important factor,” he added, “may be persistent trade deficits, which emerged in the 1980s and since then have fluctuated but never gone away.”

 Slow population growth?  Persistent trade deficit?  And that’s it?  That’s why America is in decline and 99% of the population is feeling the pain?  We got old and we bought too many Sonys, or American brand products whose manufacturing had actually been removed to China?

Earth to Paul: read your own goddam newspaper.  Look west, young man, and you may see two more glaring predicates for depressed consumer demand and a sickly economy: radical income inequality and the unrestrained greed that drives it, respectively the product and their producer of a wildly successful, if apparently unmentionable, class war.

The main reason Americans is not spending "enough," is that they don't have enough.  Since 1985, their share of national income has been dropping, and since 2007 much of their savings have disappeared.  And the spending of hyper-rich people whose incomes are rising like rockets, does not trickle down across the whole economy.  When the 1% spend, they do it in big chunks on a few big things, made by a select few producers, or they buy corporate shares or hedge fund accounts, for which they get big tax discounts, and through all this they separate themselves ever farther from the bulk of people who make up the economy and the nation.  They live in their own world, as far from yours and mine as say, Chicago is from Seattle.

Republican Washington State Sen. Mike Hewitt looked at the wreckage of the contract negotiation and told AP, “The dynamics at Boeing have changed over the years from a corporate structure filled with Washington residents to leaders who no longer have ties to the state.

“’The thought processes are different than 10 or 12 years ago when Boeing was a Washington state company,’ Hewitt said.”

Sounds like Summers and Krugman are onto something.  As the late great Walter Cronkite would have said, “And that’s the way it is.”

He would never have called it “class war,” either.

 

    

IT'S NOT WHAT THEY'RE SEEKING, IT'S WHAT THEY'RE HIDING

As I said before in another context, what’s wrong with what’s been going on at the National Security Agency (NSA) “is not the spying, it’s the lying.”

Spy agencies are supposed to spy, but within the rules laid out for them by Congress.  They are not allowed to lie to Congress or to Congress’ mandated overseers like the Foreign Intelligence Surveillance Court.  Nor, it should be said, are the NSA, The White House or leaders of the Congress allowed to lie to the American people about what they’ve learned about law-breaking activities in the name of national security.

When lies like this become routine, the bond of trust between citizen and government breaks down and democracy dies with it.

This week, Wikileaks published an August summary of negotiations over the Intellectual Property chapter of the Trans-Pacific Partnership, a trade agreement which is meant to strengthen economic relations among twelve signatory nations: the United States, Canada, Australia, New Zealand, Japan, Mexico, Malaysia, Chile, Singapore, Peru, Vietnam, and Brunei.

Several commentators have noted, the Wikileaks document may not be current; there have been a couple of secret negotiating sessions since August.  But the release is timely, as the next round of talks among the 12 nations’ Chief Negotiators is scheduled for next week in Salt Lake City.

If the document is still relevant it indicates that what the US Trade Representative is seeking is bad enough, but worse by far is that the Obama Administration is hiding all the potentially consequential details.

Make no mistake, what’s being proposed could directly affect you if you suffer from cancer, if you’re going to have surgery using a new medical device, if you read a book or use the internet. 

Think you might fit into one of those categories?  Think you ought to be included in at least the theoretical discussion of new global rules for who can claim patent protection, for what, for how long?  Or are you happy to leave that to the fine folks at the Trade Rep’s office or the Oval Office or lawyers for a few hundred directly interested corporations?

Even if you’re appalled to be excluded from the whole discussion, don’t take it personally.  You and I are not the only ones being cut out until the dips have their fait accompli. According to the International Business Times,

http://www.ibtimes.com/leaked-tpp-chapter-5-scary-provisions-wikileaks-trans-pacific-partnership-release-1468856

“Only 700 representatives of various corporations have access to the text. The governments of the countries involved in the negotiations are not able to view the text while it is being discussed by the corporations, meaning that the public will have little to no input on what will be included in the final version.”

And The Guardian notes,

http://www.theguardian.com/media/2013/nov/13/wikileaks-trans-pacific-partnership-chapter-secret

“Even members of the US Congress were only allowed to view selected portions of the documents under supervision.

“‘We're really worried about a process which is so difficult for those who take an interest in these agreements to deal with,’ says Peter Bradwell, policy director of the London-based Open Rights Group.

"’Lots of people in civil society have stressed that being more transparent, and talking about the text on the table, is crucial to give treaties like this any legitimacy. We shouldn't have to rely on leaks to start a debate about what's in then.’"

What’s not to like about the Intellectual Property rules the USTR has put on the table?  International Business Times cites 5 major issues.

The first is the strengthening of Big Pharma property rights to their proprietary medicines.  What this generality could mean specifically is spelled out by Politico.

http://www.politico.com/story/2013/11/wikileaks-ip-pacific-rim-99793.html

“Pharmaceutical patents and copyright issues addressed through the intellectual property rights chapter have proven especially controversial, as the United States seeks strong protections for its drug-makers, and Asian countries fight for cheaper medicines.”

What protections to the pharmaceutical giants want?

Politico says they want to eliminate, or sharply reduce countries’ rights to breach patent rights “in the interest of public health," by restricting those exceptions to epidemics and disallowing diseases such as cancer.

“The United States is also pushing to ease drug-makers’ ability to obtain patents overseas and in developing countries and to extend the duration of those patents beyond 20 years.”

As Public Citizen put it in their response to the Wikileaks document, "These proposals would strengthen, lengthen and broaden pharmaceutical monopolies on cancer, heart disease and HIV/AIDS drugs, among others, in the Asia-Pacific region."

Second, the manufacturers of medical devices want the right to patent-protect their use by surgeons and technicians in the operating room.  IBT sums up the real-world meaning of this: “In layman's terms, the United States' TPP proposal would make it so that the patent protections exception would apply only to “surgical methods you can perform with your bare hands,’" quoting Burcu Kilic, legal counsel to Public Citizen's Global Access to Medicines Program.

Third, what’s sauce for Big Pharma is also to be served up for Big Ink,the publishers or words and music.  IBT reports, “The preliminary version of the TPP would also rewrite the guidelines on international copyright law by lengthening the terms that copyright protections.  [Today] copyright term protections are capped at the life of the author of a work plus 50 years.  But under the TPP, longer copyright protections could extend copyright term protections to Life + 70 years for works by individuals, and either 95 years after publication or 120 years after creation for corporate owned works (such as Mickey Mouse)."

The net-net here, says IBT will “bolster the profits of corporations and harm consumers by keeping works out of the public domain for far longer than under current law.”

Points 4 and 5 would, several critics claim, gut many of the freedoms enjoyed by today’s citizens of the internet.  International Business Times quotes from “the relevant section of the TPP's intellectual property chapter leaked Wednesday: ‘Each Party shall provide that authors, performers, and producers of phonograms have the right to authorize or prohibit all reproductions of their works, performances, and phonograms, in any manner or form, permanent or temporary (including temporary storage in electronic form).’  Then IBT cites The EFF response: “'the provision ‘reveals a profound disconnect with the reality of the modern computer,’ which relies on temporary copies to perform routine operations.

"”Does that mean—under the US proposed language—that anyone who ever views content on their device could potentially be found liable of infringement?’ the EFF wrote. ‘For other countries signing on to the TPP, the answer would be most likely yes.’"

Finally, the proposed Trans-Pacific Partnership rules would dump the job of enforcing these radical new limitations on Internet freedom on whom?  Again, IBT quotes the Electronic Freedom Foundation: “The TPP wants service providers to undertake the financial and administrative burdens of becoming copyright cops, serving a copyright maximalist agenda while disregarding the consequences for Internet freedom and innovation."

With such big changes with such big consequences in play, why is such a small, unelected, unrepresentative group of corporate lawyers and carefully anonymous government bureaucrats allowed to debate and promulgate in such secrecy.

It sounds like the answers are (1) they have so much to hide, and (2) they know many if not most people, in the US, in the other 11 TPP countries, in the world, would not agree to their diktats.

By the way, if you think these arguments are harmless abstractions, check this list from The Guardian’s George Monbiot of how "investor-state rules" in similar international trade agreements have enabled private companies to bully elected governments.

http://www.theguardian.com/commentisfree/2013/nov/04/us-trade-deal-full-frontal-assault-on-democracy

“The Australian government, after massive debates in and out of parliament, decided that cigarettes should be sold in plain packets, marked only with shocking health warnings. The decision was validated by the Australian Supreme Court. But, using a trade agreement Australia struck with Hong Kong, the tobacco company Philip Morris has asked an offshore tribunal to award it a vast sum in compensation for the loss of what it calls its intellectual property.

“During its financial crisis, and in response to public anger over rocketing charges, Argentina imposed a freeze on people's energy and water bills (does this sound familiar?). It was sued by the international utility companies [and] for this and other such crimes, it has been forced to pay out over a billion dollars in compensation.

“In El Salvador, local communities managed to persuade the government to refuse permission for a vast gold mine which threatened to contaminate their water supplies. A victory for democracy? Not for long, perhaps. The Canadian company which sought to dig the mine is now suing El Salvador for $315m – for the loss of its anticipated future profits.

“In Canada, the courts revoked two patents owned by the American drugs firm Eli Lilly, on the grounds that the company had not produced enough evidence that they had the beneficial effects it claimed. Eli Lilly is now suing the Canadian government for $500m, and demanding that Canada's patent laws are changed.”

The next round of TPP negotiations starts next Tuesday.  Let’s see if anyone outside the secret circle can find out what’s being discussed, much less actually join in the discussion.

Wasn’t one of the first things Barack Obama promised, long before he said anything about being able to keep your health insurance coverage, was transparency.

Well, you gotta say that promise has been easy to see through.

 

 

 

  

 

 

TODAY IN WASHINGTON: 2 WAYS TO HIDE FACTS

Profiles in courage (Craven Division).

The NY Times reported today on the utterances of one John A. Boehner.

http://www.nytimes.com/2013/11/14/us/politics/boehner-rules-out-push-on-immigration.html?hp&_r=0

He was confronted, the Times aid, at his daily Capitol Hill breakfast stop, Pete’s Diner, by 2 teenaged students, brought to this country illegally by their parents when they were young children, who asked for his help in passing comprehensive immigration reform, Boehner told them, “I’m trying to find some way to get this thing done. It’s, uh, as you know, not easy, not going to be an easy path forward. But I’ve made it clear since the day after the election it’s time to get this done.”

Later, that same day, Boehner must have re-checked the time, because he told reporters asking about the Senate-passed immigration reform legislation:

 

“’The idea that we’re going to take up a 1,300-page bill that no one had ever read, which is what the Senate did, is not going to happen in the House,’ he said. ‘And frankly, I’ll make clear we have no intention of ever going to conference on the Senate bill.’”

Whatever you think of Boehner’s political bind, what can one say about the bald-faced lie he palmed off on the students?  He sure taught them a thing or two about honesty and honor in American politics.

I mean who were these “illegals” to demand the personal respect of an honest answer?

Of course, by the end of the article, Times reporters Ashley Parker and Michael S. Schmidt had provided evidence that dishonesty through non-disclosure is no partisan thing in today’s Washington. “John McCain, Republican of Arizona, said at a confirmation hearing for Jeh C. Johnson, the nominee for secretary of the Department of Homeland Security,” the Times reported, "that the administration had refused to provide information on how it was policing the border.

"After Mr. Johnson stopped short of committing to provide the border data without consulting with homeland security officials, Mr. McCain said that he would not vote to confirm him until Mr. Johnson gave a 'yes answer' to sharing the information. 'How can we carry out our functions of oversight if we don’t get the kind of information we need to make the decisions that this committee to make?' Mr. McCain said."

 

 

FOLKENFLIK'S MYTHICAL MYTHS ABOUT MURDOCH

Sunday's Washington Post published an article by NPR Media Correspondent David Folkenflik, derived from his recent book, Murdoch's World.
http://www.washingtonpost.com/opinions/five-myths-about-rupert-murdoch/2013/11/08/341837ea-47bf-11e3-b6f8-3782ff6cb769_story.html?hpid=z3

The article consists of 5 "Myths" about Rupert Murdoch Folkenflik is anxious to dispell.  Like his book, the article substitutes an ostentatiously "fair and balanced" approach to avoid making meaningful judgments about the most powerful man in today's media journalism.

Below, the 5 "Myths" and my rebuttal of their de-mythification.

 

 

1.      Murdoch is on the far right

In the narrow sense, this is no myth at all.  Despite a few aberrant stands, Murdoch and his media holdings consistently advocate for the re-empowerment of the already powerful.  If that isn't "far right" thinking, I don't know what is.  Folkenflik’s “evidence” that this is “a myth,” that Murdoch will support such NY “liberals” as Hillary Clinton, Ed Koch, or the (LOL) “moderate” Republican Rudy Giuliani, shows only that his interest in politics will frequently come in second to his interest in himself.  But the bottom line on all his political investments is a belief in the sanctity of the "favors bank" exchanges of the overdogs.

2.      Murdoch cares only about profits

This is a myth.  For Murdoch, profits are just a means to an end.  The reality is Murdoch cares only about power, his own power.

3.      Whatever he touches turns to gold

As with #2, Folkenflik dispatches as a myth what is only a truth a word or 3 shy of the bullseye.  The reality here: Whatever Murdoch touches he shapes in his own interest, knowing that more than enough gold will follow.  Example: the money-losing NY Post, sustained because its much-abused front page can boost local politicians like H. Clinton, Koch and Giuliani who help him breach legal restrictions on media cross-ownership and reap quantum leaps of money and power.

4.      He destroys good journalism.

Again, to readjust the “myth” to reality, change just one word.  Murdoch displaces good journalism.  A perfect example: he displaced news from the NY Post's front oage whenever he needed to suck up to someone who could help him expand his media empire. Another: Folkenflik likes and respects today’s Wall Street Journal, in part because he likely does not remember the WSJ of great investigative reporters like Jim Drinkhall or Jonathan Kwitny, both prone the kick the asses of the sort of people Murdoch calls friends and institutions he calls prey.  As for FoxNews, it has displaced both dispassion and on-the-scene fact-gathering with blind fury and dis-facted partisan rant.

5.      Murdoch is old and spent.

Maybe I run in different circles, but this is not a myth I hear promulgated much.  Probably the most memorable invocation of this image was the hilarious impersonation of a “humbled” Rupert Murdoch, presented by the man himself to a Parliamentary committee investigating his UK newspapers’ addiction to phone-hacking and police corrupting.  Old, he may be, but spent?  No, I think the anti-myth here, the truth, is that Rupert Murdoch remains alive and dangerous.

If you missed my review of Murdoch's World....see

http://davemarashsez.blogspot.com/2013/11/rupert-murdoch-judgment-deferred.html

VIRGINIA PICKS A GOVERNOR: THE AFTERMATH

Who elected Terry McAuliffe Governor of Virginia?  If the exit polls can be believed it was Government workers, Black people, single women, the 1% and the disgusted (aka “the Marash voters.”)
 

Tracking polls over the last month of the campaign suggest, the issue that seemed to turn this wretched race the Democrat’s way was the shutdown of the Federal government.  Before the shutdown, Republican Attorney General Ken Cucinnelli was ahead.  After it, he was so far behind, even the subsequent public outrage over the incompetent mis-launch of Obamacare could only close the gap. 

 

“The shutdown demoralized a chunk of the Republican base and really energized a chunk of the Democratic base,” GOP pollster Wes Anderson told Politico’s James Hohmann.  “Terry McAuliffe had not found any way to energize the Democratic base prior to the shutdown.”

 

McAuliffe’s paltry margin, 55,000 votes out of 2.2 million cast has enabled all sides to claim to see something they liked about the results, especially pundits, who could, in the empowering words of Roanoke College political scientist Harry L. Wilson, quoted in the NY Times, “spin this any way you want.”  

Cucinnelli’s spin has emphasized two main points, neither of them really good news for the Republican Party.  The Richmond Times-Dispatch reported the first: “This race went down to the wire because of Obamacare,” Cucinnelli said in his concession speech.  “That message will go out across America tonight.”

The national news wires contain a lot of evidence that a lot of Republicans believe this is true, but for how long will the GOP assault on the Affordable Care Act resonate?  My guess is, hostility to Obamacare and to Obama himself is at a peak, and as the inevitable fixes are made, and people understand that for most them, Obamacare is a pretty good deal, the issue will lose potency.

Cucinnelli’s second point is even more incontrovertible: he was left high and dry by the Republican establishment, insiders and fellow-travelers alike.  Although the Republican Governors Conference tried to make up for it, the GOP National Committee dropped their Virginian gubernatorial candidate like a burning coal. The RNC, Politico reported, “spent about $3 million on Virginia this year, compared to $9 million in the 2009 governor’s race,” while usually loyal GOP retainer the US Chamber of Commerce, “spent $1 million boosting [Republican Governor Robert] McDonnell in 2009 and none this time.”

In 2013, a lot of big-money donors went Democratic, giving the fixer's fixer a huge edge, -- “$34.4 million to $19.7 million,” the NY Times’ Trip Gabriel reported.  On the short end, this is another manifestation of the Disgust Factor (of which, more later), but on the weighty side of the money scale, what is seen as opportunity by the 1% is often winds up being viewed as waste or corruption by the less-favored.

Gov.-elect McAuliffe’s career contains ample proof of that embittered proposition.

His success with a few rich normally-Republican contributors seems to have confused the winner.  Politico’s Hohmann reported, ‘McAuliffe declared in his victory speech that ‘a historic number of Republicans’ supported him. But that’s just not how it happened.

“The Democrat won only 4 percent of self-identified Republicans, according to exit polling,” Hohmann reported. “His key was getting more of his people to the polls — 37 percent of voters self-identified as Democrats and 32 percent self-identified as Republican.”

In other words, one big reason Cucinnelli lost is that he was rejected by many of his own party's rank and file, as well as by a few renegade Republican McAuliffe investors.  This is seriously bad news for the GOP, showing as it does, how deep are the existing splits within the party between so-called Moderates and far-right radicals.  But there is far worse news in the details of the exit polling data.

Virginia, like the rest of the United States, is getting more diverse by the year.  In Virginia, the most important minority group by far is African-Americans, and as they did a year ago for the African-American Obama, they went 90-10 this year for the White Democrat McAuliffe.  Blacks make up 20% of the voters in Virginia.  If you win them 9 to 1, you can lose by a 3 to 2 margin with everyone else and still have a majority.

Cucinnelli lost to McAuliffe by 9 percent among women 51% to 42.  But among married women, the Republican won by exactly the same margin.  Single women did him in.  67% favored McAuliffe to 29% for Cuccinnelli.  The issue for most of them, one guesses, was access to abortion without humiliation.  But, politically, here's the frightening bottom line for the GOP, single women are, by and large, younger than married women.

A longtime Virginia Republican, wformer State sen. John Chichester, ho is serving as part of McAuliffe's transition committee summed up that issue perfectly: "“The Republican Party wasn’t put here to be the traffic cop of our personal lives, and that needs to be changed.” 

According to the NY Times’ exit polls, the only age groups Cuccinnelli won were those 45 and over.  What does this mean for 2014, 2016, 2020?  A harder road for Republican candidates.

The other interesting age-related statistic was that voters under 30 were more than twice as likely to reject both so-called “major party” candidates, to vote for, in this case, Libertarian Robert Sarvis.  He took 15% of the youth vote, 6.5% overall.

If this data is part of the trend analyst Peter Beinart said he’s seen in the NYC Mayor election and in polling data from all over the country over the past several years, the road to the future may be bumpier for both Democrats and Republicans. A lot of young people, "the Millennials," think they both suck. 

But maybe this election choice, as University of Virginia political scientist (and King of the Old Dominion political oracles) Larry Sabato put it, “between a heart attack and cancer,” will be a one-time nightmare.  Maybe we will never again see an election in which only 13% of voters exit polled by the NY Times believed both candidates to be “ethical” people.  54% split down the middle, 27% calling McAuliffe ethical, 27% applying the label to Cucinnelli.  But 30%, the plurality of Virginia voters, rejected both men as ethically deficient.

If McAuliffe mischaracterized Republican voters, Cuccinnelli’s people did the same for Sarvis voters, claiming, if the Libertarian had not stolen votes from him, the AG would have won.  Not according to exit polls analyzed by the Washington Post’s Chris Cilizza.  If Sarvis voters had gone with their second choice, he wrote, “Cuccinelli would have gone from 45 percent to 46 percent. McAuliffe would have stayed at 48 percent — and won.  Perhaps the most interesting thing,” Cilizza said, “is that the vast majority of Sarvis supporters said that if he were not in the race they simply wouldn’t have voted.”

Can we give a shout out to The Disgusted?”

And for fans of happy dust, we have the editorial writers of the Washington Post, who see McAuliffe’s victory as “a watershed moment for Democrats.”

“The good news” for Mr. McAuliffe, they crowed, is that his campaign “was relatively gaffe-free, [which] suggests that, Mr. McAuliffe may also possess a degree of discipline for which he has not been celebrated to date.”

The Post’s lead reporter, Marc Fisher picked up this theme in his coverage.  “This campaign presented a different McAuliffe,” he wrote, "his message disciplined, and his opportunities to improvise sparse. He barely spoke in his own TV ads, rarely gave news conferences and stuck to his talking points in public appearances.”

What Fisher and the editorial board see as “discipline,” the Post’s political analyst Robert McCartney saw, more accurately, I think, as “fear he’ll say something ignorant or inaccurate.” 

After winning a long and bitter campaign, which produced results much closer than almost anyone, especially the political pollsters, expected, McAuliffe’s victory news conference consisted of 6 questions, and then was shut down.

McCartney was able to get in a prized question, and got in return, not much.  “Given the outsize role that scandals played in the campaign, the state is crying out for a crusade for honest government," he said. "That’s especially important because of the numerous questions raised over the years about McAuliffe’s own business dealings and campaign fundraising.

“McAuliffe chuckled nervously when I asked him about this at the news conference. He repeated his pledges to decline gifts of more than $100 and to propose an independent ethics commission with “real teeth,” including subpoena power, to help clean up Richmond.” 

Then it was time to party.

Before we go, let’s try to remember two things, a Republican candidate who staked out the most extreme positions against women’s rights (think trans-vaginal probe), gay rights (he tried to ban the concept from the University of Virginia), and the science behind global warming (he wasted his publically-paid time and taxpayers money “legally” harassing a UVA environmental scientist), who campaigned with Sen. Ted Cruz, Mr. Federal shutdown, and who admitted taking money from a political favor-seeker, failing to report it, and only belatedly confirming the full amount he had taken, still only lost by 2 percentage points.

And, had the election been delayed a week, as Obamacare outrage continued to fester, he might actually have won.

And the second thing to remember: as Virginia Senate Minority Leader Richard L. Saslaw (D-Fairfax) said in the best line of the election, “You know what they call a guy who wins the governor’s race by only one point? Governor.”

God help us.