The Outlaw Governor

Stepping in to a hailstorm of fire, fallen compatriots all around, nowhere to go but straight into the open arms of a battle that can’t be won…

No, this isn’t the climax of a serial western novel, nor is it the final panel in a comic book whose story is “to be continued.”

Instead, it’s the tale of one “Quasi-Governor”, Pat Quinn*. Or, at the very least, that’s the impression I’m beginning to get from his actions and statements.

As the State of Illinois, like so many others, struggles to get anything even approaching a serviceable budget passed, Quinn stands steadfastly opposed to each and every half-assed (pardon the language) budget that the state legislature throws back his way.

Most recently, Quinn reaffirmed his position that the State needed to make massive budget cuts and fiscal sacrifice, by vetoing the already overdue makeshift budget that was presented to him.

Which, combined with his rather strong statements to the press lately about the State of the State, and his pressure on the State legislature to get on board, brings me to one inevitable conclusion – He knows he can’t win.

I’m speaking not only of the current budget battle, but more importantly, and perhaps more seriously, the upcoming 2010 Illinois Gubernatorial election.

I believe, judging by his demeanor, his actions and his inflammatory statements as of late, that Pat Quinn knows, or at least strongly believes, that his chances of winning reelection are on the Kate Moss side of slim, and perhaps none at all.

The field of potential Democratic contenders who will be challenging current Governor Quinn for their shot at the chief executive’s desk is not short on genuine threats, including Illinois Attorney General Lisa Madigan*.

Earlier this year Quinn said that he would be running and would seek reelection, after much speculation to the contrary. And of course, at this point, any name tossing and ballot building is all hypothetical.

That being said, there are certainly more than a handful of challengers, and that’s just within Quinn’s own party. Additionally, judging by his recent actions and statements, Quinn may be prepared for the loss, so long as he leaves office with his scruples intact (a feat which has now eluded the last two governors of our illustrious state).

It is also possible, however, that Quinn is banking all of his reelection hopes (or at least his nomination hopes) on the passage of a budget that makes some sort of headway towards pulling the State out of its precarious budgetary position.

If, in fact, Gov. Quinn manages to get a budget passed that reduces the deficit and “keeps the lights on”, so to speak, he’s automatically got a leg up on potential contenders, hanging his hat on the fact that he was able to achieve something that other governors and politicians in Illinois were unable to do.

In a state as politically fickle as Illinois, though, it may not be enough. After all, this is the same state that put Blagojevich in office due, in large part, to the fact that his opponent’s last name was the same as the corrupt, outgoing Governor (Ryan). Never mind that there was virtually no connection between the two – The people of Illinois were not going to put another guy named “Ryan” in office after the last one turned out to be fully corrupt. Or maybe everybody was voting for the hair. It’s tough to say.

At any rate, either scenario could be true. Either Quinn knows he can’t win next November and is putting up one hell of a 12^th round effort, or he’s banking all his potential reelection hopes on the passage of a fiscally responsible budget that moves Illinois out of the financial doghouse.

The coming months on the Illinois political landscape should prove to be interesting. Though probably not for the same reasons as California, South Carolina, New York, Michigan, New Jersey, Arizona, or Nevada.

*Note – I use the term “Quasi-governor” for Mr. Quinn simply because he isn’t the one that was elected to hold that office, technically speaking. One can make the argument that his name was on the ballot, but it certainly wasn’t his platform that the people were likely voting for, it was the head honcho. Or, in this case, the “Hair Honcho”.

*Note #2 – It is unfortunate that Madigan isn’t going to get the chance to run against Blagojevich, affording her the opportunity to use the perfect campaign slogan that I crafted for her months back – “Spare the Rod.”

Addendum – Sometimes, I actually know what I’m talking about. http://www.politico.com/news/stories/0709/24543.html

Too Much of a Mediocre Thing

Though I haven’t seen this mentioned anywhere as of yet, it occurred to me the other day that with the state of the economy and the recent developments in the automotive industry, there are several parallels to be drawn between the Auto industry and the Radio Industry. But first, let’s get up to speed (no pun intended) on the current state of the American Auto Industry.

At present, and for the last few years, as sales have slumped and costs have increased, the Big 3 have begun selling off pieces of their operations in the hopes of raising cash. For instance, Ford cashed in their chips on Aston Martin in 2007, they let go of Jaguar and Land Rover just last year, and as recently as last November they parted with their controlling stake in Mazda.

Similarly, Chrysler finds itself portioning out control of the company to a triumvirate of investors, including Fiat and the UAW .

And, finally, the big daddy of them all, General Motors. The General had been acquiring/creating brands the way some people collect baseball cards for decades. As such, their corporate operation has become entirely too massive to maintain. And so the sell-off began. While they attempted mightily to hold out longer than their Big 3 comrades, GM has had to find all sorts of ways to raise cash in recent years. First up, GM parted ways with their partial claim to Subaru all the way back in 2005, when the need for cash became more urgent. Then, last November, GM sold their 3% stake in Suzuki in order to hopefully free up some additional funds to maintain stock price.

But the last few months have seen a flurry of activity from the General, first parting with the predominantly testosterone-fueled, genital-compensating brand that is Hummer to a Chinese industrial manufacturer. Next to slide into the hands of investors was the auto group’s Allison Transmission unit, primarily handling commercial and military transmission manufacturing . And finally, in the last couple of weeks, news has come of pending sales for both Saab and Saturn brands – Saab to a Swedish supercar manufacturer, and Saturn to former race car driver and dealership group owner Roger Penske. And this, of course, is all in addition to the cancellation of Oldsmobile a few years back, and the end of Pontiac coming in 2010.

What’s initially most striking about this list of developments is the staggering number of brands being sold. Without knowing any better, you might assume that a sell-off this large would in essence mean there was nothing left of General Motors.

But General Motors is, or at least was, an enormous operation.

The point of all the above information is to demonstrate how deregulation, subsidies and other financial maneuvers (along with decades of do-nothingness from American legislators in terms of forcing progress or change) allowed US auto manufacturers to grow well beyond their reasonable capacity for management and profitability. And while the auto industry’s size, scale and speed of growth are all significantly different from the Radio industry, the end result is approximately the same.

Beginning in the 1990s, the FCC reduced or eliminated restrictions on media ownership, opening the door for what would become the great consolidation boom in all media, and in radio in particular. One needs only look back 10-15 years to see the birth or explosive growth of large radio corporations including Clear Channel, Emmis, Entercom, Cumulus, Infinity (now CBS Radio Inc.), Citadel, Saga, etc. (Clear Channel serves as the clear example of the effect of consolidation courtesy of deregulation, as they, at least as of 2006, were in control of 1160 radio stations across the country. Thusly, they are usually the first and largest target of scorn and disdain.)

But, in recent months and years, as the economy has tanked and radio listenership has gradually slipped lower, even behemoths like Clear Channel have decided to sell. Unexpectedly, at least to me, Clear Channel’s given up the ghost and sold everything, as mentioned in the link above. And this comes after they decided, in 2006, to sell off over 400 stations in smaller (outside the top 100) markets .

Other ownership groups, though smaller, will likely be following suit soon as the strained economy puts a serious damper on potential advertising revenue, the lifeblood of any radio operation.

But what are the parallels, other than the fact that there are examples in both industries of operations that have grown “too big for their britches”?

The most poignant correlation between the two is this – consolidation has led to homogenization, or the death of individuality/uniqueness, which has decreased the value of all products/pieces.

Consider the auto industry first. Through the consolidation of brands under one umbrella corporation, auto manufacturers like GM were able to create one basic chassis (constructed on the cheap, I might add) and clothe it in virtually identical sheet metal, then slap a different badge on it depending on the brand it would be sold under. Thus, you have cars like the Chevy Malibu/Oldsmobile Cutlass, which were identical for many years (particularly those awful “fleet vehicle” years towards the end of Oldsmobile).

Now, this “blandification” and blurring of brands/products is not unique to GM. In fact, my Pontiac Vibe GT is a combination of parts, with the chassis and suspension coming from the Toyota Corrolla/Matrix, while the engine and transmission are pulled from the Toyota Celica GT-S/Corolla XRS/Matrix XRS. And this process of sharing basic chassis designs or components has gone on in the Auto Industry since the demise of the great Coachbuilders (and even they only designed the body, fit and finish, not the underpinnings of the automobiles).

The problem comes in when the bean counters get a stranglehold on the process, and all uniqueness and style are lost. Just a few years ago Ford was criticized for their use of Taurus bits and pieces (with their accompanying low-quality, low-rent appearance) in the cabin of the Jaguar Sedan.

This kind of “parts bin” approach to completing an automobile, thereby sacrificing design quality, is exactly what kills consumer interest. If this car looks and feels every bit as cheap or mediocre as that car, why would I pay $7k more for this one? If two cars share essentially the same nuts and bolts, literally from the ground up, why would you bother to purchase the more expensive one?

Sure, there are those who still have the disposable income available to purchase a Lincoln, in spite of the fact that it’s just a rebadged Ford Fusion or Five Hundred. But the numbers of consumers willing to do that are dwindling, while the number of consumers willing to investigate the cost-benefit on their auto purchase is rising. (Thank you, Internet.)

So what you have is a homogenized collection of brands offering essentially the same car with slight variation.

In radio, consolidation has led to exactly the same problem. With a handful of companies in charge of so many stations, and operating those stations based on the same corporate philosophy/mandate/directive, everything begins to sound alike, from coast to coast.

Flip on a Hot AC station in Austin, Texas, and it will sound almost exactly like a Hot AC station in Tulsa, Oklahoma, or Fargo, North Dakota, etc. Same songs, same music news, and, if you’re unlucky, the same dearth of local content that is in any way relevant to your life.

In radio, the equivalent of digging in to the “parts bin” to outfit a car’s interior is to have multiple radio stations in multiple markets “voicetracked” by a handful of radio personalities operating out of one central studio somewhere. This is not to be confused with a syndicated radio show, which is often aired in as many markets as possible because of listener demand (think Stern before satellite, Rush, Air America, etc.). (NPR operates more closely to a syndicated series of shows, since it consists of syndicated content, which is broadcast by local affiliate stations, and the gaps are filled with local content/shows/public interest programming.)

The difference is that with 3-4 people voicetracking shifts for stations across the country, there is no local content, and oftentimes no content to speak of at all. You’ll get a little bit of music/pop culture news, a smidgen of artist info (“so and so is on tour this summer, blah blah blah”), etc. But that’s about it. And it will be the same on dozens of stations across the country, from the personality (or lack thereof) to the playlist.

With radio, like the automotive industry, the homogenization started years back. In the case of radio, the birth of the format, and the strict guidelines (all self-imposed and arbitrary, of course) that govern them, led to a severe restriction over time on playlist flexibility. I won’t go into great detail about how the music labels and industry encouraged and influenced this creation of a nationwide range of vanilla radio stations, but there’s plenty of reading to be done on the subject both in print and on the internet. Suffice it to say, by restricting playlists to a finite number and type of songs, radio programmers and owners began the slow murder of the industry as a whole.

Like the auto industry, music fans nowadays are significantly more savvy, and have access to more choices and more information than ever before. Additionally, music lovers have more methods by which to conveniently enjoy their music, which only serves to make radio that much more irrelevant. That is, unless there is something other than music to interest them.

Going back to our parallel between the two industries, just as automakers are selling off brands to investment groups and private firms, and just as that may lead to new ideas and unique automobiles that can once again compete on the global market for consumer interest, the sale of radio stations back to smaller local and regional owners could potentially be exactly what the industry needs. Local ownership and management (in theory, anyway) would have a much better grasp on what matters to their listeners, since the listener base will be comprised of their neighbors, friends, coworkers and colleagues. And if that’s the case, and management actually listens to their friends and family, they may make the necessary adjustments to keep the community listening.

Also, local ownership makes it easier to sell to local advertisers, since the business owners can actually have a relationship with radio owners and managers, and may even get to speak to an actual human being about their goals and needs for their business, making it more likely that they will continue to spend money on advertising.

In both cases, what appears to some to be the end of an industry may in fact be just the type of readjustment and refocus that was has been so desperately needed for many years now.

And, in both cases, I’m probably stepping out on a limb here with the optimism. If there’s one thing that both industries have in common, it’s short-sighted management that lacks willingness to make hard choices, and that would much rather maintain the status quo than launch a new idea.

The Big 3 have had the opportunity for years to revamp their operations and work on the next generation of cars and trucks for consumers. Better fuel economy, better safety and new forms of fuel were all within reach as far back as 1996, and perhaps even further depending on which development you want to look at/investigate. The Clinton Administration even had an initiative underway with several federal agencies and automakers, working in collaboration to bring fuel economy to the 80 mpg range. Not shockingly, that project/program was eighty-sixed by none other than President George W. Bush.

Look back to the oil crisis of 1973 and you see that the auto industry received a major wake-up call – One that they too refused to heed. Frankly, to be 36 years later touting a pickup truck that gets 20 miles per gallon as an “advancement” is a notion so absurd it is difficult to contain the rage.

Similarly, the radio industry has seen the storm on the horizon for years, and certainly since I last attended a radio conference in 2000-2001. Nearly a decade ago it was obvious that change was coming in the way that people got their music (at the time it was internet radio as the potential grim reaper of terrestrial radio, being pre-iPod), and that radio would need to undergo a significant sea change in the way that it operated as an industry. Now, with the advent of mp3 players, digital distribution and more, it is painfully obvious that a change has come, but no one seems to be doing anything about it.

Whether neatly or not, the evolution of two industries, both long overdue for change, continues to roll on. As for what the result of that evolution will be, no one can say. The optimists will no doubt welcome this time of change as an opportunity to revitalize each industry, to regain interest in their respective products and services, and to put the economy back on track. The cynics, however, will likely look at the government involvement (at least in the automakers’ case) as tacit approval of returning to “business as usual”, without the swift and significant change that is needed. And the realists among us will look upon this as an opportunity that, being fragile in this violent economic climate, could easily be squandered and sunk.

In all cases, time will tell. Keep your fingers crossed for now, and keep your money out of media and domestic auto stocks too. At least until the dust settles.

Riding the “Other Third Rail”

Though it comes as no surprise that President Obama and his administration would have the opportunity to nominate a justice to the Supreme Court during their time in office, this particular opportunity comes sooner than expected.

It was presumed, by those in the know, and reiterated at length by the press, that Ruth Bader Ginsberg would be the next Supreme Court Justice to step down, creating an opening for the President to place a nominee on the bench. Unexpectedly, though, Justice David Souter announced his retirement, well ahead of expectations.

Regardless of how it came to be, however, the simple fact is that the President is now tasked with nominating a justice to the court. A task that these days I view as the other “third rail” in politics.

People, pundits and politicians all speak of Social Security as being the “third rail” in American politics. The meaning being that to touch Social Security in any way is equivalent to getting zapped with 1200 volts of electricity – so say goodbye to your eyebrows and your political career.

I contend, however, that the Supreme Court is the OTHER third rail in American Politics. Not the same voltage, perhaps, but such a tremendous strain on an administration and their image that it is perhaps an issue to be avoided to an extent.

A large part of the issue is that in our modern political climate, presided over predominantly by extreme positions and pointless bickering, it is completely and entirely impossible for an administration to choose a jurist who will both meet the criteria for the job (based on that administration’s standard for such) while gaining the approval of the public and Congress.

Additionally, given the Supreme Court’s limited time to consider cases and the ever-increasing caseload, it is impractical for a nomination to take an excessive amount of time for any reason (filibuster, losing a confirmation, etc.).

Thus, at the very least, nominating a justice to the Supreme Court of the United States in this day and age is a political high-wire act of mind-boggling proportions.

With the nomination of Judge Sonia Sotomayor to the Supreme Court, the difficulty is no different. In fact, I don’t believe that I’ve seen the mention of one’s race (or their purported racism) this often in press coverage in quite some time.

There are so many variables that present possible attacks on a nominee that, no matter how thorough and intense your vetting process may be, your nominee will have an uphill battle ahead of them. As will you and your administration.

Of course, first and foremost in any legislator’s mind should be the issue of whether or not the nominee will be a good, impartial and effective justice while serving on the Supreme Court. And while this sounds like a simple question to answer by merely reviewing the credentials and judicial record, the question of what constitutes “good, effective, and impartial” is open to some interpretation (in so far as politicians are concerned, anyway).

Though I know both sides are guilty of it, the Republican party (or, at the very least a handful of their most vocal representatives) have a knack for consistently, and almost constantly bringing up the point that they “don’t want someone who will legislate from the bench”.

Which is a notion that I fully and entirely support. At face value, anyway.

The issue comes in that, in spite of the rhetoric to the contrary, many legislators actually do want a justice who will legislate from the bench…just consistently and almost constantly in favor of their own views.

Yes, of course, one’s personal views will lead to a particular leaning one way or another on sensitive issues and topics. The point of being a judge, though, and particularly one who serves on a federal bench of any ilk, is that you must, MUST be able to separate your own views from the facts and figures presented to you, and make an informed, impartial ruling based solely on the information presented and the laws as they are presently structured/written.

I’ll grant you that you can’t always count on that, which is why you review the rulings and record of a nominee. However, if the nominee proves to be qualified, educated and impartial, then the confirmation should be swift.

Again, that’s simply not the way politics works in the States these days.

That point is evidenced by the fact that Senator Pat Roberts (R-KY) is already on the record as saying he will vote against a Sotomayor confirmation for the Supreme Court.

Which really takes all of the suspense out of the process, when you go ahead and give away spoilers like that.

In all seriousness, though, why even bother having the floor vote if Senators like Roberts can simply phone it in through the press, without allowing for a debate among his colleagues?

Yes, as mentioned in the previous article, Senator Roberts has already voted against Sotomayor once, when she was nominated to the Second Circuit Court of Appeals in 1998.

Seeing as that was 11 years ago, don’t you think that times, and opinions, may have changed just a bit? And seeing that she was confirmed anyway, doesn’t that mean that there are now 11 more years of judicial records and decisions to review before making your final ruling?

Evidently not. Which is precisely what I mean when I refer to Supreme Court nominations as the “Other Third Rail” in American politics.

I suppose it’s foolish to hope for a nomination process that actually proceeds smoothly in both the Congress and the press. That’s just not meant to be.

Kudos, then, to the administration and the nominee who manage to navigate these tumultuous waters and do some good in serving their country. And regardless of the difficulty inherent in the process, I presume that just being nominated to the Supreme Court is a pretty significant honor.

At least it beats being nominated for a Grammy.

Back in the Saddle Again?

GOP members, voters, supporters and friends are less than pleased as of late, and perhaps with good reason. So displeased, in fact, that there are rumblings of rebellion coursing through the formerly cohesive Conservative movement.

Item one that has feathers ruffled in the Republican party (aside from the fact that they are “out of power” for the time being) seems to be that there is no voice. The GOP lacks leadership. There is no one to unify, to garner support, to provide the dissonant voice of critique for the current administration (I support the administration, but everyone in power needs someone to call them out every once in a while, if nothing else).

And frankly, I don’t think Republican voters have been satisfied with their leadership at all for the last 4-6 years. Ultra-conservatives, perhaps, but the moderate Republicans are nearly just as dissatisfied as the Liberals and Democrats were during Bush’s entire term in office. Aside from tax cuts (which benefited a select few) and a handful of maneuvers that placated the religious base, the majority of the Republican party no doubt feels that their 8 years in the limelight was wasted, having passed no substantial, lasting or impactful legislation.

I wouldn’t blame Republican voters for voicing their dissent, particularly at this time. If ever there was a time for them to start rebuilding (and, ideally, make an honest attempt at luring voters in the middle of the road rather than catering to the outliers), that time is now.

But there needs to be a voice. Someone who can put that derailed train of a party back on the tracks and focus the talking points on the core issues.

Judging by the glut of recent media appearances and testimony on the Hill, that voice could be Republican stalwart and present thorn in the administration’s side, Newt Gingrich.

Most recently, Gingrich gave testimony to the House Energy and Commerce Committee in regards to draft legislation regarding climate change and emissions, following former Vice President Al Gore’s Testimony to the same group . This in addition to his recent appearances on Sunday talk shows in order to issue criticism of the Obama administration and their legislative work thus far.

Gingrich was rebutting the legislation currently under debate with a 38-point environmental plan of his own (details of which I’ve been unable to locate as of yet).

Which makes for one notable distinction between Gingrich and other Republicans – At least he has a plan. As for the substance of the plan, I can’t say. But thus far he’s perhaps the only representative voice in the party who actually has items on paper that he can point to and garner support for.

Don’t get me wrong – I am not a Newt supporter. In fact, I have mixed feelings about Mr. Gingrich’s priorities and views. There are times when I’ll see him on a Sunday talk show or giving comment on a news story, and what he has to say is not that far from what I would say. But there are other times (many, in fact) where I couldn’t be further from his view on the issue/topic at hand.

I’m also not necessarily cheering the arrival of a uniting force within the GOP, but there is one good thing that could come of having a somewhat unified opposition party – The Democrats won’t get complacent.

Speaking as a Democrat, I think I’m at liberty to say this – The Democratic Party knows how to lose. Perhaps all too well. And, like many other categories in life, it often takes competition to bring out the best in each side.

As such, a healthy opposition party would (hopefully) only light a fire under the Democratic Leadership’s rear end, inciting them to action, and potentially resulting in better legislation, more legislative action, a unified party platform, and maybe, just maybe, reelection.

To that end, I say “Welcome back, Newt.” And to the Democrats I supported and/or voted for, I say “Get your a$$ in gear. We got company.”

Followup: Sen. Arlen Specter ditches the GOP and switches parties, precisely because the GOP actively stifles moderate Republicans.

Update: Listen to the Common Sense with Dan Carlin podcast from 04/22 for a similar thought on Gingrich becoming the only emerging voice of the GOP. (http://www.dancarlin.com/cswdc.xml)

Gaming the System

I feel as though I have been out of the loop for months or even years with all that’s gone on in the news recently. It’s funny how losing a job has actually made me more disconnected from what’s going on in the world. But such is the case.

While attempting to play catch-up on all of the stories that have blown by me  in the last few weeks, I fell upon an interesting piece about the Geithner-Summers plan for the banking industry over at Huffingtonpost.

And while I’ll grant you that the first “bailout” plan, the one with absolutely no oversight whatsoever, was pretty terrible, this one could create issues all its own.

As mentioned in the article linked above, it appears that the Geithner-Summers plan leaves open a tremendous loophole that, barring some miraculous display of patriotism and moral fortitude on the part of banking executives, they will most assuredly take advantage of.

The “Toxic Assets” that are referred to are most likely the package-deal bundles of mortgages and debt that have been defaulted on, foreclosed, bankrupted, and so on (not to be confused with toxic assets such as my 401K plan, credit rating, etc.).

The gaping hole in the plan is such that it would allow the banks to set up essentially shell corporations that would bid full, face value on the toxic assets, opening the door for essentially free money from the treasury and Fed. Since the assets are, in fact, toxic to the point of having absolutely no worth on the open market, the shell corporation has no choice but to file bankruptcy, while the parent bank (in Sachs’ example, Citibank) effortlessly makes off with a large chunk of taxpayer change.

Who’s really picking up the tab for all of this? It would have to be the middle class, of course.

When you make just enough money to live comfortably, but not enough money to qualify for huge tax breaks, you’re in the middle class. And the check you’re cutting to Uncle Sam in just under a week could wind up going to one of these failed banks that gambled little Timmy’s college fund on a mortgage boom that anyone could see was make believe.

A lot of people in our nation’s capital simply shrug and ask, “what else can we do?”

Well, it just so happens that there are a few other suggestions floating around out there. Why not have a look?

For instance, the Congressional Oversight Panel has suggested a plan wherein the managers of these banks, the ones who squandered little Timmy’s college fund, would be fired, and the failed banks (or those very near failure) would be liquidated.

I don’t know about you, but if firing a few executives and selling off the desk chairs from WaMu is a viable alternative to financing our economic recovery on money we may or may not have in 40 years, I’m all for it.

I would offer another suggestion, one where we start calling in the tab on countries who owe us money. Whether it be for food we’ve given, or weapons we’ve provided, etc.

The problem with that option is two-fold:

1. The recession is worldwide. So nobody’s got any money, and making the phone call as big bad bill collector is just gonna get us the answering machine,
2. We’re already borrowing money from the other countries that have any left.

You know who “owns” a big fat chunk of this country right now? China. And of course the heavy, heavy investments from Saudi Arabia as well.

Guess which two countries we may have to play real nice with for a while…

If the Federal Reserve, the Treasury and Congress don’t come up with some sort of workable, effective plan soon, you’ll be seeing pieces from the Smithsonian up on eBay within a matter of months.