View From a Height

The Denver Post reporters John Ingold and George Plavin either don't know what "astroturfing" is, or don't care to correct leftists for using the term incorrectly.  In their report on the Denver Tea Party, they quote Mike "The Headless Chicken" Huttner, as deriding the Tea Parties:

"The tea parties are the latest version in a months-long campaign against change, organized by right-wing think tanks and lobbyists who have done well over the last eight years under George Bush," he said.

He pointed to a number of national conservative political groups listed as sponsors on Taxdayteaparty.com, including FreedomWorks and Americans for Limited Government.

But of course, publicizing events isn't astroturfing. 

Astroturfing is when paid activists pretend to be unpaid volunteers or "men on the street."  It's when ACORN members pretend to be "outraged citizens" stalking AIG employees.  It's when people are paid to spam websites with comments, or when the Pew Foundation finances a campaign finance reform campaign, and then conducts a poll showing increased interest in the subject.  It's when DNC employees photocopy petition signatures and then report the number submitted in triplicate. 

In short, it involves deception, and hiding one's involvement in a campaign in order to make it look popular.

This isn't random name-calling, this is an attempt to deprive the language of a useful term for the sort of thing the Left excels at by changing the definition to any sort of organizing.

Posted by Joshua Sharf at 8:13 AM | Permalink | Comments (0)

Guess which one gets a better review?

As the Colorado House of Representative took us further down the road to socialized health care earlier this week, Douglas County School are considering moving to a Health Savings Account plan for their employees. Needless to say, the Denver Post finds this objectionable:

Douglas County School District soon may join a growing number of employers pushing workers to manage their own medical spending with health savings accounts, eliminating copays for drugs and doctor visits.

The transition is frightening for many who see it as a reinvention of health insurance as they've always known it.

...

The plan would work nicely for about 85 percent of employees, who are predicted not to spend more than the $1,000 put into their accounts by the district.

But for the other 15 percent, the change could mean a few extra thousand dollars a year spent on health care.

By the twenty-second paragraph, we find out that the system would actually include all that preventative care that single-payer advocates talk about:

A major component of the new health plan, up for a teachers-union vote at the end of the month, is a push to get employees to eat healthier and exercise more.

The plan comes with free preventive care, meaning no charge for mammograms, well-baby checkups and vaccines. Also, the district wants to reward employees for getting healthier - holding contests akin to "The Biggest Loser" reality TV show.

In-between is a real-life, specific case of financial hardship that the plan might cause.

And then, almost at the end of the article, comes what could well be the most appealing aspect of the plan for middle-class employees:

Health savings accounts are the fastest-growing trend in health care, said Andrew Sykes, chairman of Health at Work, a Chicago company hired by Douglas County to coordinate the possible conversion. The accounts have a triple tax benefit - the money goes in pre-tax, grows without tax and can be taken out without tax penalty to spend on health care.

In fact, the money can eventually be rolled over into a regular IRA, without the health-care-spending stipulation. And the tax implications for that real-life case aren't even discussed.

Compare this with the promise-heavy description of single-payer earlier this week:

During the extended debate on the bill, Democrats argued passionately for a government-backed system covering all Coloradans to replace a current system they said is inefficient and full of holes.

"I think it is our responsibility that every single Coloradan, regardless of their wealth or position in society, get the health care they need," said Rep. Daniel Kagan, D-Cherry Hills Village. "It is our obligation."

"This system we have right now," said Rep. Claire Levy, D-Boulder, "is completely and fundamentally broken, and there's no amount of patching it up that we can do to provide universal coverage."

Democrats said a single-payer system would save money overall by streamlining the health-care machinery and taking advantage of economies of scale.

Eventually, we get to the Republican response, but the political trumps are saved for the last paragraph:

Last month, the head of the state Department of Health Care Policy and Financing told lawmakers that Ritter is against the bill, noting that Ritter's health-care commission studied a single-payer system and rejected the idea.

There are no numbers given, no estimates of what such a system will cost or what care compromises will inevitably have to be made, no examples of people who would lose treatment because it wasn't deemed cost-effective by the state, only vague Republican accusations of rationing and expense.

In the meantime, a system that the Post admits will work for 85% of employees, that is intended to control costs by having individual rather than bureaucracies make choices, that provides a serious tax shelter for the young and healthy - exactly when we want people to be putting away money for retirement, is described as scary.

Apparently, for the Denver Post, free stuff is an easier sell that freedom.

Posted by Joshua Sharf at 12:00 PM | Permalink | Comments (1)

E. W. Scripps has announced that Friday will be the last day of publication for the Rocky Mountain News. This is a sad day for Denver and Colorado, and given the state's pivotal position in national politics, it's not too good for the country, either.

The Rocky always had longer articles, better coverage, and sharper commentary than its surviving rival, the Denver Post. But a tabloid format and a series of poor marketing and business decisions left it unable to compete in the shrinking market for dead-tree-based news.

The Rocky was also one of the main reasons that the more liberal Post didn't become the utterly irresponsible caricature of a newspaper that the Star-Tribune and the Los Angeles Times have turned into. With the Rocky now gone, there will be less pressure on the Post to be a responsible outlet, rather than a mouthpiece for the Democratic party and its affiliates.

In past times, the Post would have picked up the important features and much of the news staff of the Rocky. However, the Post is facing financial problems of its own, laying off some editorial and management staff, and it's unclear how long it will continue to function, even without direct competition.

It's tempting to say that bloggers and other alternative media can step into the breach, and it may well be that a number of the reporters from the Rocky will try to develop their own sites for a living. And indeed, I'm sure we'll be able to pick up some of the slack.

But there's nothing like being on payroll to have the time to write and develop sources and stories. The Denver Press Club still has a bias against those who don't have major media organizations behind them, which limits credentialing and access to information and newsmakers. There's no question this is a serious loss for the area.

UPDATE: The Post will be taking on some Rocky staff, after all.

Posted by Joshua Sharf at 12:52 PM | Permalink | Comments (0)

A couple of more quick thoughts on the evident, imminent demise of the Rocky, and Mike Littwin's comments on an earlier post.

First, the Seattle Post-Intelligencer may be looking at an online-only existence. So at least someone's taking the idea seriously.

Second, as to that claim about risk-taking. The PI employees may be examining a buyout. Still:

The Pacific Northwest Newspaper Guild is "trying to figure out if enough P-I employees are interested in a buyout that it would be worthwhile for us to bring out a consultant and to seek state money for a feasibility study," Guild Administrative Officer Liz Brown said. (emphasis mine.

State money? How about starting an "I Want My PI" site and asking for online contributions to that cause? (For that matter, how about using "I Want My Rocky" to ask for money to study alternatives?) How about seeking money from a local venture capitalist? I understand there are a few of those around the Seattle/Redmond area. How about the union ponying up the cash for its own study? It's commendable that they're considering buying out the paper, especially if they remain open to the online-only concept. But asking the taxpayers to fund a feasibility study?

Finally, Mike claims that a paid online version of the Rocky couldn't compete with a free version of the Post. Talk about assuming facts not in evidence. I said I thought it could, if it were better, and relentless pointed out its superiority to its customers. But there's another, more basic reason why this might work.

To claim that paid-for superior coverage can't compete with free schlock is saying that people won't pay for local and state news. At all. It's saying that what you do has no economic value And you don't believe that, or else you wouldn't continue writing, and couldn't continue drawing a paycheck for contributing nothing to anyone's well-being. And I don't believe that, or I wouldn't be willing to pay for an online Rocky, even one that included your columns. (We kid because we care.)

Which means that if the Rocky were able to charge - even a little - for its online product, the Post, which is laying off staff of its own, would immediately recognize another revenue stream and start charging for its own product.

Price competition isn't the issue here. The Rocky tried essentially giving away its product several years ago, and found it didn't help at all. It made, or was saddled with, some other handicaps as well. When I moved here 12 years ago, I made the mistake of assuming the Post was to be taken more seriously because 1) I knew the name, and 2) it was a broadsheet, and tabloid were, well, tabloid-ey. (They also kept Holger Jensen around in the same way the Mariners are bringing back Ken Griffey, Jr., but that's another story.)

It made these mistakes in a market that had been contracting for decades. This isn't about fighting that fact. It's about changing habits of mind that are saddling an important product with horrible, unsustainable costs.

Posted by Joshua Sharf at 5:23 PM | Permalink | Comments (0)

In a comment response to "Saving Your Local Newspaper," Mike Littwin makes some interesting points that deserve a reply.

Some reporters put themselves personally at physical risk all the time, of course. But that's very different from experimenting with things that have never been done before. In fact, they often seem more threatened than excited by innovation. From Dan Rather's reaction to being mercilessly fact-checked, hurricanes are easier than criticism. His and CBS's reactions were all too typical, and hardly courageous.

Editors and columnists and reporters love controversy under the old rules. It meant they were selling papers. They could print a few letters to the editor about how that so-and-so Littwin was a jerk, and satisfy their readers that they were having a real discussion. But that sort of controversy isn't risk, it's reward. For the New York Times, having its inability to get basic facts right mocked relentlessly, that's risk. And for some reason, they don't seem to embrace it.

As for paid competing with free, it works when your product is better or when you have a niche. I could read BusinessWeek or Forbes for free. Sometimes, I even do. But I pay to read the Wall Street Journal.

• Ditch the print edition. Or sell it only in limited quantities at stores. Your product is news, not paper. Everything about that print edition costs you money. The Post has pretty serious financial problems, too, and you'll have divested yourselves of the biggest industry design flaw.
  
• Produce two products. A 700-word article that people are used to reading and have time for, and longer pieces. Point out - repeatedly - what questions the Post's reporting raises but leaves unanswered, and then answer them. Do this every day. Newspapers don't sell themselves, you know. This won't make you or anyone else at the Rocky liked over at the Post.
  
• Limit online advertising. It'll make your product more attractive. Part of Isaacson's idea is to have both advertising and subscription revenue streams. We all agree pop-up online ads are annoying. I might not subscribe to the WSJ if every article were preceded by an in-my-face pitch for a $2,000,000 foreclosure in the Hamptons.
  
• Charge reasonably for the archives, and make sure everything, back to 1859, is in there. (College students will work for remarkably low wages.) I will almost never pay $2.95 for a three year old story. But if I'm already paying $50 a year, another nickel or dime doesn't seem like so much. Certainly cheaper than driving down to DU to use Lexis-Nexis on the library computer.
  

I don't want to see the paper die at the end of the month. I like the Rocky. One of the reasons the Post hasn't spun off into Star-Tribune levels of irresponsibility is the existence of the Rocky. I don't blame the Rocky for others' hare-brained ideas of government subsidies. It's all too easy to beat up on other people for not wanting to compete.

But whatever newspapers are doing isn't working, and this refusal even to try is an much symptomatic as it is causational.

Posted by Joshua Sharf at 5:12 AM | Permalink | Comments (0)

Every time I talk to someone from the Rocky, indeed, every time I talk to someone from any newspaper who likes the Rocky, I float the idea of ditching the paper version, stripping out all the extraneous coverage, and going back to charging for their content.

The response would make crickets chirping sound like an oncoming tornado.

Maybe now that Walter Isaacson has proposed the same idea, it'll get another look. He lays out the case against an advertising-only model, while still preserving and charging for what local newspapers do best.

One of the most creative arguments against came from a reporter for the Grand Junction Sentinel, who argued that newspapers couldn't compete against local television. Two answers: 1) they did for 50 years, and 2) local TV can't compete with newspapers for actual content.

Look, I'd never pay for access to the news departments at Channels 4, 7, 9, and 31. I don't watch now for free, and I'm not sure how much they'd have to pay me to watch. But I'd pay, oh, $50 a year for the online Rocky, as long as I didn't get sued for quoting from its work.

In fact, such a product would be better than the printed paper. It could preserve the current forms and lengths, since those are what people are used to reading, and perhaps even what they have time for. But it could also allow for longer-format writing, which indulges what writers really like to do: write. So Lynn Bartels produces a 700-word piece on the legislature, and then a longer-form, 2000-word discussion of a particular bill that's caught her eye. Meanwhile, the Post, stuck with a paper edition, can only choke out 500 words that barely lets people know there is a story.

I think Isaacson (along with Littwin) too easily dismisses liberal bias as a source of decline. Yes, the papers have many hits online, but still look elsewhere for coverage of stories, and many of those people reading the Denver Post online then go to other sites for the analysis.

But liberal bias may be killing the papers in another way - a lack of entrepreneurial spirit which would save the industry, even in this economy. Reporters simply aren't interested in taking that kind of a chance, which requires a completely different way of thinking , risk-taking, and actual competition. Instead, they create sites like, "I Want My Rocky," that make people feel better and do absolutely nothing to preserve the paper or the brand. That's why they're reporters and not businessmen.

And that's also why their newspaper is about to disappear.

Posted by Joshua Sharf at 10:41 PM | Permalink | Comments (1)

These apaprently include paying for everyone else's college education.

These don't include examining how colleges are spending that portion of your taxes they end up with.

They do include raising your taxes.

State legislators must stand together on the steps of the state Capitol and make a compelling case to voters for a fix to the nonsensical budgetary constraints that Colorado government lives by.

Remember, Referendum C brought in far more money than expected, which the Democrats in charge of the legislature since 2004 plowed into long-term spending. The state government has been able to keep every dime it's brought in since 2006.

Some of that money is dedicated to certain uses. If the Post and its Democratic allies want to defund certain programs, they should name them.

Barring that, there are no budgetary constraints, only revenue constraints. Even last year's mercifully-dead Amendment 59 would have retained a taxpayer veto on tax increases, at least until they could persuade us to forgo those. How inconvenient for them to have to make the case for unlimited taxation power all at once, their surrender-by-degrees strategy having failed.

Posted by Joshua Sharf at 6:08 PM | Permalink | Comments (0)

Some of the writers over at the Rocky have started a site, I Want My Rocky, dedicated to saving their newspaper.

Good luck with that. I doubt that those participating believe that they're doing anything other than sharing memories, more or less resigned to the demise of their beloved paper. A letter-writing campaign may have given us one more miserable half-season of Star Trek, but owners are more savvy now.

What struck me was the old-time, MSM-based orientation of the site. The stories linked to are almost all print or tv news sites. The important links are all legislators and Scripps, as though elected officials had been able to save the NY Sun. In the meantime, there's an appeal to something called the Newspaper Preservation Act, and a friendly reminder from the union.

There is, it appears no Facebook group, no twitter hash tag, There's a plea for links to stories about the site, implying no access to Google Alerts. There's no discussion of alternate business models, of the kids taking over the barn and saving the paper themselves, no talk of making an online model work.

The Rocky's demise isn't something to celebrate, it's something to mourn. I've gotten to know some of the reporters and columnists personally. I've no desire to see them unemployed. But this site underscores the somewhat blinkered thinking that has let newspapers get overrun by new media, and doesn't give much hope for change,

Posted by Joshua Sharf at 11:14 PM | Permalink | Comments (0)

As by now everyone know, the Rocky Mountain News has been put on the block.  This at a time when the Tribune Company has filed for Chapter 11, when over 30 papers are for sale nationwide, and there don't seem to be any buyers for large-market papers.  The business reasons for this have been chewed over ad infinitum, but the chief culprit is declining ad revenue, which only looks to get worse.  (I'd also suggest brand equity; the Rocky used to win the lion's share of the journalism awards, but the Post had a better brand, in part because broadsheets seem to carry greater credibility.)

Editorially, this is an opportunity.  It's an opportunity for center-right bloggers, who will now be able to go after the Post as it inevitably spins off to the left, becoming our version of the Strib.  It's an opportunity for us to do more original reporting, since it's possible the Rocky won't be there to do it.

It may be a big opportunity for the Examiner, which may try to pick up some of the loose talent soon to be running around Denver looking for work.  The online paper is based here in town, and could rapidly turn its local edition into the flagship for the country.

It's also an opportunity for the talent at the Rocky, who could try the same thing on their own.  Shed the national reporting, bring in some entrepreneurial-minded management, ditch the printing presses and expensive delivery system, and turn the paper into an online, state- and local-oriented newspaper.  Charge a nominal fee for a subscription, and go back to a no-holds-barred style, that takes on the Post directly.

Posted by Joshua Sharf at 9:48 PM | Permalink | Comments (1)

I've been a fan of John Feinstein's sports writing for years. Not so much of his political writing. Today's Washington Post carries a sterling example of the latter, masquerading as the former.

As some of you may have heard, New York Giants wide receiver Plaxico Burress carried an unlicensed handgun into a New York nightclub (is there any other kind of handgun for a private citizen in New York?), and put himself on the disabled list by shooting himself in the leg.

This is the latest in a series of gun-related, ah, fumbles by NFL players in recent months, and Feinstein uses it as an excuse to call for repeal of the 2nd Amendment, and to launch a broadside at those who might disagree:

Now, let's not start screaming about the Second Amendment. To begin with, the amendment should be abolished -- a sensible interpretation of the amendment is that it was written to allow the people to raise a militia for protection and to hunt for food. Clearly no one needs to raise a militia these days, and those who hunt for a living can be licensed to do so.

It would be nice if President-elect Obama had the time to focus his energies on repeal of the Second Amendment, but he first has to deal with a broken economy and the incredibly wrong-headed war started by his predecessor. What's more, the issue of gun rights causes almost as much screaming from the right as abortion rights, the irony being that those yelling the loudest about the right to life are usually those yelling almost as loud about their right to carry weapons that kill.

Barring that, he says, the NFL should make it a condition of employment that no player can own a handgun. This, because protection even in their own homes is something that NFL players apparently can't be trusted with. To get there, he has to revisit the death of Sean Taylor, who had gotten himself on the straight and narrow just in time to be killed in his own house by what I would presume to be former...associates.

It's not worth arguing the 2nd Amendment with someone who lives near DC but who evidently hasn't bothered to read or understand the Heller case. But the juvenalia on display in the second paragraph could have appeared, word for word, in the Cavalier Daily 25 years ago when I was in school. And probably did.

Imagine a conservative sportswriter writing a column about the evils of McCain-Feingold, the abuses of Title IX (coming to a physics department near you), or the joys of limited government, and in the bargain, questioning man-made climate change and accusing Obama of socialist tendencies. I'm sure it happens every once in a long while, and when politics creeps into sports talk radio, it does tend to be from both sides. But for some reason, the print guys tend to think their columns are a license to shill for the Left.

Posted by Joshua Sharf at 1:53 PM | Permalink | Comments (0)

The Balance Sheet

Put simply, American newspaper companies have too much debt, and have been fooling themsevles about how much equity they have. When they went through that period of consolidation a few years back, the surviving (so far) companies vastly overpaid for the properties they bought, thinking that either they could turn them around or that the names would translate into sales. Then they borrowed agains these "assets," and have thus robbed themselves of whatever flexibility they had.

Here are the assets of the seven companies we've been looking at so far:

The bars represent the total assets. The blue represents something called, "Goodwill," the red, everything else. Goodwill is, roughly speaking, the vigorish that you pay for a company. Essentially, according to accounting rules, you're not allowed to pay more for something than it's worth. What you pay for it is what it's worth. So if you pay $4 million for a company whose net assets are valued at $3 million, after the buyout you put down the extra $1 million as an asset called, "Goodwill." It can generously be interpreted as extra cash you think the property should generate over time.

But it's a guess, an estimation, and can also serve as a slush line item to hide the fact that you just overpaid by 50% for a name that isn't generating any ad revenue any more, but that People Trust. It used to be that Goodwill was amortized over a period of time. Now, it has to be re-examined as often as necessary, and written down as appropriate.

Let's take a look at what's going to happen, as accountants realize that if the New York Times can't sell ad space, neither will the Podunk Press they sunk $2.5 extra large into five years ago, and that all the Goodwill in the world isn't going to change the fact that Iowans are getting their news from here and their local advertising from here.

The other rule here, so basic it's been known since the Italian Renaissance as the Accounting Rule is that Assets = Liabilities + Equity. If I write down an asset, I also need to subtract a like amount from either liabilities or equity. Since Goodwill isn't exactly a loan, likely it'll come out of equity. Here are the Owners' Equity lines from these companies, before and after Goodwill is subtracted:

That's right, boys and girls. Four of these Titans of Type go from having positive equity to negative equity, meaning they owe more than their companies are worth. And this is a completely defensible assessment. Given the current market, and the likelihood of how these will develop, you can't sell that Goodwill on the open market, because people apparently have resorted to paying what things are worth.

Now all of these companies have some long-term debt, although the Washington Post company seems to have made an effort to pay its down to minimal levels. Typically, I don't want debt-to-equity to be more than about 1. I know, there was a time not so very long ago when investors liked leverage. Because after all, we'd always be able to refinance that, wouldn't we? But I was never comfortable with huge debt-equity ratios.

Naturally, the D-E are calculating including Goodwill. Here's what happens when you subtract the Goodwill from the equity, and recalculate:

Not much fun. Of course, four of them go from positive to negative, including USA Today, which looked safe. The Journal newspapers only edge up to 1.30, and the NY Times - whoa, there, Pinch! - run up from a safe-looking 0.75 to almost 3.2. Only the Washington Post manages to stay sober.

These companies have been fooling themselves about the state of their balance sheets, believing that they had better balance than they did, because they were counting on revenues that will never materialize.

Now, I know what you're thinking. Debt's ok if you can pay it. Well, as we'll see next time, that's a problem, too.

Posted by Joshua Sharf at 2:34 PM | Permalink | Comments (0)

A lot of pixels have been spilt over the financial crisis that newspapers are now facing. Some of it has been triumphalist, some of it more in sadness than in anger (or joy).

Now, as Ecclesiastes says, there's, "a time to destroy, a time to gloat." OK, I made that part up. But the fact is that while new media may create the buzz, most issues are still ultimately validated by appearing in the MSM. Their brand-name appeal still carries a lot of weight, as demonstrated by their post-2004 counterattack against blogs. And the fact that their corrections sections pages compete only with their apologists ombudsmen in after-the-fact self-justification hasn't yet succeeded in destroying that brand-name.

So the financial condition of newspapers should still be of interest to us all. (They are, it would seem, at least of passing interest to their publishers. Although not of enough interest for the publishers to pay for the conference themselves. "The summit conference was enabled by a generous grant from the McCormick Foundation and funded by API's J. Montgomery Curtis Memorial Seminar Fund.")

Some of the gloating has come from talk radio and the right, on the assumption that the MSM's credibility gap is causing its financial difficulties. Maybe. But as one of the participants put it, "'We don't have a crisis of audience. We have a crisis of revenue' in monetizing that traffic."

Over the course of a series of articles, I'm going to look at the industry's financials, learning and revising as I go, trying to understand and explain what's happening to the newspaper industry, and why it's producing stock charts that look like the pre-Fed Bear Stearns:

Posted by Joshua Sharf at 9:20 AM | Permalink | Comments (0)

Hate Sprint. Love the technology. I love the Sprint wireless card, and I love the Palm Treo I've had for about a year.

Now, if only the local papers could catch up. It's not like they don't know about the Net. In fact, the Denver papers have been among the best in integrating New Media into their operations, including archives, blogs, neighborhood blogs, online community-building, the woiks. The fact that the Denver Post website is the visual equivalent of a SWAT team crashing through the window is beside the point.

And yet, they have nothing mobile. I can go to mobile.boston.com, or mobile2.wsj.com, or mobile.washingtonpost.com. The New York Sun, Boston Globe, and Cleveland Plain Dealer websites will browser-sniff and automatically send me to their mobile sites.

Maybe we can roll the request into one of the Mayor's bond refereda...

Posted by Joshua Sharf at 8:59 AM | Permalink | Comments (1)

Never's a long time, but, "Never Enough" seems appropriate for the state Democrats and their enablers over at the Denver Post. This morning, the paper's Local & Western Politics Blog runs an uncritical story about the desire of state Democrats to raise taxes again ("Seventeen tax proposals under discussion in Colorado").

The two liberal groups quoted, the Bell Policy Center and the Colorado Fiscal Policy Institute, are not identified as such. Members of Bell campagned with Ref C supporters a couple of years ago. And the CFPI's parent institute, the Colorado Center on Law and Policy, describes its mission as: "The Colorado Center on Law and Policy's mission is to promote justice and economic security for all Coloradans, particularly lower income people. CCLP advocates on behalf of the the poor, working poor and other vulnerable populations though legislative, administrative and legal advocacy." My guess is you'll find about as many free-market types there as you'd find Republicans in CU's Ethnic Studies faculty.

Meanwhile, they quote House Minority Leader Mike May, briefly suggesting other revenues, and former Republican Senator Hank Brown, now Presdient of CU, crying poor for the University again.

House Speaker Andrew Romanoff is given whole paragraphs (and backing by Bell's "outreach director," to make his case for suspending constitutional restrictions in order to overhaul the state's tax code. Naturally, the fact that he won't discuss the nature of that overhaul in advance of voters approving the suspension goes unnoticed.

Also unnoticed is the fact of Referendum C, and the fact that tax revenues, far exceeding proponents' projections, aren't being used as promised. CFPI is full of dire claims for Colorado spending:

The state ranks 49th in the amount it spends per capita covering low-income families on Medicaid. It is 48th in state spending for higher education, 39th in state highway spending per capita and in the bottom third in per-capita investment in K-12 education, according to the institute.

Remember, these are the same folks who brought you the debunked claim (parrotted in at least 49 other states), that Colorado ranked 49th in state spending on education. Needless to say, these claims also go unchallenged.

Well, at least now we know their platform and talking points.

Posted by Joshua Sharf at 11:21 AM | Permalink | Comments (0)

Apparently, the Undocumented-American community is having a tough time of it. No, really.

A year after state lawmakers passed what they called the toughest illegal-immigration laws in the nation, there is no proof illegal immigrants have been caught taking advantage of taxpayers. Instead, there are abundant stories of citizens eligible for services who can't prove it because they lack the required ID.

Of one side, the side that wants to prevent illegal aliens from taking our tax dollars, "proof" is demanded. From the other, anecdotal evidence comprising "abundant stories" is sufficient. Of course, abundance is also in the eye of the reporter.

"We have nothing to show that this law is doing what it was intended to do," said Maureen Farrell, executive director of the Colorado Center on Law and Policy. "The reality is that more citizens appear to be impacted than illegal immigrants."

The Post, as freuqently happens when referencing liberal think tanks, fails to identify them as such. The CCLP's mission: "The Colorado Center on Law and Policy's mission is to promote justice and economic security for all Coloradans, particularly lower income people. CCLP advocates on behalf of the the poor, working poor and other vulnerable populations though legislative, administrative and legal advocacy." Maybe so you won't notice there's no "balancing" conservative opinion.

Beyond the effects on hospitals and social-service providers, businesses have also complained that the anti- immigrant fervor generated by HB 1023 and other laws has made it harder to find employees.

Ah, that's why! There is no balancing conservative opinion! Or at least no balanced conservative opinion. There's merely, "fervor." Fervor all through the Right. Fervor! Funnily enough, it's actually generated by the law in question, rather than helping to generate it. Oh, and note that it's no longer about illegal immigrants, but all immigrants.

Other lawmakers, meanwhile, argue HB 1023 doesn't go far enough.

Sen. David Schultheis, R-Colorado Springs, said tales of how the law is hurting the homeless and indigent are a diversion tactic by social-service providers.

"That is being used as an excuse to make sure that this procedure is loose enough to ensure that anyone can apply," he said.

Schultheis never actually says the laws don't go far enough. What he does say is that social service providers want to, well, provide services, and that their claims are misleading.

Others argue that such immigrants were never draining Colorado coffers.

"People who are undocumented are here to work - not use social services," said Deb DeBoutez with the Colorado Coalition for the Homeless.

Except for the gang members who are here to funnel drug money to jihadists, that is. They're fine, law-abiding illegals.

State agencies reported this year that the package of immigration laws cost them about $2 million to put in place. But they found no cost savings through kicking illegal immigrants off of state rolls.

This is the WMD method of argument. Fine enough for a Presidential debate, not so good for what supposed to pass for journalism. In fact, cost savings was only one reason for this law. Perhaps more important was taking away a reason for people to come here.

It is estimated there are nearly 12 million illegal immigrants in the U.S. and about 225,000 to 275,000 in Colorado.

If this doesn't conjure up images of Drew Carey standing on a stage, asking these reporters to make a guess, with the audience yelling, as one, "higher, higher!" There's no source for the national numbers, they're clearly at the low end of the range. Apparently, the numbers for Colorado come from a study by the left-leaning Pew Hispanic Center, but you wouldn't know this, either.

A large number of those who are affected, especially in the case of health care, are indigent citizens. Just try mentioning that mentally ill homeless should be put in state facilities, though, and see how many syllables make it out before, "warehousing!"

Denver Health, which serves a large percentage of the indigent and homeless population, has spent nearly $2 million in the past year treating indigent patients who don't have enough identification to prove they are legal residents. The hospital cannot include such charges in its application for a refund through the Colorado Indigent Care Program.

"It means that we have $2 million less in our operating budget," said Bobbi Barrow, a spokeswoman for Denver Health.

A shooting victim who arrived at Denver Health's emergency room without insurance or state-approved ID stayed for more than a month, leaving behind a $182,000 medical bill.

Denver Health's loss will not save the state any money.

Hospitals are refunded a percentage of the money they spend each year on indigent patients. But there is a fixed amount of grant money each year, and the state divides it up among the hospitals. So just because a hospital spent more money on indigent care, it doesn't mean that it will get a bigger check from the state.

This is simply incoherent. According to the logic, they weren't going to be able to recover the money, anyway, because there's a cap on how much the state pays out. We're not told what the algorithm for dividing up the money is (did the reporters even bother to ask?), so we have no idea whether spending more or less is better.

There's more, largely about the amount of paperwork the rule is causing non-profits. Don't hold your breath waiting for the paper to endorse a flat tax.

Oh, and that "fear factor" headline. Apparently Jim Spencer was able to find work after the buyout, after all.

Posted by Joshua Sharf at 7:30 PM | Permalink | Comments (0)

Media bias doesn't operate by outright lies (usually). Instead it operates by settling on and relentlessly repeating an overly-simple and therefore deceptive narrative. The Washington Post's article yesterday morning about how meaningful climate change legislation is being stifled (but only on this side of the Atlantic) by economic concerns ("Climate Change Debate Hinges on Economics"). There are those of us who are grateful for such concerns, but the Post seems disturbed by them. Naturally, the issue is cast as a morality play, with the selfless Europeans facing off against the narrow-minded Americans. The truth is, naturally, a little more, ah, nuanced.

The potential economic impact of meaningful climate legislation -- enough to reduce U.S. emissions by at least 60 percent -- is vast. Automobiles would have to get double their current miles to the gallon. Building codes would have to be tougher, requiring use of more energy-efficient materials. To stimulate and pay for new technologies, U.S. electricity bills could rise by 25 to 33 percent, some experts estimate; others say the increase could be greater.

Most of the technologies that could reduce greenhouse gases are not only expensive but would need to be embraced on a global scale, scientists say.

Nowhere does the article cite any basis for the claim that only reductions of 60% or more are, "meaningful." And since the US isn't the world's largest CO2 producer any more - China is - the Post is either admitting impotence or arguing for an even more aggressive extension of American sovereignty abroad.

In the Senate, five climate change bills have been introduced recently -- with sponsors from both parties. They do not tax carbon but use variations on Europe's cap-and-trade system. Europe modeled its system on the 1997 Kyoto Protocol, which the Senate rejected and President Bush later dismissed, saying it would cause the U.S. economy "serious harm."

The last sentence is deeply disingenuous, but the whole paragraph is misleading. In fact, President Clinton signed the Kyoto Protocol but never submitted it to the Senate. The Senate later took a non-binding vote, unanimously rejecting the treaty because it didn't include the most-polluting, fastest-growing economies of India and China. The Senate never formally rejected the treaty. And President Bush has never pulled the US's signature from the document.

Deutch says that the technology, seen as a vital part of almost any strategy to slow global warming, won't be commercially viable until carbon dioxide reaches $30 a ton. That would translate into a 25 percent average increase in electric bills nationwide, Deutch said.

"It's certainly affordable for our economy and our society," Deutch said.

Deutch said, thus demonstrating the same incisive acumen that's made the CIA what it is today. Of course, the Post never actually does any analysis on this statement, preferring instead to paint US citizens as pampered children who just don't want to pay more. The Post gives no average energy bill for individuals, the number of people which such an increase might push from saving to spending each month, the institutional costs of such an increase, the jobs it might cost, or the effects of the price increases on consumers, or even the disproportionate effects on smaller and mid-size businesses. You know, the sort of analysis we got when every welfare recipient was on the verge of starvation from reform.

In Europe, there is a much greater sense of urgency about combating climate change, as Bush discovered at last month's meeting of the Group of Eight major industrial nations. German Chancellor Angela Merkel wants to slash greenhouse gas emissions by 40 percent by 2020 and 80 percent by 2050. Merkel is expected to push for big increases in power plant productivity and more renewable energy, although Germany is already the leading country in Europe for wind and solar power. Spain and Italy are offering incentives of about 40 cents a kilowatt hour for solar-power installations.

Actually, in Europe, there's a much greater sense of urgency about not allowing the US economy to continue to out-compete. The Europeans are terrific poseurs, talking a big game, but doing worse than the US since 2000 in reducing CO2 output, despite the fact that the US economy has grown faster than Europe's over that time. They, and their Democratic friends in Congress, draw the baseline at 1990 in order to capture one-time, non-repeatable events, that in any honest accounting would be thrown out. Despite that, they still have to keep raising the 1990 baseline in order to minimize the amount by which they fail to keep their promises.

As for solar, that's just a technology bet that Germany's made, and is now looking for the rest of the world to subsidize their market. Of all the countries in Europe, Germany's one of the worst for solar power, given its cloudy climate and northern latitude. Their leadership in solar isn't bootstrapped by any domestic demand, it's created by a goverment policy of picking winners.

Overpromising and misinvesting should be signs of deep unseriousness. Sadly, the Post mistakes them for "urgency."

Posted by Joshua Sharf at 6:30 AM | Permalink | Comments (0)

Do the Denver Post editorial writers even read the stuff they're commenting on?

A recent GAO report has them in high dudgeon about presidential signing statements, those usually-harmless-but-occasionally-informative comments on what a president thinks about the laws he's signing into being. Never mind that the legal portion of this discussion took place last year, with many liberals siding with the President.

More important is the Posts misleading report on what the GAO actually said.

"While the GAO studied only a small sample of provisions that Bush had objected to in signing statements in fiscal year 2006, it found that 30 percent of the time those provisions were not followed according to law." In fact, the GAO carefully selected 19 cases to cover a variety of different classes on objections. This is a sample so small as to be statistically meaningless.

"...those provisions were not followed according to law."In six cases, the law was not "executed as written," a completely different matter from "not followed according to law," since in the absence of a definitive court ruling, the Post cannot rightly claim that the law wasn't being followed. For example, the President is clearly under no obligation to enforce a provision contrary to the Constitution. And if he did, we'd certainly see a Post editorial about it. As soon as Dick Durban called a press conference to complain.

"House Judiciary Committee chairman John Conyers, D-Mich., and Sen. Robert Byrd, D-W.V., have wisely called for a more extensive review of bill provisions that Bush has objected to in these signing statements." Well, except that the GAO report was itself in response to a request from these two, a fact the Post conveniently omits. The GAO could have come back with a clean bill of health, and Conyers and Byrd would likely have interpreted the absence of evidence as anything but evidence of absence.

As important are two GAO comments the Post omits entirely:

"Although we found the agencies did not execute the provisions as enacted, we cannot conclude that agency noncompliance was the result of the President’s signing statements." (Emphasis added. Commentary superfluous.)

The GAO concludes that courts almost never cite signing statements as authoritative. This is similar to their spurning of legislative history as a source of authority, and indicates a willingness to overrule presidents on this sort of thing when they like.

But this isn't really a converative vs. liberal issue, anyway, although the Post only seems to have problems with the current President exercising his judgment. As in the GAO report, it lumps together Presidents Reagan, George H.W. Bush, and Clinton, without mentioning that Clinton issued statements at a 50% greater clip than Reagan. Go to that UCSB link, and you'll find plenty of Clinton signing statements that challenge or interpret sections of the law in question.

Stuart Buck has analyzed a 1986 memo by Samuel Alito defending the practice, and the Post seems not to have noticed Walter Dellinger's 1983 memo reaching the same conclusion for the Clinton Justice Department.

In fact, the "constitutional mess" the Post worries about is inherent in Constitution itself, in the separation of powers, and thus has been going on since at least 1787. The Post would - at least for the duration of this presidency - make the executive the only branch without the power to interpret the Constitution, or laws according to it. This comes uncomfortably close to the fears address in Lincoln's First Inaugural:

I do not forget the position assumed by some that constitutional questions are to be decided by the Supreme Court, nor do I deny that such decisions must be binding in any case upon the parties to a suit as to the object of that suit, while they are also entitled to very high respect and consideration in all parallel cases by all other departments of the Government. And while it is obviously possible that such decision may be erroneous in any given case, still the evil effect following it, being limited to that particular case, with the chance that it may be overruled and never become a precedent for other cases, can better be borne than could the evils of a different practice. At the same time, the candid citizen must confess that if the policy of the Government upon vital questions affecting the whole people is to be irrevocably fixed by decisions of the Supreme Court, the instant they are made in ordinary litigation between parties in personal actions the people will have ceased to be their own rulers, having to that extent practically resigned their Government into the hands of that eminent tribunal. Nor is there in this view any assault upon the court or the judges. It is a duty from which they may not shrink to decide cases properly brought before them, and it is no fault of theirs if others seek to turn their decisions to political purposes.

Dan Haley - a genuine good guy - is the new editorial page editor for the paper. He's conservative, which means this job must often make him feel like one of those travelers to distant lands who is captured, brought to the king, and made to serve out the rest of his life as court physician and chief advisor. You know, Joseph. Or The Last King of Scotland.

Posted by Joshua Sharf at 3:12 PM | Permalink | Comments (0)

Last week, the local propagator of economic illiteracy, the Denver Post, ran an op-ed by a professor over at the University of Colorado Health Sciences center, who specializes in bioethics and the humanitites. It included the usual bromides about obscene profit margins and too much marketing vs. too little R&D. It concluded with a call for the citizenry to demand more R&D spending by drug companies. Or presumably, we'll be taking away those profits to make sure there's no more R&D. (Ironically, a week earlier I had had this debate with a friend of mine who's a doctor there, so maybe it's something in the water. Or a virus.)

In the meantime, Russ Roberts has an extensive podcast with Mr. Law-and-Economics himself, RIchard Epstein, an actual economist, of the Hoover Institution and the University of Chicago. Epstein makes the following points.

• That studies show that drug companies keep somewhere between 15% and 25% of the economic profit from their discoveries. Which means that you and I get to keep about 80% of the benefit from someone else's work.
  
• That the excessively long FDA approval time robs the compnies from many of the benefits of the patent system
  
• That taxing away the profits is only going to force the drug companies to focus on the higher-margin projects, which will then lead the same whiners to complain about the even more obscene profit margins
  
• That there will always be competition, since it's the molecule not the health benefit that gets patented; this means that your slightly different drug with a slightly different mechanism can compete even while the original is under patent protection
  

I'd add one other point. Mark Yarborough complains about the ratio of marketing budgets to R&D budgets. But this is always true. I just finished visiting a company, Brush Engineered Materials, which refuses to get pantents on much of its research out of the belief that they'd rather not have their competition reverse engineer their processes. Their competitive advantage and their real asset is their institutional know-how and craftsmanship in the art of making metal alloys. This is a company that knows it needs to be ahead of the curve, always developing new alloys and new uses for those alloys.

They spend less than 1% of gross revenues on R&D.

I never would have know about Epstein's book if not for a series of blog links.

Thus do institutional biases restrict the debate. At least on their pages.

Posted by Joshua Sharf at 9:01 PM | Permalink | Comments (0)

Longtime Denver newspaper readers - of whom there seem to be fewer and fewer every year - will remember someone called, "Holger Jensen" who used to edit the Rocky's foreign coverage. Jensen had a thing about Israel. He didn't much like it. Eventually, his bias got the better of him when he allowed it to overwhelm his journalistic ethics and he printed an easily-fact-checkable-and-yet-un-fact-checked slander against Ariel Sharon. The Rocky had no choice but to can him, and he was last seen writing fishing articles.

This morning, the Rocky has printed what is easily one of the most dishonest pieces of Islamist propaganda ever to disgrace its pages. Then again, "dishonest" and "Islamist propaganda" are quite reundant.

Rima Barakat accuses Israel of deliberately murdering a random, innocent, Palestinian family for the crime of practicing for the 4th of July. She then calls on the world to hold the Jewish community here in the US accountable for this. Really.

Barakat begins with a bill of particulars against the IDF. Here's how it starts:

The latest massacre in Gaza of 18 members of the Athamna family, including eight children, who were sleeping in their beds, is another example of the level of contempt with which the Israel government views Palestinian lives. The regular use of disproportionate firepower against a trapped population not only violates international law but also contradicts the basic civilized conduct of any responsible government.

One might well think that the "basic civilized condust of any responsible government" would include preventing its citizens from launching armed missiles into schools, homes, cars, ice cream stands, and whatever other "soft targets" are in their way. One might be forgiven for thinking they include not launching cross-border raids to capture and murder soldiers. But such strictures apparently don't apply to the Hamas government of the Palestinian territories.

Of course, I suppose it's possible that the IDF troops, seeing a group of small children picking strawberries, just decided to pick up and machine-gun them all, although if they wanted the strawberries, they probably could have just taken them after the kids were finished.

No, this tragedy, like so many others, is a result of deliberate cynical Palestinian strategy - the placement of Qassam rocket launchers in civilian areas, in order to maximize the deaths of their own people for propaganda purposes. People like Ms. Barakat are mouthpieces for this sort of calculating blood libel, making hay on the deaths of the very people they purport to support. People like Ms. Barakat ought to be ashamed of themselves, yet apparently are beyond shame.

In fact, the Palestinians in question make use of the very humanity of the Israeli soldiers - which they then seek to deny. The Jerusalem Post reported the other day that masses of people flocked to the home of a targeted Hamas murderer, in order to prevent him from being killed or arrested by Israeli troops. I know Gaza has turned into a large school for martyrs, but my guess is that most of those people were there knowing they were safe from the depradations of the IDF.

Israel justifies these attacks as military responses to a simple homemade device called the Qassam "firecracker" rocket. But Israeli politicians do not believe that the Qassam creates a threat to Israeli security. In fact, Shimon Peres, has commented that "This hysteria over the Qassams must end."

Well, when you're quoting Shimon Peres, you know you've run out of options. I'm surprised she just didn't go all the way and quote Jimmy Carter. Let's make a deal - when the Qassams stop killing people in Sderot, and turning that and other border settlements into ghost towns, Israel will stop trying to uproot them. Until then, it's not really up to a government whose charter foresees the complete destruction of Israel in every paragraph to decide what constitutes a security threat.

Brutality has never brought peace to any country or people. Slavery, apartheid and Nazi concentration camps have eventually brought ruin and disgrace upon the perpetrators. All acts of mass slaughter of innocent civilians must be condemned by people of all faiths.

A special responsibility sits with people belonging to the Jewish tradition. After all, these atrocities continue to be committed in their names. It is time that they stand up and defend the Jewish faith from being associated with acts of heartlessness. We have yet to hear even a whisper of disapproval coming out of the American Jewish leadership. This silence from the Jewish community about Israeli atrocities is unconscionable.

One might well conclude that yes, in fact, Palestinian brutality, from Arafat to Abbas to Hamas, hasn't really gotten the Palestinians very much, and that they might want to take a different tack.

As for the call for American Jews to stop defending Israel, Barakat knows perfectly well that's not going to happen. Certainly not as long as Israel remains under existential threat from its Muslim neighbors. In fact, given Barakat's recent hosting of the Mufti of Jerusalem and representatives of the Muslim Brotherhood, such a call could be construed as a thinly veiled threat to bring that existential threat Stateside.

Ms. Barakat is apparently beyond shame. But the Rocky ought to know better.

Posted by Joshua Sharf at 7:46 PM | Permalink | Comments (6)

...and those we don't. In the < I>Denver Post's case, they don't llike whistleblowers who leak to Republican campaigns. Of course, they're more than happy to report on the reaction of the Perlmutter campaign to a story planted by that campaign in the Post itself.

The Post ridicules Beauprez's claim that his source is courageous, even as it campaigns for federal shield laws for journalists. It states that Beauprez's source leaked for partisan political purposes, even as it defends the New York Times for publishing information that's likely to get Americans killed, in pursuit of its own political agenda.

Someone needs to remind the Post that "freedom of the press" is a right reserved to all the people, for all political speech, not just to newspapers.

In the meantime, I'm sure the paper will make much of this report by Reporters Without Borders, with the absurd claim that press freedom is eroding in the US:

"Relations between the media and the Bush administration sharply deteriorated after the president used the pretext of 'national security' to regard as suspicious any journalist who questioned his 'war on terrorism,' " the group said.

"The zeal of federal courts which, unlike those in 33 U.S. states, refuse to recognize the media's right not to reveal its sources, even threatens journalists whose investigations have no connection at all with terrorism," the group said.

The fact that relations between an administration and a partisanly hostile MSM have deteriorated is no evidence at all of actual curtailment of press freedom. At this point, the only journalists to serve time in a terrorism-related case did so because of an investigation initiated at the behest of the newspaper that published them. If RWB really believes that the administration has conducted some sort of war against hostile journalists, they've been toting more than laptops back from Columbia. (I would note the scare quotes around War on Terrorism, except that RWB might accuse me of censorship.)

Posted by Joshua Sharf at 6:34 AM | Permalink

Why is it that the normally-sensible Rocky goes all weak-kneed and gooey-eyed when the subject is Israel and its neighbors right now?

A few dozen Israeli Jewish, Israeli Arab, and Palestinian schoolgirls are coming to Denver to meet each other and you know, like, have a dialogue.

Seeking Common Ground requested that the teens' last names not be published for safety reasons.

No comment necessary.

Assertion...

"I'm so completely confused," said Lily, 18, of Guerneville, Calif....

...and...

"There's no right on either side," said Lily...

QED! I promise, any lack of context here is entirely the fault of the reporter.

"Any time you get Palestinians and Israelis in the same room together, it's a success," she said.

Unless it's a deli, schoolbus, shopping mall, pizzeria, bar, or ice cream stand. Then it's only a partial success.

When the Israeli girls talk about understanding someone else and discovering similarities, and the Arab girls "have their opinions" and are "ready to talk about differences," it says a lot about the relative confidence of their cultures.

These kinds of things have been going on for as long as I can remember, along with mushy NPR-speak about "building bridges" and "breaking down barriers." That's all well and good as long as the enemy isn't using them for resupply and cover.

Posted by Joshua Sharf at 10:12 AM | Permalink | Comments (0)

My friend Peter Baker is following the President around on the campaign trail. This morning's report from a Missouri fundraiser for Senator Jim Talent contains this technically accurate but deeply dishonest paragraph:

Sharpening his rhetoric as the midterm congressional campaign season accelerates, Bush offered a robust defense of his decision to invade Iraq even though, ultimately, no weapons of mass destruction were found, and drew standing ovations for his attacks on those who question his leadership of the war or the fight against terrorists.

The only merit in this sentence is that it so neatly encapsulates the MSM's storyline on Iraq and the politics surrounding it. And the only thing that allows the Post to publish something like this without abject shame is their years-long ostrich-like refusal to publish anything that doesn't fit.

Saying that, "Bush offered a robust defense of his decision to invade Iraq even though, ultimately, no weapons of mass destruction were found," is like saying that, in 1778, Washington defended the Revolution even though there was trade with Mexico, meaning that George III hadn't quite, "cut off trade with all parts of the world."

Never mind that they have been found. Never mind that the WMDs were merely one reason for going to war in the first place. Never mind Iraq's running a pre-war bed-and-breakfast for Islamist terrorists. Never mind the Duelfer Report's findings that Saddam was planning to restart his WMD production after his hos on the Security Council got sanctions lifted. The war was all about WMDs, and the fact that we haven't found Castle Anthrax makes it a failure.

The second half of the sentence is no better. The President takes hits all the time for his "leadership of the war." What he's objecting to here is something very specific - the attempt by politicians to run the war by PERT chart, or at least to score points by appearing to try to do so.

The Post is trying to narrow the focus of the war to a point it can pretend it's won, while broadening the President's presumed response into Ray Bolger.

And no Post political story about the President would be complete without the obligatory Bush-as-Rove's-sock-puppet reference:

In his appearance in this St. Louis suburb, he said directly that some Democrats want to surrender, adopting the more cutting approach of his senior political adviser, Karl Rove.

The fact that this is exactly the take that Congressional Republicans, in one of their few recent moments of lucidity, used exactly the same language is of no moment whatsoever. Pay no attention to the man behind the curtain.

This is how the MSM and the Post will make use of the narrative they've established.

Posted by Joshua Sharf at 5:36 PM | Permalink | Comments (0)

Warren Buffett, in addition to his admirable philanthropic endeavors, has also been trying to make sure that the Federal Government continues to be the recipient of your largess from beyond the grave:

The world's second-richest man, Warren Buffett, has asked Sen. Ken Salazar to vote against repealing the estate tax.

Buffett sent a letter to Salazar, D-Colo., the senator's spokesman, Drew Nannis, said. The multibillionaire Monday called on Congress not to repeal the tax.

...

Repealing the entire estate tax now would cost the government an estimated $550 billion to $700 billion through 2010. (emphasis added - ed.)

The Post gives no citation for this number, nor does it consider the additional wealth that will be created by businesses that can, well, stay in business after their owners die. If the estate tax comes back, it will be on estates over $1 million. Most estates over that number aren't just cash sitting around under mattresses. They're in businesses that employ people.

Larger businesses tend to be separate corporations, but the smaller businesses hit here are often partnerships or sole proprietorships that tend to struggle for cash. They would have to sell all or some of their assets just to pay the IRS. In all likelihood, they'll sell to larger companies. Even assuming that everyone stays employed - a bold assumption at best - these transfers concentrate wealth, they don't diffuse it.

The Post also fails to notice that Mr. Buffett hasn't been such a big fan of paying unnecessary taxes himself:

Mr. Buffett’s decision to give away to charity Berkshire Hathaway stock valued at about $37 billion, much of it to the Bill and Melinda Gates Foundation, is the sort of bold move that has made so many Americans admirers of Mr.Buffett. As an avowed supporter of the estate tax, Mr. Buffett could have let the government take its share of his estate after he dies. But just as Mr. Buffett has accumulated his vast wealth without paying much personal income tax, he has found a way to avoid the tax man in this maneuver as well, even writing in his letter to Bill and Melinda Gates that a condition of the gift is that the foundation “must continue to satisfy legal requirements qualifying my gifts as charitable and not subject to gift or other taxes.”

(Hat tip: Best of the Web)

Posted by Joshua Sharf at 9:06 AM | Permalink | Comments (0)

The Denver Post and Rocky Mountain News continue to ignore the good economic news in the ISM's Regional Reports on Business. The Institute for Supply Management's monthly national survey is one of the most respected and widely-followed economy surveys, covering as it does the expected purchasing and hiring trends, as well as the trailing indicators of price and supplier performance.

In addition to the national survey, the ISM also publishes monthly regional surveys, one of which is based in Denver.

For the last two months, the manufacturing survey has been extremely strong. This month, the more violatile non-manufacturing index moved from slightly negative (49.4) to solidly positive at 53.2.

The Rocky gave plenty of space to the unreliable Index of Leading Economic Indicators and the one-week increase in the volatile Jobless Claims, ignoring the decline in the more reliable 4-week moving average.

Personally, I believe we're cresting the economic cycle, but economic news is always mixed. Eliminating the positive while accentuating the negative doesn't help anyone make informed decisions.

Posted by Joshua Sharf at 11:29 AM | Permalink | Comments (1)

In From the Cold had this to say about the MSM's treatment of the chemical and biological shells found in Iraq:

The MSM--if it ever gets around to this story--will likely claim that Santorum and Hoekstra are playing politics with intelligence.

From this morning's Washington Post (buried on Page A10):

The intelligence officials also suggested that they were pressured by Hoekstra into declassifying the study in recent weeks. Hoekstra first sought its release June 15 and June 19 and made the request again giving John D. Negroponte, the director of national intelligence, 48 hours to declassify it, according to a senior intelligence official.

In From the Cold does what the Post declines to - describes the way intelligence now operates that makes such pressure necessary:

As a young intelligence officer, I was drilled that important information should make its way up the chain of command as soon as possible. Apparently, things have changed since I left the business. Information that contradicts prevailing judgements can be ignored, or simply buried on an intelligence website--let the customer find out on his own. If members of Congress want information, simply delay your response as long as possible, and provide data only when someone with enough horsepower (in this case, the HPSCI chairman) demands answers. Then, provide only a fraction of what they ask for.

Posted by Joshua Sharf at 8:39 AM | Permalink | Comments (0)

Well, yes, actually, although you wouldn't know it from this morning's addition to the "Yes, but" Chorus from the Rocky.

The al-Qaida leader's demise has given the Iraqi people "a lot of hope and optimism," said Joe Rice, a former Glendale mayor and Army reservist who recently completed his second tour in Iraq.

Joe Rice is also running as a Democrat to succeed Joe Stengel in the Colorado House's 38th District. Should our friend Matt Dunn win the Republican nomination, this is the guy he'll be going up against.

Rice has actually been over there, so he does have some expertise on the situation. But doesn't it behoove the Rocky point out when they're giving free pub to a candidate for office?

Posted by Joshua Sharf at 6:54 AM | Permalink | Comments (0)

In addition to its monthly national survey, the Institute for Supply Management publishes a series of local and regional reports as well. Denver's manufacturing sector is lucky enough to be included in the list, and April's report explains why state tax revenues are going through the roof, and would have solved the budget problem on their own, without a need for Ref C. (It's a terrible thing when a governor loses faith in his own state.)

Now, it's worth remembering that the local reports often cover either only manufacturing or services, which narrows the base even further. As a result, these reports tend to be more volatile than the national survey. And yet.

Looks, it's not all three-martini lunches and Tyco Analyst Days parties. The cycle is starting to hit some self-limiting factors, such as price increases in a time when nobody seems to have pricing power, a labor shortage, increasing lead times, and suppliers who can't seem to get copper or components onto the trains fast enough. But those are good problems to have. They're somewhat manageable, and are problems of prosperity.

In fact, even the Raw Materials story isn't all glooomy. Raw Materials inventories are rising, even as prices and lead times rise, and supplier performance deteriorates. if managers are complaining they can't find tungsten, maybe it's because they're hoarding the stuff.

The time to worry is when these guys are blowing dust off their inventory and their LIFO reserve starts to rival their equity.

These surveys were only published today. Let's see if the local papers bother to pick this up. After all, you'd think that business sections that have space for the Annual Tucler Hart Adams We're All Going to be in Hoovervilles This Time Next Year While The Bank Directors Use Our Those Vacant Unsold Homes For Their Dogs, might be available to cover a survey with national juice.

Posted by Joshua Sharf at 8:52 PM | Permalink | Comments (0)

Mais Non!

If the French government cared about business, the fact that their businessmen get it might matter.

Posted by Joshua Sharf at 7:37 AM | Permalink | Comments (0)

Yesterday, Glenn Reynolds suggested some things that newspapers could do to become more relevant and to stay alive:

• First, I think I'd skip the "paper" part.
  
• Second, I'd put some of the money I saved ... into hiring reporters and writers
  
• Third, I'd stop insulting readers.
  
• Fourth, I'd get readers involved.
  

On the same day, the WSJ (subscription required) discussed things newspapers are trying to do to make themselves more profitable:

• New, smaller-circulation papers targeted at people who don't read Generation Y
  
• New, smaller-circulation papers targeted at communities
  
• Free (or low-cost) classifieds
  
• Having search engines return advertising
  

Notice a difference? Reynolds is concerned with product; the WSJ is concerned with revenue model.

The WSJ also included this little bit of incoherence:

Newspapers remain a profitable business, despite the high fixed costs of printing plants, news-gathering staffs and home-delivery operations. As the primary advertising option in their local markets, most newspapers have enjoyed significant leverage with advertisers. They use that power to raise prices.

In 2005, publicly traded U.S. newspaper publishers reported that newspaper operations produced operating-profit margins of 19.2%, down from 21% in 2004, according to figures compiled by independent newspaper-industry analyst John Morton. He says that figure is still more than double the average operating-profit margin of the Fortune 500 companies.

Without seeing Morton's numbers, it's hard to know how he got there. It's also hard to see how this squares with the fact that newspapers have only maintained any profitability by cannibalizing each other at a rate that would make Idi Amin squirm. And self-cannibalizing, as well, which is the point of Reynold's item ). And raising prices in a declining market has a certain air of Detroit about it.

The fact is, both approaches are necessary. All of Reynold's product improvements won't make any difference if they can't figure out how to make the thing pay. Some newspapers are experimenting with the Net. The WaPo has turned the blogosphere into its comments section (although some blogs seem to ping generously in order to attract traffic). The Rocky has tried to get bloggers to cross-post in YourHub.

I got an email a couple of weeks ago from a local section editor asking for advice on what stories to cover. But if he had been reading the blogs, he wouldn't have needed to ask. (I answered anyway.) Mike Littwin insists that newspaper guys read the blogs obsessively, but the blogosphere itself (through Newsbusters, Powerline, a dozen other media-watch blogs) provides evidence on a daily basis that it's not doing much good.

To some extent, this is a matter of self-selection. After all, the Journal is a newspaper, and a business newspaper, so it's likely to focus on things like operating margins and revenue streams. Yet, in the past, it's covered other industries with far more attention to product, so I'm inclined to think that this isn't the business bias of the paper. To the extent that the Journal accurately reflects what newspaper magnates are thinking, they're decidedly not looking at their product.

And Detroit can tell them all about that.

Posted by Joshua Sharf at 6:57 AM | Permalink | Comments (0)