August 1, 2009

WSJ Gets 2Q09 GDP Report About Right; POR Economy’s Effect Verified

Filed under: Economy,Health Care,Taxes & Government — Tom @ 10:08 am

In an editorial this morning, the Wall Street Journal’s editorialists, in the midst of assessing the current economic situation, make a huge point that if you want a markets recovery from the POR Economy aka the POR Recession/”Repression” As Normal People Define It to continue, statist health care must be stopped (bolds are mine):

Poised for a Rebound
The good-bad news in second-quarter GDP.

The bad news in yesterday’s second-quarter GDP is that the recession was even deeper than previously thought. Or should we say that is the good-bad news. Because that pain is now largely past, the very steepness of the decline means that the economy is now poised for a sharper rebound, or at least it should be if the history of recessions is any guide.

The economy contracted by only 1% at an annual rate in the quarter, but the Bureau of Economic Analysis report was even more interesting for its growth revisions in previous quarters. Last year’s third quarter was revised downward by a remarkable 2.2-percentage points, to a negative 2.7% rate. This means the recession began in earnest in July and August, which follows the spike to $145-a-barrel oil and the collapse of Fannie Mae and Freddie Mac, and it accelerated in September with the fall of Lehman Brothers and its aftermath.

….. We’ll never know for sure, but it seems probable that the recession that formally began in late 2007 would have remained far less destructive had our financial plumbers done a better job of preparing the shaky financial system for the rough weather. Last year’s commodity spike—a reaction in part to reckless monetary policy—and Washington’s failure to build financial firewalls after the fall of Bear Stearns look to be major culprits in making the recession worse than it needed to be. This is where we’d most fault Ben Bernanke’s Federal Reserve and Hank Paulson’s Treasury.

The encouraging news is that the Adam Smith washout of recent months has now set the economy up for a comeback.

….. What didn’t seem to make much difference is the “stimulus.” Transfer payments did climb sharply by 7.4% in the quarter, reflecting the likes of jobless insurance. These payments offset declines in worker compensation, but they didn’t do much for consumer spending, which declined by 1.2% in the quarter. In any event, these transfer payments are temporary and thus do nothing to promote the investment and risk-taking that are the only way back to steady growth and prosperity.

….. Political uncertainty also continues to hang over risk-takers, and on that point it has been fascinating to see the latest Wall Street rally coincide with the political troubles of ObamaCare. If it collapses, we might see Dow 10,000.

Gee, I wonder who else said that “the recession began in earnest in July and August” of last year? Actually, my consistent take has been that it the recession didn’t even begin until just before then, back in mid- to late-June 2008. An economy that somehow showed positive growth in the second quarter despite the oil-price rise (revised to +1.5% from +2.8% in Uncle Sam’s comprehensive revision yesterday) went irretrievably negative when Nancy Pelosi, Barack Obama, and Harry Reid injected an ultra-heavy dose of the very “political uncertainty” the Journal refers to above as a still-present menace. Shorthand, it’s the FUD factor (Fear, Uncertainty, Doubt).

In hindsight, it’s fascinating to recall that the “uncontrolled and unexpected” Lehman bankruptcy, in effect decided upon by Tax Cheat and Proven Liar Tim Geithner, was a major FUD addition and the catalyst to the palpable sense of financial panic that ensued last fall. It still seems from here to have been artificially orchestrated, enhanced by Hank Paulson’s blackmail, and abetted by the government’s decision to hang WaMu bondholders out to dry.

The coincidence of Geithner’s nomination once Obama won, and the President’s determination to see his nomination through in spite of Geithner’s disgraceful tax problems and the very mixed reviews of his performance while at the New York Fed and during the initiation of TARP, is more than a little hard to take at face value.

And of course the Journal is right that the mislabeled “stimulus” hasn’t been relevant, despite Obama’s crowing to the contrary yesterday. The transfer payments that have dominated “stimulus” spending thus far by definition do NOT add to GDP; the spending of those transfer payments potentially can to a nominal degree. But it’s clear, as the Journal noted, that consumers are holding relatively tight to their money.

The fact remains that the POR Economy represents the first time since quarterly data has been tracked that there have been four quarters of contraction in a row. During that time, after yesterday’s comprehensive revision, the economy has shrunk by 3.9%. It would have to grow at an annualized rate of just over 4% for a full year before we are even back to where we were on July 1, 2008. Even then, getting per-capita GDP back to where it was would require another 6 months or so of similar growth. Pelosi, Obama, and Reid really have no credible right to even open their mouths about “economic progress” until that point is reached.

In terms of opportunity lost, Pelosi, Obama, and Reid’s Lost Year should really be seen as a 6% hit. If they hadn’t deliberately done what they did to tank the economy we could easily have gotten through 2008 at +2% or more.

That President Obama’s statist health care takeover efforts should fail for moral reasons should be pretty obvious. Sadly, it isn’t, which is why there will be elaborations on this aspect of things in the coming days, including editorial reinforcements.

But, as the Journal has noted, a statist health care crackup in Washington would more than likely be very helpful to the stock market and the economy as a whole.

An Open Letter to FRC’s Tony Perkins

Filed under: Activism,Health Care,Life-Based News,Taxes & Government — Tom @ 8:47 am

RomneyNo0808I sent the following in an e-mail to the Family Research Council last night, and directly to Mr. Perkins this morning:

Mr. Perkins,

Normally I peruse your e-mails and shake my head in disgust that you, like so many alleged social conservatives, are more interested in hollow “victory” and maintaining your precious seat at the table, regardless of the compromises involved, than fighting for an aggressive, values-driven agenda.

But your obvious happiness that Mitt Romney will appear at your September Values Voter Summit demands a response. Romney’s annual presence at the event is a risible disgrace, and a mockery of everything you claim to stand for.

Mitt Romney, proactively and on his own, unconstitutionally instituted same-sex marriage in Massachusetts. That’s not arguable.

Mitt Romney, in signing CommonwealthCare, established a legislated legal right to subsidized abortions in Massachusetts for the first time. That’s not arguable.

Mitt Romney has defamed the memory of Ronald Reagan by claiming that Reagan was “adamantly pro-abortion.” Reagan NEVER was. Romney also claimed that Henry Hyde was once pro-abortion. Hyde NEVER was.

As those who had to endure his four years as Governor of Massachusetts can attest, the examples and betrayals I have cited only scratch the surface.

Mitt Romney’s annual presence at the “Values Voters Summit” is an insult to the intelligence of true values voters, as is any claim you might have to be a legitimate leader of social conservatives.

Do not be surprised if REAL values voters start picketing and protesting at FRC events, including this one. If I lived in the DC area, I would be marking my calendar to do just that. For all the potential damage that a Mitt Romney could do, lose OR win, a strategy to picket your events and offices and those of other values traitors might save more pre-born and aging lives in the long-term than picketing actual abortion chambers.

We cannot tolerate the total sellout of our values accompanied by an almost certain electoral defeat in 2012 if Mitt Romney is the GOP nominee. Even if he somehow were to win, there is no reason to believe that he won’t do the same things to the nation that he did to Massachusetts. He deserves no legitimizing platform. Shame on you for continuing to provide him one.

This will be posted as an open letter at my web site on Saturday morning.

Tom Blumer
BizzyBlog.com
Mason, OH

The Associated Press Declares War on the Online World

APupsideDownAP wants web sites to pay for content (even headlines) users may not read, or even see.

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Note: This originally went up at Pajamas Media and was teased here at BizzyBlog on Thursday.

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My beloved, eternally-bumbling Chicago Cubs swept the even lowlier Washington Nationals in a 3-game mid-July series. I read that in an Associated Press report headlined “Big 4th inning gives Cubs sweep of Nationals.”

Will reporting this result to readers get me in trouble some day soon?

That result isn’t as far-fetched as you might think.

On July 23, the AP, that empire of alleged journalism that characterizes itself as “The Essential Global News Network,” signaled its intention to fundamentally change its relationship with the rest of the online world:

As part of a strategy approved Thursday by the AP’s board, the cooperative will start by bundling its text stories in an “informational wrapper” that will include a built-in beacon to monitor where stories go on the Internet.

The beacon is meant to be a policing device aimed at deterring Web sites from posting AP content without paying licensing fees. The AP and its member newspapers contend unlicensed use of their material is costing them tens of millions of dollars in potential ad revenue.

…. “This is a pivotal step in the fight to ensure that quality journalism can be funded in the digital era,” Tom Curley, AP’s chief executive, said in an interview. “We have stood by too long and watched other people make money off the hard work of our journalists. We have decided to draw a line in concrete.”

The wire service expects to roll out the “informational wrapper” in stages beginning in November.

AP’s press release is troubling enough, but in a related New York Times interview that day with Richard Perez Peña, AP’s Curley added this:

…. the company’s position was that even minimal use of a news article online required a licensing agreement with the news organization that produced it. …. he specifically cited references that include a headline and a link to an article, a standard practice of search engines like Google, Bing and Yahoo, news aggregators and blogs.

Asked if that stance went further than The A.P. had gone before, he said, “That’s right.”

While AP’s aggressive posture is of course largely about money, it is also about control, accountability, and thin-skinned resistance to criticism. The only thing up for debate is the relative importance of each factor.

Of course, the money involved is a big deal. In its press release, AP cites a roughly 6.5% drop in revenue in 2008 from $748 million to $700 million. It expects another drop in 2009 because of reductions in fees charged to newspapers and broadcasters.

The wire service should consider itself lucky, because it is. While AP’s revenue declines are only a bit less than those seen at larger subscribing outlets such as the New York Times (down 7.6% in 2008) and Gannett (down 9%), problems further down the newspaper food chain are clearly much more serious. Click on the “Quarterly” tab at this Newspaper Association of America link (HT Newsosaur), and you’ll see that total print advertising revenues in the first quarter of 2009 ($5.923 billion) were 36% lower than 1Q08 ($9.296 billion), and a shocking 55% lower than 1Q06 ($13.245 billion). In that context, it would seem that AP’s price breaks are nowhere near what its subscribers need to survive.

In fact, AP’s relative strength, and its ability to limit its fee reductions to far less than the revenue hits its subscribers are taking, are a result of its dominant, near-monopoly market position. Because of the steep decline in available resources and a worse crash in credibility during the past decade at the New York Times, AP reports now probably form the basis for the vast majority of most newspapers’ national news and a high plurality of their international news. AP reports very often serve as the starting point for top- and bottom-of-hour radio newscasts, and more than likely drive a large portion of the content of television news shows and newscasts. For breaking daily business news, the nation, heaven help us, is largely at AP’s mercy, where the economic narrative shaped by its fundamentally weak and insufferably biased reporters seems to insinuate itself everywhere.

Though the wire service has content licensing agreements with the major search engines and some aggregators, it currently only gains financially when visitors click through to AP or a subscribing affiliate. That’s not enough for Curley & Co. They want to get credit when a user only lands on the page containing a related search engine listing or, as noted above, arrives at a page with a mere headline – even if the user never actually looks at it.

In taking this position, the AP and Curley apparently believe that megasites like Matt Drudge, whose every linked headline drives hundreds of thousands if not occasionally millions of readers to their related stories, and who on his own provides ten links to the wire service that are visible 24-7-365, should be paying AP for the “privilege” of beefing up AP’s and its subscribers’ traffic, and even for every user who visits him. Charging Drudge, or a search engine, or anyone else, for a user who doesn’t click through is like making a store pay a nickel for every customer who walks by the newspaper rack, whether or not they even look, let alone buy.

Beyond that, AP seems to believe that blogs, forums, and other online outlets that link and excerpt its material (perhaps even e-mailers, texters, and twitterers?) have no right to do so without compensating AP.

Of course, the AP’s position is economically ignorant, at least in the short-term. There will be pushback from those who will refuse to link to AP. Others will likely figure out how to disable the wrapper, while still others will resort to likely wrapper-proof screen shots and area grabs.

If Curley & Co. were consistent, they would prevent web crawlers from indexing the wire service’s content. But that would require them to build a web business on their own. Fat chance of that.

AP’s astounding arrogance is intensely galling. These control freaks seem to believe that they not only own the news, but also that the news is only what they say it is, and that you have to come to them to get it – or otherwise pay for the privilege.

Not so, guys. Of course, you own your content. Obviously, your content ownership proscribes outright pilferage. But in a free society, ownership of news content also comes with responsibilities. Those responsibilities include permitting the quality of your content to be critiqued, allowing your alleged facts and claims to be disputed and expanded upon, and putting up with documented criticisms of possibly biased reporting, along with the exposure of the possible sources of those biases. It also should allow readers to question why the tone of stories changes in mid-stream, as exemplified by the headline changes this past weekend in the Obama-Gates-Crowley affair even though there were no new story developments during the intervening period:

APobamaGatesHeadlines0724and0725

Curley & Co. do not recognize the legitimacy of what normal people refer to as “fair use,” and are in fact seeking to narrow its scope to near nothingness.

Last year, AP’s legal bullies went after a leftist critique site called the Drudge Retort, telling it that even an excerpt as short as 33 words “does not fall within the parameters of fair use.” Though Curley would not discuss fair use with the Times, it’s clear that demanding money for listing mere headlines is a quantum leap beyond last year’s widely ridiculed exercise.

It would be one thing if there was anything resembling reciprocity, but the fact is that AP frequently scrapes news from blogs, and even its subscribers, without attribution. One small example: In Fall 2007, yours truly and fellow PJMer Patrick Poole exposed the terror-sympathetic background of a Muslim cleric who was about to begin serving as imam at a Cleveland mosque. When the imam “resigned” before he even started and blamed “bloggers” for his demise, the AP parroted his whining and refused to name either of us. For that matter, the Cleveland Plain Dealer, for whom I was actually blogging at the time, also mostly ignored us. This is the same Plain Dealer whose Readers Representative recently stooped to calling bloggers “pipsqueaks.”

But credit, like content, is a one-way street in AP-land. As far as it’s concerned, once their reporters type it, they have absolute control over it, and you can’t have any of it, even for perfectly legal reasons — unless you pay their toll. Do not rule out the possibility, especially given who is in charge in Washington, that they might succeed. Meanwhile, at least you’re reasonably up-to-date on how the Cubs are doing.

Positivity: Leading Italian pro-lifer reiterates commitment to unborn

Filed under: Life-Based News,Positivity — Tom @ 7:54 am

From New York City:

Jul 30, 2009 / 02:04 pm

Following concern about some of his comments on abortion, pro-life Italian politician Rocco Buttiglione has clarified his position. Saying his words were taken “out of context,” he endorsed defending the unborn child “with all possible means” and stated he did not want to do anything to split the U.S. pro-life movement.

Buttiglione, a Christian Democrat politician and political science professor, is a member of the Pontifical Academy of Social Sciences. He was reported recently as saying that Italian pro-lifers’ opposition to the decriminalization of abortion was a “mistake.”

Speaking in a July 28 interview with the Catholic Family and Human Rights Institute’s “Friday Fax,” he said his remarks had created “quite a big mess.”

Describing the history of the Italian pro-life movement, he noted that a 1981 referendum on abortion was a “terrible defeat” for the pro-life cause, losing by 68 to 32 percent.

“In Italy the people freely chose abortion – a tremendous defeat for the cause of life,” he said.

Reporting that the situation has improved, as evidenced by a successful referendum on embryo research, he said pro-lifers would still lose another referendum on abortion.

“On the other hand, while there is no majority in favor of banning abortion in Italy, there is a majority that thinks that abortion is too widespread, and something should be done to reduce abortion,” he added. ….

Go here for the rest of the story.