Saturday, December 25, 2010

Merry Christmas Nina Totenberg

NPR’s Nina Totenberg’s recent offensive remark about Christmas (“forgive the expression”) would have had her fired had the network followed the same rules that saw Juan Williams’ contract revoked. But that is liberalism. Juan committed the unpardonable sin of appearing on Fox News, Totenberg did not. So she gets a pass.

The vicious attacks on Christianity by liberals usually peak at Christmas, one of the two most important celebrations for Christianity. Christmas is an easy target because it has devolved from a primarily a religious holiday, to a more commercial one. But even in its current form, it is a time of cheer, forgiveness and joy. It is when we enjoy happiness even in a time of war. It is when we wish peace to our enemies. It is when we sing carols and share our happiness.

I am not a particularly religious person. Only recently did I start regularly attending services, after a 50 year gap. I did it as much to please my wife as anything – but I also feel better for having done so. Last evening I attended a Catholic service, the religion of one of my daughters and her husband and their children. I felt as comfortable there as I do in my Episcopal church and as I do when I attend services at Congregational and Lutheran churches. As I sat through the service I thought about the recent attacks on Christianity and how trivial they are compared to past history. In Roman times, Christians defied lions in the Coliseum. They lived and practiced their religion in the catacombs out of fear of Roman reprisals.

Despite all of this, Christianity thrived and spread. It also survived in Soviet Russia, where the government refused the ordination of new priests and it survives in Communist China where it was banned and practiced underground until recently. Still it operates under restraints of the government. So a silly remark by Ms. Totenberg, or a suit to remove a crèche scene from a place used for dozens of years is insignificant. It reflects more on the perpetrator than on its target, Christianity.

In the spirit of the times, we all should turn the other cheek and wish these folks too can find the joy of the Christmas season. And with that in mind and in all sincerity, I wish Nina Totenberg a Merry Christmas.

Monday, December 13, 2010

Is the Washington Post about to spoil the NY Times’ big payday?

Last week Washington Post CEO Donald Graham, addressing a financial analysts conference in New York, said the Post has no current intentions of erecting a paywall to charge for his newspaper’s online content, making it one of the few papers not planning to do so. This comment was only lightly reported in the media, but it is earth shattering in the newspaper industry and especially for the NY Times which had announced it would begin charging for content in 2011.

For the past three years, newspapers have struggled with declining advertising and circulation with ad sales down on the order of 10 to 25% each year. Losses like this render their business model unsustainable. They have rued the day they decided to give away their internet content for free, and yearned to put Humpty Dumpty back together with a fee based system. But it’s not that easy. Should any direct competitor continue to provide free content, the one charging is committing suicide.

In December 2008, shortly after the election, Stanford journalism professor Joel Brinkley got the ball rolling by penning this gem:

Now, here's my idea: The newspaper industry should ask the Justice Department for an antitrust exemption that would allow publishers to collaborate on a decision to begin charging for their Web sites. No paper would have to charge, and each paper could determine its own price. But if most papers in a region - San Francisco, Oakland and San Jose, for example - began charging for Web access at more or less the same time, many readers would likely subscribe.

An unsympathetic Tim Burden on his journalism blog Printed Matters comments on Brinkley’s proposal and puts it more succinctly (emphasis added):

Brinkley implicitly understands that unless all news sources start charging at the same time, everyone will just go to the free sources, killing the paid ones quick-fast. So he proposes a government-sanctioned cartel.

It didn’t take the administration long embrace the concept. In mid-March 2009 Attorney General Eric Holder told Reuters he was willing to consider loosening antitrust enforcement of the newspaper industry. While couched in terms of production and distribution cooperation between newspapers, those familiar with the industry know these are back burner items. The only issue that counts is getting unanimity on the online paid content issue. But coordinating between competitors is an anti-trust violation that can land publishers in jail. Did newspaper publishers take Holder up on his pass? It appears so.

In late May 2009,’s James Warren broke the story that the NY Times and major newspaper chains were attending a secretive and unannounced meeting, entitled: Shhhh. Newspaper Publishers Are Quietly Holding a Very, Very Important Conclave Today. Will You Soon Be Paying for Online Content?

He goes on: Here's a story the newspaper industry's upper echelon apparently kept from its anxious newsrooms: A discreet Thursday meeting in Chicago about their future."Models to Monetize Content" is the subject of a gathering at a hotel which is actually located in drab and sterile suburban Rosemont, Illinois; slabs of concrete, exhibition halls and mostly chain restaurants, whose prime reason for being is O'Hare International Airport. It's perfect for quickie, in-and-out conclaves.There's no mention on its website but the Newspaper Association of America, the industry trade group, has assembled top executives of the New York Times, Gannett, E. W. Scripps, Advance Publications, McClatchy, Hearst Newspapers, MediaNews Group, the Associated Press, Philadelphia Media Holdings, Lee Enterprises and Freedom Communication Inc., among more than two dozen in all. A longtime industry chum, consultant Barbara Cohen, "will facilitate the meeting."One hopes it displays the same sense of purpose as, say, troubled world leaders did at Yalta in 1945 or, in a rather less respectable sector of the economy, beleaguered mob bosses did at a legendary Apalachin, New York, confab in 1957. Read it all. It will curl your hair.

Enter the Washington Post, which, it appears, was not a participant in the Chicago meeting. It has pretty much avoided the paywall issue in the past other than to say it has no plans for paid online content, similar to last week’s statement. It has become the spoiler, especially for the Times. Both have significant national and international coverage and following. If the Times goes the pay route and the Post doesn’t, online Times readers will gravitate to the Post, jeopardizing the Times’ reputation as the “newspaper of record.”

With the Post a holdout, something concerns me. It is the possiblity the administration is pressuring the Post to conform. The Post owns a substantial interest in Kaplan, a for-profit college operation. It is a highly profitable enterprise that contributes heavily to the Washington Post Co’s bottom line. Since this summer Kaplan and other for-profit colleges have been viciously attacked the in same way as the health insurance companies and bankers. And in at least one case it has led to a downgrading of Post stock. Coincidence? Maybe.

My guess is the Post is not being an opportunist. I think it has more to do with the legal aspects. While Holder may signal an easing of anti-trust enforcement, the law is the law. Another administration might not be so tolerant, and two years is not that far away. And there still remains the potential for civil suits that Justice can’t control.

Note: The last two paragraphs have been edited (12/15/2010 3:00pm).

Monday, December 6, 2010

Why is Lady Gaga’s music better protected than our state secrets?

Good question. Unauthorized publishing of Lady Gaga’s copyrighted music on the internet would most likely result in a takedown notice under the Digital Millennium Copyright Act. If that failed, then the offending website could be taken down. No such protection applies to classified material from our military or government agencies, except for the original leaker who will, no doubt, pay the price. Republishing leaked classified material carries no penalty.

Solution: Hillary, don’t stamp your cables SECRET. Stamp them COPYRIGHT.

Friday, December 3, 2010

Why the $250,000 tax threshold is so dangerous … It’s not indexed for inflation

Prior to 1981’s Kemp Roth Tax Act, which indexed tax brackets for inflation for the first time, Democrats were happy to watch inflation force taxpayers into higher and higher tax brackets. Bracket creep was the easy way to raise tax rates without putting themselves on record.

The experience of the Carter years, with inflation (CPI) rates rising to over 13.5% made indexing a high priority for the incoming Reagan administration. And indexing has worked well. But there are reminders of disastrous consequences of unindexed tax legislation, most notably the Alternative Minimum Tax. The AMT was intended to rectify the problem where several hundred millionaires were able to avoid all Federal income taxes through legal deductions. Now it ensnares millions and, because of its complexity, is becoming known as the tax accountants’ welfare act.

Lest you think Obama’s $250,000 threshold could not affect you, think again. During the Carter years, inflation rates rose from 6.50% in 1977 to 13.58% in his last year in office, 1980. It took Fed Chairman Paul Volker over three years, 20% interest rates and a recession to get inflation under control. It was bitter medicine, but necessary to stabilize the dollar. Yet the Fed now is throwing the 2-3% inflation rate limits to the winds with QE2, preferring to inflate our way out of the recession.

Nothing could be worse. Should Carter’s 13.5% inflation become the norm, $100,000 today will become the equivalent of $250,000 in about 7 years. A tax on the rich, as Obama describes it, will have the same result as the AMT, reaching deep into the middle class.

But this is the intent of Democrats. They are happy with inflation. They want stealth tax increases.