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Teh Stupid Hurts

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by shep

What a surprise, the ever-angry howler monkeys on the right started flinging at the news that the government facilitated an industry agreement to freeze rate resets on certain categories of adjustable rate mortgages to: 1) help prevent a housing value collapse from tanking the economy leading to recession, 2) protect mortgage lenders and downstream investors from winding up with $billions of negative equity properties, 3) protect otherwise responsible home-buyers from losing their homes chiefly because of the (free-market) vagaries of the real estate market.

Much like the hue and cry that sank immigration reform (legalizing our cheap, immigrant labor force) this is another byproduct of decades of conservative/Republican propaganda leading to mass insanity based upon provably false ideology. It’s why someone like Lou Dobbs can spew racist hate-speech for an hour on what is euphemistically called a news channel.

Now I’m the last person to root for another government bailout of industry as we suffer (as we always do) from it’s own avarice, amorality and obviously unsustainable profit-producing practices (it would be far better to diligently regulate it in the first place). But the fact is, my little free-marketeers (like Mouseketeers but without the sweaters and “the funicellos”),

That. Is. Why. Industry. Needs. Government.

In this case, there is simply no mechanism to bring all of the affected commercial interests together to even create such a mutually beneficial deal (they’re competitors, remember?).

The financial instruments, structures and effects are so complex that no one in industry really understands them entirely.

If government can act as broker for a voluntary policy that seems to benefit everyone (including, uncharacteristically, even consumers) and costs no taxpayer money, what is the harm?!

The Wall Street Journal doesn’t like the idea because they see it as, “forcibly rewriting financial contracts.” The Journal’s editors apparently don’t share any of my credit card companies who forcibly rewrite our contracts on a regular basis. Besides it’s, um, VOLUNTARY!

The main popular objection seems to be that it’s somehow unfair to people who aren’t having a problem and it’s guvment, “interfering with the market.” Helllooooo, (I’m typing this slowly), without government regulation, There. Is. No. Market (unless you plan to devolve the marketplace to handicrafts and yard sales).

Are you like eleven? Have you seen how many times the “godamn govament” has had to step in to rescue us from industry and industry from themselves? Ever hear of the Savings and Loan crisis and the Dot Com bust? Enron anyone? (I know, it was all the govmint’s – or, alternately, the Democrat’s – fault).

Seriously, you people have been sold a contrived, thoroughly disproved ideology, you are always wrong about the role of government and you really need to STFU. There is no such thing as a healthy, highly-functional marketplace without a healthy, highly-functional government (that means run by people who understand and believe in it).

So, until the grownups can somewhat right this listing ship of state, limit yourselves to emailing Lou Dobbs. There, no one will notice teh stupid.

[Cross-posted at Dispassionate Liberal]

by shep

John Rogers:

This is where I'm always amused at libertarians, because they so love markets but never seem to understand how business actually works. If you, my fine libertarian friend, decide to forego the union and negotiate your own contract vis a vis residuals (or pretty much anything else), you will find that unless you are one of the maybe eight out of 12,0000 most famous and profitable writers in Hollywood, you will get exactly the same deal from each studio, or slightly worse. Because what possible motivation would they have to share their profits, relative to each of the other five competitors? That's just common sense.

Rogers is obviously talking about the writers’ strike – cruise the whole blog if you want a great writer’s perspective on the issues.

But he also make a great point about Iibertarian “free-market” types: they have no idea how the marketplace really works, suffering mainly from the delusion that the market is always a force for competition and good (Microsoft, Enron and Halliburton, they never explain). Rogers uses a great Chris Rock joke as a metaphor for the amoral, predatory nature of business:

One of my favorite jokes, just a lovely piece of writing, is Chris Rock's bit about the time one of Siegfried and Roy's tigers mauled Roy.

"Everybody's mad at the tiger. 'That tiger went crazy!' That tiger didn't go crazy ... that tiger went tiger."

This is how I feel about corporations in general, extended to the Studios in particular. There are those who rail at the AMPTP for being profit-maximizing heartless, soul-less bastards as if that were a bad thing. It's not.

A corporation's job is to make money, and if necessary fuck you in the process. Just like a tiger's job is to eat, and if necessary kill you in the process. I'm okay with that. I like capitalism. A lot. I like tigers. A lot. That doesn't mean I trust corporations not to try to screw me and everyone next to me when negotiating. Nor would I trust a tiger not to attack me in the wild. Nor am I personally offended when they try.

Exactly. It’s just business. But that is why you need regulatory government and institutions like unions to make it a fair fight. You alone, against the tiger, will soon be jungle fertilizer, ten times out of ten.

And the problem stretches the tiger analogy when you look at the other worst consequence of unregulated “free-markets”: pretty soon the biggest, baddest, most ruthless tigers start eating their own until there are only a few left that can survive (see Microsoft, Enron and Halliburton). In other words, competition – the supposed source of predictably “good” market outcomes - gets gobbled up by the market itself if left to its own amoral, greed and power-based nature.

You’d think that these facts would be self-evident, looking at what has actually transpired in marketplaces and societies throughout history, relative to the strength of existing trade unions and other worker and consumer-based institutions and (very occasionally) liberal, democratic government. But that’s reality-based thinking and, I’m sure, not nearly as satisfying as a simplistic, comforting worldview about business, government and human nature gleaned from a work of bad fiction.

[Cross-posted at Dispassionate Liberal]

The People's Choice

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by shep

I’m convinced that the only way anyone is going to beat Hillary to the Democratic nomination and lock up the general election is through a real-deal, fire-breathing appeal to populism. John Edwards has the closest thing going but, so far, he lacks a cohesive frame and focus (besides being too young and pretty for the current state of nervousness in the electorate).

The trouble is, the only true populist message is an anti-corporate one (why Lou Dobbs comes off as a racist xenophobe rather than a true populist) and no one in the rarified world of national politics would ever consider such a thing. The idea is so antithetical to corporate media, corporate lobbyists, corporate political consultants and corporate-financed politicians that they simply can’t see the utility, even the necessity, of it.

Nevertheless, on every major domestic crisis from healthcare to energy policy, it is the parochial (and, in many cases, short-term and ultimately unwise) desires of corporations and the outsized influence they have on US policy that stands directly in the path of progress. And anti-corporatism is the only way I can see for Democrats to get out in front of the immigration debate (without pandering to racists themselves), which will be the key to the ever-critical independent voter in ‘08.

Simply put, on every issue that Americans care about, there is a corporate interest that can be shown to be part of the problem. An anti-corporatism message would immediately rally the Democratic base, which is deeply suspicious of Clinton’s corporatist bona fides. And used to frame Iraq (Haliburton and Blackwater), illegal immigration (Tyson and Tropicana), healthcare (Blue Cross), Katrina (Bechtel) global warming (Exxon and Conoco), there is position to be taken on the side of the interests of middle and working class people against unsympathetic, predatory corporate entities.

It really is a big part of the Great Village Disconnect that none can utter the truth that almost everyone understands: our world is being raped and pillaged by corporate greed and the past Republican-run government (aided and abetted by corporatist Democrats) has all but held the down victims (think bankruptcy bill) while industry applied the lube (consumption on credit). But there is simply no way to really run against Republican corruption and malfeasance without pointing to the fact that they are doing the exact bidding of their corporate masters (the fact that Democrats share some of those same bosses partly explains their resistance to do so).

But it really shouldn’t be so hard. The argument can be made in the framework of reinvigorating government’s role as protector of the public interest without bashing business generally, just corporate excess and corruption of government. Corporations are good for the world; they are the engine of technical and economic progress, but they should not be writing the public policy of the United States of America. Dick Cheney’s “Energy Task Force” could be the poster child for the problem, if the people are ever allowed to see what their elected Vice President did in their name.

Public-interest vs. corporate-interest populism opens the door to every key Democratic policy approach to restore this country: healthcare reform, economic reform, energy policy, campaign finance reform, media ownership, even war policy (and it moves Democrats outside the simple Republicans vs. Democrats kabuki dance that people have long-since tuned out).

The people are angry at the fact that these problems grow, unaddressed, even as they try to change the political leadership of the country. And they have a good sense of why. I suspect that many of them, maybe without even knowing it, are just waiting for someone in the political and media establishment to simply say out loud who and what is to blame.

The fact that this cannot happen in American politics shows exactly why it needs to.

[Cross-posted at Dispassionate Liberal]

Moyers Does Murdoch

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"If Rupert Murdoch were the angel Gabriel, you still wouldn't want him to own the sun, the moon and the stars. That's too much prime real estate for even the pure of heart."

When it comes time to talk straight about the "the cascading series of mergers, buyouts and other financial legerdemain that are making a shipwreck of journalism," there isn't a better commentator to turn to than Bill Moyers.

And if there is anyone who personifies this corrosive effect, it's Rupert Murdoch.

So on Friday evening's Bill Moyers' Journal, Moyers takes Murdoch, the man who "hires lobbyists the way Imelda Marcos bought shoes and stacks them in his cavernous closet along with his conscience," to the woodshed.

by shep

It has always struck me as odd when libertarians express their hostility toward Democrats for their approach to regulatory government. Beside the obvious fact that it has consistently proved essential for the health and safety of individual Americans and the reliable functioning of markets, what would so aggravate liberty rights advocates about regulation of industry? It took me a while to realize – H/T to Trey and Matt – that they have been completely indoctrinated with belief in “corporate personhood.”

Yesterday’s Supreme Court action points up the inevitable conflict libertarians face if they continue to fail to recognize the inherent differences and conflict between the constitutional rights of individual persons and the supposed rights of corporations. These rights were conflated in the late 19th century by corporate lawyers and judges representing railroad interests but have no basis in the US Constitution. Simply put, corporations aren’t “persons,” in whom all constitutional rights are vested.

For liberals, nothing could be more obvious than the intrinsic conflict between the rights of the individual and the rights of corporate entities. Mainly, this comes in the form of the complete indifference of the corporation to the rights of the individual – ironically, the opposite of the libertarian – and the circumstantial conflicts that occur when amoral corporations seek to use people to make things and sell them to other people, irrespective of the benefit of the making or the selling to people.

Liberal Democrats understand that not only is corporate power the real threat to individual rights, the critical political and public policy issues essentially revolve around the question of whether government winds up being an instrument of industry, often working against the interests of the individual, or a bulwark against the abuse of the rights of individuals by industry.

So now libertarians know. Republicans are finally making it clear what they successfully obscured with their silly “free-market” ideology and rhetoric these many years. They don’t give a rat’s ass about the constitutionally guaranteed liberty rights of individuals, relative to the corporate-created liberty rights of industry.

I wonder if libertarians will finally see how they’ve been fooled and used in time to stop this Republican-led, anti-individual-rights cultural revolution before it’s too late. If they do, there’s a political party that already shares their conviction about individual liberty rights.

Derrick has a great post about how YouTube Won’t Be Able to Match the Appeal to Advertisers of the News Corp/NBC Video Site.

That said, I wouldn't count Google out just yet.

Here's why:

Clearly the NBC/News Corp venture is all about creating another advertising medium not much different than broadcast/cable TV. That is a proven model of revenue and profit generation that goes back nearly 75 years.

But it won't replace YouTube (or its successors).

Why not?

Because NBC/News Corp. is a top-down approach (e.g. broadcast TV) and, as such, is different than YouTube which is P2P and/or bottom-up. There is plenty of room for both models.

And not only that...

I believe that the studios and Google could both have profited far more by working together than working apart. But, for whatever reason (e.g., "control") this isn't happening. As a result, both parties will make less money than if they had cooperated.

In short, we're talking about the demand for apples AND oranges. Why not sell them both in the same market instead of... well you get the picture.

We've seen this before -- remember how the recording industry "greeted" Napster? Yes, Napster is gone, but the recording industry ain't doing so well either. In fact they were so sick back then they couldn't attend the funeral of the goose that laid the golden egg.

The only one who could walk away under his own power was the customer who now controls the market more than ever.

This time it might be worse for the studios. Here's why...

The main difference between Google and Napster is that Google has deep pockets (Napster had no pockets) and Google has diversified the implementation of its technology. Oh, and their market cap is ... approximately a lot more than Viacom, et. al.

These are just a couple of reasons why I wouldn't bet against Google right now.

The weasels that work at network TV think this is all about chasing after the audience that fled broadcast television for the Internet.

Fox parent News Corp. and NBC Universal said Thursday they will launch a free online video site this summer, featuring full-length movies and television shows in a challenge to Google Inc.’s YouTube.
I'm...underwhelmed.

First off, this isn't a "challenge" to YouTube. If anything it is a "challenge" to whoever is in the business of providing one-way broadcast/cable TV content over the Internet.

I don't know who that is -- but I know who it ain't: YouTube.

The audience at YouTube downloads video AND uploads it too. From their desktops. From their cellphones. From their laptops. Not only that -- it's a social medium much more than it is an advertising medium (which is what broadcast TV is). YouTube is bottom-up video; it is point-to-point video.

Not so this new venture -- it is top-down all the way.

“This is a game changer for Internet video,” News Corp. Chief Operating Officer Peter Chernin said in a statement. “We’ll have access to just about the entire U.S. Internet audience at launch. And for the first time, consumers will get what they want — professionally produced video delivered on the sites where they live,” he said.
Consumers want that? Really? I'm skeptical.

It's all the way down in the eighth 'graf before you get to the nut:

The Internet video market is key to the future of media and will be vast enough to accommodate competition, analysts said. But one missing element they noted is the ability for users to upload their own videos — a function that has made YouTube so popular with the younger audience.
You think?
NBC and News Corp. sought to woo additional media companies into its partnership, including Viacom and CBS Corp., which are both controlled by Sumner Redstone, according to people familiar with the matter.

Viacom said it welcomed the new venture as a vehicle for spreading entertainment online while protecting copyright holders.

"Spreading entertainment..." Right -- that's what you do with manure.

YouTube logoLots in the news recently about how rocky is the road travelled by Google in trying to make YouTube an online video money-making powerhouse. The always-excellent Internet Marketing Monitor has catalogued a series of "setbacks" suffered by Google recently:

...and so forth.

I know how they feel. I believed that Google couldn't help but succeed, given the enormous amount of money that Google's audience represents in advertising revenues. Reading these stories was a disappoitment because I felt that Google might let this opportunity slip through its fingers.

But then I thought about it some more and here is what I found…There is plenty of blame to spread around.

In fact, although you could blame Google, I think the lion’s share of the blame should rest with the studios — based on their ignorance, greed and a desire to control forces that are grossly beyond their control.

Hear me out and consider this:

Of all the studio honchos that I’ve read about, only Anne Sweeney, president of Disney-ABC Television, got it right when she said “We want to go wherever our viewers are. Viewers have control and show no sign of giving it back.”

Is she really the only honcho who understands that the viewers are walking away (in droves!) from “traditional” movie, music, and broadcast TV prodcuts? Maybe not. But she does show a refreshingly pragmatic approach to the market.

Seems obvious — there’s no putting the genie back in the bottle. That said, Disney is still taking the ultra-cautious approach, having cut a deal with board director Steve Jobs’ iTunes and not Google. And make no mistake: iTunes represents only 1/40th of the volume of downloaded music — and they’re the Big Dog in the pay-for-play music industry. Hunh.

Makes you wonder what would happen if someone offered non-DRM mp3s for, say, 3 cents each. I think there’s money to be made on that, boys and girls. But the traditional studios won’t do it because they want the Big Score.

In other words, all the other studio heads are still thinking about old patterns and protocols. For example, television networks are used to getting $0.30 and more in commercial advertising revenues per viewer for a hit show.

But the revenues from Google advertising are considerably lower than that: A page eCPM of $1 generates only a tenth of a cent per view in revenue. Multiply that by ten and you still have only a cent. But those fractions-of-a-penny have added up to billions-with-a-B for little old Google.

Yes, yes, I know: the content on YouTube is infringing on copyrighted material. But, paraphrasing Sweeney again, piracy is, in fact, a business model.

But that apparaently is too daring a concept for the studio heads. Not only that — they cannot even acknowledge that a YouTube video ain’t broadcast TV and never will be.

So, I ask you: who really has their head you-know-where?

Bottom line: movie, music and TV entertainment content isn’t worth what the studios think it’s worth — not anymore, not in a Bit Torrent/YouTube world.

In THAT world, I think Google has a better idea of what (and where) the viewers are — and where the money is coming from and how much of it there really is and how to get it.

Anyway, that’s all just my opinion. I might be wrong.

But I doubt it.

The Republicans used tort reform and smaller government as a way of firing up their base. So if the Democrats need an issue to fire up their base, insurance reform would be my first pick.

Here's just the latest two examples of what makes my blood boil:

[State Farm Insurance,] the nation's largest residential insurer said Wednesday that it would stop selling new homeowners and commercial policies in storm-damaged Mississippi because of lawsuits and legislative saber-rattling over the company's handling of claims from Hurricane Katrina.

The decision ... is the latest by a major insurance company to reduce its risks by retreating from the nation's coastlines. Allstate Insurance has canceled or weakened coverage, or refused to write new policies in more than a dozen coastal states including Mississippi, Louisiana, Florida and Texas.

"We've reluctantly come to the conclusion that it is no longer prudent for us to take on additional risk given the uncertain legal and business climate" in Mississippi, said Fraser Engerman, a spokesman for the Bloomington, Ill.-based insurance giant.

Translation: we're getting sued big time and the legislature is about to force us to pay up. So we're taking our ball and going home. So there.

This is part of an ongoing trend of insurance companies cherry picking the easiest, lowest-risk accounts in order to maximize their profits. And not only that: they have ALWAYS dragged their feet when it is time to pay a claim. In the aftermath of Hurricanes Katrina and Rita we had to nag and nag and nag our insurance company to come up with a settlement that would actually make our home whole again -- and then they raised the rates as though it was a shock to them that hurricanes happen in Lousiana.

Hel-lo? What is insurance for anyway? Don't they have any actuaries who can actually, you know, read a weather table?

Then there's this:

United Health Group, its United HealthCare and Oxford subsidiaries and several United and Oxford executives, including former United CEO William Maguire, are accused of violating the U.S. Racketeer Influenced and Corrupt Organizations Act (RICO) in a law suit filed Tuesday in the U.S. District Court...by Jamaica Hospital Medical Center and Flushing Hospital Medical Center.

The hospitals...accuse United Health Group...of implementing a “rogue business plan” on a “national level” that, for more than three years, “has contributed to UHG’s profits, which, in turn, have been utilized in attempts to justify outlandish compensation to Maguire and to enhance the value of illegally backdated options for UHG stock” which were given to Maguire, other UHG senior executives and to managers of its business units.

[...]

David Rosen, president and CEO of both hospitals, said: “UHG, United and Oxford have clearly established and refined a pattern of deceitful practices and myriad means to improperly retain money they owe to service providers, and to arbitrarily and unjustifiably deny payment for their members’ medical services under their plans.

This is why I believe that the government should be the sole provider of health insurance for everyone: at least you have a voice in how the system gets run. With insurance companies, the best you can do is be a shareholder and then it's one share equals one vote. The big guys control the system and dictate who gets covered and who doesn't. It's all about the bottom line and devil take the hindmost.

I'd be happy to see Medicare for all and an end to all health insurance companies. Period.

P.S. Read more on the United Health lawsuit.

Google Should Just Buy Viacom

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I see where YouTube has been told to remove Viacom clips. I mean come on, isn't Sumner Redstone like -- what? -- 138 years old? Google should wait til he passes on and then just buy Viacom and be done with it.

Seriously, this is more about Viacom negotiating a (better) deal with Google than it is about protecting the copyrighted material.

Think about it: 100 thousand infringing videos? NO WAY the Viacom lawyers know what's on those videos. More likely they did a quick search and cast a VERY wide net. They marking as much territory as they can right now. The ROI for Viacom will be very good -- Viacom knows a deep pocket when it sees one.

In short, what they're really saying is..."Where's my cut?"

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