Daily Archives: February 2, 2012
Today’s economic statistical releases:
Chain store sales are coming in mixed today, with no identifiable spending or consumer trends. It’s looking like there’ll be little change to the upcoming retail sales report this month, which was disappointingly unchanged in December.
The Challenger Job Cut Report indicates that layoff announcements rose to 53,486 in January from 41,785 in December. That’s a big monthly jump, and raises warning signs about employment.
The Bloomberg Consumer Comfort Index rose to -44.8 from last month’s -46.4.
Initial claims for unemployment fell 12,000 to a lower-than-expected 367,000. the 4-week moving average posted a a 2,000 decline to 375,750.
Productivity growth in the 4th quarter slowed to a lower than expected 0.7% from 2.3% in the previous quarter. Unit labor costs rose 1.2%, compared to the previous quarter’s drop of -2.5%.
The invaluable Warren Meyer at Coyote blog (one of my all time favs) has a great article up on protectionism and why its something we should be avoiding.
President Obama used a lot of his state of the union address again teeing up what sounded to me like a new round of protectionism. Protectionism is the worst form of crony capitalism, generally benefiting a handful of producers and their employee to the detriment of 300 million US consumers and any number of companies that use the protected product as an input.
The example he uses? Sugar. What industry does it protect and subsidize in the end? The producers of high fructose corn syrup (HFCS). And what does the government tell us about HFCS?
It’s bad for us. Sugar would be preferable.
So why do we continue to use it in place of sugar? Protectionism. Look at the chart he includes:
The chart says it all. With the tariff added, look at the average US cost of sugar vs. the world’s average cost.
As Meyer points out though, that’s not how this gets spun:
Food activists on the Left often point to the use of High Fructose Corn Syrup (HFCS) as one of those failures of capitalism, where rapacious capitalists make money serving an inferior product. But HFCS resulted from a scramble by food and beverage companies to find some reasonable alternative to sugar as the government has driven up sugar prices through a crazy tariff system that benefits just a tiny handful of Americans, and costs everyone else money.
Yup, the usual, convenient and usually wrong whipping boy – “market failure”.
When a tariff is involved, you’ve just moved out of the realm of real capitalism and into the realm of crony capitalism. This has nothing to do with markets failing. This has to do with the usual – government intrusion using their monopoly power of force which then distorts a market and causes users of the product whose price they chose to artificially inflate with a tariff to seek lower cost alternatives.
Remember, the same government that is claiming HFCS isn’t good for you is the one that’s also made it impossible to use a product that it claims is better for you (in relative terms of course):
For the last 10 years or so, HFCS-42 has actually traded at a price higher than the world market price for sugar, but lower than the US price for sugar. There is a lot complexity to prices, but this seems to imply that HFCS would not be nearly as attractive a substitute for sugar if US sugar tariffs did not exist (not to mention subsidies of corn which support HFCS). This can also be seen in the fact that HFCS has not been used nearly so often as a sugar substitute in markets outside of the US, even by the same manufacturers (like Coke) that pioneered its use in the US.
Or, if markets had been left alone, all indications are we’d be using lower cost sugar right now.
Meanwhile the government protects and subsidizes an industry that makes a product it says is worse for you .
When most people think of an investigative reporter, they think of someone who pursues a story in depth, gathers all the facts and then, using those facts, connects the dots to a then fairly obvious conclusion. Of course that means that ethically, the same reporter would be required to write an objective investigative article or series based on those facts even if the conclusion is contrary to what was expected. That is, the target of the story could possibly be exonerated rather than condemned based on the reporters work.
What most people don’t consider investigative reporting is the use of selective facts that support an ideology and agenda in an attack on someone to reach a preordained conclusion. An example of that sort of reporting was recently found in a Rolling Stone hit piece on LTG William Caldwell. The author had enjoyed success in being instrumental in the removal of another general (Gen. Stanley McChrystal) based on an article he’d written. His later piece on LTG William Caldwell, however, was a classic example of the genre of “investigative reporting” that is becoming more and more common – selective facts, poor research, an agenda all working toward a particular conclusion.
The article was roundly panned as atrocious work as the blogosphere took it apart piece by piece and trashed it.
Another example of that genre has popped up on the radar screen in a Salon hit piece on Rep. Buck McKeon. Why a hit piece and not, as Salon tries to characterize it, an investigative report? Several reasons. First, the “investigative reporter” is hardly someone who fits the definition of an objective reporter as outlined above.
When you read the Salon article here, you’ll see the author of the article’s bio at the bottom.
Lee Fang is an investigative journalist in the Bay Area.
Is he? Again, the implication of the short bio is he’s an objective reporter who has pursued a story lead and what you read in the article above is an objective assessment of the gathered facts leading in connect the dot fashion to a logical conclusion.
But as it turns out that’s not at all who Lee Fang is.
However, unfortunately, you have to leave Salon and go elsewhere to make that determination. Salon certainly isn’t forthcoming with the details.
We find the truth in an interview with a Santa Clarita CA radio station, KHTS, where the host introduces Fang thusly:
Lee Fang (pronounced Fong, pictured at left) is a freelance journalist and the senior investigator for United Republic, a nonpartisan group dedicated to ending the corrupting influence of special interest money in American politics.
While you may sympathize and even agree with the premise of the group, calling something founded by MSNBC’s Dylan Ratigan, Huffingto Post’s Paul Blumenthal and former Free Press founder Josh Silver a nonparitsan group is like calling James Carville an independent. There is a definite ideological agenda at work there and in essence, Lee Fang is the opposition research guy. And this isn’t his first stop on the "advocacy journalism" side of things.
That’s not quite a “freelance journalism” is it?
Another tidbit from the radio interview:
Lee Fang: Right now we’re just looking at Chairmen of important committees in Congress so we’ve looked at Armed Services, we’ve looked at Energy and Commerce and on the Senate side we’ve looked at Banking and Finance.
Really? Just the “Chairmen”? The ranking members on the House committees, who are essentially the opposition co-chairs and still wield enormous power on the committees, don’t merit a look? Of course, in the House, those ranking members are all Democrats. Only on the Senate side have has he claimed to have looked at a Democrat.
As to the facts, here’s the basic claim of the article:
Recent disclosures reveal that a federal lobbyist with ties to Rep. Howard “Buck” McKeon, R-Calif., the senior member of the committee overseeing the Pentagon, provided financial support to McKeon’s wife, who is seeking a seat in the California Assembly this year. As defense industry lobbyists scramble to head off looming cuts in the Pentagon budget, they are looking for new ways to ingratiate themselves with McKeon.
The contribution, reported here for the first time, appears to be an effort to circumvent federal campaign limits. Federal campaign disclosures show that Valente has already maxed out in donations to Rep. McKeon this cycle, having given $2,500 to his campaign for Congress. And the contribution came within a day of Valente’s donation to Patricia’s campaign for the California Assembly.
Valente’s lobbying firm, Valente and Associates, reported over $1.4 million in fees last year. The firm represented at least one company, 3Leaf Group, a government contractor specializing in human resources, that sought help from Valente on issues relating to the Defense Authorization bill. McKeon, as chairman of the Armed Services Committee, was the principal author of that legislation.
Valente did not respond to a request for comment. But his so-called 527 campaign entity, the Fund for American Opportunity, gave only one contribution to a state politician in all of 2011: Patricia McKeon.
Craig Holman, a lobbying expert with Public Citizen, says that the donation to McKeon is part of a larger pattern of influence peddling in Washington: “The objective is to throw as much money as possible at the feet of the lawmaker; that includes at the feet of his family as well.”
McKeon’s staff, specifically Alissa McCurley, responded to a request for comment from KHTS:
First, contrary to Mr. Fang’s inaccurate assertion, Patricia was not the only state candidate to receive a donation from the Fund for American Opportunity. If you click on the link in the article, you will see several state candidates listed on the group’s 6-month contribution report. Secondly, again contrary to Fang’s false assertion, Mr. Valente has not maxed out to Congressman McKeon. In fact, Mr. Valente has not contributed to Congressman McKeon’s “McKeon for Congress” campaign committee at all."
“Investigative reporter?” Two of the most basic and supposedly damning “facts” are incorrect? Those two “facts” are the main support for Fang’s implication that McKeon is rotten. McCurley correctly labels the piece as more one of “opinion” than fact. And given the above, it certainly seems to be assertion masquerading as factual reporting. If the author can’t get those two basic facts correct, then why should anyone believe anything else written?
The attempt to smear is clear. In fact, again in the radio interview, Fang has to admit that there’s nothing illegal in any of McKeon’s activity:
KHTS: I’m reading the article and I’m saying to myself is there anything illegal or just inappropriate?
LF: I talked to some McCain-Feingold experts, that’s the campaign finance law on the books, and they said in this case there’s no evidence of illegal conduct.
So why all the innuendo, inaccuracies and implications? Because there’s an agenda at play here and this is how ideological advocacy works. Spin something to appear in the best light which advances your cause, whether the facts supporting it are there or not. But this is certainly not “investigative reporting”.
Again, you may agree with the United Republic goal, but when a major publication hides the fact that someone it bills as an “investigative reporter” works for an ideologically driven activist group and that the article is an extension of that group’s activist focus, then you are doing your readers a disservice. This isn’t “investigative reporting”. This is advocacy “journalism” in its purist form. You’d think the editors of Salon would have known that and put a disclaimer in Fang’s bio.
Instead, they either chose to deceive by omission even while questioning the ethics of others or they didn’t do their job.