What do these incidents, all occurring within a short span of time, have in common?

Today Show Allows Cruise Control (HT Michelle Malkin)

Cruise’s contentious Today Show “War of the Worlds” interview with Matt Lauer that veered into Brooke Shields, post-partum depression, and alleged overmedication of patients by the psychiatric profession was apparently heavily edited under pressure before we saw it:

As Tom Cruise got all shook up with Matt Lauer on Thursday, the movie star’s publicists kicked into high gear, TVNewser hears. They lit into senior entertainment producer Tim Bruno, demanding that ‘Today’ only air portions of the interview that related to War of the Worlds. Then the handlers threatened to pull all future star bookings from the top-rated morning show. NBC eventually came to an agreement with the reps, but I wonder what Cruise said in the 20 minutes of the interview that didn’t air…

Not in This Backyard

ABC’s attempt, in a “reality show” (how I loathe that term), to create neighborhood conflict (HT: Radioblogger) and reinforce stereotypes, known as “Welcome to the Neighborhood,” has been pulled (link requires registration) less than 2 weeks before airing, and there are apparently no plans to broadcast it.

What happened? Although the program appears to have been an equal-opportunity offender of liberals, conservatives, and others, “somebody” got to see the program in advance, and effectively vetoed it:

The six-episode show, which was to debut July 10, follows three families in Austin, Texas, who are given the chance to choose a new neighbor for a house on their street.

Each family initially wants someone similar to them–white and conservative.

Instead, they must choose from families that are black, Hispanic and Asian; two gay white men who’ve adopted a black child; a couple covered in tattoos and piercings; a couple who met at the woman’s initiation as a witch; and a poor white family.

In the early episodes, one man makes a crack about the number of children piling out of the Hispanic family’s car and displays of affection between the gay men provoke disgust.

The series’ producers had said it was intended to promote a healthy and open debate about prejudice and people’s fear of differences.

The Gay & Lesbian Alliance Against Defamation, after viewing the series, expressed strong concerns.

No other group affected is mentioned as having had a preview privilege.

Who has Veto Power Over Author’s TV Appearances?

Ed Klein, the author of a book about Hillary Clinton that heavily relies on anonymous sourcing is having problems promoting his book in the usual TV settings.

Klein claims everyone is caving to pressure:

For instance, because of my book, Hillary and her war machine have called every major television network in the United States and suggested to them that if they have Ed Klein on to discuss his book, they can forget about Hillary being a guest on their network. (Is that a threat or a promise?–Ed.)

Given the treatment Gary Aldrich received (go to Item 2 on the page) from the Clinton White House in 1996, there is little reason to doubt Klein’s contention.

A very good case can be made that Klein’s book is sleazy journalism and doesn’t deserve the free publicity of TV appearances. But a late-2004 pre-election book by Kitty Kelley about George Bush that also was top-heavy with anonymous sourcing had no trouble getting tons of attention (including three mornings in a row on The Today Show), as Cal Thomas notes:

I think - first of all, I think there’s a double standard. I want to say something about the book, which I think is slimy, unsourced and the rest, and I’m not going to write about it because somebody has to say no to something sometime. But I do think that there is a media double standard, because the Kitty Kelley book, which was almost - not quite - as equally unsourced, full of innuendo, rumor and whatever, was all over the media, especially the “Today” show. She had a - she had a special deal with the perky Katie Couric on this. And some of the people who were raising the moral hackles about this and the slimy and seemliness didn’t have the moral conscience on the Bush book with Kitty Kelley.

* * * * *

So we have a liberal actor, a liberal group, and a liberal politician exercising editorial control over TV content, with accompanying threats and intimidation if the nets don’t fold.

That leads to three questions with obvious answers:

• How much success would a conservative actor, a conservative group, or a conservative politician have if they tried to exercise the above types of content control?
• And what kind of response would there be to the types of threats delineated here if conservatives made them?
• (since this is a business blog, a business question) Is it any wonder that more viewers are going elsewhere to get news and entertainment that isn’t pre-filtered, prejudicial, or pre-selected?

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UPDATE: Beautiful Atrocities proposes some alternative reality neighborhood programming for ABC’s consideration.

A Timely Auto-Buying Tip: Don’t Let Your Guard Down

In spite of the near-universal availability of employee-discounted prices on new GM and Ford cars, you can still negotiate.

The CNN-Money article is good for what it does cover (negotiate the price of the car), but it glosses over the fact that you need to nail the new car price down:

• before you even think of talking about what you will get for your trade-in. In fact, it’s best not to even mention the possibility of a trade-in. Instead, pretend you don’t have one or that you will sell on your own.
• and before you begin any discussions about the financing. Don’t answer a “Leasing or Buying?” question or let them pull your credit report until AFTER you nail down the new-car price. Don’t give them your driver’s license when you go for a test drive (they need it to pull a credit report; they don’t need it to allow you to take a vehicle out for a spin). If they insist that they must know your credit first, leave immediately.

A Kinder, Gentler Toyota

On a somewhat related note, Mickey Kaus notes the “so sorry” marketing strategy of Toyota (scroll down a bit): “What’s really annoying now are Toyota’s pledges to be gentle with us.”

It may be annoying to Kaus, but it must be downright embarrassing to the Big Two.

The Supremes and P2P

All the focus on the ruling’s impact seems to be on how tough it will be for Groskster, LimeWire, Kazaa, BitTorrent, et al when they (and users) have to adapt or die.

I haven’t seen much mention of the idea that Internet Service Providers (ISPs) may be sued for merely hosting P2P sites. I personally expect this, and soon, as the big ISPs are where the money is, and where the most effective intimidation can occur. If I’m right, it will force ISPs into a whole new level of site policing that consumers will not like one bit.

Up, up, up: The final revision of first-quarter GDP came in at 3.8%, up from the originally estimated 3.1%, up from the first revision of 3.5%, and beating Street expectations of 3.7%.

Good news? For Reuters, of course not (my heckling is in italics):

WASHINGTON (Reuters) - Robust new-home building and stronger exports helped the U.S. economy expand at a faster-than-expected 3.8 percent annual rate in the first quarter, the Commerce Department said on Wednesday.

Initially, the department said gross domestic product — the broadest measure of total economic activity within U.S. borders — grew at a 3.1 percent rate but it pushed that up to 3.5 percent a month ago before finally revising it to match the 3.8 percent rate posted in the closing quarter of 2004. (so much for the “sluggish” talk we’ve had to endure for months)

The final figure outpaced Wall Street economists’ forecasts for a 3.7 percent rate of first-quarter growth and added to expectations that the U.S. central bank will again raise short-term interest rates this week. Most forecasters say GDP will continue expanding at rates around 3.5 percent in coming quarters, despite some strain from costlier energy prices.

“We are not out of the woods with the economy,” said economist Robert Brusca of Fact and Opinion Economics in New York. “The global economy is still up in the air depending on what oil prices will do.” (leave it to Reuters to find a pessimistic economist-we’re not IN the woods, Mr. Brusca)

White House spokesman Scott McClellan said the GDP data showed the economy enjoying “solid and sustained growth and job creation,” and urged House and Senate lawmakers to agree on proposals for boosting energy output.

…… The first-quarter GDP report was one of the final pieces of economic data that Federal Reserve policy-makers, who are scheduled to begin a two-day meeting on Wednesday afternoon to consider interest-rate strategy, will have as they move toward a widely predicted ninth straight rate increase on Thursday. (Reuters sure seems to hope so; they’re thinking “Something’s got to slow down this good economy so we can start saying bad things about it. This good news is getting really painful for us to report.”)

Inflation remained well in check. A gauge favored by Federal Reserve Chairman Alan Greenspan — the personal consumption expenditures index excluding food and energy — advanced at a 2 percent annual rate instead of 2.2 percent estimated a month ago. That was only moderately ahead of the fourth quarter’s 1.7 percent rate.

The Fed began raising rates a year ago, pushing its trend-setting federal funds rate up in eight successive quarter-point increments from a 46-year low of 1 percent to a current level of 3 percent. So far it has given no indication that it is considering a halt to the rate-rise cycle.

The first-quarter GDP data is relatively old and some analysts were skeptical about its predictive value. (How blatant. Reuters’ message to the reader is: “Be patient-Give us a few days or weeks and we’ll find some bad news.”)

Horrid reporting like this is what led to BizzyBlog’s personal favorite rant when the 3.1% figure was first released, and to an “I told you so” when the first upward revision occurred.
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UPDATE: American Thinker notes the quiet coverage of the upward revision.

UPDATE 2: The Wall Street Journal (link requires paid subscription) wonders why whether the frequent upward revisions are an indicator of data-collection problems, and gets in a good rip at the pessimists:

These increasingly frequent, and substantial, revisions raise some questions about the accuracy of government statistics in our entrepreneurial, information age economy. The employment numbers have seemed especially odd the past couple of years, underestimating actual job creation. Personal income growth was also wildly understated at first last year. If the average CEO revised his company’s earnings as often as the Bureau of Economic Analysis revises its data, the SEC would charge fraud. The Bureau needs to look anew at what it is, or isn’t, measuring.

The other lesson is that too many economists and politicians continue to underestimate the incentive power of the marginal rate tax cuts on income, dividends and capital gains. In the spirit of July 4, we’ll refrain from quoting the sages who’ve been predicting doom throughout our current prosperity; we’re just happy to say they write for the competition.

As one who likes pleasant surprises better than unpleasant ones, I personally don’t mind BEA’s caution, if that’s what it is. But if they need to do more to pick up entrepreneurial activity, they need to get on it quickly, or the revisions will be larger in the coming years, and they won’t always be upward.

What an absolute hoot that some Baby Boomer bosses are calling the current crop of young kids the Entitlement Generation (bolds are mine):

The Entitlement Generation: Are Young Workers Spoiled or Simply Demanding a New Kind of Work Life?

CHICAGO (AP) — Evan Wayne thought he was prepared for anything during a recent interview for a job in radio sales. Then the interviewer hit the 24-year-old Chicagoan with this: “So, we call you guys the ‘Entitlement Generation,’” the baby boomer executive said, expressing an oft-heard view of today’s young work force. “You think you’re entitled to everything.”

Such labeling is, perhaps, a rite of passage for every crop of twentysomethings. In their day, baby boomers were rabble-rousing hippies, while Gen Xers were apathetic slackers.

Now, deserved or not, this latest generation is being pegged, too — as one with shockingly high expectations for salary, job flexibility and duties but little willingness to take on grunt work or remain loyal to a company.

“We’re seeing an epidemic of people who are having a hard time making the transition to work — kids who had too much success early in life and who’ve become accustomed to instant gratification,” says Dr. Mel Levine, a pediatrics professor at the University of North Carolina Medical School and author of a book on the topic called “Ready or Not, Here Life Comes.”

While Levine also notes that today’s twentysomethings are long on idealism and altruism, “many of the individuals we see are heavily committed to something we call ‘fun.’”

He partly faults coddling parents and colleges for doing little to prepare students for the realities of adulthood and setting the course for what many disillusioned twentysomethings are increasingly calling their “quarter-life crisis.”

The finger is definitely pointed in the proper direction when the schools are brought into play. But who ruined them? Boomer parents coddling their kids, who (shock!) now feel “entitled.”

But look at the NOdometer on the left side of this page. We Boomers are pushing, by current count, $1.72 trillion onto future generations, representing what we’re going to try to force them to pay us while we are in our “golden years.” And that’s just Social Security–there’s Medicare, prescription drugs, Medicaid…you start to see how if nothing is done, future generations will face confiscatory taxes and lowered living standards.

And now that it’s crunch time, which generation is saying “I want my Safety Net” (Business Weak link may require paid subscription)? Hint–it’s not the current crop of young people:

While many members of Safety Net Nation have nothing against investing and choice, they’re worried that the country’s web of public and private social protections is fraying. They believe in more, not fewer, safeguards against downward mobility in a world that’s already pulsing with economic uncertainty. Safety Netters include plenty of card-carrying Republicans and independent swing voters, and the group may represent a broader swath of America than the White House imagines.

A Sept. 2-5, 2004, survey by the Civil Society Institute, a Newton Centre (Mass.) nonprofit group, found 67% of Americans think it’s a good idea to guarantee health care for all U.S. citizens, as Canada and Britain do, with just 27% dissenting. Support for a government-directed universal insurance system is strong, despite GOP warnings about socialized medicine. Similarly, a Feb. 3-5 Washington Post/Kaiser Family Foundation poll found that 47% of respondents believe the government ought to guarantee a minimum standard of living for retirees, vs. 35% who felt that was an individual’s responsibility.

But who is going to pay for all of this? Boomers are expecting subsequent generations to fund what is by far the greatest intergenerational redistribution of wealth and income in human history. Remind me again: Which generation should be called the “entitlement generation”?

Don’t be surprised if the children and grandchildren of Boomers decide that they are “entitled” to not pay the bill.
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UPDATE: This post is a proud participant in the Beltway Traffic Jam.

UPDATE 2: Welcome to Betsy’s Page readers, and now the smooth, linky goodness of Anchoress (whew).

Y’all can call me Tom. To get a flavor for what this blog generally covers (subject to change based on whims of the moment), consider checking out this (on shareholder suit corruption), this (on Hollywood’s slump), this (on possible blog software hogging), and this Instalinked blast from the past on business reporting bias.

The Wall Street Journal (link requires paid subscription) has a front-page story that I expect will be ignored by the mainstream business press (bolds are mine):

Federal prosecutors are investigating one of the nation’s most aggressive class-action law firms, Milberg Weiss Bershad & Schulman, for alleged fraud, conspiracy and kickbacks in scores of securities lawsuits, and could seek criminal charges against the firm itself and its principals.

The three-year investigation focuses on allegations that the New York-based firm routinely made secret, illegal payments to plaintiffs who appeared on securities class-action lawsuits brought by the firm, according to court documents and lawyers close to the case. A grand jury in Los Angeles convened last October has been hearing evidence of alleged illegal payments in dozens of suits filed against oil, biotechnology, drug and chemical companies during the past 20 years, the lawyers close to the case said.

Prosecutors offered a glimpse of the broad investigation in an indictment filed in federal court in Los Angeles on Thursday against a single plaintiff, Seymour M. Lazar, a retired Palm Springs, Calif., entertainment lawyer who is 78 years old.

The charges don’t name Milberg Weiss, but Milberg Weiss officials confirm that it is the firm cited in the indictment. The firm has been told that senior partners alleged to have authorized payments to the plaintiff and the firm itself could face indictment, the lawyers close to the case said.

Milberg Weiss has brought hundreds of class-action cases over 30 years and won tens of billions of dollars in settlements and judgments against businesses. Some corporate and Wall Street executives say the firm exemplifies abuses in class-action litigation that burdens the courts. In Washington, Milberg Weiss has often been cited in Republican-led efforts to curb class-action suits and in congressional debate that led to 1995 legislation to limit securities litigation.

Class-action lawyers said they feared that an indictment of Milberg Weiss could have far-reaching impact and hamper efforts to recover damages for shareholders and consumers. Michael Hausfeld, a prominent Washington plaintiffs’ lawyer, said such a case “could taint private civil enforcement of securities law” and deflect attention from “the egregious corporate misconduct at issue in these suits.”

Last week’s indictment charged Mr. Lazar with fraud, conspiracy, money laundering and obstruction. It alleges that a New York law firm paid “millions of dollars in secret and illegal kickbacks” to Mr. Lazar.

The indictment alleges that Mr. Lazar or a member of his family appeared as a plaintiff in more than 50 Milberg Weiss securities cases during a period running from 1981 to 2004. Mr. Lazar and family members together received more than $2.4 million in secret payments from the law firm, the government charges. During this period, Milberg Weiss earned at least $44 million in legal fees from cases in which Mr. Lazar or a family member was a plaintiff, according to the indictment.

Investigators allege that Mr. Lazar was illegally promised a share in the legal fees that would result from the cases in which he was a plaintiff, according to the indictment. Named plaintiffs in class-action cases can’t have a special interest or concealed inducements beyond others in the class.

The indictment confirms what many public company executives and their legal counsel have believed or known for years: that individuals, in return for under-the-table compensation, have bought minor equity positions in companies for the express purpose of helping a law firm they are cozy with sue if the stock price drops on bad news. I personally know someone who I suspect was doing this for a time; his target was Michael Milken.

Mr. Hausfeld’s crocodile tears about the supposed greater good and corporate evildoers notwithstanding, the actions described are illegal, and support an organized racket that distorts the securities markets, discourages companies from going public, encourages public companies to go private, and in the long run stifles innovation and economic growth.

If Mr. Lazar is guilty, please reserve him a space next to Mr. Rigas of Adelphia, and for an equivalent amount of time. As to Milberg Weiss, if the government can put Arthur Andersen out of business for Enron, the least it can do is disbar and imprison the offending partners for brazenly illegal payments in these mostly frivolous “strike suits.” These suits’ cumulative dollar amounts not only dwarf those involved in Enron, but in most cases are situations where the companies sued did no wrong, and simply paid money to make the problem go away and to avoid years of costly attorney and executive time.
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UPDATE: Forbes.com has stories on the investigation and indictments (plural). I don’t see any others.

As a relative WordPress novice, I can only imagine the difficulties involved in developing and maintaining a blogging platform, so I try to stay out of the bits and bytes.

But Wizbang got me interested about 10 days ago in the evolution of blogging software when he noted how Markos Moulitsas Zuniga, proprietor of The Daily Kos (affectionately known to friend and foe alike as “Kos”) is handling software development.

In October 2003, Kos began using the open-source version of a blogging and publishing program known as Scoop. Since then, he has been enhancing the program. Most curiously to say the least, he has chosen to share those enhancements only with certain left-leaning blogs:

You can’t get the version of Scoop in use at DailyKos - One of the cool features (reader recommended diaries) isn’t in the Scoop available from scoop.kuro5hin.org. In fact as the development page indicated, there’s been very little public activity on the Scoop development site, while sites led by DailyKos have been implementing all sorts of new Scoop features. Why is that, you might ask? It’s because Scoop has become, in effect, a bought and paid for tool of the elite liberal bloggers. Scoop development is occurring, funded by Kos and others, and the by-product of that work isn’t available to you the lowly blogger. There’s nothing wrong with Kos and crew keeping the good stuff for themselves while the open source Scoop stagnates…

Whoa. Stop, right, there, Wiz. I sense an inconsistency in KosWorld.

A Wizbang commenter at the same post confirms and references my suspicions about Kos’s in-the lefty-house development efforts (bold is mine):

Scoop is licensed under the GPL v2.

What Kos is doing with it is within the letter of the GPLv2 but is in violation of the spirit.

Stallman is working on GPLv3 and if this statement from wikipedia–”We’ll put in something to deal with this case of public use on a server the public connects to”–bears out (statement is in italicized section of page under “History”–Ed.), then Kos’s use of Scoop (which can remain licensed under GPLv2) will be in violation of the letter of the GPLv3.

Open source developers would consider Kos’s actions to be sleazy hoarding.

“Fine,” you might say (and Wiz might agree), “what’s wrong with Kos and his cohorts doing the capitalist thing, improving a generic product and using it in a competitively advantageous way to set his blog and other lefty blogs apart from the others? Going further, what would be wrong if he or they ultimately (it’s hard to know at this point) decide to license the improved blogging software to others for profit?”

The problem is that Kos, and perhaps his cohorts, appear to believe in “open source for thee, but not for me.”

Look at how excited Kos was (”The Rise of Open Source”) on February 11 about the growth of the open-source Firefox web browser, and how it leads him to wax rhapsodically about the beauties of an open-source world (posted in full, bold is mine):

I’ve been watching with fascination as Microsoft’s share of the browser market erodes at warp speed to better alternative browsers.

On 12/03/04, Internet Explorer had 67 percent of browsers. Earlier in 2004, IE enjoyed over 85 percent of the market.

As of this post’s writing, IE is down to 55 percent of Daily Kos readers. That number can fluctuate quite a bit over a typical day, so at times IE will drop below 50 percent.

The biggest culprit is the open source Firefox, which has garnered about 25 percent share of the dKos readership in a matter of mere months, with no advertising campaign. That’s pretty cool, and yet more evidence that open source is the way of the future.

What does this have to do with politics? Not much. But as the Propagannon types have shown, dozens (hundreds) of people waging open source journalism can sometimes be more effective than understaffed newsrooms filled with overworked reporters trying to meet deadline.

When I’m asked about blogging’s legacy, I talk about open source. Open source politics, open source activism, open source journalism — the aggregation of thousands on behalf of a common cause. Bloggers and their opinions might be mildly interesting, but the ability to pool our efforts on issues that capture the collective imagination is what really gets me excited.

So it appears reasonable to conclude that Kos believes the following:

• Open source browsers, operating systems, and software–way of the future, good (stated by Kos in a generalized way clearly meant to apply to all software development).
• Open source politics, activism, and journalism–way of the future, good.
• Open source blogging software–”Nope. It’s ours, all ours.”

These positions appear to be at best inconsistent, and at worst hysterically hypocritical.

I’d be open to receiving a coherent defense or explanation from Kos (I have requested a response to this post from him) or someone who believes he or she can stand in for him before removing the question mark from the post title. E-mail me here.
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UPDATE: The footer at the Daily Kos site reads:

“© 2005. Steal what you want. Powered by Scoop.”

Cute. This would appear to be an open invitation to hack and steal “open source” Kos’s upgraded Scoop, doncha think?
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UPDATE 2, July 1, 1 AM: Three unanswered e-mails sent within Kos’s site (which means I registered and everything [eek]). The question mark has been removed. More to come on this subject from another more technical person who is addressing this.
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UPDATE 3, August 20: A person in a position to know tells me in two separate e-mails (the two different paragraphs):

Markos recently reached out to all the other large volume Scoop sites …. in an effort to rally some momentum around the platform before the big traffic rush next year in the primaries. Other than a few introductory emails, I don’t have anything yet. But the intent seems to be to share what’s been improved upon.

We’ll see if words are followed by action. So far, they have not. I’m perfectly happy to call him on the mat if he misbehaves.

Hollywood is experiencing an unprecedented slump:

Revenues for the top 12 movies came in at $116.5 million, down 16 percent from the same weekend last year, when “Fahrenheit 9/11″ opened as the top movie with $23.9 million, according to studio estimates Sunday.

It was the 18th weekend in a row the box office declined, passing a 1985 slump of 17 weekends that had been the longest since analysts began keeping detailed figures on movie grosses.

……Theater revenues have skidded about 7 percent compared to last year. Factoring in higher ticket prices, movie admissions are off 10 percent for the year, according to box-office tracker Exhibitor Relations.

If the slump continues, Hollywood is on course for a third straight year of declining admissions and its lowest ticket sales since the mid-1990s.

Rob Rogers of the Pittsburgh Post-Gazette explains it almost perfectly in a cartoon in Business Weak’s July 4 issue; unfortunately it’s not available online or at the Pittsburgh Post-Gazette, Rogers’ home paper. So I’ll have to describe it: An older couple is walking away from the theater. The man is reading a newspaper headlined “Box Office Slump” and asks “I wonder why no one’s going to the movies.” Behind him is the theater’s marquee with the week’s four offerings:

1 - Unoriginal Remake of an Average ’70s Film
2 - Pathetic Adaptation of a Vintage Sitcom
3 - Another (yawn) Comic Book Hero Flick
4 - Revenge of the Really Bad Sequels

and

Coming Soon: 2 Hours of Your Life You’ll Never Get Back

Enough said, except for one omission:

“Injection of the R-Rated Content into PG and PG-13 films”

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UPDATE: Found the cartoon here.

UPDATE 2: This Variety piece (HT Drudge) focuses on the tensions between producers, exhibitors and studios over how quickly DVDs are released after a movie’s theater run has ended. If you’re going to blame the decline in the box office on the idea that people are holding out until the DVD is released, you would have to assume that DVD sales and rentals are increasing significantly. Oops, they aren’t (bold is mine):

Privately, studio execs and filmmakers are wrestling with the traditional strategies. Studios are murmuring that it doesn’t make fiscal sense to shell out enormous marketing costs twice for one film. A closer DVD launch can ride the wave that began with the bigscreen.

Though, as with all booms, the DVD explosion seems to be coming to an end. The format is and will remain the most important source of revenue for studios, but the growth of consumer spending on DVDs is slowing — from a 71% jump between 2001 and 2002 to a more moderate 17.5% this year, according to DVD Exclusive. Much of the new money, though, is coming from the release of TV properties, not films. Absent the tube titles hitting shelves, total DVD growth would likely be in the single digits.

UPDATE 3: Speaking of tensions, the friction between the studios, producers, and PR people on one end, and the media and film critics on the other, is growing quite a bit, based on this Variety piece on the “War of the Worlds” rollout:

Media around the globe have been up in arms about over the restrictions imposed by Paramount and DreamWorks as “War of the Worlds” bowed in Tokyo, Berlin, Paris, London, Marseilles, Madrid and New York.

The publicity backlash points up the perils of day-and-date openings. Overseas journos, accustomed to writing about films that have already opened in the U.S., are being asked to see a film — and then refrain from writing or talking about it for several weeks.

To top it off, they’re meeting the star, but being given limits on the conversation.

The result is day-and-date media hostility.

Given piracy fears and security concerns over Steven Spielberg and Tom Cruise, the June 23 N.Y. preempreem featured four-hour security lineups, which caused media grousing.

That was matched by grumbling over the New York print media being shut out of the preem (Variety was one of the few allowed in).

And though studios routinely put an embargo on review dates, Germany’s top film critics association launched an official protest against what it called “a violation of basic constitutional rights” over the studio’s review restrictions.

Alienating your first audience, which happens to be the one that serves partially as a filter to the general public, does not seem like a wise move for an industry trying to stop a decline.

UPDATE 4: The Wall Street Journal, in a Taste section editorial, thinks all we need are heavyhanded ushers to root out the rudeness of theater yakkity-yaks. I don’t think it will be that easy.

UPDATE 5, July 5, 1AM: Make that 19 weeks.

Another installment in a nearly-regular series of mysteries and pseudo-mysteries this inquiring mind would like to have answers for (some links included may require free registration):

• When will the world learn that aid money given to foreign countries has to be controlled?Item 1: The London Daily Telegraph reports that “Nigeria’s past rulers stole or misused 220 billion British pounds (400 billion US$) between 1960 and 1997:
  

  Gordon Brown, the Chancellor, has spoken of a new Marshall Plan for Africa. But Nigeria’s rulers have already pocketed the equivalent of six Marshall Plans. After that mass theft, two thirds of the country’s 130 million people - one in seven of the total African population - live in abject poverty, a third is illiterate and 40 per cent have no safe water supply.

  With more people and more natural resources than any other African country, Nigeria is the key to the continent’s success.

  Mallam Nuhu Ribadu, the chairman of the Economic and Financial Crimes Commission, set up three years ago, said that £220 billion was “squandered” between independence from Britain in 1960 and the return of civilian rule in 1999.

  “We cannot be accurate down to the last figure but that is our projection,” Osita Nwajah, a commission spokesman, said in the capital, Abuja.

  Item 2: The incomparable Mark Steyn notes the scope of tsunami relief corruption:

  A couple of days later I read that Oxfam had paid the best part of a million bucks to Sri Lankan customs officials for the privilege of having 25 four-wheel-drive vehicles allowed into the country to get aid out to remote villages on washed-out roads hit by the Boxing Day tsunami. The Indian-made Mahindras stood idle on the dock in Colombo for a month as Oxfam’s representatives were buried under a tsunami of paperwork. Aside from the ‘tax’, they were charged £2,750 ‘demurrage’ for every day the vehicles sat in port.

  This was merely the latest installment in what’s becoming a vast ongoing Tsunami Tshakedown Of The Day retrospective — you can usually find it at the foot of page 37 in your daily paper, if at all. Fourteen Unicef ambulances sent to Indonesia spent two months sitting on the dock of the bay wasting time, as the late Otis Redding so shrewdly anticipated. Eight 20ft containers of Diageo drinking water shipped via the Red Cross arrived at the Indonesian port of Medan in January and are still there, because the Indonesian Red Cross lost the paperwork. Five hundred containers, representing one quarter of all aid sent to Sri Lanka since the tsunami hit on 26 December, are still sitting in port in Colombo, unclaimed or unprocessed. At Medan 1,500 containers of aid are still sitting on the dock.

  Item 3: In a relatively tiny example of absurd waste in the midst of an unconscionable and totally preventable humanitarian disaster:

  HARARE - Zimbabwean police have ordered US$3.5 million worth of high-tech gear from a South African company as the country battles to raise money for food and fuel imports, ZimOnline has established.

  Donor nations and individual donors must insist that aid not simply be handed over to corrupt governments. Aid workers on the ground must not give in to corruption and in essence insist on signing the checks to ensure that aid is used as intended. And yes, if it takes the threat of or actual deployment of the military to force their hands, then threaten and deploy away. If the UN is to mean anything, it ought to have a standby force acting on blanket Security Council authorization to intervene when aid is being systematically denied to starving and homeless people by their soulless rulers and bureaucrats.

• How can the Eurotunnel (originally called the “Chunnel,” the tunnel connecting England and France), possibly be going broke?But it is:
  

  Eurotunnel could sink without a trace

  Eurotunnel has admitted that it is on the slippery slope to bankruptcy, unless it can cobble together a deal with its financiers.

  Eurotunnel chairman Jacques Gounon, has admitted that the debt-ridden company has until mid-July to submit its proposals to sort out its financial afairs. If a deal isn’t struck, the company could be forced into administration (bankruptcy).

  Gounon claims that the company can sustain no more than £2.2 billion of its £6.2 billion debt, and is demanding that its financial backers write off the remaining £4.2 billion.

• When will lawmakers tell the growing army of lobbyists to kiss off?Lobbying is big, big business:
  

  To the great growth industries of America such as health care and home building add one more: influence peddling.

  The number of registered lobbyists in Washington has more than doubled since 2000 to more than 34,750 while the amount that lobbyists charge their new clients has increased by as much as 100 percent. Only a few other businesses have enjoyed greater prosperity in an otherwise fitful economy.

  The lobbying boom has been caused by three factors, experts say: rapid growth in government, Republican control of both the White House and Congress, and wide acceptance among corporations that they need to hire professional lobbyists to secure their share of federal benefits.

  “There’s unlimited business out there for us,” said Robert L. Livingston, a Republican former chairman of the House Appropriations Committee and now president of a thriving six-year-old lobbying firm. “Companies need lobbying help.”

  Lobbying firms can’t hire people fast enough. Starting salaries have risen to about $300,000 a year for the best-connected aides eager to “move downtown” from Capitol Hill or the Bush administration. Once considered a distasteful post-government vocation, big-bucks lobbying is luring nearly half of all lawmakers who return to the private sector when they leave Congress, according to a forthcoming study by Public Citizen’s Congress Watch.

  This is a disgrace, and a total betrayal of the limited-government mindset that is supposed to rule the conservative roost. It is beyond sad to see people like Bob Livingston and others help the government grow out of control after they spent their careers trying to get it under control.

  The only bright side I can think of is that we can stop worrying about where defeated congressional candidate Bob McEwen’s next meal is coming from.

I blogged at length on this about 6 weeks ago.

Now The House is saying “not so fast” to having the government in effect take on the bankrupt company’s pension obligations:

WASHINGTON (Reuters) - The U.S. House of Representatives on Friday voted to block bankrupt United Airlines (UALAQ) from defaulting on its pension plans and shifting them to the Pension Benefit Guaranty Corp. (PBGC)

The provision was attached to a government spending bill expected to pass the chamber later in the day. The bill would still have to pass the Senate before it could take effect.

However, even then its impact would be unclear, as the PBGC does not spend government-appropriated funds. In any case the agency has already taken over one of United’s four “defined benefit” pension plans.

More than 30 Republicans joined the proposal’s Democratic sponsors in supporting the measure by a vote of 219-185. It said the PBGC could not spend government funds to carry out a court-approved agreement to take over four pension plans from the bankrupt airline.

California Rep. George Miller, the amendment’s sponsor, and other Democrats warned more airlines could follow United’s lead, inundating the PBGC and forcing a taxpayer bailout of the agency.

“This amendment is absolutely necessary if we are going to stop the dumping of pension obligations on the taxpayers of the United States,” said Rep. David Obey, a Wisconsin Democrat. “Without this amendment, Uncle Sam is being Uncle Sucker.”

A PBGC spokesman said the agency was examining the amendment.

My immediate reactions and questions:

• What if the company decides to totally liquidate in response? The employees would almost certainly get nothing from their pension plans, and it’s possible that even current benefit recipients would see their benefits disappear.
• Somebody should have thought about the “Uncle Sucker” implications a long time ago, like before legislating PBGC into existence, and if not then, during the 1980s when it became clear that companies, largely in the steel industry at the time, were beginning to use PBGC as a guarantor of last resort before emerging from bankruptcy.
• What employer in their right mind would want to start up a new defined-benefit pension plan in this environment?
• If United sets a precedent by liquidating and leaving employees and beneficiaries out in the cold, what employee of a company in serious financial trouble but not yet bankrupt is going to stick around when leaving and cashing out accumulated benefits enables them to at least get something out of the plan?
• If the skeptics about the bill, which is far from being law, correct in claiming that Congress essentially has no jurisdiction over the “independent” PBGC? If so, maybe it should be turned into a publicly-traded company after a limited and one-time government bailout. Then market discipline would be forced into PBGC’s pricing (e.g., seriously underfunded plans would have to pay higher premiums) and even into its decisions on continuation of coverage. The ultimate market discipline would be the possibility that PBGC itself could actually go broke with no conceivable recourse to Uncle Sam. This would have to be crystal-clear from the start, or we’d end up with a pension entity that has the problems that Fannie Mae and Freddie Mac, with their implicit government bailout, have today. Taking this step now would also shake some sense into General Motors, Ford, and the United Auto Workers union.
• Finally, if the possibility that UAL will simply liquidate if the legislation ultimately passes is real, I can’t help but notice the irony, in light of the Kelo property-rights/eminent domain case yesterday at the Supreme Court, that this primarily a Democrat-driven bill. Or maybe they’re being consistent. After all, Democrats are usually hostile to property rights, so perhaps extending that hostility to totally annihilating property rights UAL employees had built up over the years (if UAL opts to liquidate) isn’t that much of a stretch.

I haven’t run the numbers, but I get the sense that trying the PBGC spinoff idea 10 years from now, or maybe even 5, won’t work. It will simply be too late because the bailout cost will be too high.

It appears at the moment that Congress is playing a high-stakes game of chicken with PBGC and UAL. But if this legislation passes, there won’t be any winners, and maybe no survivors.
_____________

UPDATE: A brilliant entry from Von Mises on the long-term consequences of public and yes, even “private” (in quotes because of the existence of The PBGC) pensions.

Spitzer Appointed De Facto Bank Regulator

A federal judge Monday appointed Elliot Spitzer de facto regulator of national banks when he said okay to a Spitzer fishing expedition, despite the objections of the entity that actually is legally mandated to regulate national banks, the Office of the Comptroller of the Currency.

NEW YORK (Reuters) - A federal judge handed New York Attorney General Eliot Spitzer a victory on Monday when he refused to grant a temporary restraining order that would have stopped Spitzer from investigating large U.S. banks for their lending practices to minorities.

The order was sought by eight members of The Clearing House Association of 11 banks and the Office of the Comptroller of the Currency (OCC), which are suing Spitzer’s office on grounds that states do not have jurisdiction over national banks.

But Judge Sidney Stein in the Southern District of New York allowed Spitzer to continue his probe despite the suits.

The suit was filed on behalf of eight federally chartered banks of the 11-member association: JPMorgan Chase & Co. (JPM), Wells Fargo & Co. (WFC), Citigroup (C), Wachovia Corp. (WB), Bank of America Corp. (BAC), HSBC Holdings, LaSalle Bank Corp., and U.S. Bancorp (USB).

I have noted several times that I am less than pleased with the performance of the OCC, but that’s not the point. If the OCC isn’t doing its job, Congress and the President need to step in and give it new leadership and/or direction. It’s not Elliot Spitzer’s place to usurp OCC’s role.

While we’re on the subject, the claims of lending discrimination against minorities have always struck me as a case of wanting equal results regardless of merit, instead of trying to achieve results based on merit. Minorities get turned down more often for loans because they are more likely to have made financial mistakes that negatively affect their credit reports and credit scores. The scoring system itself is totally colorblind.

Supremes Fail to Stop Government Home Seizures

Of course that’s not how the headlines read, but that IS what happened:

WASHINGTON (AP) — Cities may bulldoze people’s homes to make way for shopping malls or other private development, a divided Supreme Court ruled Thursday, giving local governments broad power to seize private property to generate tax revenue.

In a scathing dissent, Justice Sandra Day O’Connor said the decision bowed to the rich and powerful at the expense of middle-class Americans.

The 5-4 decision means that homeowners will have more limited rights. Still, legal experts said they didn’t expect a rush to claim homes.

“The message of the case to cities is yes, you can use eminent domain, but you better be careful and conduct hearings,” said Thomas Merrill, a Columbia law professor specializing in property rights.

City, county, and state governments have always had the right of eminent domain for truly public purposes: i.e., to build roads, bridges, etc. But the idea that these governments can force homeowners to sell, even if fairly compensated, so a private developer blessed by the government can build a privately owned facility (shopping mall, office complex, etc.) is offensive.

The court’s ruling runs against a trend (about 3/4 of the way down the page) that had been building in lower courts. Outrages like this show why the choices for the next Supreme Court justices are so important.

China Shopping

I’d be more open to the idea of allowing Chinese companies to buy US companies if:
- The Chinese companies were truly private entities (but they’re not).
- The Chinese yuan were allowed to float against other currencies (but it’s not).
- US and other foreign companies were allowed to buy Chinese companies outright (but they can’t).

Until those three fundamental issues are resolved, I’m totally against what is effectively Chinese state ownership of US firms.

We’re supposed to be happy today in the Buckeye State. I’m not, because people refuse to see the relationship among these three stories about Ohio’s economy:

(click “more,” if necessary, to see what the three stories are)
(more…)

For the moment at least, courtesy of the Heritage Foundation, I am displaying their NOdometer on the left (Hat Tip to Porkopolis, where I first saw it).

Heritage explains it all (except for my clearly identified editorial change):

The NOdometer display shows the outstanding debt owed to the Social Security Trust Fund. Congress will have to raise taxes, reduce Social Security benefits, reduce other spending, or borrow more when it comes time to repay the Trust Fund–starting in 2017, according to the Social Security Administration.

Without reform, future taxpayers will be paying down the Trust Fund debt until 2041. But things don’t just get better then. When the trust fund is finally paid off in full, Social Security will face annual deficits just under $400 billion (in 2004 dollars), relative to the benefits that it has promised. Under present law, Social Security would have to cut benefits across the board by about 25 percent. The only alternatives are raising taxes, cutting away entire government departments serious cuts in and/or elimination of other government programs, or borrowing more money.

For Social Security, time is money. The longer lawmakers delay fixing Social Security, the more painful the fix will be. This year alone, the debt owed to Social Security will increase by over $60 billion.

None of the facts in the above narrative are in dispute.

The NOdometer isn’t displaying very well in my favorite browers (Firefox and Safari for Mac), but apparently looks okay in IE for Mac and Windows (if I’m wrong please e-mail me).

I have contacted (begged) Heritage to produce a thinner version that doesn’t display the last six numbers, but for the time being I’ll leave the current version up.

UPDATE: Well, well. Now it looks fine in all browsers and is thinner. Don’t know whether to give thanks to my web guy Charles, or Sami at Heritage, or both. Each of you can take the credit as far as I’m concerned.

The rounded figure currently on display is $1.72 TRILLION.

UPDATE 2: BizzyBlog’s impeccable sense of timing fails again, as the Bush Administration appears to be wimping out either wimping out or playing a trump card on private accounts (see Update 2A for more):

Washington - With the acquiescence of their leaders, key House Republicans are drafting Social Security legislation stripped of President Bush’s proposed personal accounts financed with payroll taxes and lacking provisions aimed at assuring long-term solvency.

Instead, according to officials familiar with the details, the measure showcases a promise, designed to reassure seniors, that Social Security surplus funds will be held inviolate, available only to create individual accounts that differ sharply from Bush’s approach.

Under current law, any Social Security payroll tax money not used to finance monthly benefits is in effect lent by Social Security to the Treasury, which uses it to finance other government programs. Government actuaries say the surplus is expected to vanish in 2017 when benefit payments exceed payroll taxes collected.

In addition, the GOP bill “doesn’t deal with solvency,” according to another official, indicating it would avoid the difficult choices of curbs on benefits, higher taxes or changes in the retirement age needed to implement the president’s call for long-term financial stability.

The officials who discussed the measure Tuesday did so on condition of anonymity, saying they were barred from disclosing details until a formal release today.

There may be a trick up someone’s sleeve here, but I don’t see it. Mr. Bush, my kids, if they were allowed, would quietly curse you. Mr. Bush, I think I get it, now carry through with it, and my kids will love you.

UPDATE 2A: Well, there is a “trick” in the sense that the Administration appears to be shifting the debate from “carving out” contributions to using the excess of FICA taxes over benefits paid for the next 12 years to build phased-in private accounts. The money in these accounts would be invested in the first few years in US securities and after that individuals could move some or all of the money into other (presumably pre-approved index-fund) investments.

That’s a very brief description of what is described at the Opinion Journal editorial today, which is essentially a pre-emptive leak from a couple of congressmen pushing the idea (with almost certain administration support).

The devil is in the details of this “invest-the-surplus” idea, but it looks promising (in fact, I’m tempted to say brilliant, but am holding back to see if the administration will put its political capital fully behind it).

The immediate question is what is the rest of the government going to do when it can’t steal this money any more, but that’s a good debate to have, because it exposes the well-hidden truth that the government has been getting by for 30-plus years only because it has “borrowed” Social Security surpluses and used it to fund everything else.

Roth 401(k)s are Finally Getting Noticed, But Employers Are Playing Wait and See

Yahoo Finance provides a rundown of how they will work. Essentially, they will operate just as Roth IRAs currently do, but will have the much higher contribution limits found inside 401(k) plans. 401(k) contribution limits are usually at least 15% of earnings, but are sometimes as high as 50%, depending on the employer’s plan design. The Roth IRA contribution limit for 2005 is $4,000 ($4,500 for those 50 and older).

This is an idea whose time has come, especially for younger employees. The trouble is that very few employers plan on making the move in 2006 (graphic was obtained from Investment News–paid subscription required):

This is not a good thing. A few years of delayed implementation could cost younger employees thousands of dollars in long-term wealth. The Yahoo item notes:

This is where it gets tricky: While any employer can add a Roth 401(k) option to its plan starting Jan. 1, 2006, it isn’t required. Among the major concerns for employers are the costs associated with managing the plan, and educating their workforce about this new investment option. According to The Profit Sharing Council of America’s President David Wray, companies will be much more likely to start offering a Roth 401(k) if their employees indicate that they intend to participate. So if you want a Roth 401(k) option to be added to your plan, make sure to let your employer know.

Education should be an ongoing employer concern anyway. To try to get a handle on the costs involved, I called Fidelity Investments, and confirmed what I thought, which is that the conversion costs essentially would involve adding boilerplate language to the 401(k) plan documents permitting the Roth treatment (no tax “deduction” for contributions, distributions tax-free) vs. the traditional treatment (contributions are pre-tax, distributions are taxed), and changing the forms for enrollment and making changes.

This doesn’t seem like a big burden to me. I would chalk up employers’ current posture to inertia more than anything else. So BizzyBlog’s Money Tip of the Day is to let your employer know you want the Roth option in your 401(k)–starting next year.

Business items worth noting today (some links require registration and/or subscription):

Data Breach Specific Still Being Kept Under Wraps

It stunning (to me) that more about the compromise of 40 million credit card account numbers isn’t known to the general public yet. The Eweek column notes that “only” 200,000 accounts out of the 40 million appear to be at high risk.

There does seem to be a more general concern emerging about third-party processors like Card Systems, where the breach occurred:

While companies that handle sensitive data may have shored up their own network defenses, they often fail to follow the data trail and consider the security of third-party companies they partner with, Gibbons (a security official at another company) said.

“My sense is that companies haven’t thought this through from a protection point of view—they haven’t done real clear thinking about how to protect sensitive data and what do when incidents occur,” he said.

MasterCard said it intends to take a “close look” at third-party processors and is recommending that the U.S. government expand the reach of data privacy laws such as Gramm-Leach-Bliley to cover third-party processors that deal directly with consumers, Locke said.

This does seem to validate some of the general concerns expressed by many privacy advocates over the past few years about outsourcing certain sensitive functions.

The Big Two respond very differently to difficult times

BizzyBlog wrote a pretty thorough piece about Ford’s and GM’s troubles in late April and predicted that Ford had a legacy of union-management cooperation from its late-1970s problems that would help it through it current troubles, while GM, which is going through its first crisis of continued existence, will have a much more difficult time.

It turns out that the two companies are indeed responding differently:

• GM is offering their employee discount to everyone until July 5, a top-down, one size fits all approach.
• In another top-down move, GM is giving the union until the end of the month to agree to cut UAW members’ health benefits.
• Ford, on the other hand, is putting power in its employees’ hands by making each and every one of them a salesperson (link requires free registration):
  

  Ford workers learned of their company’s incentive offer in an e-mail message Wednesday, company spokesman Jon Harmon said. It runs through Sept. 30.

  “If every employee and retiree helps sell just one more vehicle, it would account for over 300,000 sales and an additional two points of market share,” Ford Vice President Steve Lyons said in the e-mail.

  Employees or retirees will get $50 for the first customer they draw. They get $75 for the second, $100 for the third, $150 each for the fourth through seventh and $175 for the eighth, he said.

  “The response so far has been positive from employees,” Harmon said.

People Downloading (i.e., stealing) Movies Will Not Be Pleased with This

Bit Torrent loses its virginity, so to speak, as a torrent of spyware often comes along for the ride. Some would call it poetic justice. I would just call it a reason not to download movies.

(Another entry in an irregular series of items worth noting that I’ve come across [usually three in each post] about those in America illegally)
______________

ITEM 1. An idea whose time has come.

Wizbang on the efforts of Hudson, NH to enforce immigration law by charging illegals with trespassing. Absolutely brilliant.

ITEM 2. An idea that should never have seen the light of day, and should be repealed wherever it has gone into effect.

Having watched in-state tuition at Ohio schools go up at the rate of about 10% per year for the last 4 years, I can’t imagine a crazier idea than this: in-state tuition for illegal immigrants. What a complete slap in the face to taxpayers and to immigrants who have followed the rules to become citizens.

ITEM 3. An idea whose time should not have passed: Stopping employers who won’t verify Social Security numbers.

This 3 year-old entry is about how RICO laws traditionally used against organized crime can be used to rein in employers who don’t research Social Security Numbers and knowingly (who’s kidding who?) hire illegals at cut-rate wages. Question: Why isn’t this tactic being used more often, given that nearly every employer who should be checking isn’t doing so?

ITEM 3 UPDATE:

Good news from The Federation for American Immigration Reform (FAIR)–After a phone inquiry about progress on the RICO idea, I received this e-mail along with the court’s decision, which I will not burden you with (it’s a PDF):

(From Howard Foster) On June 9th, the 11th Circuit, based in Atlanta, issued its decision in this appeal. It upheld the plaintiffs’ claims under both the federal and Georgia RICO laws against the defendant (Mohawk), the nations’s second largest carpet manufacturer, for depressing wages by hiring illegal immigrants. I am delighted at this victory, which means these RICO claims have now been upheld in 4 federal appellate circuits comprising most of the nation.

Hear, hear.

Another installment in a nearly-regular series of mysteries and pseudo-mysteries this inquiring mind would like to have answers for (some links included may require free registration):

• When will those who assail “evil capitalists” go after companies that are helping oppressive governments squelch dissent?I realize that the arguments here are not black-and-white, but I am still troubled by Microsoft’s apparent willingness to help Communist-and-sorta-capitalist China keep a lid on dissent:
  

  Fresh off its controversial flip-flopping on support for a gay-rights bill in Washington state comes a news report that Microsoft is cooperating with the Chinese government to censor users of the MSN Spaces section of its MSN China Web portal.

  …. Still, the idea that an American business would help a government censor its people, to however small a degree, should leave us a little uneasy. These companies aren’t just representing themselves in foreign countries, they represent the United States as well.

  ….. Today China asks Microsoft to help ban certain words in file headers only. What if tomorrow it decides to extend that censorship to file contents? Or asks for archived records of some dissident’s Web travels? Or the Web addresses of all unregistered users of the portal? How far will Microsoft go?

  The company has gained a business foothold for now, but tomorrow, if the Chinese people find themselves free to decide where they want to go today, will they view Microsoft appreciatively as the company that helped open the door to the Internet and new ideas or suspiciously as an agent in the Chinese government’s efforts to keep that door only partially open? No one can know, but it’s something to think about.

  It would be nice to see if Microsoft has a coherent policy on this, other than “whatever makes money.”

  UPDATE: Obviously I’ve been working too much on local politics–The Wall Street Journal (link just moved to Opinion Journal at 12:01 am on June 19, so it only requires free registration) ripped Microsoft, Yahoo and Google in a brief editorial called “Microsoft’s Kowtow” originally published on Wednesday (June 15), and notes that Colin Powell is (sort of) grudgingly backing thoses companies:

  Where do you want to go today?”

  That was Microsoft’s slogan in the mid-1990s, one that evoked the unlimited possibilities inherent in the age of the Internet and the software revolution. The answer to that question today would be, “hopefully not where they discuss ‘freedom,’ ‘democracy’ and ‘human rights,’” at least not if you expect to use Microsoft’s new portal in China.

  The software giant has just bowed to the Chinese government by banning these words. If you type them on Microsoft’s new portal, a message appears telling you to try different ones. If this weren’t insulting enough, the message actually says, according to news reports, “this item should not contain forbidden speech such as profanity. Please enter a different word for this item.”

  To be fair to Microsoft, it is not alone. Yahoo! and Google have also caved in to China. Google chose last year to omit sources the Chinese government does not like from its Google News China edition, saying that it didn’t make sense to provide a link to sites that would probably be blank anyway. All of these Internet companies make the point that it is better to make a compromise, gain a foothold in China and then offer China’s masses the smorgasbord of information that is out there.

  ……. Powell added that he thought the Chinese government was fighting a losing battle in thought control over the Internet, at least “if Chinese teenagers are like the teenagers in my family.”

  It is admittedly difficult for China’s government to block Internet content from its estimated 87 million users, a number that is growing. But it is a lot easier if it has the cooperation of the industry. These corporations might also remember that Beijing needs their business. The Internet is where demand and supply meet these days, and China’s leaders need economic growth to continue if they are not to face large-scale upheaval. Certainly the Microsofts and Googles might try to drive a harder bargain.

  This bears serious watching.

  UPDATE: Uh-oh. Looks like all TypePad blogs no longer can be seen in China. Much more depressing detail, including insights into the less-than-open design of the Chinese Internet and corporate complicity in it, at RConversation.

• Do you seen now why Elliot Spitzer prefers press-release intimidation over real trials? (HT: Professor Bainbridge)I let this ride for a week in hopes of seeing a lot more reaction to this, and saw very little other than the predictable business locales (WSJ, etc.). It is impossible to conclude anything other than that Spitzer is getting a pass from the business press because he’s going after “obviously” bad people–so tactics don’t matter.

  As an example, watch how the Reuters writer tries to soften the blow to Spitzer with a ridiculous headline, sub-headline, and early paragraphs all designed to make the reader dig deep before finding out Spitzer’s target got off scot-free (my heckling is in italics):

  Ex-BofA broker acquitted on most counts
  Sihpol was acquitted of 29 of 33 charges that he helped a hedge fund trade mutual funds illegally. (what about the other four charges?)
  June 9, 2005: 2:27 PM EDT

  NEW YORK (Reuters) - Theodore Sihpol, a former Bank of America Corp. broker, was acquitted on Thursday of 29 of 33 criminal charges that he helped a hedge fund trade mutual funds illegally. (ahem–the other four charges?)

  The jury said it could not reach a verdict on the remaining four counts against Sihpol, leading Manhattan Supreme Court Justice James Yates to declare a mistrial on those charges. (So this means…..Sihpol wasn’t convicted of anything, right? Why can’t you say that?)

  The trial marked the first time that New York Attorney General Eliot Spitzer’s office has taken a case before a jury in his efforts to reform practices in the $8 trillion U.S. mutual fund industry. (I thought lawmakers were in charge of passing “reform” laws if business practices are suspect; AGs are supposed to prosecute cases.)

  Sihpol, 37, faced seven counts of grand larceny, four of securities fraud and scheming to defraud, and 22 of falsifying records. If convicted on all counts, he would have faced up to 30 years in prison. (you almost sound sad that it didn’t happen.)

  “Those of us who have believed in Ted Sihpol are euphoric,” defense attorney Paul Shechtman said after the verdict. “He showed enormous personal courage to go to trial and he and his lawyers bless the jury system.”

  It’s understandable why most of Spitzer’s public sliming targets fold, but it would be nice to see a few more hand Elliot his hat, if only to force him to have second thoughts about his tactics every once in a while.

  Here’s another blog comment on the Spitzer setback:

  The Sihpol acquittal yesterday focuses attention on an important aspect of the current wave of criminalizing merely questionable business transactions — that is, the government’s destruction of good reputations in its quest to obtain convictions and prevent juries from hearing testimony that is favorable to unpopular defendants.

• Will anybody miss those moronic “Meet Bob” commercials if this company that makes this product (warning: link is rated PG-13 by BizzyBlog) gets put out of business by the group of state attorneys general pursuing it?It would appear that the product involved has not always, uh, risen to the occasion:
  

  According to a news release from (Ohio Attorney General) Petro’s office, the suit claims Berkeley, Lifekey Inc., Boland Naturals Inc., Warner Health Care, and Wagner Nutraceuticals failed to inform consumers who received a free-trial offer for nutritional supplements that they also would be enrolled in a plan that automatically billed them for future shipments of products. It also alleges Warshak and his companies made unsubstantiated claims about the effectiveness of products and that the companies did not have competent and reliable scientific evidence to back up advertised health claims.

Some Specifics on Increases in Required Credit Card Minimum Payments

A quote famouly attributed to Mark Twain, but according to this link never actually verified, is that “When the end of the world comes, I want to be in Cincinnati because it’s always twenty years behind the times.”

So I suppose I should congratulate the Cincinnati Enquirer, my hometown paper, on only being a bit less than two months behind other publications that reported upcoming increases in required minimum payments mandated by banking system overseers, specifically The Office of the Comptroller of the Currency.

But the Enquirer does come through with a few specifics for a couple of banks:

Beginning July 1, many banks will increase minimum credit-card payments from 2 percent of the principal balance, fees and interest to 3 percent or higher.

Other banks are raising them gradually through the end of the year, to comply with the early 2006 deadline set by the comptroller.

All U.S. Bank credit-card holders will see minimum payments increase July 1 from 2 percent to 3 percent of the outstanding principal, says spokesman Steve Dale. Customers have already been notified about the change.

At MBNA Corp., the nation’s third-largest credit-card issuer, the new minimum payment formula is 1 percent of the principal balance, plus fees and interest, each month, spokesman Jim Donahue says. That begins July 1 for new customers and Oct. 1 for existing customers. Previously, some cardholders may not have had to pay anything toward their loan principal.

My understanding is that the eventual target for minimums is supposed to be 4% of the outstanding balance.

Wifi Workaround?

Since Cincinnati gets its fair share of grief for Twain’s alleged quote, it seems only fair to note a WiFi initiative that appears to have the potential to break the deadlock between telcos that want to control all WiFi and cities and other governments that want to provide it for free:

Test sites for free wireless Internet access could be operational across the region within a few weeks, the founder of the effort said Thursday.

And Ryan Rybolt, who is leading up Project Lily Pad, said the free Wi-Fi “hotspots” could be a way to further attract young professionals to the area.

He spoke at a Cincinnati USA Regional Chamber event geared toward such young professionals.

“We want to crawl before we run and make sure we can do it for four to five spots before we get to 50 spots,” said Rybolt, who also is chief operating officer for Blue Ash-based Infintech, an electronic financial services provider.

“We want to make sure we work out all the technical bugs because we know once we get started, it will turn quickly from us asking for permission to places coming to us wanting to be a part of this.”

Rybolt said the initial sites being considered are Hyde Park Square, Fountain Square and Findlay Market.

The Project Lily Pad effort will be a public/private partnership, with business sponsors fronting the $2,000 or so a year it would cost to keep a Wi-Fi “hotspot” up and running in exchange for credit on signs in the area plus mentions on the launch Web page - much like an Adopt-A-Highway program.

“We want this to be a turnkey operation, where eventually all we need is the application, a sponsor, and we’re ready to get it set up,” Rybolt told a gathering at the chamber’s offices.

The cost to sponsors would be tax deductible, Rybolt said.

He said several businesses are already signed up or are close to doing so, with Time Warner Cable of Cincinnati’s RoadRunner business division providing the technical installation for each site.

…… Efforts to widen free Wi-Fi access are under way in cities throughout the country, with Austin, Texas, a prime example. Philadelphia also is trying but has run into resistance because of the use of public funds.

But according to Rybolt, no other city is using the sponsorship model.

To me, this would appear to bust objections by the telcos and free-marketeers such as the Institute for Policy Innovation (link is to home page; study that decries public ownership of WiFi is in print and not available online) that governments should stay out of WiFi.

I’m looking forward to the day I can do Hyde Park Square blogging, or catch on e-mail between meetings at Fountain Square. How cool.

UPDATE: It turns out that my take on IPI’s reaction is correct. Bruce Cleland of IPI was kind enough to respond my e-mail inquiry about the proposed WiFi setup and said in part:

While so far as I know IPI has not published anything specifically on this model I see no reason we would not support it. Essentially it is the television broadcast model, or terrestrial radio model - something of value is provided to the public via the funds of those who advertise.

Our objection has always been government stepping in where the free market should/could be operating.

MasterCard Mess

In what looks to be the largest instance of compromised data ever, MasterCard disclosed a security breach that potentially affects a whole lot of people:

MasterCard International said on Friday it was alerting member financial institutions of a security breach that could affect over 40 million credit cards, of which nearly 14 million are MasterCard-branded.

The breach took place at CardSystems Solutions in Tucson, which processes transactions on behalf of financial institutions and merchants.

MasterCard said it is giving member financial institutions the specific card account numbers that may have been compromised. MasterCard-brand cards include MasterCard, Maestro and Cirrus.

The company learned the final details of the breach this week, according to spokeswoman Jessica Antle. “It looks like a hacker gained access to CardSystems’ database and installed a script that acts like a virus, searching out certain types of card transaction data.”

The credit card information exposed in the breach did not include any Social Security numbers, birth dates or other highly sensitive personal data, Mastercard said.

I would give more info, but I don’t see any indication of what particular MasterCard-branded or other cards are affected; I will update if I learn something. The chances that any given reader of this post might be affected appear to be more than minimal.

I will tell you that though I can’t prove the “experts” wrong, I don’t like, and am very skeptical, of this spin reported in the article:

Rather than a rash of illicit activity, experts say, the slew of reports may have more to do with companies wishing to protect themselves in the wake of a California state law requiring businesses to notify its customers when their personal information has been exposed in a security breach.

UPDATE: It appears, according to this item in ZDnet, that “only” 68,000 MasterCard accounts are in jeopardy. Color me skeptical:
- First, if thieves manufacture working cards (and assuming the thieves have the extra 3- or 4-digit security code, which I would suspect they do), they can probably use it anywhere that does not require a signature, which around here is more and more places: gas stations, grocery stores for purchases below $25. And for that matter, who checks signatures any more, and against what?
- Second, the MasterCards were only 14 million of the 40 million cards compromised. What is the status of the rest?

In a rare (one would hope) but necessary detour into defending the honor of our military and their soldiers, I must bring attention to Large Bill, who has noted The Silence of the Ohio Senators regarding Illinois Senator Dick Durbin’s comparison of our soldiers guarding terrorists at Guantanamo Bay to Nazi soldiers in WWII and conditions there as analogous to WWII concentration camps.

In case this displeases you as it does me (notice the measured rhetoric disguising purple rage), here are links to their contact info:
- Mike DeWine: 202-224-2315; all other info here.
- George Voinovich: 202-224-3353; index to in-state offices is here.

Emphasize when you call (if true) that you are from Ohio, and you vote.