May 31, 2005

Yes, I Still Blog on Business (Links for 053105)

Even in the midst of Ohio’s hot-and-heavy 2nd District congressional primary, there’s plenty of business news and views worth noting, which I will continue to review once each business day:

  • Accounting firm Arthur Andersen’s conviction for destroying Enron-related documents was overturned today, unanimously.This is being seen as a defeat for the US Justice Department. But if the DOJ’s objective was to put Arthur Andersen out of business, the strategy worked just fine, though how that is “justice” escapes me.

    There may be plenty of other substantive reasons to go after Arthur Andersen on Enron (like the accounting they allowed for the various related shell companies that sprouted like weeds), but shredding audit docs clearly has turned out not to be one of them. The may be other cases where Andersen may be convicted with finality (WorldCom perhaps).

    But if I were among the 28,000-plus Andersen employees who had to look elsewhere for work after Enron, especially if I were among those who had a tough time finding work for a while, I might be thinking of former Reagan Administration Labor Secretary Ray Donovan:

    “Where do I go to get my reputation back?” — Reagan Labor Secretary Ray Donovan after being acquitted of corruption charges in 1987.

    As noted here (near bottom of page):

    Donovan, of course, was asking a rhetorical question, knowing full well that his name had been dragged long enough and hard enough through the media mud that no legal victory could ever fully restore his reputation and vindicate him in the public mind.

    Today, former Andersen employees can understandably ask: “Where do we go to get our company back?”

  • (A major personal pet peeve) A Friday Opinion Journal editorial (link may require free registration) on academics and athletes in the NCAA notes that when all costs are considered, very few Division 1-A athletic programs may be breaking even:

    Yet the most surprising figures to come out of this week’s meeting were not about graduating. They were about what some call an “arms race.” It seems that spending on college athletics has been growing four times faster than overall university spending. According to data compiled in several studies for the NCAA, the spenders may not be getting much bang for their bucks, either.

    In 2001-2003, both revenues and expenditures of Division 1-A athletics programs rose by an average of about 17%. If you exclude the extra money universities cough up in “institutional support” for sports, only about 40% of all Division I programs report that they run athletics in the black. More ominous yet, that statistic doesn’t reflect capital spending, e.g. for building stadiums. If that’s factored into the equation, as few as 12 of the division’s 325 member programs may be self-sufficient.

    Meanwhile, spending on scholarships and coaching salaries continues to soar. This despite studies indicating that, on balance, pumping money into athletics does not increase winning rates, or bring in more donations from alumni.

    For the time being, a train wreck is being delayed in part by institutions contributing more out of their general budgets to sustain athletics programs. Then there’s the tax otherwise known as the “student athletic fee.” For example, one public university in Florida raised more than $11 million this way in 2003-2004 and students at another state school now pay more than $11 per credit hour to finance athletics, whether they have any interest in sports or not.

    I can deal with nominal “general” fee charges for activities that improve campus life and enable activities that don’t make any money to function. But the Florida charge is NOT for those activities, and it works out to about $175 per term for a typical course load of 16 hours. To athletics, which is supposed to sustain itself? That’s an outrage. My position is: Not, one, dime. I know these examples aren’t Florida-related, but they make the point (and don’t tell me Florida college programs are any cleaner). That’s right–not one dime. Not when a basketball coach with a DUI is suspended with pay. Or when a bigtime football program has a newspaper headline list that looks like this (link should work; going to individual articles requires paid subscription). Or when college football coaches get paid like this (link may require registration).

  • Good news for New Media and news content diversity–Bad news for Network TV newscasts (and presumably, their bottom line):

    Between November 2003 and November 2004, ratings for nightly news fell 2% and share fell 5%. (despite the presidential election)

    In absolute numbers, that means that in November 2004, 28.8 million viewers watched the three network evening newscasts, half a million less than in November the year before. That is a 45% decline from the 52.1 million people who watched the nightly newscasts in 1980, the year CNN began.

UPDATE on Andersen-Enron: Opinion Journal channels Bizzyblog on the Ray Donovan quote, but makes the point that individual wrongdoers instead of the entire firm should have been pursued: “As we argued at the time, it would have been wiser for the Justice Department to go after individual Andersen partners for obstructing justice while handing over the firm to Paul Volcker, who had a clean-up plan ready to go. Instead, with one exception–David Duncan, the Andersen partner who audited Enron and turned state’s evidence–no one was held responsible.” Thoroughly unsatisfying, to say the least.

As the 2nd District (OH) Turns–The McEwens Plan a Campaign Day

Filed under: OH-02 US House — Tom @ 9:05 am

Note: The following conversation was relayed to BizzyBlog by a high-tech fly on the wall.
The scene: Bob McEwen and his wife Liz are meeting with campaign manager Nonita Via. Bob has a lot of ideas about places to visit.


Nonita Via: Good morning, Mr. and Mrs. McEwen.

Bob McEwen: Good morning, Nonita. We’ve been campaigning here for two whole months now, and we’ve gotten to know the people of this district very well. In that spirit, you can start calling us Bob and Liz, and we’ll call you NV.

Boy, Liz and I can’t wait to get out there and mingle with the people of myyyyy Second District today. We’re getting down to the last couple of weeks, so we have to plan our agenda very carefully. Let’s start in Batavia. We’ll go shake hands with the patriotic blue-collar men and women at the Ford plant there.

Liz McEwen: Good idea, Bob. High-paying manufacturing jobs are so important.

NV: Uh, Mr. and Mrs. McEw-, er, Bob and Liz, that’s not a Ford plant any more, and hasn’t been for over 5 years. Now it’s a joint venture between Ford and Z-F.

Bob: Ford and the F what?

Liz: Hey, no F words around here.

NV: No, no, Mr. and Mrs., er, Bob and Liz. The name of the other company in the joint venture is ZF Friedrichshaefen.

Bob and Liz: Oh. (pause)

Bob: They still make transmissions, right?

NV: Yes.

Bob: Well, at least that hasn’t changed. But The F–sorry, Liz, I mean Z-F– probably wouldn’t be the best place to go to show my support for American companies.

NV: Especially since the UAW local endorsed Paul Hackett.

Bob: Paul who? In what race?

Liz: Wait, the 2nd District IS the only race. Are we running against him?

NV: Not yet. (under breath) If ever…..uh, Hackett’s a Democrat.

Bob and Liz: (looking at each other knowingly and overconfidently) Oh. (pause)

Bob: That’s okay. We’ll go and visit the Corning Precision Lens Plant west of Amelia. Betcha thought I was going to call it U.S. Precision Lens, didn’t you, NV? But I know they changed their name to Corning Precision Lens in in 2000, because I keep up with what’s going on in myyyyy district.

NV: Well–

Bob: I can remember when President Reagan visited there when it was USPL in 1988. What a special man he was… (daydreaming) What special days those were…. (eyes getting misty)

NV: But Corning sold it. Now it’s called 3MPO. Mr. Mc-, er, Bob?

Bob: (coming back to reality) What? Oh. Sorry. (pause) They make robots now? Like that one in Star Wars?

Liz: Oh, high-tech manufacturing is so important.

NV: No, Mr. and M-, er, Bob and Liz, it means 3M Precision Optics. They still make lenses that go into TVs and other types of displays. 3M bought the plant about 2-1/2 years ago. That probably wouldn’t be a good place to go either. They haven’t done real well since 3M bought them.

Bob and Liz: Oh. (pause)

Bob: That’s all right. We’ll just hop on over to the Kenwood Towne Centre. That’s one of the great malls in America, and it’s in myyyyyy district. We can greet the people there at the entrance to Lazarus.

NV: Mr., um, Bob, that store is a Macy’s now.

Bob: What? This is a low-crime district, and I plan to keep it that way! Why would anyone devote a store of that size just to selling Mace? When I’m elected, I’ll make sure that–

NV: Bob! This is a conversation, not a speech.

Bob: Oh. Sorry. (pauses) Well, let’s do the meet and greet in front of McAlpin’s instead.

Liz: Shoot, I was hoping to do a little shopping at Lazarus. But McAlpin’s will work. Having first-class retail stores is so important.

NV: Guys, the old Lazarus is a Macy’s department store. Y’know, the same people that have the Thanksgiving Day Parade in New York, and who have a store about 10 miles from yourrrrr home in Virginia? And McAlpin’s is now Dillard’s.

Bob and Liz: Oh. (pause)

Bob: Well then. That will be perfect. We’ll do a meet and greet at Macy’s, and then go right over to McAlp-, I mean Dillard’s. You know where I want to visit next?

NV: (under breath) Uh-oh…I mean, uh, no. Where, Bob?

Bob: We should go visit that historic elementary school up in Kings Mills and say hi to the kids and the teachers there. We should call in a photographer to take pictures of us with those kids, our most precious resource, in that old school. Shots like those would work well in our next round of TV ads.

Liz: Oh, how perfect, Bob. Education is so important.

NV: Uh, guys, that building just has the district’s administrative offices now. The district built a new elementary school across the street four years ago, and their last day of school was last week.

Bob and Liz: Oh. (pause)

NV: (reaching into desk drawer) Here, Bob. It would probably be better if you study this map of the district’s major landmarks, and this Southern Ohio Directory of Companies. I’ve printed out a list of our district’s zip codes, so you’ll know whether each company is really in yourrrrr district or not. That way, we can plan our day better tomorrow, after you have learned about the big companies and important places that are in yourrrrr district. Like Luxottica.

Liz: Since when did that kind of thing get into this district? It’s just everywhere these days.

NV: (sighs) No Liz, not Erotica. It’s called Luxottica.

Liz: I don’t care. Bob, I don’t want that sick stuff here in yourrrrr district–

NV: Liz, stop. It’s an Italian company.

Bob: I don’t care what nationalities or ethnic groups are involved, I–

NV: Guys, will you please listen? Luxottica is the company that owns Lenscrafters now. Y’know, the “glasses in about an hour” people? They built a huge headquarters up in Mason three years ago, and they’re expanding it again.

Bob and Liz: Oh. (pause)

Liz: Well, making sure people can see is so important.

Bob: Well, NV, maybe you have some suggestions about where we can go.

NV: Well…(bravely suppressing true thoughts) There are a lot of other big companies here that weren’t in the Second District back in the mid-1990s, or that have grown a lot, like Thomson Publishing, Cintas, Anthem Health Care, a big Procter & Gamble research facility, and (gulping) FACS Group.

Bob: That’s great. A company that make fax machines in myyyyy district!

Liz: And more high-tech. That is so important.

NV: (almost yelling) Guys! That F-A-C-S. It stands for Federated Allied Credit Services. They manage the credit card programs and do administrative things for Federated Department Stores.

Bob and Liz: Oh. (pause)

(longer pause)

Bob: Well, it looks like I have a little work to do, NV. While I study the directory and the landmarks, why don’t you get on the phone and buy more radio and TV ad time? We need to remind the voters how much Liz and I know and love the people and places of myyyyy 2nd District.

2nd District (OH) Congrressional Race–A (Relevant) Blast from the Past on Bob McEwen

Filed under: OH-02 US House — Tom @ 9:01 am

June 3, 4PM Update: NixGuy lifts and posts the graphic. Go for it, everybody.

Note: Bolds are mine. The original column is not available online, and was obtained from library microfilm. No other commentary is necessary. Excerpts from that column are presented for education and discussion purposes. And remember, I didn’t write this.

From: The Cincinnati Enquirer; Sunday, March 21, 1993; Page B-8/Metro


Howard Wilkinson on Politics

Some people just have to learn the hard way.

…..people told Bob McEwen not to do it–not to run for another seat in Congress three months after being booted out of his old one.

State party leaders told him. Friends–political allies….–told him.

He did anyway, and Tuesday, he ran into an electoral buzz saw–the Second District special primary election, which he lost to Cincinnati lawyer Rob Portman, favorite of the Hamilton County GOP.

So now, the 43 year-old McEwen–who has held elective office in Columbus or Washington since he was 24 years old–has lost two congressional elections in about five months.

McEwen lost his seat in Congress last fall in an upset that probably stunned even the man who beat him, Democrat Ted Strickland of Lucasville.

In retrospect, though, it’s not so surprising.

McEwen dragged several 500-pound albatrosses around his neck…. He had 166 rubber checks in the infamous House Bank Scandal. He had traveled at taxpayer expense to more exotic climes around the world than anyone since Marco Polo.

McEwen’s political friends told him those issues, the stuff of a politician’s worst nightmares, would rise up again and bite him if he decided to come down to the Second District….

But running is what he does.

….the advice from political friends was to bide his time, wait for the memory of 1992 to fade and take a stab at winning back his old seat in 1994.

But he didn’t take the hint….

And McEwen is now saying what southern Ohio Republicans never thought they’d hear–that he probably won’t run for anything.