June 23, 2008

Newspaper Ad Revenues Dive; No Media Self-Examination Evident

In any other industry, when revenues fall steeply, those in charge take at least a casual look at the quality of their product, and try to get a grip on whether it’s meeting consumers’ needs and expectations.

But that never seems to happen in the news business.

True to form, the New York Times’s Richard Perez-Pena devoted over 850 words to the latest developments, and had nothing to say about product quality:

For newspapers, the news has swiftly gone from bad to worse. This year is taking shape as their worst on record, with a double-digit drop in advertising revenue, raising serious questions about the survival of some papers and the solvency of their parent companies.

Ad revenue, the primary source of newspaper income, began sliding two years ago, and as hiring freezes turned to buyouts and then to layoffs, the decline has only accelerated.

On top of long-term changes in the industry, the weak economy is also hurting ad sales, especially in Florida and California, where the severe contraction of the housing markets has cut deeply into real estate ads. Executives at the Hearst Corporation say that one of their biggest papers, The San Francisco Chronicle, is losing $1 million a week.

Over all, ad revenue fell almost 8 percent last year. This year, it is running about 12 percent below that dismal performance, and company reports issued last week suggested a 14 percent to 15 percent decline in May.

“Never in my most bearish dreams six months ago did I think we’d be talking about negative 15 percent numbers against weak comps,” said Peter S. Appert, an analyst at Goldman Sachs. “I think the probability is very high that there will be a number of examples of individual newspapers and newspaper companies that fall into a loss position. And I think it’s inevitable that there will be closures in this industry, and maybe bankruptcies.”

Geez, even an investment analyst won’t talk about the media-bias and media-incompetence elephants in the room.

In fact, in the face of calamitous failure, the arrogance lives on (bold is mine):

“As long as we’ve got content, we’ve got something nobody else has,” said Mr. Morton, of Media General. The industry’s challenge, he said, is to keep expanding that audience, “proving to the advertiser that we, in fact, are the right link so that he can have his conversation with the customer through us.”

There’s plenty of fair and balanced content elsewhere, and the supply is growing. With attitudes like Mr. Morton’s, the cliff can’t be far away.

Cross-posted at NewsBusters.org.

Paragraphs of the Day: On Yesterday’s Fram-Putman AP Disgrace

Alan Caruba (Wiki entry here), in going after the disgraceful “report” by Associated Press writers Alan Fram and Eileen Putman (“Everything is seemingly spinning out of control”) that I criticized yesterday, makes an important point — namely, that the problem goes well beyond the pathetic pair of jaded journalists:

World to End. Vote Democrat.

….. If Fram and Putnam are not on the payroll of the Democrat Party, then they surely should be for writing tripe like this. It screams at the reader to vote Democrat and, in particular, for Sen. Barack Obama, the wizard of hope and change.

This is not journalism by any stretch of the imagination. It is a blatant use of scare tactics to influence the outcome of an election. One expects a political party to engage in such tactics, but a major newswire syndicate should have a layer or two of seasoned editors who make sure such tripe does not move to newspapers and other media.

One has to conclude that the AP agrees that such “tripe” is “journalism,” and that there’s nothing out of order in what these two sad sacks wrote.

(Sidebar: SourceWatch doesn’t like Caruba, which is a sign that he’s likely an OK guy. Regardless, his critique is dead-on.)

Barack’s Social Security A-bama-nation

Filed under: Economy,Soc. Sec. & Retirement,Taxes & Government — Tom @ 9:34 am

Note: This column was first posted at Pajamas Media on Saturday morning.

________________________________________

In a speech in Columbus, Ohio on June 13, Barack Obama proposed a massive tax increase to fund the Social Security program.

A Democratic presidential candidate proposing a tax increase is not exactly news. But this is no ordinary tax increase.

For the first time in the history of Social Security, Obama would impose the payroll tax on a group of people — anyone earning over $250,000 from work or self-employment — who would receive no additional benefit in return. The Illinois senator would carve out a “doughnut hole,” sparing those who earn between the current maximum taxable earnings of $102,000 and $250,000 from having to pay any additional tax.

This is a tax increase that is stunning in both size and scope, as this chart shows:

SocSecObamaProp0608

Obama’s justification is particularly odious (statement comes at about 7:00 into the linked video):

Right now the Social Security payroll tax is capped. That means that most middle-class families pay the payroll tax on every dime that they earn. But once you get to $102,000 per individual, then you’re no longer paying the payroll tax. And what that means is that ….. you’ve got billionaires and miliionaires who are paying ….. payroll tax on only a tiny fraction of their income.

Obama’s class-envy rhetoric obscures his proposal’s abandonment of what has been, until now, an immutable principle of Social Security: Every dollar a person pays into the system affects the amount of his or her Social Security retirement benefits, should he or she live to see that day — not by much, in the case of those whose earnings are in the top half of the taxable earnings range, but at least by a bit. Those who earn more than the taxable threshold aren’t taxed; but, in exchange, they don’t receive any additional benefits.

If Obama’s proposal were ever to become law, those days would be over.

There’s a supposedly open item in all of this that I believe has a pretty obvious answer. On June 4, as the outline of what Obama intended to propose began to become clear, the Wall Street Journal speculated on it:

A key question that the Obama campaign hasn’t yet answered is whether higher earners under his plan would collect more in Social Security benefits than under current law, to reflect the additional payroll taxes paid.

Many economists argue that if the earnings cap is lifted, it would be unseemly to pay benefits according to the current formula to wealthy CEOs who don’t need to rely on Social Security for financial support in retirement.

That’s exactly right. Although it might arguably be “fair” to extend benefits to high-income earners proportionate to the taxes they have paid in, it’s clear to me that any legislator or president attempting to defend doing this would be committing political suicide.

Thus, I believe that Barack Obama has no intention of increasing Social Security benefits paid to anyone he is targeting for the new tax beyond what the system currently provides — or if he claims he will, it will never happen. Instead, the Illinois senator simply wants to force the person earning $1 million, or $10,000,000, along with his or her employer (very often the same person), to kick in a combined additional $93,000 or $1.2 million, respectively, because …. well, because he can.

Obama’s proposal thus officially severs the earnings/benefit linkage for the first time in the 70-year history of Social Security. As Jim Taranto wrote in the Wall Street Journal on Monday:

Obama’s proposal to use Social Security as a means for taxing “the rich” amounts to a repudiation of the program’s original New Deal conception. Social Security is supposed to be a pension for workers, not a redistribution scheme. That is why Democrats have, over the years, resisted efforts at means testing–i.e., preventing the wealthy from collecting benefits. Obama’s proposal would convert Social Security into nothing more than another welfare program.

Many don’t realize that Social Security is already means-tested in at least two ways:

  1. The more you make, the less you get, as a percentage of what you earned while you were working. You’ll see that this is the case if you work through and understand the larger implications of the examples that begin on this page at Social Security’s web site.
  2. If you make “too much” while you’re retired, you have to pay federal income tax on either 50% or 85% of your Social Security benefits.

Obama’s proposal effectively means-tests Social Security all the way up the income scale, piling additional insult on top of existing injury. Class warriors may take comfort in the money they will take from the rich, but I doubt that they have an answer to this question: How is the economy going to avoid a meltdown if its highest earners see their take-home pay and spending power cut by so much?

Things I’d Like To Post About Today ….. (062308)

Filed under: TILTpatBIDHAT — Tom @ 8:06 am

But I Don’t Have Any Time For:

Positivity: Bedford man offers gratitude to stranger who saved his life

Filed under: Positivity — Tom @ 5:56 am

From Fort Worth, Texas:

Posted on Sat, Jun. 14, 2008

For two days, Jaye Mangrum has been thinking about the stranger who called 911 after Mangrum was accidentally run over while working on his truck at his home in Bedford.

A former Army medic, Mangrum was sure the man must have had military training in first aid. Mangrum even credited the stranger’s parents, figuring they must have taught him to always help a stranger.

On Friday, the mystery was solved when Mangrum met his “hero.”

“That’s him! That’s him!” Mangrum said as James Brannan walked into his room at Harris Methodist Fort Worth Hospital.

Brannan, 34, of Hurst, was on his way to work in the shipping department at a Grapevine business Wednesday when he saw the accident out of the corner of his eye.

“I thought, don’t let what I just saw be true,” he said.

The half-ton pickup, which Mangrum had raised with wooden four-by-fours, had rolled over his legs and torso. Mangrum, a plumber, had a collapsed lung, broken ribs and severe bruising. His wife and two children weren’t home, and he couldn’t call for help.

Brannan pulled over and called 911. He said that he’d never dealt with such a serious situation before but that his uncle was a Dallas sheriff’s deputy and an aunt is a licensed vocational nurse, so he knew he had to keep Mangrum from moving.

Brannan held Mangrum’s hand and kept him calm until he was loaded into a helicopter ambulance.
“I was just doing what anybody else would have done,” Brannan said. …..

Go here for the rest of the story.