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How would you “stimulate” the economy? March 7, 2009

Posted by Jeff Block in Business, Economics, News, Politics and Culture.
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stocks_droppingAs much as I’ve tried not to watch the news any more than I have to, it’s hard to get away from all the talk about Washington’s “stimulus package” and the subsequent unbelievable spending that’s followed in its wake.  President Bush, proving once again not really to be a fiscal conservative, participated in the first “rescue plan” last year for hundreds of billions of dollars, which was at that time the largest single charges against the federal credit card in the history of the nation.  Now, President Obama, in no way conservative, has broken the record with a second package at about $800 billion dollars.  Both will top $1T easily when you include interest payments.  Democrats and Republicans alike (shame on those calling themselves conservatives!) have taken us from $6T to $10T in national debt under President Bush, which took 8 years.  Now we’re likely to jump another $1T in the first MONTH of President Obama’s presidency, and the new budget has the deficit at $1.6T, so the debt will be climbing from this point at a rate of over $1T per year, unless something changes.  Now, there’s talk of TARP 2.0, government taking over healthcare and the banks, the auto industry asking for more money, mortgage bailouts, and STILL the Omnibus for 2009-10 is packed with pork.  I think the latest estimate is like 8,500 to 9,000 earmarks.

I don’t know about you, but my head’s starting to spin … and my stomach’s starting to churn.

Not only is this amount of debt totally irresponsible, it’s ridiculous.  It’s borrowing against the future and writing checks our children and grandchildren and great grandchildren will have to try to cover, and likely won’t be able to.  But what’s even more ridiculous to me is what we’re spending the money on, which in my view will NOT “stimulate the economy”.  I didn’t like the first stimulus/rescue/crazy spending plan (whatever you want to call it) under Bush, and I like the official Obama stimulus plan even less.  And I don’t even want to think about a third, which DC is already doing.  If it were up to me, I’d recommend less government involvement in the free markets, not more.  In my view, it’s not capitalism that’s failed here, it’s government’s interference with capitalism that’s (once again) been clearly shown to lead us down the wrong road.  My concern is that we’re finally getting to the stretch of road where Socialism replaces Capitalism, and we get to be like France and Canada … yippee!

So, as much as I’ve tried not to blog political lately, I really do want to try to understand how what we’re doing right now makes any sense at all.  I have a few ideas on what I’d do to stimulate the economy if I was king for a day, and they’re all totally opposite what we’re doing.  But rather than posting those (and fighting over them), I’m more interested in getting answers to two basic questions…

First, how will what we’re doing actually stimulate the economy? I truly don’t understand the thinking here.  First, it seems like we’re spending when we’ve already overspent.  It’s like gorging yourself on the all you can eat buffet, and then when you feel sick to your stomach, someone prescribes that the solution is to chase lunch with a 3/4 pounder from Fuddruckers (with extra fries and those awesome cookies).  How does that make any sense?  If you came to me and said that you had credit card debt equal to 2/3 of your annual income, and I told you that what you should do is increase your spending by 60%, you’d laugh in my face.  But that’s exactly what we’re doing.  National debt is $10T, 2/3 of the GDP which is roughly $15T.  2008-09 budget was $2.9T (already insane).  Obama’s proposed 2009-10 budget is $4.6T, an increase of 60%.  How does that make any sense?

And Obama’s stimulus plan doesn’t make any sense to me.  Even if I concede to his declaration that there are NO earmarks (a debatable point) and believe every word about the jobs he claims he it will create (another debatable point), still all the jobs will be government jobs and temporary at best.  If the bill funds building a new road, then the government pays a construction company to build a road.  That’s good.  But when the road is done, the construction company is no better off than before the road was built.  It seems like we’re asking for a cycle like the auto industry is in…  Come ask Uncle Sam for money, spend it, then come ask for more.  That’s the wrong idea.  Wouldn’t it be better to use government money (if we’re going to use it at all) to give private industry the tools to create more jobs, open more lines of business, create new markets, etc?  Doesn’t seem like we’re doing much of that.

All I see when I look at the current “stimulus” plans are short term fixes and more dependency.  What am I missing?

Second, what would you do if you were in charge? How would you guide / lead America right now?

I’ll give you an example to get us started.  If I were in charge, I would create a couple year window during which you could deduct 100% of capital investments.  Currently, you have to ammortize your deduction over several years.  If all of a sudden companies could buy a new piece of equipment or build a building and deduct the whole expense immediately, wouldn’t they be incented to expand NOW rather than wait to do so.  Wouldn’t that create new jobs and expand business immediately and entirely in the private sector, without creating increased dependence on the government?

Another example:  I’d increase military spending by 10%, not decrease it.  Then we’d spend more money on planes and tanks and other equipment, which American companies could build.  Why wouldn’t that stimulate the economy?

But I want to hear your ideas.  What would you do?

Fair and Balanced? December 11, 2006

Posted by Jeff Block in Media, News, Politics and Culture.
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This one’s been a while in coming…

Is the press in America “free and neutral”, as prescribed by the Bill of Rights?  This is a question that evokes adamant response from lots of people.  Many would swear on their grandmother that the New York Times (for example) is predominantly liberal and wouldn’t give President Bush (for example) a fair shake if their lives depended on it.  Others scream and yell that most of the media is “fair and balanced”, and that it’s the Fox News Network that’s gone off the rails in their conservative bias.  I feel like I’ve heard just about everything.  Maybe there’s no bias at all.  One of my friend’s claims that all news is biased toward the sensational, not in one ideological direction or another.  Some contend that the senior staff at the Fox News Channel meets every morning to read through the talking points faxed to them by the White House the night before and to go over how they’ll spin their programming conservative that day.  Others contend that the networks plus CNN get their marching orders directly from satan’s representative to the UN.  Does the “elite media” really hate Bush, so they’ll simply never give him a “fair shake”?  What is the “elite media” anyway?  Some content that there’s no real ideological difference between CNN, FNC and the BBC (to name a few).  So, what’s the deal?  To borrow a phrase from my Bill O’Reilly, who’s looking out for us?

I’ll start with what’s fresh in my mind…

I recently saw a shoot-out between Bernie Goldberg and Jane Hall on FNC.  These two disagreed vehemently on the topic of liberal bias.  Bernie took the traditional conservative point of view — that most of the media tilts left, and specifically is unfair to President Bush (that was the real topic of their debate).  Jane feels there is no bias, and that indeed the media should be harder on Bush.

Bernie cited two examples to prove his point…

After the Republicans gained control of congress in 1994, much media focus was given and much speculation aired as to why that had happened (and rightfully so).  Peter Jennings (for example) compared the voters who voted republican to “two year olds throwing a temper tantrum”, as an explanation for why the democrats lost.  Bernie contended that if the Democrats regain control of the congress next month, reporting will be very different.  (This was before the 11/8 election.) He has a hard time imagining that the general attitude among the descendants of Peter Jennings (and others) will play it the same way … and so did I.  It seemed much more likely that we would hear the same thing from most of the media…  that President Bush is a lying, war-mongering, election-stealing, fascist, rights-violating, power-grabbing incompetant, who finally got what was coming to him because the congress has shifted power.  And this is pretty much how it played out.

Bernie also cited a comparison between headlines under Bush and headlines under Clinton.  He described the following example…  When the Dow Jones reached record highs in October (and still climbing), the Chicago Tribune’s headline was “As Dow Surges, Many Left Behind” — a negative tilt.  In 2000, another time the Dow surged to record highs, the same paper ran a different headline, “Bull Market Spreading the Wealth in America” — a positive tilt.  These are only two headlines, and they’re obviously cherry-picked to demonstrate his point, but I think there’s some legitimacy to what he’s pointing out here.  Clinton was hailed as a wonderful president by both domestic and international news sources.  He got beat up over Monica Lewinski, but was pretty much the golden boy on everything else.  Bush has been attacked every single day by SO many people that it blurs together.  Maybe I’m just seeing what I want to see, but I don’t think so.

Jane disagreed with Bernie, but really didn’t have any data to refute Bernie’s argument or offer counter-point examples of a lack of bias.  She simply insisted that she was right and Bernie was wrong.  Even this reality helps reinforce for me that there’s more to Bernie’s arguement than hers.

Let’s leave these two behind, and look at some other data points…

The Center for Media and Public Affairs (CMPA) is a nonprofit, nonpartisan research and educational organization that conducts scientific studies of the news and entertainment media. They conduct research reports on news coverage of such diverse issues as economics, science, and politics.  The CMPA recently analyzed the coverage of the president by ABC, NBC and CBS year-to-date in 2006, and discovered that 75% of the coverage of the president was negative.  That’s an incredible leaning toward “anti-Bush”.  Does it say that the press is liberally biased?  Not necessarily.  I’d like to see analogous studies during past presidents’ terms.  Plus, war is never a good thing for a president.  But this definitely doesn’t refute the “liberal bias in the press” thesis.  (BTW, here’s the complete study if you want to look it over.  Very interesting.)

A recent study conducted by UCLA’s Department of Political Science (no bastion of conservative thinking) concluded that there is indeed “a very significant liberal bias”.  They cited that only one program on Fox News was left of the average position in congress, supporting the claims made by people like O’Reilly that FNC has opinion all over the map, while most outlets predominantly allow opinion clustered only around group think liberalism.  A side note…  This can be combined with another UCLA study (HypergeneMediaBlog’s highlights) which showed that 53% of the population generally believes what they read on the Internet, and it becomes easy to understand why a bias in the media is so significant.

Last data point…  Recently, I made the commitment to Neva that I would return to listening to NPR occasionally to get some more exposure to “liberal media”.  Having listened to several hours of NPR over the last few weeks, my opinion is unchanged.  It seems to me to be clearly tilted to the left.  The opinions given credence there were liberal, and the opinions that were demeaned (most commonly in the tone of voice / slant of the way they were questioned) were conservative.

So, based on my experience, and a few evidentiary data points, I conclude that the media generally tilts left.  Why do I think this is?  Well, let me tell you…

First, I’ve already talked about left-brained vs. right-brained people, and how they naturally gravitate toward certain professions and not others.  Journalism is a *very* right-brained profession.  So, if you accept any of my theories about right-brained types being more liberal, then this helps explain the bias.  But even if you don’t, read on…

Almost all of the most significant media players in the country are clustered together in a few couple-square-mile areas.  Manhattan island, certain parts of LA, etc.  For example, every journalist who works for the NY Times (facesiously, but you get the idea) lives within one mile of every other journalist who works there.  These folks all go to the same parties, bars, restaurants, meetings, etc.  They all know that if you walk into one of those parties and say, “I just published my column on how wonderful President Bush and the Fox News Channel are”, then they’re ostracized.  Might as well be a lepper.  So that’s just not going to happen.  It creates (even subconsciously) group-think … because everyone wants to be accepted by their peers.

And that’s assuming that openly liberal heads of organizations (such as Arthur Sulzberger at the New York Times) would even hire someone who thinks radically differently than they do, which doesn’t seem likely – unless (as the LA Times has done of late) they are making an intentional effort to create a balanced perspective inside their organization.

Other thoughts?  I know they’re out there.

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