October 12, 2005

Bizzy’s Business Briefs (101205)

Quick links for today:

Angela Merkel will become Chancellor in Germany

This is a relief, after Gerhard Schroder’s initial post-election pretense that he was still in charge.

But Ms. Merkel’s flexibility, particularly in economic matters, will be severely limited by the coalition she had to build to gain power after the close election result.

The Wall Street Journal (requires subscription) suggests that Ms. Merkel should at least work to rebuild frayed German-US relations after Gerhard Schroder’s government’s past 7 years of America-bashing:

The Chancellor had every right to oppose the war, which was unpopular among a majority of Germans. What was stunning, rather, was the aggressiveness with which he and his government expressed their opposition, never mind that there was never a chance of Germany assuming any kind of combat role.

Thus we had such spectacles as Foreign Minister Joschka Fischer lecturing Defense Secretary Donald Rumsfeld on the folly of American policy. Still worse was Mr. Schröder’s Justice Minister, Herta Däubler-Gmelin, explaining that Mr. Bush was using the war to distract attention from his domestic problems: “That is a popular method,” she reportedly said. “Hitler has done that before.” The Justice Minister lost her job for that remark, but Mr. Fischer kept his.

Since then, matters have scarcely improved. In the immediate wake of hurricane Katrina, Mr. Schröder’s Environment Minister, the former Maoist Jürgen Trittin, did not even stop to express his condolences before pointing an accusing finger at Mr. Bush: “The American president,” he wrote, “has closed his eyes to the economic and human damage that natural catastrophes such as Katrina — in other words, disasters caused by a lack of climate protection measures — can visit on his country.” And a recent Social Democrat election poster showed a photograph of flag-draped American caskets coming off a military transport plane. The caption: “She [Merkel] would have sent soldiers.”

All of this has helped contribute to a broader climate of anti-Americanism in Germany. Recent headlines from best-selling Stern magazine include: “How America Lied to the World”; “Somalia in America’s South”; Americans “could care less about the rest of humanity.” Meanwhile, one-third of German youngsters reportedly believe the U.S. was behind 9/11.

We often hear from senior German diplomats that they will “never forget” what the U.S. did for their country after World War II. If that’s true, then the first order of business for Ms. Merkel and her government is to drain this swamp of German paranoia and prejudice, grown to monstrous proportions during Mr. Schröder’s tenure.

All well and good, but if Germany doesn’t do something to address its long-term economic malaise, it will fall further behind the US and perhaps even other still-developing countries in standard of living. The resentment against economic inferiority may be just as likely to increase an anti-American backlash as it is to cause the German people to look inward for workable solutions.

Delphi vs. GM vs. US Taxpayers Pension Battle Looms

This will be a donnybrook (link requires registration; bolds are mine):

Delphi may cost GM $11B
Money would be owed for post-retirement benefits to former GM workers

General Motors Corp. says the amount of money it may be liable to pay toward post-retirement benefits of former GM employees who transferred to Delphi Corp., when it was spun off from GM in 1999, could range from nothing to as much as $11 billion.

GM’s contribution — and whether other entities, including the federal pension agency, will also pay in — looms as a major issue in the New York-based court that will preside over Delphi’s Chapter 11 bankruptcy reorganization. GM officials say it is too soon to determine what its contribution will be because of the uncertainties created by that case.

The haggling begins today when a federal bankruptcy judge is assigned the case and conducts an initial hearing. Lawyers for union interests are expected to attend, along with attorneys for Delphi, creditors and others.

It could be months before union-covered employees get a clear answer on exactly where the money for their pensions and post-retirement health care benefits will come from, Delphi spokeswoman Claudia Baucus said on Monday.

Union leaders say GM made an ironclad commitment in 1999 to guarantee the pensions and post-retirement health care of all union-covered Delphi employees who become eligible for retirement by October 2007, should Delphi become financially unable to provide those benefits.

“I don’t see that they have any choice,” Wes Wells, executive director of the AFL-CIO’s Dayton region, said Monday of GM.

The IUE-CWA will coordinate with the other unions to do all it can to protect the pensions, health care coverage and jobs of union workers, said Henry Reichard, chairman of the IUE-CWA Automotive Conference Board. His board represents IUE-CWA workers at eight Delphi plants nationwide, including two in the Dayton area.

GM says, however, that Delphi’s reorganization filing by itself didn’t trigger GM’s commitment to the unions to pay those benefits, and that the amount of GM’s liability — and who else pays — remains to be determined.

GM said, for instance, that it believes it would be liable to pay pension guarantees only to the extent that pension contributions from Delphi and the federal Pension Benefit Guaranty Corp. don’t add up to the amounts GM has guaranteed.

GM has a response if it ends up being on the hook for the whole $11 billion–it could file for bankuptcy. CNN reports that one analyst believes there is now a 30% chance of that happening.

Deductions for Mortgage Interest and Employer-Paid Health Insurance Set for Trimming?

A presidential commission thinks so:

Panel urges restrictions on certain tax breaks

WASHINGTON — Two of the nation’s most popular tax breaks — for home mortgage interest and employer-paid health insurance — should be narrowed, a federal panel appointed by President Bush suggested Tuesday.

The panel’s recommendations will be made in a report scheduled to go to the Treasury Department by Nov. 1. In addition, the panel will recommend giving all Americans who pay taxes the opportunity to deduct charitable donations, even if they don’t itemize their tax returns.

The most far-reaching proposal previously endorsed by the panel is the elimination of the alternative minimum tax, which would affect 20 million taxpayers next year unless changes are made. But the panel is charged with making revenue-neutral changes, so it must propose raising as much money as the AMT repeal would lose.

Neutral, schmeutral.

Trimming back the mortgage interest deduction at the peak of a housing boom could make the housing bubble a self-fulfilling prophecy. Employers who can’t deduct all of their health-insurance costs, especially smaller ones, will stop covering their employees. Getting rid of the AMT will enable people to arrange their financial lives rationally, instead of forcing them to arbitrarily arrange things for the mere purpose of avoiding the AMT.

The two deduction rollbacks will generate much less revenue than anticipated. Though this contention will be difficult to prove, AMT repeal will probably generate tax revenue through efficient resource allocation and the generation of more productive economic activity.

Back to the drawing board, guys.

The BBC and Taishi–A Correction

Filed under: MSM Biz/Other Bias,MSM Biz/Other Ignorance — Tom @ 4:51 pm

Angus Foster, Asia-Pacific Editor of the BBC news website, has e-mailed me comments concerning my original post on the BBC and Taishi: “Is the BBC Censoring Itself to Keep in China’s Good Graces?”

My concern was that BBC might be washing out references to the city of Taishi in the preparation of some of its web reports covering uprisings in rural China. As evidence I cited a Google search result listing a BBC article containing a reference to Taishi where the actual linked article had no immediately visible reference to the city.

All of which is true, but it doesn’t reflect what I originally feared, namely that an editor or other official with BBC had removed the city reference from the original article text.

Here is Mr. Foster’s e-mail explaining the situation:

Hi there again, someone who understands these things better than I has now pointed out the reason for your original concern.

Your google search found this:

BBC NEWS | Asia-Pacific | China summit targets poverty gap
A villager walks past a row of riot police in Taishi, southern China …
closed-door meeting in Beijing to map out policy for the next five
years. …
news.bbc.co.uk/2/hi/asia-pacific/4321186.stm – 36k – 10 Oct 2005 -
Cached – Similar pages

For whatever technical reason, Google is pulling in our story’s headline (China summit targets poverty gap) and then the alt tag – rather than the caption – of the photo. (The alt tag is the text that becomes visible if you hover your mouse over an image – I am sure you know that, but just in case the term is different in the US).

We didn’t remove Taishi on our story, you can still see it there in the alt tag on the photo at news.bbc.co.uk/2/hi/asia-pacific/4321186.stm

All that has happened is that Google has shown you a different part of the story than you expected to see.

So I hope you can now do more than give us the benefit of the doubt.

I have gone to the page source code to confirm that the language Mr. Foster is referring to containing the reference to Taishi is indeed there, and of course it is. None of the Mac browsers I am using (Firefox, Safari, Explorer) displays the language when I hover over the picture, but I do see it in Firefox if I control-click on it and look at “Properties.” I would expect that hovers in Windows browsers reveal the Taishi-containing language, though I’m not in a position to know that at the moment.

I am grateful that Mr. Foster went to the trouble of getting an explanation, and to the further trouble of providing it to me.

I apologize to the BBC and BizzyBlog readers for jumping to an incorrect conclusion in this case. The fact that the Beeb did indeed work to eliminate the word “terrorist” from its initial coverage of the July London subway bombings may have justified initial suspicion, but did not justify my reaching the same conclusion regarding Taishi, and I greatly regret the error. I have referenced the original post to this one to ensure than all who read the original are aware of this correction. I believe that the Beeb is indeed, as Mr. Foster suggests, entitled to more than a mere benefit of the doubt on the fairness and accuracy of its Asia-Pacific and other reporting.

Now perhaps we can move on to Google and ask it why it shows hidden text as part of a search engine result.

UPDATE, October 15: Not that it constitutes redemption, but RConversation also thought Lu was dead: “Based on such a description, it seems implausible that a person could survive. But he did.” She further characterizes the error as a “colossal journalistic mistake.” I’ll say.

Positivity: Fast Action by 4 Saves 2 from Blaze

Filed under: Positivity — Tom @ 6:07 am

From the Arizona Republic (may require registration; reproduced in full):