Monday, May 30, 2005


So two weeks after trying to push “Blogs” as a business topic, the May 22nd issue features the cover “Evangelical America. Big Business. Explosive Profits.”

I guess the mention of two large churches gives anti-Businessweek the cover (pun intended) to sneak an article on “evangelicals” into a putative business publication. This article is as extracurricular as CNN’s Inside Politics discussing who the next pope should be.

I started reading anti-Businessweek years ago to help me trade the financial markets. I don’t know if the publication changed or if I just became more aware of the incessant off-topic political, cultural, and social commentary injections. It could also be that the cooling of the economy and stock market has really challenged the publication to produce relevant content. (Last year it seemed like half of the articles were about the presidential election.) Whatever the case, anti-Businessweek doesn’t help me trade stocks anymore and it consistently fails to edify me on anything concerning business or economics.

Even when they do address a pertinent topic, like this week, the arguments are vapid and the conclusion is predictable.

“Safety Net Nation– Why so many Americans aren’t buying into Bush’s Ownership Society”

Why can’t the title just be “Safety Net Nation”? Why the loaded editorial snip about what “so many Americans” think, about President Bush, and about the nebulous “Ownership Society”?

I guess I am just too hung up on the title of the magazine – Businessweek – but I would expect an article on social security to be rife with economic and financial facts, statistics, and arguments. The article begins by portraying some 66 year old waiter disillusioned by his 2000 stock market losses with this profound insight into the partial privatization of social security accounts,

"If people are left to their own devices, we'll become top-heavy with poor people." Silli says.

Note the coffee cup. Is that really his mug with the flag on it or is it a prop?

Next we get an indictment of private accounts from a 30 year-old “Republican” woman,

…It’s too risky…No one knows how much there will be in the end.
It is worth noting that this is the formula for hack partisan journalism. Find and highlight some dissenter who supposedly resides on the other side of the argument. In this case a young Republican. I know a boatload of people that made serious money in the bull market, yet anti-Businessweek is not going to mention anyone like that. Young Republicans against partial private accounts? I am sure they exist, but I have yet to meet one.

So after two anecdotal and contrived indictments of privatization, we get this nugget of wisdom,

…in a world that’s already pulsating with economic uncertainty…Safety Netters include plenty of card-carrying Republicans and independent swing voters, and the group may represent a broader swath of America than the White House imagines.
Now that sounds foreboding. Too bad we all can’t live in the other more certain “worlds”, I guess. How much BS is in that final sentence? It combines the words “may” and “imagines”. A mere five paragraphs into this alleged business publication it is clear that the authors “may” be presuming, projecting, and “imagining.”

Next comes the formulaic push poll, from a non-profit of course, that finds that 67% of Americans want guaranteed healthcare. So what. By my count, 82% of golfers want the sun to come out when they hit the first tee. There is still no sign of an economic fact, statistic, or argument. This is like a Superbowl recap that fails to name the teams, players, or score.

I will end the suspense now – the article never gets to the economics of social security or any other part of the “Safety Net Nation” and the political innuendo couldn’t be more pervasive. The authors headline “The Sellathon That Didn’t” which one has to assume is some reference to Bush’s inability to thus far “sell” his idea for partial privatization. I say assume because the authors make this assertion/headline and then gloss over that particular subject, instead focusing almost completely on naysayers.

But skeptics, among them prominent New Democratic thinkers, counter that America's safety net can be both modern and market-based without piling still more financial burdens onto the stooped shoulders of Joe and Jane Average.

I am a news junkie, yet I have never heard of “New Democratic thinkers”. So I just googled that and came up with only two hits. One was from the Daily Kos “encyclopedia”. I won’t link to it, but let’s just say those bloggers think Ted Kennedy is a capitalist pig. Also, why are these obscure “thinkers” characterized as “prominent”.

The commi authors continue:

While federal spending on the safety net for the poor has grown briskly, it hasn't kept pace with society's needs.

Among the groups whose faith in the market dipped most are three key Bush constituencies: baby boomers, college grads, and suburbanites.

Safety Netters… view private accounts as a giveaway to Wall Street and a gamble for their children and grandchildren.

And there are the burned investors of the Baby Boom generation, who want some government safeguards from the serrated edge of globalism -- from corporate downsizing to vaporware pensions and rampant outsourcing.

But there's a glitch in Rove's machine: Polls show that, rather than flocking to Bush over Social Security, the under-40s are growing skeptical of his approach.

If polls show this, why not mention one? Too lazy to even include a push poll?

Then there are disillusioned techies who once wanted government to get out of the way and let them get rich by age 30 but who now favor a federal role in shielding them from the excesses of capitalism.
“Excesses of capitalism”, “serrated edge of globalism”, “rampant outsourcing”, “a giveaway to Wall Street”, and spending for the poor “…hasn't kept pace with society's needs.” – that is why I called them commi authors.

The screed continues with a portrayal of Bush as a risk-taking gambler who has always had the wealth of family to fall back on.

To George W. Bush, a Texan who revels in the myth of the wildcatter, running risks in pursuit of the big gusher is a quintessential part of the American character. But as the scion of an aristocratic Eastern dynasty, the budding young tycoon always had a network of family friends and relations to call on.

I guess this is suppose to imply that Bush doesn’t and couldn’t understand the plight of common Americans in “a world that’s already pulsating with economic uncertainty.” How Bush grew up is not relevant in any honest discussion of the facts and economic realities of social security. The problems of our social security system were there before Bush was elected and will be there long after his term if nothing is done.

This reminds me a bit of a conversation I had last year. I was trying to explain to someone how we need more free market forces in healthcare. I used the example of corrective laser eye surgery. That procedure is not covered by healthcare and thus its cost has crashed from over $2000 per eye to around $350 an eye now. What response did my great example invoke, “You sound like Bush…” I told this guy that these ideas have been out there long before Bush was elected and they stand on their own merits.

A couple of other point before I end this fisking.

In April, the Dow Jones industrial average hit a new low for the year on stagflation worries, and the major indexes gave up most of their '05 gains as investors fled from risk.
Maybe anti-Businessweek should take a look at the stock market once in a while. There have not been any ’05 gains at any point this year. The indices rose in December and sold off in the first week of January. Only for a couple of days did a few market indices get back to around unchanged for the year at the beginning of March.

Dow Jones Industrials

S&P 500


Russell 2000

So investors lost gains they never had and then “fled from risk”. Apparently the stock market is synonymous with “risk”. Could we say perhaps that here anti-Businessweek has fled from facts and editorial oversight?

There is one sentence in the article that treats Bush’s partial privatization plan fairly. How do I know this? The authors explicitly tell us.

What the White House proposes, in fairness, is not a complete swap of a public retirement supplement for a private one.

“fairness”? Hah. That is great. A factual reference to Bush's plan has to be qualified by "in fairness".

One last agitprop exhibit- consider this "typical" private accounts skeptic:

Karen Marshall Hudson, 43, of Houston, worked for 12 years as a bank vice-president at Chase and was a manager at Enron when it crashed, wiping out a chunk of her 401(k). She is now director of community outreach at the Houston Metropolitan Transit Authority. While she likes the idea of investing a portion of her payroll taxes, the Enron experience left her with a diminished appetite for risk.

Lest anyone forget, Enron is the lodestar or posterchild for the anti-business crowd. One, out of 14,000 public companies commits fraud and anti-Businessweek will never lay the issue to rest. Does anyone really think that Karen was randomly selected?

I wish this blog was more about social security and less about partisan psuedo-journalism, but reading this article last week put me in a sour mood. Social security may be a complex socio-political problem but it's a very simple economic one.

First of all, there isn't and never was a trust fund. Social security revenues have never been segregated. They get lumped in with all other government tax revenues. The whole "I paid I should get my benefits..." doesn't hold water. No one ever paid in, they paid their social security taxes to the government in exchange for only the promise of future payouts. These people have forgotten the major intermediate step - that they elected politicians for 70 years that squandered their money and effectively reneged on all promises. Today’s youth and future generations will end up bearing this burden. It amazes me that anyone with children and/or grandchildren, perhaps the editors at Businessweek, could rationally see social security as a mere political football.

As this article mercifully ends, the authors lament:

But in today's hyper-partisan climate, the fight over the ownership agenda has taken on a larger dimension…
If these authors want relief from the “hyper-partisan climate”, maybe they should step out of the Businessweek office for a few minutes.

Saturday, May 21, 2005

It is not an SUV….it is a CAR !!!!

Watching Law & Order the other night got me riled up again at the anti-SUV nonsense.

On this latest episode, some guy tried to commit suicide by crashing his “SUV” into a commuter train. Of course he ended up killing 12 train passengers...

In the show, they must have said, “SUV” 50 times or so it seemed. Nobody but these anti-SUV whackos uses the term “SUV”. It is just a “car” to everyone else.

I take my Ford Explorer to the CARwash and put my infant son in a CARseat. Probably no one has ever asked, “where can I park my SUV?” or “should we take your SUV or my SUV?”

“SUV” has turned into a propaganda term by the agitators of class warfare. Google “SUV” and stories like this, this, and this will dominate your search results.

More propaganda:

Here's a headline from the Boston Globe (February 2004): "Teacher dies after SUV strikes her in driveway." The subhead lets us know that her ex-husband is to face murder charges. Ah. So an embittered ex runs down his wife, but the SUV did it. Would a BMW have killed her any less? I'm just asking.

Here's the Alameda Times-Star (September 2003): "Swerving SUV kills 92-year-old woman." If we read the story, we learn that the woman was killed when the SUV was sideswiped by another car, forcing the SUV onto the sidewalk. And what was the make of the swerving car? Doesn't say. Doesn't matter. What's significant is that the SUV killed the poor woman.

Here's a CBS Internet headline from November 2004: "Man dies in SUV accident on Long Island." You'd think the SUV picked the man out of a crowd and iced him. In reality, the man crashed his Ford Explorer into a cement barrier after sliding on a rain-slicked road. Presumably, he'd still be alive if he'd been driving a different vehicle.

On my recent trip out to Asheville, I decided to scream every time a so-called fuel efficient car cut me off,sped by, or dangerously weaved in and out of lanes. (Those little cars with the fluorescent, lit-up license plates seem to be disproportionately dangerous.) I was yelling my head off for the whole trip much to the dismay of my captivated passengers. The point of my histrionics was to show the idiocy of the “SUV drivers are more dangerous” canard. Yes, I have seen the dubious insurance reports that try to show SUVs involved in more accidents than other cars. These conclusions are so specious it chafes me to have to debunk them. None of these studies consider the other multitudinous factors in car accidents. For instance inclement weather – the anti-SUVers point out that smaller cars don’t get in as many accidents in rain, ice, etc. But maybe owners of these cars don’t drive when the roads gets dicey. Or maybe weather, and not car type, is the main factor in accidents and people in climates prone to these conditions just don’t buy the so-called fuel efficient cars in these areas.

They have theories that smaller cars are vulnerable and so their drivers drive more defensively. In contrast, SUV drivers feel safe and secure (remember they think they own the road) and therefore drive recklessly. The propaganda is unending and it demonstrates what an otherwise unnotable teacher of mine one said, "...if you look for the negative in something you are always going to find it..."

Here is a well written hit-piece on SUVs. He gets in nearly all of the anti-SUV talking points and even provides a few links to back his claims. He describes SUV owners as stupid, environmentally irresponsible, reckless, victims of false advertising, arrogant... This article couldn't illustrate any better my claim that anti-SUV sentiment is a briocolage complaint and a weapon of class warfare.

One claim he did not source is "97% of all SUV's on the road are single occupant..."

As I have pointed out before when discussing the oversimplified miles per gallon metric of choice for anti-SUVers, if there are consistently more passengers in SUVs than in other cars, their metric is not relevant. All I could find to support this (other than common sense) was an older study that ranks SUVs ahead of subcompact cars in terms of passenger miles per gallon.

Taking off for a week to drive my SUV, I mean CAR to the Outer Banks. If I don't see any fuel efficient cars stuck in the sand, will that mean that the Prius, Accord, et al are good off-road vehicles? I guess by some people's logic.

Wednesday, May 18, 2005


Personally, I think the United Nations is a joke and should be expelled from Manhattan. But this story I read today is absolutely crazy.

Instead of kicking the UN out, the federal government is loaning it 1.2 billions dollars to renovate its headquarters. The problem is, that based on what numerous real estate developers have appraised, using square footage and considering possible rates for renovation, this figure of $1.2 billion is multiples of what it should cost. Donald Trump told Kofi Annan that he would do it for under $500 million and got no response. In fact, forget renovation, Trump just spent only $350 million to build a new 90 story building.

This last paragraph of the article I read is particularly nauseating.

American taxpayers have a legitimate interest in knowing the answers to these questions. The renovation is to be financed by a low-interest, 30-year, $1.2 billion loan from the U.S. government. (Kofi Annan's original request for an interest-free loan was turned down.) And, of course, the loan will then be repaid largely by American taxpayers, who foot a little over 20 percent of the U.N.'s bills.
Here is the entire article.

Tuesday, May 17, 2005

Asheville, North Carolina

Unfortunately I am moving my family (not by choice) back to Boston this summer. So we are trying to do as much as we can down here before we start serving our sentence in that bastion of bitterness. Last weekend, we ventured to Asheville, North Carolina.

It is a beautiful part of the Appalachian mountains, that is almost spoiled by the kooks that populate the area. Asheville is a place whose reputation precedes it. Having been to New Paltz, New York, I knew what to expect: dirty white college kids with dreadlocks, old tiny cars ridden with political bumper stickers, T-shirts like this, very lazy street musicians, girls without earrings, flyers for trans-gendered conferences, etc.

I turned on the television to some Asheville channel and what did I get – a documentary lecture on global warming. I open the hotel restaurant guide and I must have seen the expression “locally owned” fifty times. “Locally owned” is commi-speak for “not owned by evil national corporations.” I glance at a local newspaper and these are the headlines:

US Troops Accused of Arms Theft in Columbia…

Groups Push Bible as Public School Text…

Iraq Begins Corruption Inquiry…

Secrecy and Propaganda Sweeping US…

The paper was the Asheville Global Report. I went to their website today and got this:

Are we finished?

Unless something dramatic happens right away, the editorial collective of Asheville Global Report is sad to announce that this will be the last issue. We're not kidding.

Many of you reading this message may be familiar with our pleas every fall and spring for public support to cover our operating expenses. And miraculously, for over six years every fundraising season has found the newspaper literally snatched from the jaws of death by public support. Perhaps we have described this dependence and have desperately begged so much in the past with somehow surviving each time that by now a "cry wolf" syndrome has set in. But the fact is that every single time — every season — this desperation has never been exaggerated.

But this time it's different. It's been bad before, but never this bad. This is not a "Spring Fund-drive" letter. We're seriously in crisis —bankrupt with no guarantee that we'll be able to publish next week. We're publishing this statement as one last attempt to immediately rouse the support we need to continue. The situation is that we owe our printers thousands of dollars, rent is due this week, and we have to decide if it's time to figure out the best way to cut our losses by redirecting our attention to paying off our debts and rebating our subscribers.

This past year has seen a marked decline in support for AGR — in community funding and in the level of volunteer commitment needed every week to produce the newspaper. It's been so disastrous and unsustainable that we're now forced to ask ourselves if we should be reading this lack of enthusiasm for our efforts as a sign that people generally don't care whether or not the paper's around.

We're fully aware that it is no easy task to run an all-volunteer, non-profit, weekly newspaper. Maybe that's why you don't see more newspapers like ours in other cities. We feel lucky that we've managed to get by this long the way we have been doing things. The reality is that we always seem to have just enough volunteer power to churn out the production of the newspaper, but absolutely no one dedicated to raising money, writing grants or soliciting advertisements. We have no salaried employees, and none of us can personally afford to finance this operation. And it's pretty hard making sure all our bases are professionally covered at AGR at the same time as keeping ourselves personally afloat with meager-paying, part-time work and by keeping burn-out just out of reach.

We admit that this is not a sustainable management model. But in order for things to change so that this isn't the case, we need to know right away that we're still even wanted and that we'll be given the chance to do it. So unless people step up and donate or advertise RIGHT NOW, AGR's demise is imminent. Look at this would-be farewell as our last message in a bottle for help. Hopefully, enough loyal, generous readers will read this and respond with emergency donation money to buy us some time and keep us going for a couple more weeks. We hope this happens, while understanding that this is not a sound, long-term strategy, but a last grasp, break-the-emergency-glass measure. If not, thanks for your support all these years, good luck out there, and goodbye.


The Asheville Global Report
Editorial Collective

Obviously that is the type of article that I can’t link to, since the site may be gone tomorrow.

There was one response posted (not by me):

Well, in the market place of ideas, apparently your distorted perspectives are just something that people aren't "buying." Not all that much different than a company marketing a product that has no viable market and the company goes under. Maybe if some of you are introspective enough and have minds that are open to other perspectives, you may well understand that your product is not viable... I seem to recall a statement that if ignorance is bliss, then liberals must be in nirvana... good luck finding real jobs that contribute to society. Then y'all can simply join the multitudes of street people in Asheville who think they deserve to be supported by those whom they ideologically detest. I am happy to hear of your impending demise...

Art M

On the subject of imploding newspapers. The New York Times is going to charge for online access to much of its content, $49.95 a year.

There have been rumblings of this off and on for quite some time. From back in January:

"It gets to the question of how comfortable are we training a generation of readers to get quality information for free," Arthur O. Sulzberger Jr., the paper's publisher, is quoted as saying in the article. "That is troubling."

I have to give Artie credit. I didn’t think it was possible to cram that much arrogance into one sentence. First of all, no matter what the Times does, it is not going to alter the economics and realities of the internet. Net surfers want free information and the only industry that has been successful at charging for online content is the porn biz. When sites so much as require free registration, their web traffic plummets.

And “quality information”? That is quite condescending to every other publication or site that posts content for free. Aren’t public libraries free? Is there no quality information there?

This Sulzberger lives on another planet. From a speech he gave in February.

On the charge of liberal bias, Sulzberger laughed.

"I hear more complaints that the newspaper is in the pocket of the Bush administration than that it is too liberal," he said.

Maybe he should read his own paper. In July 2004, his own Public Editor penned a column titled, “Is The New York Times a Liberal Newspaper?” with the upfront conclusion of “Of course it is.”

The Times was careful not to make the entire site restricted to paid subscribers. Maybe they think their editorial page is the big seller for the paper. I have no idea. Overall this is not a very risky move for the Times though. If their website hits drop and advertising suffers more than they take in from paid subscribers, they can always go back to the all free model. Correct me if I am wrong, but didn't television networks survive for years solely on advertising dollars?

Anyway I don’t want to make Times bashing, although a cottage industry in and of itself, a focus of my blog. I think that this move towards a paid subscription model is a dubious business decision; it reeks of arrogance, and demonstrates even further that the MSM (Mainstream Media) doesn’t understand the internet paradigm shift. If the Times was smart they would focus on lowering their bloated editorial budget and expanding their customer base.

The New York Times recent actions: trying to charge for editorial content, touting their "readership" metric, spending $400 million for (link), buying half of the Boston Metro (link), etc. reflect more hubris than business prudence.

The Obesity Police

Like almost everyone in Charlotte, North Carolina, I am a recent northeast transplant. All this year I have had to explain to my residual northeastern family and friends why I love it so much down here (mostly because of the people, the weather, the golf, and the cost of real estate). I was even recently mocked for my effusive Charlotte praise by a bitter Bostonian. Of course, I have lived up there whereas he has never set foot in the Queen city. Just about everyone who has bothered to visit has left in accord with me on Charlotte’s merits.

The misconceptions about Charlotte, and I guess the South, run rampant up north. At some point I will do a Charlotte blog. But one question that I have been peppered with quite frequently is “Is everyone fat down there?”

My answer: “No”, “I don’t think so”, “….and who cares what other people weigh anyway?”

Before I discuss the nascent Obesity Police, I want to address the economics.

First of all, unbeknownst to most people, food is extremely cheap today. Americans spend only 6% of their personal income on food. That is down from about 16% in 1950. Food prices have been in constant decline for over 100 years.

Daniel Akst writes:

“In America today, food is cheaper than it has ever been. The Federal Reserve Bank of Dallas reports that in 1919 the average American had to work 158 minutes to buy a three-pound chicken; nowadays, 15 minutes get you the bird. Americans spend less than six percent of their after- tax income on groceries, a figure so low they can afford to spend another four percent eating out. It's likely that in no other country is food as cheap as it is in the United States . The U.S. Department of Agriculture, using 1996 data, reports that the Japanese spend 16 percent of disposable income on food, and the Germans 17 percent. But even those figures pale in comparison with Third World countries. People in India , for example, still spend nearly half their disposable income on food.“

Now this explains why our grandparents are so fanatical about saving leftovers, bacon grease, and their doggie bags. (I know a caterer who tells me that the grandparent demographic often asks for doggie bags at wedding receptions!)

Contrary to popular opinion, people don’t eat out more now because they can’t cook, that is mostly a side effect. People outsource meals because of cost and time-saving factors.

“In 1919, after all, you not only had to work 158 minutes to earn that chicken; you also had to spend a lot of time plucking it, cooking it, serving it, and cleaning up afterward-instead of just stopping at KFC on the way home from work.”

Back to the Obesity Police. There are many people, and I can’t really stereotype all of them, that believe obesity is a nationwide problem and a ripe subject for vilification. Much like the anti-SUV crowd, this anti-obesity crusade is also a bricolage complaint and a weapon of class warfare.

The only effect that obese people could possibly have on others is through higher healthcare costs. But here we go again. The fomenters of class warfare are trying to parse the price of healthcare into the healthy and the unhealthy demand components. Just as those irresponsible gas-guzzling SUVs are driving up the price of oil, the obese are strangling our healthcare system.

If the Obesity Police stuck to the healthcare argument and suggested that HMOs be allowed to price discriminate on weight issues for its enrollees, I wouldn’t have any problem with them. After all, life insurance companies do this all of the time – their rates are based on age, health history, smoking or non-, etc. Anywhere you see a “one-price for everyone”, it is pretty much a certainty that price will be high.

But solutions and economic reform don’t concern the Obesity Police. They claim to be looking out for public health, but their criticisms smell more like politics, class warfare, and corporation bashing. If I blamed anyone, it might be insurance companies for not pushing for price discrimination. Or maybe I would just hold the “obese” responsible for their own plight. After all, there are plenty of stigmas and burdens inherent in obesity.

However, the real aim of the Obesity Police is blaming and castigating Corporate America. So the obese must be victims of profit hungry McDonalds, Coca-Cola, Hershey, etc. How surprising is it to see icons of capitalism targeted this way? Not at all these days. Corporation bashing has become a de facto weapon for econo-illiterate politicians, academics, and media.

One of these days I will blog about corporations in general: about the birth of the corporate structure and how paramount it has been for economic development and prosperity. Corporations allow investors to pool capital, limit personal liability, and have fueled the entrepreneurial risk taking needed for economic growth. Do you think the owners of Newsweek want personal liability for the 15 dead from their Koran-in-the-Toilet debacle?

John Edwards and his trial lawyer brethren are licking their chops at the prospects for obesity class action suits. It worked for tobacco and asbestos, but I am cautiously optimistic that it will fail this time. Nonetheless, fast-food companies and other purveyors of fattening foods have modified their fat and sugar contents and started offering healthier products. This won’t stop the Obesity Police and its agitprop (Super Size Me and Fast Food Nation), but they are at least prepared to fight this legal war. It is amazing how food and every other product has to have warning labels and nutritional information on it, yet I have never seen any such disclaimer on a newspaper or magazine. For instance, "Reading this paper could be hazardous to your brain, and it may cause paranoia, delusion, or constipation..."

Everyone knows that big was beautiful a few hundred years ago, but now that food is cheap, obesity is a “socioeconomic” epidemic. Click here to see a racial breakdown of obesity state by state.

That hyperlink and politicos like Jesse Jackson explain why health insurance companies can’t charge higher premiums to insure obese people.

I mostly don't care about this alleged obesity epidemic. Yeah, they shouldn't sell Doritos and soda in public schools, but this isn't the cause of obesity. At best, eliminating junk food in public schools would be more symbolic than efficacious. I have a better solution, eliminate free lunch programs. This would save the financially strapped schools systems and would target the "socioeconomic" demographics most in need of help. I am seriously for the elimination of free lunches but the "socioeconomic" argument was tongue-in-cheek. Junk food in schools - that is about 100th in the hierarchy of public school problems. If they ever do lose the junk food, you can be sure there will be little junk food stores opening down the block from many schools.

Fast-food is a product of cheap food and cheap food is a product of capitalism. In other words, you can't have capitalism without cheap food, they are born of the same market forces. Read Daniel Akst's entire article. It is long but very informative.

Tuesday, May 10, 2005

Template News

As a youth in Massachusetts, it didn’t take me long to see the predictability of local newscasts. It was the same everyday, someone got shot in Dorchester, and somebody got stabbed in Mattapan, some days it was vice versa. Reporters would be on the scene and get comments from the victims’ families. Why news stations thought their audience wanted this same dribble everyday was beyond me. Partially I think it was born out of journalistic laziness.

Nowadays this is referred to as “template news” and it extends way past nightly local newscasts.

Check out the oops, from the NY Times website in reporting the Pope’s death. click here. you can double click on the pic to enlarge.

If that isn’t a template, I don’t know what is. To me, “template news“ is a powerful disincentive for consumers to buy newspapers. Why read a paper when you know what it is going to say?

Newspapers have been losing readers on a persistent and widespread basis for some time now, to the tune of 1 to 4 % nationwide over the last year. For links, click here, here, and here.

The reasons for newspaper decline are multivariate (competition from cable news, the internet, “template news”, political bias, etc.) and the publishers’ excuse is as lame as they get. They cite Do Not Call legislation as the culprit responsible for subscriptions declining.

The Wall Street Journal article linked above states that as much 60% of new subscribers have been signed up via telemarketing. But some basic math implies that papers are still signing up new subscribers and therefore the problem is really existing customers not renewing. Every business has new hurdles to clear each year. It is not like the Do Not Call List sneaked up on them. I am sure they implemented failed counter-measures, which go conspicuously unmentioned. To newspaper executives, it is much more palatable to blame an exogenous event for the business falloff, than it is to blame themselves.

Lets play some $100,000 Pyramid.

“Maybe our politics offends some readers…”

“Maybe perpetual negativity isn’t so marketable…”

“Maybe our news gathering budgets are too high…”

“Maybe we haven’t embraced the internet…”

What is the category?

If you guessed, “Things a newspaper executive would never say to explain declining circulation...”, then you are correct.

In fact, true to their elitist core, now the New York Times is trying to tout the quality of its readers, at least to its advertisers. Furthermore they are trying to change the metric from a circulation model (number of papers sold) to a readership model (number of times a paper is read, per sale). I can’t find the exact statistic, but they have determined that each paper they sell gets read by 3 to 4 people, highest in the industry, and they want their due credit. This may make the Times management feel better about themselves, but it won’t sway any advertisers. They are already aware of how often a paper gets read and it is already priced into their rates.

This metric switch (to a readership model) is nothing more than a marketing ploy quite redolent of some of the bull market dotcoms. Many of these upstart internet companies incessantly touted their price-to-eyeball and price-to-click ratios. That old metric called profit? That was defunct. Okay, maybe this analogy is a stretch, but the similarity lies in the self-aggrandizing metric selection.

The MSM has been excoriating corporations about accounting and financial transparency practically nonstop since the Enron debacle. Yet ironically enough, the New York Times won’t breakdown its editorial budget for Wall Street analysts. Its editors obviously spend a boatload of money ($80 million per year?) on unknown travel and opinion column expenses. The Times management clearly doesn’t want analysts or shareholders to demand or even suggest any fiscal prudence. Remember the Times is a publicly-owned company. I guess shareholder rights and corporate transparency only apply to OTHER public companies.

UPDATE – Remember my blog on Internet Luddites? Well a mere week later, the New York Times weighs in on blogs. Click here for article. Guess what they think – well it isn’t much different from the content of that anti-Businessweek article. They even used some of the exact same expressions like, “…should be a clear wall between editorial content and advertising.” Perhaps there is a talking points memo on blogging making the rounds. Talk about “template news.”

Who is the exalted author of this latest blog-bashing screed? One Mr. Adam Cohen, a guy so web savvy that he doesn’t even have an email address.

What next? Is the Times going to have this guy...

...write an editorial on anger management?

Let me just say that the New York Times total readership model should be adjusted. They should net out the buyers and readers who are only interested in the crossword puzzle. Furthermore, I think the total readership number should then be reduced by a coefficient of constipation. I am serious, they can hire a scatologist to estimate, based on readership demographics, how many readers could be using the Times primarily as a laxative. From this data they would have to revise downward, the readership numbers because if reader number 1 gets the paper first and is in the constipation demographic, then there is no way readers 2,3, and 4 will touch that paper.


Last week, while waiting in line at a Bank of America branch, I glanced up at a prominently placed dry-erase board to inspect the day’s advertised mortgage rates. It wasn’t a second before I was accosted by a bank rep asking me if I was buying a home and needed a mortgage. I was shocked. In 15 years of personal retail banking I have never seen anything like it. Next time I go there, I will be sure to turn my head far away from that board. This is akin to avoiding eye-contact with aggressive panhandlers.

UPDATE – The next time I went into the bank, upon making a deposit in my son’s account, the pubescent teller tried to sell me a 529 account. Still perturbed by the aggressive mortgage push of last week, I impolitely told him not to worry about my son’s college savings. After all, I am making him go ROTC.

$42,100 This is what it would now cost annually to send my son to my alma mater. 2004 UPenn tuition.

Using some algebra, 26,000*((1+X)^12)=42,000, and solving for X, I find that tuition has risen on average 4.07 % annually since my freshman year (13 years).

If tuitions continue to rise 4% per annum, my son's first year at UPENN will cost $85,286.

So sending three kids to college in 2023 would cost 3 * $85,286 * 4 years each = $1,023,442

I do not think it will eventually cost that much. Tuitions are already at untenable levels and these inflation rates will seemingly have to abate. At another time I will delve into the causes of today’s exorbitant tuition levels.

One quick note though. Probably THE main cause of ridiculous tuitions is the government student loan program. These subsidies start out with ostensibly the most innocuous and wholesome intention – that of making college education more affordable. But invariably, as with any attempt at price control, they end up distorting the economics of college tuition. Universities and colleges haven’t done anything to rein in their expenses. After all, why should they when the federal government will loan or grant all of the money its customers (students) need? Essentially, these schools have become little federal governments replete with all of the markings: expanding budgets, bloated administrations, entrenched labor (i.e. tenured faculty), and the defining characteristic - they are funded by public tax monies.

Ten years after I left UPenn, the campus is now almost unrecognizable to me. There are huge new buildings all over the place. UPenn has extended its tentacles in all directions. Sure they will say that a particular building was paid for by some rich alumnus, and they may even name it after them, but is that benefactor paying for added staff salaries and benefits, maintenance, heat and electricity, etc.? I think not – the students are.

How is college more “affordable” when students nowadays are graduating with upwards of $50,000 in loan debt?

Yes, I have seen those studies that “prove” that a collegiate education at today’s prices is a great investment because college grads will more than earn back their tuition costs through higher wages (than non-grads). What other conclusion would you expect from “academic” studies?

Thursday, May 05, 2005


Between 1987 and 2000 the stock of Home Depot (HD) split nine times. A veteran trader I knew lamented one day, “I knew I should have bought that stock….the parking lot was packed every time I drove by.”

Many famous investors have suggested that individuals invest in sectors that they know. In this spirit, I bought some shares of Google in December. I wanted to buy it in the fall around $100, but I missed it and had to buy it at $177. Today it closed at $228 and I am really kicking myself for not buying it at $100. In the absence of a major price spike, I plan on holding this for a very long time.

Why did I buy it? Because I google about 20 things a day. Not only that, I see massive growth ahead. I don’t know anyone who googles nearly as much as I do. The future on this is so clear to me. More people will have broadband, internet literacy is only going to grow, wireless internet devices like blackberries will soon be as common as cell phones, and there will just be more and more googling.

Of course there is risk. Microsoft and Yahoo have Google in their sites. But Google has the head start. Remember everyone tried to start up auction sites to compete with Ebay and they all fell meekly by the wayside. Amazon defeated similar competitive threats. All Google has to do is hold off the upstart search technologies of Microsoft and Yahoo and it will solidify itself as a very profitable monopoly.

At $228 per share, Google seems quite expensive. A mere 50 shares costs over $11,000. After all, how excited can someone get about owning 20 or 30 shares of a stock? To counter this, I am reminded of a guy who told me that he put $2000 into AOL stock and it appreciated to over $100,000 at one point. My advice, buy some Google and forget about it.

Wednesday, May 04, 2005

Internet Luddites

I remember 5 years ago, I was meeting with a headhunter and she asked me if I was working with any other headhunters. I responded no, but added that my resume was listed on She laughed her ass off at me and exclaimed, “no one uses”. I told her that I had gotten a few job interviews from it already. Yet she could not contain her derision or condescension. Now, 5 years later, nobody uses headhunters. And those headhunters that are still in business, they ALL scan for candidates.

I could tell a similar story about real estate agents and in New York City. They all scoffed at the idea of landlords listing apartment rental ads online, rather than trying to rent through their agencies. Now those same agencies ALL list their units on and they ALL use the site to troll for more business themselves.

Even last week, someone challenged my use of to determine the market price of a two bedroom apartment rental in Brooklyn Heights. I had written that the rental price is “around $2000 a month”. I should have written more precisely that it is around “$2300” a month, which doesn’t change the Rent versus Buy argument much at all. (compare $2300 a month to $3300 in mortgage payments + probably $1400 in maintenance and taxes + insurance, etc...) He told me that I had to look in the NY Times to get the real market rental rate. I respectfully disagreed. has 117,000 listings under NYC Housing. Also, most of the NY Times listings are posted on as well.

Moving along…

The headhunter and real estate agent anecdotes illustrate the word of the day:

Luddite – 1) any of a group of British workers who between 1811 and 1816 rioted and destroyed laborsaving textile machinery in the belief that such machinery would diminish employment. 2) one who opposes technical or technological change.

The term is mostly used generically now to describe those that resist progress. I could understand being an internet Luddite back in the 1990s, but anyone who belittles the internet now is just plain foolish. Yet I can hardly go a day without hearing or reading someone disparage the net. The criticism is usually predictable in both source and content. It mostly germinates from old entrenched interests (MSM - mainstream media, politicians, business, higher education, …) and from people that either don’t use the internet or haven’t really harnessed its potential. The substance of these complaints is invariably an assault on the veracity or origin of web-based information. This really is an ad hominem attack on the whole web – and it is quite ridiculous.

So when I saw anti-Businesweek’s cover this week, “Blogs Will Change Your Business”, I could pretty much predict the tripe they would call an article. Look at these excerpts (parenthetical remarks are mine):

Most of you are sick to death of blogs (QUITE A PRESUMPTION)

And yes, there's plenty out there not to like. Self-obsession, politics of hate, and the same hunger for fame that has people lining up to trade punches on The Jerry Springer Show. (NOTHING TO LIKE?)

Name just about anything that's sick in our society today, and it's on parade in the blogs (HOW ABOUT MAINSTREAM MEDIA?)

On lots of them, even the writing stinks. ( read: BLOGGERS ARE RANK AMATEURS)

Let's assume that 99.9% (of blogs) are equally off point…. (SO FAR 99,9% OF THIS ARTICLE IS “OFF POINT”)

If it's scandalous, a poisonous e-mail from a CEO, for example, or torture pictures from a prison camp,…

And here's the killer: Blog posts linger on the Web forever. (“LINGER”?)

Whether at newspapers or global manufacturing giants, they decide what the masses will learn.

This elite still holds sway at most companies. You know them.

This raises all kinds of questions about the ever-shrinking wall between advertising and editorial.

Any chance that a blog bubble could pop?

The difference is that while dot-coms promised to make loads of money, blogs flex their power mostly by disrupting the status quo.

A prediction: Mainstream media companies will master blogs as an advertising tool and take over vast commercial stretches of the blogosphere.

....and earn some pocket change

Popular blogs can land sponsorship deals for as much as $25,000 per month, say consultants. O.K. money for an entrepreneur, but a rounding error in the ad industry.

The big companies have what the bloggers lack. Scale, relations with advertisers, and large sales forces. They can use these forces to sell across all media, from general audience to bloggy niches. (MORE SELF-SERVING WISHFUL THINKING.)

All of this nonsense is in an article ostensibly about how blogs are changing businesses. The only business blogs are drastically changing is the media business. While blogs “linger forever”, in the past, the content of media companies did not. So pundits, journalists, and other mouthpieces could pretty much be wrong with impunity. It used to be much tougher to keep track of who said, or did what, when, or where. Now the moment a falsehood is published or broadcast, my blogging cohorts are all over it. One would think the media companies would appreciate this free editing and fact checking service.

Question: if blogs are just poorly written and unreliable garbage, beneath the concern of real advertisers, why did Businessweek devote its frontpage and lead story to such an irrelevancy?

The next time someone bashes blogs, ask them to name the most popular blogs on the net. I will bet you that they can't. It is almost needless to say that they haven't read them either. If someone wants to learn about blogs, I suggest they read blogs and not Businessweek.

Anyway, here is the link to that article.