The Gathering Storm - Part 3: The Death of an Objective Press

When I was small, the family would gather around the television at 6:30 and watch 15 minute long national news programs on the major networks. There was The Huntley-Brinkley Report and The CBS Evening News with Walter Cronkite. ABC had World News Tonight with John Daly, Howard K. Smith, and John Cameron Swayze. My parents trusted these guys. I trusted these guys.

Then in 1968, Walter Cronkite journeyed to Vietnam to report on the Tet offensive. He dropped all pretense of objectivity and stated overtly on national television that the Vietnam War was unwinnable. He used his position of objective authority to politicize the war, and sowed the seeds for the morphing of the 5th estate to what it is today; partisan, bias, and for the most part liberal. Cronkite became the role model for modern journalists. Factual reporting ceased, and we are the worst for it.

The problem is that modern day journalists want to have it both ways. They cloak themselves in the aura of objectivity. But every standardized measurement of numerous journalistic watch dog groups clearly shows that modern day journalists are overwhelmingly liberal…with 90% overtly identifying themselves as Democrats. This goes for print and broadcast media. The only media path with a clearly conservative bias is talk radio.

It is sad to watch. When I was working on my Masters Degree in History, we were taught that only The New York Times had the stature to be quoted as a primary source. No more. Its editorial left wing bias is overtly touted by its publisher, and that policy spills out onto the front page in such pitiful displays that it has forced it to the brink of bankruptcy. The same goes for the Boston Globe and the San Francisco Chronicle. The digital age has certainly taken its toll on these American icons, but the American public isn’t stupid. It knows bias when it sees it.

In my lifetime, I don’t think I have seen anything like quite like this past election cycle, where the media jumped into bed with Barack Obama. The media ceased covering the news to become the news. It wasn’t a surprise that Obama won the election after continual press fawning. The surprise was that he won by so little notwithstanding the press becoming a branch of his campaign.

This is dangerous stuff. The country is set up for the press to be critical of the government. It watches out for our interests. Objectivity is central to that function. It needs facts. It needs intelligence. It needs ideological neutrality. In 2009, the press, the House, the Senate, and the White House are of one mind…and 50% of the American public is skeptical of all of the above.

A case in point was CNN coverage of the tax Tea parties last week. Anderson Cooper, supposedly one of the new age journalistic stalwarts, degraded the demonstrators as “teabaggers” and all they did was “teabagging.” This is an urban (the politically correct word for ghetto) phrase for oral sex. I didn’t know what it meant. I was watching CNN for some factual coverage. So much for my view of Anderson Cooper as an objective journalist!

The mainstream media is attempting to redefine the “center” of the political spectrum by deliberately blurring the lines between news coverage and editorial opinion. People normally considered being in the center are now being portrayed as radical and extreme. If you are critical of the government, you are stupid and a “douche bag”, a phrase that has migrated to MSNBC from HBO’s Bill Maher’s Real Time. If you oppose Barack Obama, you are a racist. If you oppose gay marriage, you are a homophobe. It is unending.

What is scary is all pretense of objectivity is gone. Reporters have capitulated to criticism and are becoming more and more bias in their reporting. Congress talks about reinstating the “fairness” doctrine, but it will never happen because it would also apply to liberal media outlets, and ironically, Public Television and Radio where my tax dollars are used to promote a political agenda I oppose.

All of the above makes for frustration among the public with views differing from the liberal political line of the press. How deep that frustration goes, and how it manifests itself, contributes to the gathering storm.

The Gathering Storm: A Collapsing Tax Code

New York City is in crisis. The collapse of the Wall Street financial system and the class warfare ignited by the Obama administration has left tens of thousands of productive, taxpaying, New York citizens out of work. According to Mayor Bloomberg, who is raising the financial hue and cry, approximately 40,000 people paid 50% of the revenue used to operate Gotham. And now the chickens are coming home to roost. Many of the so-called rich taxpaying citizens have lost their jobs, and numerous financial concerns have closed. Revenue to the city has been drastically cut, and it is in danger of going bankrupt. Massive layoffs in city services are looming. Who is going to pay? According to President Obama and Governor Paterson…the “rich” will pay. Oh really?

In reality, this story is being played out all over the country in states that have adopted the tax the wealthy model for entitlement services. The most obvious ones are New York, New Jersey, California, and Michigan. The weight of the bureaucracy has collapsed on itself, and the tax well is dry. Sooner or later, the public is going to realize that in order for these entities to survive, the “rich” will be considered anyone who has a job. Sure, President Obama has assured America that there will be tax cuts for the middle class…at the Federal level. That may or may not happen. But it is at the state and city level that the middle and the lower classes will be feeling the stress. A friend of mine here in Ohio figured out that he and his wife pay around 45% of their income for Federal, state, and city income tax (Youngstown and Canfield), as well as property and sales taxes. Really makes you want to work.

Sooner or later the public is going to wake up to the smoke and mirrors game being played by all of the levels of government. A system that is based on 50% of the population paying for benefits accruing to the other 50% of the population who pay nothing will eventually collapse under its own weight. While auto worker are being laid off, more than a few PERS systems have an 80/20 retirement plan. You work for 20 years, and retire with 80% of your income. What a sweet deal that is. No wonder many of our governmental entities are on the verge of bankruptcy.

All you have to do is add to figure out that strapped states and municipalities will end up taxing everyone to make up for budget shortfalls. It may be income tax, but will probably take the form of sales taxes, property taxes, and sin taxes…all of which are regressive, and affect everyone. Cigarettes now cost $5.00 per pack. That is after the latest Federal tax on cigarettes to fund its healgh care program fro children in families that make $60,000.00/year. Oregon is considering raising taxes on beer 1800%, and that's no typo.

Nothing in life is free. Someone has to pay for whatever the government program somewhere, sometime. Here are the lessons the Federal government and the big liberal states like New York and California are going to have to learn again.

1) You can’t force someone to work. When you have taxed the rich to the point where their jobs are no longer there, your revenue is going to go down, not up. And unless you have your government employee unions under control, you are going to go broke. New York City has that problem: it is running out of rich to tax…so the burden will have to be shifted down.

2) You can’t force a company to stay in a high tax state. While Michigan and Ohio have floundered as the auto industry disintegrated, low tax/right-to-work states have seen their auto industry blossom. Yes, the entire industry is suffering, but Honda and Toyota are not on the verge of filing bankruptcy. And while Michigan is on the verge of going third world, Tennessee and Alabama are holding their own and will thrive when the economy turns around.

3) You can make fun of Rush Limbaugh all you want, but his move to a no income tax state such as Texas is absolutely emblematic of the troubles the liberal model states are facing. I see it here in Ohio, where many of my clients have retired to Florida to escape the income and estate tax problems.

People laughed at Ronald Reagan’s trickle-down economics. Media types still laugh. It won’t be so funny when what trickles down is poverty. That will plant the seeds for social unrest. If you haven’t been watching these past few weeks, check out the riots in France…another of the gathering storm clouds. (To be continued).

The Gathering Storm - Part 1: The US Mint

Over the years, whenever I had put together a few shekels, I would purchase fractional ounce gold proof coins from the US Mint. While perusing the US Mint web site today, I came across this notice:

“Production of United States Mint American Eagle Gold Proof and Uncirculated Coins has been temporarily suspended because of unprecedented demand for American Eagle Gold Bullion Coins. Currently, all available 22-karat gold blanks are being allocated to the American Eagle Gold Bullion Coin Program, as the United States Mint is required by Public Law 99-185 to produce these coins “in quantities sufficient to meet public demand . . . .The United States Mint will resume the American Eagle Gold Proof and Uncirculated Coin Programs once sufficient inventories of gold bullion blanks can be acquired to meet market demand for all three American Eagle Gold Coin products. Additionally, as a result of the recent numismatic product portfolio analysis, fractional sizes of American Eagle Gold Uncirculated Coins will no longer be produced.”

FYI, gold bullion coins are coins that are marketed through dealers rather than the Mint itself, which only sells select coins to the public. These are usually uncirculated coins, or “proof” coins which are high gloss, and not touched by human hands. Note the notice says that the demand for gold bullion coins is so high, the mint will no longer sell fractional ounce gold coins; only the one ounce gold coins. I guess I am shut out.

Gold is notoriously a bad investment. It is subject to rapid fluctuations that can cause it to spike in value or lose value…and stay there not for months, but for years. But as I told my wife, the attraction is that you can physically take possession of the gold, and if the chips are down, hide it. The government can’t take it away from you notwithstanding the value. I surmise that many Americans are coming to that conclusion; hence the skyrocketing demands. That looks attractive in an era where the government is seizing private companies, dictating corporate governance, setting salaries, taking over the banking, auto, and health care industries, and overtly stating it will tax productive people who create the jobs in our country. If you believe that all that printed money will result in a huge inflation two or three years down the road…gold is the way to go. With Medicaid look backs going back 5 years, it also is a way to beat the system. It circumvents estate taxes when you die. The fluctuating value of the gold is secondary.

This portends badly for the United States. It shows that a growing segment of our society believes that government activity is bordering on illegitimate, and there is no faith in elected officials to either curb it, or in the courts to cut it off.

That is the attitude I found on my first trip to Russia before the collapse of the Soviet Union. There was the official economy. Calling it anemic would have been generous. The ruble was worthless. You could call long distance to the United States for 10 cents and talk all you want. You only had to schedule the call a week in advance and confirm daily that you still wanted to make the call. Then you had to sit by your phone in the hotel until the phone rang to place your call. When you were done, a Russian baba would knock on your door to collect the dime.

Then there was the real economy, operating under the radar of the government. Folks wore phony seat belts thrown over their shoulders while driving their cars because the cops made seat belts a priority while thugs ran through the streets unheeded. Kiosks were everywhere openly selling black market goods. Foreign currency was traded in hotel lobbies unfettered. If you wanted anything at all, you either lined up for hours at the legal stores, or bought what you wanted when you wanted it at the black market stores using hard currency, preferably the dollar, but anything would do. As to any government forms you had to file…it was irrelevant what was in the forms so long as they were filled out and timely filed. As my friend told me…we pretend to work, and they pretend to pay us.

This is the first time in my lifetime that I have seen faith in our currency and financial system faltering. People are cautiously optimistic about the economy, but are hedging their bets. Those of us over 50 understand the gas lines, cold houses, inflation, and high interest rates that stifled the economy under Gerald Ford and Jimmy Carter. While we are grateful that Barack Obama is trying to do something, his approach in viscerally un-American. Talk of the new world order, increase taxes, massive budget deficits…we have seen it before. It doesn’t work. But this time around, there are no checks and balances.

Loss of faith in our system can spell disaster. If the posting on the US Mint site doesn’t indicate a falling faith in our system, what would?

Are the storms clouds beginning to gather? (To be continued).

What Obama Can Learn From the Mahoning Valley

Last night I was thumbing through a book entitled Mahoning Memories. It is a history of the Mahoning Valley starting back with the Native American population and moving forward. It talks about the Connecticut Western Reserve and the land purchase by our forefathers with names that us locals can identify: Young, Shehy, Hillman, Wadsworth, Boardman, Canfield…you get the picture.

I was amazed by how fast this area “settled up.” With the original land purchases being made in the late 1790’s and Youngstown established on what is known as Spring Common in 1802, these folks endured many hardships, building rudimentary log cabins for communal living and communal agriculture. It was a hard existence. So hard, in fact, John Young’s wife only lasted a year or two and left along with Youngstown’s founder back to a more civilized existence. That being said, paintings show that by the 1820’s, a scant 18 years later, Youngstown had grown into quite a community with normalized and substantial structures and attractive housing for the well-to do.

What really caught my attention however, were the industrialists that populated the area almost from the beginning. The first blast furnace in the area was established in 1803, one year after Youngstown’s founding, by James and Daniel Heaton. By the mid 1840’s, mills had popped up all along the Mahoning River, which in turn morphed into Youngstown Sheet and Tube, Republic Steel, and numerous other factories that provided steel for the growth of our nation and supplies for America’s armed conflicts from the Civil War (Ohio’s Civil War Governor was Youngstown native David Tod) to Vietnam. Then everything collapsed in 1977, and it has been a long and slow road to recovery. Journalists are currently visiting the area to see how the first de-industrialized region in the country has fared now that the rest of the nation is where we were 3 decades ago.

When I put the book down, I began to think of today’s economic crisis. Could those visionary industrialists do today what they did back them? Probably not! We have so regulated ourselves, and put so many roadblocks in the way of doing anything, the result is nothing gets done. From taxes to zoning to permits to environmental regulations to the carbon emission garbage to hoot howls and supposedly endangered rodents, it is practically impossible to do anything of any magnitude and scope. How do we expect this nation to survive?

The most blatant example is the proposed coal liquefaction plant to be built in Wellsville. The developers announced that they scrapped government funding because it would take years for basic compliance requirements. They say they have private funding. Don’t bet the rent.

President Obama is proposing an upgrade and expansion of our electric grid, something that needs to be done badly as evidenced by the several blackouts the country has experienced these past few years. The environmentalists in conjunction with various cities are already threatening legal action to stop it, and it has yet to be voted on in Congress. A private entity doing this without strong participation by the government and its attendant rules wouldn’t stand a chance.

High speed trains between our major cities and in specific corridors like Cleveland to Cincinnati or Chicago to New York is an idea whose time has come. It is the most fuel efficient way to move large numbers of people, and would relieve airport congestion and jammed packed highways. Can you imagine the red tape in trying to get a project like that off the ground? Legal machinations would delay it by 20 years, yet it would provide thousands upon thousands of jobs and give this nation a boost. No private entity could even begin to do such a project in this day and age.

If Mr. Wick and Mr. Campbell and Mr. Todd were to try to build an industrial base in Youngstown today, I suspect that they would not succeed. And that,folks, is the problem with America today. The wealth of nation is determined by how many refrigerators it builds, not by how many hamburgers it flips. That is a lesson that should be learned by the United States government from President Obama on down the every school district Board of Education member. Until we do, we will remain a nation focused on “service” rather than “production.”