hollywood

Hollywood Lobbyist To Politicians: Don’t Count On ‘Support’ If You Opposed SOPA

by on January 24, 2012

Huffington Post…

California Watch . By Will Evans Hollywood is threatening politicians with one thing they hold very dear: campaign cash. As anti-piracy legislation stalled in Congress last week, the movie industry’s top lobbyist, former U.S. Sen. Chris Dodd, warned Democrats not to count on Hollywood money if they turn their backs on the industry’s legislative priority. Among the biggest recipients of Hollywood money are Californian members of Congress who remain supportive of the controversial anti-piracy bills. Eight Californians in the House of Representatives, as well as Democratic U.S. Sens. Dianne Feinstein and Barbara Boxer, co-sponsored the bills, representing more co-sponsors than from any other state. Boxer was the top Senate recipient of campaign contributions from the movie production industry over the last six years, picking up nearly $413,000, according to data compiled by MapLight.org and the Center for Responsive Politics. Democratic Rep. Howard Berman, whose Los Angeles district includes the famed Hollywood sign, is the industry’s top beneficiary in the House, picking up $106,500 in the last two years of reported contributions. Berman was an early co-sponsor of the Stop Online Piracy Act that the Motion Picture Association of America has been pushing. The movie industry and other supporters maintain that the bills, known as SOPA in the House and PIPA [PDF] in the Senate, are necessary to fight foreign websites that pirate American films and music. Opponents, including tech companies, claim the bills threaten freedom of expression on the Internet. The debate pits two powerful California industries against each other, but one gives much more political money than the other. In the Senate, for example, MapLight.org found that the entertainment industry gave $14 million in contributions over the last six years, compared with $2 million from Internet interest groups. The rare admission of the power of campaign contributions from Dodd, a former senator and past presidential candidate, puts a spotlight on the influence of money in this policy debate. “Candidly, those who count on quote ‘Hollywood’ for support need to understand that this industry is watching very carefully who’s going to stand up for them when their job is at stake,” Dodd told Fox News last week. “Don’t ask me to write a check for you when you think your job is at risk and then don’t pay any attention to me when my job is at stake.” Dodd, CEO of the movie industry association, added: “I would caution people don’t make the assumption that because the quote ‘Hollywood community’ has been historically supportive of Democrats, which they have, don’t make the false assumptions this year that because we did it in years past, we will do it this year.” Watch Dodd’s interview with Fox News : Watch the latest video at video.foxnews.com Howard Gantman, spokesman for the association, said in an e-mail that Dodd “was merely making the obvious point that people support politicians whose views coincide with their own. When politicians take positions that people disagree with, those people tend not to support those politicians.” Meredith McGehee, policy director of the Washington-based Campaign Legal Center, said Dodd’s statement “reveals how much the current system is legalized bribery.” “It’s notable that it’s coming from someone who was so steeped in the system,” she said. Art Brodsky, spokesman for Public Knowledge, an advocacy group that fought the anti-piracy bills, said campaign contributions have indeed factored into the policy battle. “You’d have to be totally naive not to think so,” he said. “Look at the contributions and look where people were on the issue.” Californian co-sponsors of anti-piracy legislation in the House include Los Angeles-area Democrats Karen Bass, who received nearly $30,000 from the movie industry; Brad Sherman, who got $23,000; and Adam Schiff, who picked up about $19,000. Another co-sponsor, Rep. Mary Bono Mack, a Palm Springs Republican, received almost $22,000 over two years. Technology companies and Internet activists succeeded in stalling the bills despite the fact that Hollywood gives more money. But that doesn’t mean that campaign cash didn’t matter, said McGehee, because the fight isn’t over. “We’re only in round one,” she said. Feinstein, who garnered about $146,000 over six years from movie production interests, is working toward compromise legislation. In a statement, Feinstein said: “The only way we can resolve the differences on this bill is by the key CEOs sitting down together.” Will Evans is an investigative reporter for California Watch, a project of the non-profit Center for Investigative Reporting. Find more California Watch stories here .

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Hollywood Lobbyist To Politicians: Don’t Count On ‘Support’ If You Opposed SOPA

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Romney’s Offshore Investments Revealed

by APThe Huffington Post on January 18, 2012

Huffington Post…

GOP presidential candidate Mitt Romney holds millions of dollars in offshore investments, a new report from ABC News finds. While it is unclear whether any of the investments provided specific personal tax benefit to Romney — a possibility that his camp has explicitly denied — the report nonetheless adds further support to an ongoing narrative that the presidential hopeful stands on a financial plane reserved only for the top flight of the elite. According to ABC News, Romney, a former executive at private equity firm Bain Capital who is projected to be worth upwards of $250 million, holds around $8 million of his personal wealth in as many as 12 funds based in the Cayman Islands. Romney also lists a separate investment, valued between $5 million and $25 million, placed on the same Caribbean island chain. ABC News reports that Bain holds some 138 shrouded offshore funds in the Cayman Islands alone. Romney’s campaign has maintained that such behavior is not unusual, and that Romney himself has paid all the appropriate U.S. taxes on his holdings within the accounts. From ABC News: Tax experts agree that Romney remains subject to American taxes. But they say the offshore accounts have provided him — and Bain — with other potential financial benefits, such as higher management fees and greater foreign interest, all at the expense of the U.S. Treasury. Rebecca J. Wilkins, a tax policy expert with Citizens for Tax Justice, said the federal government loses an estimated $100 billion a year because of tax havens. Reuters reported earlier Wednesday that Bain also held accounts harbored in places such as Bermuda, Ireland and Hong Kong, which could lead to further questions about Romney’s personal involvement in these holdings. Andrea Saul, a spokesperson for the Romney campaign, pushed back quickly after the ABC News report, taking exception to their characterization of the investments as “tax havens.” “ABC is flat wrong. The Romney’s investments in funds established in the Cayman Islands are taxed in the very same way they would be if those funds were established in the United States. These are not tax havens and it is false to say so,” she said in a statement. Romney has come under increasing scrutiny this week after first dancing around a question about his intent to release his tax returns at a debate, then dealing himself a one-two punch by announcing that he had paid “closer to the 15 percent rate” in taxes while simultaneously downplaying $374,327 in speaking fees as “not much.” On Wednesday, New Jersey Gov. Chris Christie (R), one of his supporters, encouraged him to immediately release his returns to prove that nothing is amiss.

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Romney’s Offshore Investments Revealed

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Unemployed, Out Of School Youth A Huge Cost To Taxpayers

January 18, 2012

A sizable minority of America’s youth aren’t in school or attached to the labor force. And it’s costing taxpayers big. About 17 percent of America’s young people are “opportunity youth” — or people ages 16-24 who aren’t attached to the labor force — according to a report prepared by researchers for the Corporation for National and Community Service and the White House Council for Community Solutions (h/t Think Progress ). Each one of these 6.7 million young people is costing taxpayers $13,900 per year and it doesn’t stop there. After 25 years old, they’ll cost taxpayers $170,740 over their lifetime, the report found. That means that in total, those currently classified as so-called opportunity youth will cost taxpayers $1.56 trillion in present value terms over their whole lifetime. “Both taxpayers and society lose out when the potential of these youth is not realized,” the report said . With the unemployment rate at elevated levels for months , young people have been feeling the consequences. Mike Konczal, a fellow at the Roosevelt Institute, found in November that youth joblessness in America was in line with levels of youth unemployment during the Arab Spring. Teenage job-seekers are having an especially tough time as older, more experienced workers snap up part-time positions usually reserved for teens in a better economy. The unemployment rate for Americans ages 16-19 was 25 percent in 2011 — nearly three times the jobless rate of the overall labor force. During the summer, a time of typically high employment for youth, the unemployment rate for Americans aged 16 to 24 was twice as high as the national jobless rate . The high levels of out-of-work young people will likely have long-term implications , including a boost in poverty, increased reliance on social safety net programs and maybe even illegal activities, according to researchers at Rutgers University. But prospects for unemployed youth may be getting brighter. Nearly two-thirds of the jobs employers added between August and October went to Americans between the ages of 16 and 24.

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Report: Proposed Down Payment Rules Could Limit Minorities’ Access to Affordable Homebuying

January 18, 2012

Nearly three-quarters of African-American and Latino mortgage borrowers could be excluded from affordable homeownership if federal regulators approve a proposal to require 20 percent down payments, according to a study released Wednesday. Co-authored by the UNC Center for Community Capital and the Center for Responsible Lending, the study says that such a move would not only restrict minorities’ access to homeownership but also that of roughly 60 percent of all creditworthy borrowers. The proposal is part of a host of new regulations under consideration through the Dodd-Frank Act, legislation passed in the wake of the financial crisis. Policymakers have been tasked with developing new guidelines for the mortgage market to avoid a repeat of the easy lending environment that led so many Americans to take out bigger mortgages than they could afford — often with no money down. While no one is asking to return to the days of easy money, the study cautioned that the pendulum might now be swinging too far in the other direction, tightening lending requirements too much. Many housing experts say that 10 percent is a more reasonable down payment requirement. Federal regulators are still working out the proposed policy. “If you’re requiring homebuyers to actually save a 20 percent down payment in advance of buying the home, it would take decades for many families to amass that kind of money even though they could still afford to make those monthly mortgage payments,” said Ginna Green, a spokeswoman for the Center for Responsible Lending. Though borrowers from all walks of life would be impacted by such a policy, minorities would be disproportionately affected because they have, on average, lower incomes than their white counterparts, according to Green. “African-Americans, Latinos, teachers, firefighters, anyone who is working-class and having trouble making headway in this economy will have even more trouble if these guidelines were to come to fruition,” Green said. “It’s like the pendulum has swung from one side to the other in the housing market. On one end, minorities got the riskiest loans, and now, on the other end, minorities are going to bear the brunt of these onerous down payment requirements.” In the report, the researchers found that increasing down payment requirements does produce a reciprocal decrease in the number of borrowers who default on their mortgage loan. Specifically, for loans that meet the government’s proposed guidelines, the default rate was 7.1 percent as compared with rates of nearly 10 percent on loans sold to the Federal Housing Administration, which has a down payment requirement of 3.5 percent. Nonetheless, the researchers concluded that the benefit of lowered default rates — which, in turn, produce lower foreclosure rates — is overshadowed by borrowers’ restricted access to affordable mortgage loans. Some prominent economists disagreed with the report’s finding, including Dean Baker, co-director for the Center for Economic and Policy Research. “I know of almost no planet where a slight increase in the cost of getting a mortgage will shut out 60 percent of creditworthy borrowers. On my planet, we just had a horrible housing bubble burst and wreck the economy for a decade in large part because banks were able to pass on junk mortgages at no risk. This is an incredibly modest provision that will have no impact on creditworthy borrowers.” Mark Zandi, chief economist at Moody’s Analytics, was more moderate in his dissent. “I think a down payment requirement of 20 percent is too high. I’d like to see more like 10 percent,” he said. Nonetheless, Zandi believes the government should determine the requirements. “The very important thing to remember here is that when policymakers figure out what the future of mortgage finance looks like, it’s very likely that the government will only be able to play a role with loans that meet these requirements,” he said. “With a 20 percent down payment, only one-third of loans would fall under their guidance,” Zandi said. “But if you lower the down payment requirements, the government could oversee closer to two-thirds of the loans, which is where I’d like to see them be.” UPDATE: 5:42 p.m. — Not all borrowers would be required to make a 20 percent down payment, under the proposal. Rather lenders could still offer loans with lower down payments if the bank held onto at least 5 percent of the credit risk (the dollar calculation of the chance the borrower will not pay back the loan). This is likely to increase the interest rate charged to the borrower.

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Kay Koplovitz: Net Worth and Self Worth: A Difference Worth Noting

January 18, 2012

Over the years and then again recently, I have been thinking a lot about net worth and self-worth. Each has its value but I think the difference is “worth” noting. So much attention is given to net worth. In the world of business, net worth is the metric that measures success. For many, the size of the bank account, the CEO compensation, the number of homes, private planes, art collected and more is the value of the person, if you believe the press. We have so many examples in this land of abundant capital and wildly successful capitalists. We praise them, laud them and hold them high for all to emulate. Nothing wrong with that at all. We’ve had them over the centuries and in recent decades, from the Rockefellers, Roosevelts, Carnegies, Fords, to the Packards, Buffets, Gates, Jobs, Brins, Pages, Whitmans and Zuckerbergs. They deserve our admiration. What is their self-worth? Much harder to measure, but I maintain it has the highest value. According to the Wikipedia popular definition, “Self-worth is what enables us to believe that we are capable of doing our best with our talents, of contributing well in our society, and that we deserve to lead a fulfilling life…” What is the cost of human capital and how is it deployed? Many of these men and women have contributed to societal endeavors. Where would NYC be without the vision for Rockefeller Center, the world of poverty without the Gates Foundation, the American people without the Theodore Roosevelt vision for the National Parks? The rise of social entrepreneurs gives me food for thought. We have evidence that we Americans, successful as we are in capitalism, are beginning to realize that social entrepreneurship is changing the way we look at solving our everyday challenges. Some wonderful social entrepreneurs have emerged. They have acted and are making a difference. Wendy Kopp at Teach for America , Becca Robison, Founder of Astrotots Space Camps , Matt Flannery and Premal Shah at Kiva , John Wood at a Room to Read , Blake Mycoskie Founder of Tom’s Shoes , and Gary Hirshberg of Stonyfield Farms . These people measure their success, yes, by having sustainable business models, but also by the impact they have on society. They have substantial net worth, and they have a strong sense of self-worth. Both are important, but on my score card self-worth is by far the most valuable. What is your self-worth?

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Obama Picks Sides In SOPA Fight Between Campaign Donors

January 18, 2012

WASHINGTON — President Barack Obama entered the fray over two controversial anti-piracy bills with a Jan. 14 statement aligning the White House with technology and Internet community critics of the legislation. The statement put the president on one side of a major debate between two of the biggest donor communities in the Democratic Party — the technology and Internet industry vs. movie and recording companies — in the middle of his reelection campaign. Obama’s position on the anti-piracy legislation — the Stop Online Piracy Act (SOPA) in the House and the Protect IP Act (PIPA) in the Senate — hints at the increasing role played by computer and Internet companies, their executives, and their employees in the Democratic Party coalition. Since 2007, executives and employees of such companies have given $52 million to Democratic Party efforts, up $12 million from the period 2001 to 2006, according to the Center for Responsive Politics. Hollywood and the entertainment industry, long counted as stalwarts of the Democratic money machine, continue to give more than the party’s new tech friends. The Democratic National Committee received $1 million more from the entertainment sector than from the tech sector through Sept. 30, 2011. The biggest supporter of the president’s reelection was DreamWorks CEO Jeffrey Katzenberg, who has raised at least $500,000 for the reelection and contributed $2 million to a super PAC supporting the president. Obama has also appeared at a New York fundraiser hosted by Miramax co-founder Harvey Weinstein and, in one visit to Los Angeles, held three separate fundraisers at the Sony Pictures movie studio. Donors include big-shot Hollywood executives and producers such as Steven Spielberg, Brian Grazer, John Pepper and Katzenberg and actors like Tom Hanks, Jamie Foxx, Jennifer Garner, Eddie Murphy and Alec Baldwin. Perhaps it is the entertainment industry’s heavy tilt leftward, rarely giving fewer than 70 percent of all its contributions to Democrats, that makes the industry’s support look like a given. And that may have freed the White House to issue the Jan. 14 statement — written by Victoria Espinal of the Office of Management and Budget, Aneesh Chopra, U.S. chief technology officer, and Howard Schmidt, White House cybersecurity coordinator — on the side of tech community. A more recent convert to the Democratic coalition, the tech community has a strong relationship with the Obama White House. With its less glamorous, more cerebral stars, it seems like more of a natural fit for Obama than Hollywood. And that fit shows in campaign contributions. The $9.2 million that Obama raised from the computer and Internet industry in his 2008 campaign is three times more than any other politician had raised from the industry over an entire career. It also marked the first time that computer and Internet interests beat the entertainment industry in donating money to a Democratic presidential candidate. Although the DNC has received significantly more from entertainment companies, the tech and entertainment sectors through Sept. 30, 2011, are nearly evenly matched in giving to President Obama’s reelection campaign: The tech sector gave $1.3 million; the entertainment industry, $1 million. Silicon Valley and the tech sector overall grew from a small player in politics in 1999 to a major Democratic donor community by 2006, according to a 2008 Atlantic article by Joshua Green — and then further accelerated its involvement with Obama’s 2008 campaign. As Green describes, the increase in contributions from the tech sector were helped along by a shift in fundraising tactics away from the smaller living room events that favor the rich — such as Hollywood elites — and toward a subscription model based on Silicon Valley software sales. This was largely the model that Obama adopted by establishing online fundraising platforms and by connecting rally attendees to those platforms through mobile devices. The relationship between Obama and tech companies has involved more than money. Facebook co-founder Chris Hughes left his Silicon Valley job to help the Obama team run its social networking and online fundraising platforms. Google’s Eric Schmidt served as an informal adviser to the campaign and later went to Washington to serve on the President’s Council of Advisors on Science and Technology. In the White House, the president appointed the nation’s first chief technology officer and first chief information officer and reached out to the tech community in both Silicon Valley and Washington. “People in the tech industry appreciate the competence of his tech work and the stand in favor of Internet freedom,” Craig Newmark, who founded the popular site Craigslist.org, told The Huffington Post. Newmark, who calls himself a “libertarian moderate,” added, “His stand regarding SOPA reflects the understanding that it won’t really help stop piracy, but it would do a lot of damage to the U.S. and could shut down much of the tech industry, destroying jobs.” The Obama administration’s statement on the anti-piracy bills was specifically elicited by an online program, called We The People, that allows citizens to submit petitions asking for a White House statement of policy. An official White House statement is delivered if the petitioners can round up enough people to co-sign their request. The Jan. 14 statement says that the president “will not support legislation that reduces freedom of expression, increases cybersecurity risk, or undermines the dynamic, innovative global Internet.” The White House statement provides a broad critique that largely embraces the arguments of critics of the legislation, such as Google, Facebook and Yahoo. The administration also stated its opposition to specific elements of the two bills. The statement singled out as a threat to cybersecurity a much-noted provision related to Domain Name System rerouting, recently removed by the bills’ sponsors in Congress. Despite the president’s seeming abandonment of the entertainment industry on this subject, the industry does not appear ready to quit the president just yet. The Motion Picture Association of America, a major supporter of the anti-piracy bills, decided to interpret the White House statement as a sign of support for its side. (AOL Inc., HuffPost’s parent company, is lobbying against the Stop Online Piracy Act and the Protect IP Act. AOL CEO Tim Armstrong has met with President Obama.) Make your voice heard on SOPA and PIPA:

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Kanye’s Epic Twitter Rant: Wants To Be New Steve Jobs, Change The World

January 5, 2012

Forget album sales and glitzy awards. Kanye West’s new goal is nothing short of changing the entire world. The mad scientist tastemaker of hip hop went on an epic Twitter rant on Wednesday night, discussing his new clothing line, his musical plans and, most significantly, his new company, which he says will “pick up where Steve Jobs left off.” Called Donda, after his late mother, West revealed that its goal will be to “make products and experiences that people want and can afford,” “to help simplify and aesthetically improve everything we see hear, touch, taste and feel,” and ” dream of, create , advertise and produce products driven equally by emotional want and utilitarian need.. To marry our wants and needs.” It will be comprised, West tweeted, of over 22 divisions staffed by “architects, graphic designers, directors musicians, producers, AnRs, writers, publicist, social media experts, app guys, managers, car designers, clothing designers, DJs, video game designers, publishers, tech guys, lawyers, bankers, nutritionists, doctors, scientists and teachers.” Specifically, West wrote that one of Donda’s “projects to be released this year [is] called 2016 OLYMPIC’s … It’s a semi sic-fi since 2016 is only 4 years away,” which presumably means that it will be a movie. West also disclosed that he was in talks to become the creative director of the “Jetsons” movie, and wants to design the MTV Awards, which probably means the VMAs. In addition, West wrote that he wants to help reshape the American school system, which he says was “designed to turn people into factory workers.” That includes starting a summer school with director Spike Jonze. “There are so many broken systems from the economy to school systems jail systems… we need experts for this,” he later said , promising that his creativity and ability to bring experts together would be of service in the effort to solve intractable problems.

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Keith Olbermann Back On Current TV, But Will It Last?

January 5, 2012

Is there trouble brewing between Keith Olbermann and Current TV? Fans of his show, “Countdown With Keith Olbermann” are certainly wondering. When one viewer asked Olbermann if “Countdown” would air during the Iowa caucuses earlier this week, he tweeted that his show was not going to be broadcast. Although he didn’t explain why the program had been preempted, Olbermann did encourage unhappy viewers to contact the network and its co-founders, including former vice president and Current TV chairman, Al Gore. According to a Current TV spokesperson, the brash commentator was offered the opportunity to be the sole anchor and executive producer of the network’s primary and caucus coverage, but “unfortunately, he declined.” On Wednesday, Olbermann addressed his absence during coverage of the Iowa caucuses in a statement to The Hollywood Reporter . “I was not given a legitimate opportunity to host under acceptable conditions,” he stated. Olbermann did not provide details on the exact nature of those conditions. However, in recent weeks, his show has suffered from numerous technical difficulties, including satellite feed disruption and lighting issues, The New York Times reported . The tempestuous host left MSNBC last year, just weeks after the liberal cable news channel suspended him for making donations to political candidates. Since migrating to Current TV, “Countdown” has become the network’s top-rated program. Olbermann returned to the airwaves on Wednesday night, but it’s unclear if the rift with his bosses has been mended. No word yet on whether Olbermann will cover the New Hampshire primary next Tuesday, either.

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S&P Flat For The Year

December 30, 2011

The broad S&P 500 endured wild daily swings, but a year of drama left the index on Friday pretty much where it started. Not since 1970 has the index ended a year as close to unchanged as it did this year. For Friday, the Dow Jones industrial average .DJI was down 70.99 points, or 0.58 percent, at 12,216.05, based on the latest available data. The Standard & Poor’s 500 Index .SPX was down 5.49 points, or 0.43 percent, at 1,257.53. The Nasdaq Composite Index .IXIC was down 8.59 points, or 0.33 percent, at 2,605.15. (Reporting By Caroline Valetkevitch; Editing by Kenneth Barry)

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Cable TV Bills Have Nearly Tripled In The Past 10 Years

December 30, 2011

Do you feel like your cable bill is significantly higher than it used to be? That’s probably because it is. The average cable TV subscriber pays nearly three times as much for cable now as they did in 2001, according to research by SNL Kagan cited by the Wall Street Journal . The jump in average prices — to about $128 per month from $48 — may not be good for cable providers; executives have said publicly that they’re worried that a boost in bills will push customers away. But while the cost of cable service has risen, the costs of the televisions themselves continues to trend downward. Indeed, an early television cost nearly $10,000 once adjusted to modern-day prices. That price decline unfortunately hasn’t been enough to offset the costs of even the most basic of necessities for many struggling Americans: Nearly half of all households today are economically insecure, according to a recent report by Wider Opportunities for Women. And higher television bills aren’t helping. An increase in the costs for original cable programming as well as a boost in sports fees may be in large part responsible for the hike in bills, according to the Los Angeles Times . As cable companies see their costs rise , they pass them on to consumers. Still, the squeeze doesn’t seem to be hurting the cable providers too much — for many media companies, cable channels are their most profitable sector. The battle over who is to blame for high cable costs has grown increasingly heated in recent months. The NFL and ESPN inked a controversial deal earlier this year, prompting many media executives to blame the league and the network for rising cable costs , according to a separate report in the WSJ . Liberty Media Corp. CEO Greg Maffai called the boost in the cost of ESPN a “tax on every American household.” But it’s not only increasing sports programming fees that have cable providers worried. Some cable executives have expressed concern that with the availability of television on the internet, viewers will stop signing up for cable , according to The New York Times . Some cable providers, such as Time Warner Cable, are considering charging data usage fee s in an effort to make money off of the rising use of services like Hulu and Netflix, Bloomberg reports. Still, cable executives’ fears that rising internet viewership would turn customers away from cable doesn’t seem to have materialized. Most Americans that decide to cancel their cable bills do so because of poverty, not because they’re choosing to watch on the internet , the NYT reports.

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Why People LIKE The Kardashians

December 30, 2011

It’s no secret that not everyone is a Kardashian fan. Between attempts to boycott their shows , Kim Kardashian being named as PETA’s Celebrity Grinch of 2011 , the National League of Junior Cotillions’ “The Most Ill-Mannered Person of 2011″ , and ranking as one of the least desired celebs to have as a neighbor , the public has made it clear about how they feel about the Kardashians. Or have they? Believe it or not, but people like the Kardashians. They’re a family, but more importantly a business — at least to the companies they work with. The viewers that tune in keep them on the air. Shoppers who buy their clothes, perfumes, diet pills and books are sending a clear message to companies that the reality TV family means bringing in the big bucks. Yes, people like the Kardashians. “At their core, the Kardashians are an incredibly bonded, loving, large family who live an incredibly large life,” E! President Suzanne Kolb told The Wrap . “And if you actually look at the history of television, there’s a pretty large number of families with that blend that resonate with viewers … I think there’s something emotionally aspirational around that family dynamic and visually aspirational about the way that family lives.” Kolb added that from every piece of research she’s seen about the reality TV family, she says viewers “aspire to be them or to befriend them.” Aspiration is often the basis for most celebrity fandom. It’s the reason we read about their lives and look at photos of them doing everything from the most mundane errands to walking the red carpets. For the Kardashians — a family that has “no talent” as Barbara Walter brusquely put it — it’s easy to pinpoint what fans find aspirational; their over-the-top lifestyle combined with a plotline that still conveys the all-American values of a tight-knit family. That’s why despite their public missteps, Kolb told The Wrap , that the Kardashians’ fans don’t watch them for their bad behavior. “You watch for sort of over-the-top-situations and really a very soapy family dynamic,” she said. But what about those who don’t like the Kardashian family? What about the 180,049 people who signed an online petition asking the E! Network to boycott their shows? Kolb said the network takes every viewer comment seriously, but they never considered cutting their ties with the Kardashians. And why would they? Those 180,049 people that signed that petition are chump change compared to the 3.2 million viewers who tuned in for the season premier of “Kourtney & Kim Take New York,” or the combined 8.4 million viewers who watched the Kim’s two-part wedding special. The petitioners also don’t compare to Kim’s nearly 12.2 million Twitter followers , or even the two million people who watched her sex tape over her wedding weekend this summer. They are the reason the network has no plans to cancel the Kardashians. It’s been reported that the family made $65 million in 2010 — a figured that family matriarch and manager Kris Jenner wouldn’t confirm — but between the eldest sisters’ three Dash boutique locations, branded signature fragrances, self tanner, the online footwear site ShoeDazzle , multiple clothing lines and more shows in the works, it’s safe to say the family is profiting nicely and the companies they work with are making even more. The Kardashian family may not have “talent” but they know how to make money, and in this economy it’s easy to understand how that appeals to viewers who are dreaming of a better life.

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Oscar Statuette Manufacturers Hope Hollywood Can Help In Worker Wage Battle

December 7, 2011

CHICAGO — A stalemate between the company that manufactures the Oscar statuettes and its workers could amplify the drama at February’s Academy Awards if an agreement on wage and benefit disputes is not reached. Fifty Teamsters are holding their ground in contract negotiations with R.S. Owens & Company, the long-time producer of the statuettes awarded at the Oscars and Emmys , according to a release issued by the union Tuesday. The company froze wage increases from 2007 to 2011 and proposed renewing the policy for the next three years, leaving employees with nearly a decade of stagnated pay, the union alleges. The company also proposed cuts to vacation and bereavement benefits and increases in health care costs, according to the union. The union reports that Owens generated $31 million in revenue this year, a number the company’s president, Scott Siegel, disputes. “The workers have been trying to help the company for the last 10 months by working shorter hours, even with more demanding work, and we really feel that’s something the company should take into consideration as contract negotiations progress,” said Will Petty, a spokesman for the Teamsters Union. “The workers can only take so much, can only give so much, and right now they’re giving so much it’s starting to hurt. We want the company to recognize that.” Teamsters Local 743 , which represents the workers, announced plans to seek federal mediation Tuesday. Petty says production has not been interrupted, but a strike could be on the horizon if an agreement is not reached. Since the company’s statuette production schedule extends through January, a strike could spell trouble for the Feb. 26 awards show. Siegel expressed a desire to work things out with the union, and has two negotiation meetings scheduled with them this week, he said. He says Local 743 had two opportunities to reopen their last contract and negotiate pay increases, but failed to take advantage of those opportunities. Siegel also said he’s disappointed that they’ve made their side of this dispute so public–especially because the avenues the Teamsters have used to promote their cause could be better used to combat larger problems facing his industry. “We’re the only unionized [award] manufacturer in the United States,” Siegel said. “We have seen one after another entertainment award that we manufactured being moved to China. At no point have the Teamsters, or members of other unions, put pressure on all the entertainment organizations to buy union-made awards and U.S.A.-made awards. Part of the predicament [R.S. Owens & Company is] in right now is because most of the main awards are now being made in China.” Coincidentally, film crews are on site at the production company this week to shoot “behind the scenes” footage of the statuettes’ production for the ceremony. Petty says those visitors and others like them in the film industry could be a huge help by advocating on behalf of Owens employees. “From the Screen Actors Guild to the Directors Guild of America, most celebrities who get an Oscar are in a union themselves,” Donnie Von Moore, president of Teamsters Local 743, which represents the R.S. Owens & Company workers, said in a statement. “They know how crucial unions are to protecting livelihood. What the workers at R.S. Owens need now is union support.” This story has been updated to include a response from R.S. Owens & Company.

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Facebook Announces Big New Buy

December 5, 2011

Facebook has acquired location-based social service Gowalla for an undisclosed sum. Both companies announced the deal on December 5. “We’re excited to confirm that Gowalla co-founders Josh Williams and Scott Raymond, along with other members of the Gowalla team, are moving to Facebook in January to join our design and engineering teams,” a Facebook rep said in a statement emailed to The Huffington Post. According to a post on the Gowalla Blog , at least part of the startup’s staff will relocate from Austin, Texas, to Palo Alto, California. Gowalla services will be shuttered in January 2012. Facebook won’t acquire any of Gowalla’s technology or user data, and the Gowalla Blog explains that the service will give its two million users a chance to extract their data before the service shuts its doors for good. CNN Money published an unconfirmed report on December 2 that Facebook would buy Gowalla. According to CNN’s sources , Gowalla talent will join Facebook’s Timeline development team, which is currently finalizing Facebook’s new profile design that debuted at the company’s recent f8 conference and is expected to begin rolling out to users soon. Since launching in 2009, Gowalla had faced steep competition from check-in service Foursquare and daily deals giant Groupon, as well as a host of other location-based check-in and rewards services. In September, Gowalla announced that it had redesigned its mobile app and planned to shift focus away from check-ins and toward user-generated reviews of local places. Those plans are now kaput. Facebook also found itself struggling to keep up in the local mobile space. The social network’s location-based deals feature, Places , which launched in August 2010, failed to take off. Almost exactly a year later, Facebook said it would shutter the project .

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Is Recycling Culture Good For America?

November 24, 2011

This is the third in an occasional series examining the recession’s impact on culture, The Recessionary Arts, and part two of last week’s installment, ” Movies And The Economy: Courting Adults In A Time Of Declining Film Attendance .” Find out more about the series here . The big story about James Erwin, who recently scored a movie deal based on a comment he posted online , isn’t that he’s a 37-year old dad in Des Moines, Iowa, who never intended to become a screenwriter. Or that he won’t move to L.A. because he likes the new doors he just put on his house. Or even that he’s won Jeopardy twice. Those points are significant, to be sure, and will make for great details when Erwin himself becomes the subject of a movie, as he probably will someday. But the more important story is that Erwin, a software-manual writer with no insider connections, managed to get an original property through to Warner Brothers in this lackluster economy — in a year when every movie seems to be based on something that came before, and studios in search of sure success cut projects with any hint of mystery. Hollywood set two dubious records this year — the most sequels ever made and the release of more franchises in their fourth and fifth iteration than ever before. The 10 highest grossing movies so far have shaken out on franchising lines: one to six are sequels (“Harry Potter And The Deathly Hallows: Part 2,” “Transformers: Dark Of The Moon,” “The Hangover Part II,” “Pirates of the Caribbean: On Stranger Tide,” “Fast Five,” and “Cars 2″), seven and eight are based on Marvel characters (“Thor,” “Captain America”), nine is a reboot (“Rise Of The Planet Of The Apes”). Ten is the sole original property, “Bridesmaids.” The problem is two-fold — the down economy on one end, and technologies such as video on demand services and iPads on the other — distraction from the traditional modes of distraction. Anything is possible — even watching “Melancholia” on your couch before its released in theaters. Meanwhile, tickets are pricey, the studios have smaller budgets, and the tent-pole movies intended to draw crowds are increasingly wired to keep multiple industries in the black. But does optimizing profits in a down market necessitate movies that are essentially extended commercials? Are bad movies good for American business? Earlier this summer, Universal dropped a project known as “Ouija ,” part of a 6-year deal with the Rhode Island-based toy company Hasbro. It was brokered at the start of the recession, a year after Hasbro’s Transformers brand made millions at the box office, outstripping all but two movies. The deal stipulated the film adaptation of 7 Hasbro board games and toys — Candyland, Stretch Armstrong, Clue, Battleship, Monopoly, Magic: The Gathering and Ouija. By the time Universal paid Hasbro $5 million to back out of “Ouija,” the darkest and most promising outcroppings of the deal had also disintegrated: “Monopoly” and “Clue,” each of which had a respected director attached in (Ridley Scott and Gore Verbinski). The studio’s line was that it needed to focus on “Battleship,” “Candyland” and “Stretch Armstrong,” which is set to star Taylor Lautner. One source at Universal told The Huffington Post the “risk” and “reward” assessment by which studio executives estimate a film’s financial costs and gains have skewed since the recession. A pricey film with indeterminate rewards, like perhaps “Ouija,” probably isn’t to survive. A movie starring Taylor Lautner? Already in development. According to Patrick Corcoran, spokesperson for the National Association of Theater Owners, this mania for marketable projects is an inevitable, natural happening — the age-old game to “exploit already known properties” into a “positive feedback loop,” whereby fans of the movies buy the toys and vice versa. Hasbro, Corcoran said, was “aggressive in exploiting their properties and getting studios to agree.” In a press release from 2000 , then-Hasbro president Alan Hassenfield detailed “a very painful year” involving massive layoffs and closings. They’d realized, reported the press , that making toys for fans of a particular movie was a losing venture. Interest inevitably waned, as it had for Star Wars before Hasbro sold its inventory of Star Wars stock. Their new strategy would be the inverse. They’d capitalize on products they’d already popularized — the Ouija boards, the gel-filled Stretch Armstrongs. To keep them vibrant, they’d get studios to make movies about them (preferably, one would think, ones and twos and threes, ad infinitum). The decision seems to have paid off. Hasbro profits jumped 62 percent after the first “Transformers” movie in 2007, even as the recession took hold. And after a year of seesawing profits, they posted a growth of 10 percent this October, due in large part to strong sales of Transformers, a 27-year-old toy. The human face to all this bottom-lining is the thousands of employees of Hasbro (and Universal, and Paramount, and all the rest) working in a dismal economy for product-hawkers. The only Hasbro plant left in the U.S. is in the former manufacturing center of Western Massachusetts, where the scarceness of jobs gives even the upcoming ” View Master” movie a sense of gravity. In 1980, before the internet, the Chinese economic boom and the recession changed the landscape of a toy company’s and a movie studio’s operations, the top 10 highest grossing movies was in a near-inverse state to this year’s list . Only two sequels were in the top 10. The rest were original movies, including now iconic originals, such as “Tootsie,” “9 to 5″ and “Airplane.” As for Erwin’s original script, “Rome Sweet Rome,” it may not be so different from the rest of Hollywood’s current productions. James Erwin’s decision to move his Marines back in time, a key part of the script, was an unwitting tick in an industry check box. According to Adam Kolbrenner. the president of the boutique screenwriting agency, Madhouse Entertainment, that sold the script to Warner Bros, “the time-travel space” is a brand in its own right, and one that “everyone wants to buy these days.” “Let’s not deviate,” Kolbrenner said in a phone interview. “I’m going to figure out how to make ‘Rome Sweet Rome’ a franchise. As far as I’m concerned, those marines in episode two are flying to fucking China.”

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Occupy Portland Faces Police Showdown

November 13, 2011

PORTLAND, Ore. — Anti-Wall Street protesters and their supporters flooded a city park area in Portland early Sunday in defiance of an eviction order, and authorities elsewhere stepped up pressure against the demonstrators, arresting nearly two dozen. Crowds converged on two adjacent downtown Portland parks where protesters are camped after city officials set a midnight Saturday deadline to disperse. But hours later, the protesters were still there, backed by many supporters who spilled out into the streets next to camp, tying up traffic. They obeyed police orders to clear the street early Sunday. At one point the numbers swelled to thousands but then started to thin in the early morning hours. Organizers said they hope enough people will join them to make it difficult if not impossible for police to carry through on any eviction. “Occupy the street,” one organizer said through a bull horn. “Remain peaceful and aware. We have strength in holding the streets.” Demonstrators also used pallets and old furniture, wood debris and even a bicycle to set up makeshift barricades on either end of a street that runs through the encampment, apparently in an attempt to block traffic. Some protesters were arguing about the barricades, though, saying they want them to come down. Mayor Sam Adams had ordered the camp shut down, citing unhealthy conditions and the encampment’s attraction of drug users and thieves. Police numbers shifted throughout the night, but they showed no signs of moving against the protesters. Around 4 a.m., a line of about 200 police stretched across a street and in front of a federal courthouse. Protesters facing them appeared to be in a festive spirits with some banging on plastic pails, another clanging a cowbell while others danced in the streets as a man juggled nearby. Police had prepared for a possible clash, warning that dozens of anarchists may be planning a confrontation with authorities. Officers seized pieces of cement blocks Friday, saying they were told some demonstrators had plans to use them as weapons against police. They said they believe some demonstrators are building shields and trying to collect gas masks. “We’ll take action that’s appropriate, when it’s appropriate,” police spokesman Lt. Robert King told The Associated Press. “We are not going to engage in confrontation for a misdemeanor,” he said, noting that is the legal violation for remaining in the park after midnight. It appeared earlier that about 200 campers planned to get arrested. But police action seemed less likely after the crowds swelled the parks in the early morning. In the hours leading up to midnight, protesters held general assembly meetings where they talked about what to do when the deadline came. The also repeated the main message of Occupy Wall Street movement of peaceful resistance to income inequality and what they see as corporate greed. As those speeches were going on, some snacked on coffee and burritos as others sang protest song. About 60 bicycle riders circled the camp repeatedly to show support. “We are a peaceful resistance,” said rider Chico Tallman, a 63-year-old accountant. “But we’re fed up with the direction the country is going. It’s all about profit.” On Saturday, Occupy Portland protesters dismantled large sections of their encampment, but dozens of tents remained after midnight. For the second time in as many days, Oakland city officials warned protesters Saturday that they do not have the right to camp in the plaza in front of City Hall and face immediate arrest. The eviction notices come as officials across the country urged an end to similar gatherings in the wake of three deaths in different cities, including two by gunfire. Demands for Oakland protesters to pack up increased after a man was shot and killed Thursday near the encampment site. “Your activities are injurious to health, obstruct the free use of property, interfering with the comfortable enjoyment of (Frank Ogawa Plaza), and unlawfully obstruct the free passage or use of a public park or square,” the notice read. Oakland officials first issued the eviction notice Friday after first pleading with protesters to leave the encampment. Police officials have said a preliminary investigation suggested the shooting resulted from a fight between two groups of men at or near the encampment. Investigators do not know if the men in the fight were associated with Occupy Oakland, but protesters said there was no connection between the shooting and the camp. The shooting occurred the same day a 35-year-old military veteran apparently committed suicide in a tent at a Burlington, Vt., Occupy encampment. Police said a preliminary investigation showed the veteran fatally shot himself in the head. They said the death raised questions about whether the protest would be allowed to continue. In Salt Lake City, police arrested 19 people Saturday when protesters refused to leave a park a day after a man was found dead inside his tent at the encampment. The arrests came after police moved into the park early in the evening where protesters had been ordered to leave by the end of the day. About 150 people had been living in the camp there for weeks. Authorities in Denver forced protesters to leave a downtown encampment and arrested four people for interfering with officers who removed illegally pitched tents, said police spokesman Sonny Jackson. Jackson said police had advised protesters since Wednesday that their tents in Civic Center Park and on a nearby sidewalk were illegal. Violence marked the protest in San Francisco Saturday where police said two demonstrators attacked two police officers in separate incidents during a march. Police spokesman Carlos Manfredi said a protester slashed an officer’s hand with a pen knife while another protester shoved an officer, causing facial cuts. He said neither officer was seriously hurt, and the assailants couldn’t be located. Meanwhile, in Southern California a small group of protesters braved soggy weather on Saturday to gather for the first time under the banner of Occupy Inland Empire. Members of Occupy movements in Fontana, Redlands, Riverside, and other nearby towns marched past banks and in front of San Bernardino City Hall in what they called a “visibility action,” The Sun newspaper reported. ___ Associated Press writers Terry Collins in Oakland, Josh Loftin in Salt Lake City, Jim Anderson in Denver and Andrew Dalton in Los Angeles contributed to this report.

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PHOTOS: First Jobs Of Hollywood’s Hottest

October 6, 2011

AOL Jobs got in touch with several stars to find out what they did before they were a popular household name.

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AT&T To Defend $39 Billion Deal In Court

September 21, 2011

(Reuters) – A U.S. judge set a February 13 start for a trial over whether AT&T Inc (T.N) can buy rival T-Mobile USA despite competitive concerns raised in a lawsuit by the Obama administration’s Justice Department. U.S. District Judge Ellen Huvelle set aside 6 weeks for the non-jury trial. There was no discussion during the 80-minute scheduling hearing of any settlement of the case. The Justice Department sued last month to block AT&T’s $39 billion purchase of T-Mobile, owned by Deutsche Telekom (DTEGn.DE), for fear it would raise prices for consumers and hamper competition and innovation. The trial date falls between the government’s request to begin March 19 and AT&T’s petition for a January 16 date. Lawyers for the parties said the matter was unlikely to need six weeks. Mark Hansen, one of AT&T’s lawyers, had pressed the judge for a quick trial to provide certainty to the companies and the market, saying they were “already months beyond where we want to be.” The deal would combine the No. 2 and No. 4 wireless carriers. The companies could find it difficult to hold the deal together through a long proceeding and investors’ patience could wane. The ceremonial courtroom of the U.S. District Court for the District of Columbia was used for the scheduling hearing. The bigger space was needed to accommodate the large legal teams involved in the case. Sprint Nextel (S.N), the No. 3 wireless carrier, has sued separately to block the deal, but Huvelle refused to consolidate the cases and set an October 24 date for arguments over AT&T’s planned motion to dismiss that case. She said she planned to decide that issue “as swiftly as possible.” The case is USA v. AT&T, T-Mobile USA Inc and Deutsche Telekom AG, No. 11-1560. (Reporting by Jasmin Melvin and Jeremy Pelofsky; Editing by Tim Dobbyn) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Facebook Looking To Hire Hollywood Insider

September 20, 2011

By Alexei Oreskovic SAN FRANCISCO (Reuters) – Facebook is looking to hire a big-name executive to cultivate relationships and strike deals with the film and music industries to bolster its media offerings. In recent months, Facebook had discussions with former MySpace co-President and former MTV executive Jason Hirschhorn about a job spearheading the company’s outreach to media companies, according to several people familiar with the situation. While the talks do not appear to have gone anywhere, and it wasn’t clear whether Facebook had approached others about the position, the efforts signal Facebook’s intention to take a more hands-on approach in helping media companies bring their content to the social network. “They had held the media industry at arm’s length for a while. It was: ‘We are a platform, come use us all you want but we don’t necessarily need to partner with you.’ But now the attitude has changed,” said one of the people familiar with the situation. “They realize that one of the next phases in its evolution is to work with the media companies,” the person added. Facebook and Hirschhorn both declined to comment. Facebook’s media push comes as the company faces fresh competition from Google Inc, which launched a rival social networking service in June. Twitter recruited former Creative Artists Agency executive Omid Ashtari to be its “L.A. person” last November, according to a report in AllThingsD.com, and the company recently appointed Chloe Sladden to a new role overseeing content and programing efforts. “The view is they’re looking at Twitter and Google and their outreach to the media community and they don’t want to fall behind the curve,” the source said. “They don’t want the media companies to think they’re uninterested.” Facebook has gradually gotten closer to the media world, with Chief Operating Office Sheryl Sandberg joining the Walt Disney Co board of directors in December 2009, and Netflix Inc Chief Executive Reed Hastings taking a seat on Facebook’s board in June. Several movie studios have released movies that can be rented and viewed on Facebook this year, including Warner Brothers’ “Dark Knight” and Universal Pictures’ “Big Lebowski.” Facebook was aggressively exploring recruiting a media point-person a few months ago, but has since shifted its attention to other strategic priorities, the sources said. But with the company increasingly interested in making media a key part of the social network, people expect the search to pick up again soon. THE GAMING LESSON Facebook’s media ambitions will be on display on Thursday at its annual developer conference in San Francisco, where the company is expected to unveil new music features. The music platform will integrate streaming music services from companies including Spotify, Rhapsody and Rdio, directly into users’ home pages, said several other people familiar with the situation. Facebook users who subscribe to the music services will be able to share songs and playlists with each other and see what their friends are listening to, the people said. Facebook will also unveil new flavors of its “Like” button at the event, allowing users to flag Web pages or other online content with specific recommendations, such as “Read,” “Watched” or “Listened,” according to a source with knowledge of the matter. For Facebook, building a deeper integration with music, movies and other media into its service makes it more likely that users will spend more time on its site, allowing the company to generate more advertising dollars. Media also fits well with Facebook Credits, the payment system that Facebook has introduced for its users to buy digital goods on its site. Facebook takes a 30 percent cut of transactions using Facebook Credits. The template for Facebook’s media push is social games, which more than 200 million of its users play on the website every month. Companies like Zynga and Electronic Arts Inc’s Playfish have built successful businesses developing social games that can be played on Facebook. But recreating that magic with the media industry could be trickier. While technology-savvy social game companies are adept at quickly creating products that shine on various “platforms,” such as social networks or smartphone applications, traditional content providers don’t possess the same kinds of expertise, said another person familiar with the situation. “You can’t just drop platforms in Hollywood,” the person said. “They make content well,” he said. But, he noted, creating media that really shines on a social networking platform requires hand-holding. (Reporting by Alexei Oreskovic; Additional reporting by Peter Lauria and Yinka Adegoke in New York; Editing by Richard Chang) Copyright 2011 Thomson Reuters. Click for Restrictions

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S&P Official: U.S. Now Has ‘Less Ability’ To Stimulate Economy

September 15, 2011

Standard & Poor’s decision to strip the United States of its AAA rating suggests the country has less room to boost growth with fiscal spending, the head of the agency’s sovereign ratings committee said on Thursday. The stock market’s sharp slide after the August downgrade was partly “the realization….that there will be less ability to stimulate the economy with fiscal measures going forward,” said S&P’s John Chambers at the Bloomberg Markets 50 Summit. S&P has a negative outlook on the U.S. rating, which now stands at AA, with a one-in-three chance of another downgrade over the next six to 24 months. Chambers said that did not guarantee another move and added that one would likely be triggered if the budget control act were watered down or “if the fiscal committee doesn’t deliver the goods.” A bipartisan committee of lawmakers is scheduled to meet next month in an attempt to trim at least $1.2 trillion from annual U.S. budget deficits over a 10-year period. The White House recently proposed a $447 billion job creation package, but it remains unclear how much of the plan will make it through a bitterly divided Congress. (Reporting by Steven C. Johnson, Editing by Chizu Nomiyama) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Freddie Mac Multifamily Lending Accelerates

August 30, 2011

From WSJ.com… Freddie Mac is planning to accelerate its program to purchase multifamily housing loans even as the private commercial real-estate finance market has been hobbled by volatility in recent weeks. See the article here: Freddie Mac Multifamily Lending Accelerates Find our Weekly Commercial Real Estate, Private Equity and Fund Newsletters at www.WeeklyBrief.net

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Honda Lifts Profits With Speedy Earthquake Recovery

August 1, 2011

(Chang-Ran Kim) – Honda Motor Co reported an unexpected quarterly profit and raised its annual outlook by more than a third, as Japan’s No.3 automaker rebounded quickly from a severe parts shortage caused by the March 11 earthquake. Honda reported a 90 percent fall in quarterly operating profit on Monday, versus expectations of a loss, after it suffered the biggest production drop by any car maker from the March disaster, due mainly to bad timing for the scheduled delivery of parts. The supply shortage coincided with the full remodeling this spring of its Civic model in the key U.S. market, where sales of the popular car fell by a third in June. While its recovery schedule still lags that of rivals, Honda now expects to produce more in July-September than it had outlined in June as the supply bottleneck eased. It raised its annual sales forecast by 135,000 vehicles to 3.435 million vehicles. “I think Honda deserves some credit for the first quarter, which some expected to be in the red,” said Naoki Fujiwara, a fund manager at Shinkin Asset Management. In April-June, Honda made an operating profit of 22.58 billion yen ($292.5 million), better than the average estimate of a loss of 67 billion yen according to seven analysts polled by Thomson Reuters I/B/E/S. The results were boosted by a 43 percent jump in profits from its motorcycle operations and stronger-than-expected earnings at its finance business, the maker of Civic and Accord cars said. First-quarter net profit, which includes earnings from China, was 31.8 billion yen, down 88 percent, while revenue fell 27 percent to 1.715 trillion yen. Honda’s Japanese car production halved in June from the previous year, even as Nissan Motor Co (7201.T) eked out a rise and the decline at Toyota Motor Corp shrank to 16 percent from 78 percent in April. Top automaker Toyota reports quarterly earnings on Tuesday, with consensus estimates calling for a 190 billion yen loss. For the full year to March 2012, Honda expects an operating profit of 270 billion yen, or 35 percent more than the previous forecast of 200 billion. A poll of 21 analysts produced a forecast of 407.7 billion yen. The automaker raised its annual net profit forecast to 230 billion yen from 195 billion yen. The results came as vehicle sales in Japan fell by a record in July, battered by production disruptions from the March earthquake, while South Korean rivals extended their winning streak to report strong global sales. TOUGH U.S. MARKET With full restoration of the supply chain only a matter of time, Honda Chief Financial Officer Fumihiko Ike expects sales to improve as production ramps up. He cautioned however, that a U.S. economy plagued by weak housing starts, a high jobless rate and the debt crisis would make for a tough sales environment. “I think car makers will start offering bigger incentives once supply is available and consumers seem to know this and are waiting for them,” he told a news conference. “It will be a very competitive market then.” A stronger yen also hangs over Honda, while surging raw materials prices and escalating fears over the health of the global economy weigh on the overall industry. Honda kept its dollar assumption for the year at 80 yen, while changing its euro assumption to a more favorable 112 yen, from 110 yen. The dollar was trading around 77.5 yen on Monday, while the euro was fetching 111.6 yen. Separately, Mitsubishi Motors Corp reported first-quarter operating profit of 12.23 billion yen, against a loss of 4.5 billion yen last year as it sold more cars and cut costs. Mitsubishi Motors raised its six-month operating profit forecast to 18 billion yen from 5 billion yen but retained its full-year outlook, citing uncertainties including the strong yen and a shaky global economy. Honda’s shares have fallen 4.2 percent so far this year, underperforming a 1.7 percent drop in Tokyo’s transport sector subindex. Before the results were announced, Honda shares closed up 1.5 percent at 3,125 yen, outperforming the benchmark Nikkei average and a rise in most other auto stocks. ($1 = 77.190 Japanese yen) (Additional reporting by Taiga Uranaka; Editing by Matt Driskill and Anshuman Daga) Copyright 2011 Thomson Reuters. Click for Restrictions .

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States Preparing For Fallout If Debt Ceiling Deal Isn’t Reached

July 31, 2011

LOS ANGELES — As gridlocked Washington edges toward default, states staggering out of the last recession are preparing for the worst: The federal piggy-bank that helps them pay for health care, jobless benefits, road building and schools could run out of cash. Kansas Gov. Sam Brownback is warning that his state might not be able to fully cover potential shortfalls, and jittery California cushioned its finances last week by borrowing $5.4 billion from private investors. Massachusetts is preparing to replace $850 million in U.S. payments that could be derailed in August, while Oregon plans to free up a cache of money if Washington stops sending checks. Freighted with uncertainty, states can’t look to lessons from the past: There aren’t any. The U.S. government, which has a gilded credit rating, has never defaulted. And no one seems to know what funding could be cut, by how much or for how long. That would be determined in Washington if Congress fails to raise the government’s borrowing limit by Tuesday. “You’re chasing a ghost,” says Nevada Department of Health and Human Services Director Mike Willden. “What’s the deal? What is the cut? What can I expect?” A congressional compromise remained elusive, with anxiety over a possible default increasing with the passing days. At issue is the debt ceiling, a legal limit on how much debt the government can accumulate. If Congress fails to raise the borrowing limit by Tuesday, the U.S. might not be able to pay all its financial obligations. A default could send financial markets and the economy into a tailspin, spreading angst from Wall Street to Main Street. If the U.S. loses its top-notch credit rating, it could drag down ratings for some states, too, driving up borrowing costs. The most vulnerable are Maryland, Virginia, South Carolina, Tennessee and New Mexico because of their reliance on federal money, according to one rating agency. A group of California legislators warned Congress that failure to raise the debt limit could threaten a fragile economic recovery – California remains in the grip of double-digit unemployment. In statehouses around the country, preparations were under way as states judged what would happen if federal dollars slowed or stopped. Some were rushing to claim any federal aid that might be in the pipeline before Tuesday’s deadline. Many states appeared to have enough cash on hand to fill short-term gaps from Washington. For example, Vermont Finance and Management Commissioner Jim Reardon said the state Medicaid program is expected to receive a payment of more than $53 million from the federal government Monday, a day before the federal government might stop paying some bills. Rhode Island and New Hampshire have enough money on hand to cover expenses through August, giving Congress extra time to resolve the stalemate before programs might take a hit. But Florida’s courts system would be unable to make payroll if a crisis lasts beyond Aug. 22. In North Carolina, state Budget Director Andy Willis said the state could cover Medicaid reimbursements for a few days but floating the payments for a longer period might be a different matter because of a tight budget. Ohio has an 8.8 percent jobless rate and “if the country stops paying its bills now, those numbers will only get worse,” a bipartisan group of Ohio mayors said in a letter to the White House, calling for a settlement. All states rely on federal aid, but the impact will vary state to state. New Jersey, for example, counts on a smaller percent of federal money for state spending than other states, chiefly because it has more wealthy residents. Kansas gets about half its money from Washington. California, the nation’s most populous state, gets nearly $80 billion annually, much of it for health care for the poor. If the debt ceiling is not lifted by the deadline, the Treasury Department, which issues tens of millions of payments each month for everything from food stamps to Social Security, would have to decide what bills it could pay, in what order. The amount of cash would be limited, since the government borrows about 40 cents of every dollar it spends. With the fall school term approaching, the University of California is trying to figure out what a U.S. default would mean for more than $3.5 billion in federal research dollars and student aid it’s slated to get this year – 720,000 students receive Pell Grants at UC, one of the nation’s largest public universities. In Alabama, the state is moving some of its investment funds into cash to guard against fluctuations in the financial markets. Massachusetts is looking at whether it could provide interim financing to keep some or all of the programs funded, should federal checks slow or stop. The state receives about $200 million a week in federal funds, and 1.25 million people rely on federally subsidized Medicaid. “If we were to say we can’t make those payments any more … it’s hard to imagine what would happen,” said Administration and Finance Secretary Jay Gonzalez. “There would be potentially some dire consequences.” Some government officials worry about longer-term damage. In Los Angeles, the nation’s second-largest city, pension funds rely on income from the stock market, and if it plunges taxpayers are on the hook to make up shortfalls that, in a worst-case scenario, could reach hundreds of millions of dollars. If the region’s double-digit unemployment rate goes up, that inevitably digs into the city’s share of sales, hotel and other taxes needed to run local government. And if the nation’s credit rating goes down, uncertainty could rattle the bond market, making investors less likely to jump in while driving up interest rates that make borrowing more costly for governments around the U.S. “Should there be a crisis generated by the debt ceiling not being lifted, that would bring us to a very critical state,” said City Administrative Officer Miguel Santana. “We have little room left to manage it. Now we are at the bone in terms of the core services we provide,” Santana said. “We are sort of victims to the outcome of the gridlock.” At the Hollywood Senior Center in Portland, Ore., optimism was holding up among the low-income seniors who rely on Medicaid and other social-assistance programs to survive. But executive director Amber Kern-Johnson said the idea of federal dollars drying up seemed unfathomable to the center’s clients. “Many of them just don’t believe something like that could happen,” Kern-Johnson said. ___ Associated Press writers Sandra Chereb in Carson City, Nev., Beth DeFalco in Trenton, N.J., Nigel Duara in Portland, Ore., Susan Haigh in Hartford, Conn., John Hanna in Wichita, Kan., Dave Gram in Montpelier, Vt., Susan Haigh in Hartford, Conn., Johanna Kaiser in Boston, Jay Reeves in Birmingham, Ala., and Gary D. Robertson in Raleigh, N.C.

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Dean Baker: President Obama Doesn’t Understand the Origins of the Deficit

July 27, 2011

That is what he told the country in his address on Monday night. President Obama described a situation in which the government had been perpetually running large deficits since President Clinton left office. The deficit increased even more as a result of the recession. For the last decade, we have spent more money than we take in. In the year 2000, the government had a budget surplus. But instead of using it to pay off our debt, the money was spent on trillions of dollars in new tax cuts, while two wars and an expensive prescription drug program were simply added to our nation’s credit card. As a result, the deficit was on track to top $1 trillion the year I took office. To make matters worse, the recession meant that there was less money coming in, and it required us to spend even more. This is simply not true. In its budget projections from January 2008, the last set before the impact of the collapse of the housing bubble was clear, the Congressional Budget Office (CBO) projected a deficit of just $198 billion for 2009 . This is less than one-fifth of the “on track to top $1 trillion” figure that President Obama gave in his speech. This is a serious error. One trillion is a much bigger number than $198 billion. This difference is central to the budget debate. People can argue that the $198 billion deficit projected for 2008 was too large. But it would be absurd to claim it was out of control or represented any remotely serious threat to the nation’s solvency. In fact, over the five years 2003-2007 the country’s debt to GDP ratio was virtually unchanged, meaning that the country could run deficits of the same size (relative to the economy) literally forever. This changed with the recession caused by the collapse of the housing bubble. It was the recession, and the response to it, that pushed the deficit in 2009 from the $198 billion projected by CBO to the over $1 trillion noted by President Obama in his speech. No one can justify wasting money on wars that should not have been fought, giving away tax breaks to people who don’t need them, or deliberately designing a prescription drug benefit so that it needlessly hands hundreds of billions of dollars to drug companies and insurers. But even with all of this waste, the deficit was still not out of control. This is a central point that needs to be made 300,000 times in the current debate over the budget. The deficits were very much containable until the collapse of the housing bubble sank the economy. It was the economic collapse that gave us large deficits. This should mean that our politicians focus on getting the economy back to normal levels of output. If the unemployment rate was back at the 4.7 percent rate of 2007 the bulk of the deficit would disappear. This point may fall on deaf ears as Congress goes into its budget cutting frenzy, but the public should at least understand that these cuts are not an honest response to the budget situation. The Republicans have invented a phony past where President Obama is somehow spending money like crazy to have a good time. Unfortunately, President Obama has also invented a phony past of out of control spending, but made President Bush the villain. The reality is that if we get big cuts to Social Security, Medicare, Medicaid and other essential programs it will be because the politicians who vote for these cuts want them. It is not because spending or the deficit were out of control and they had no choice. One final point, when push comes to shove, the financial industry will make the Tea Party Republicans vote to keep them in business. Wall Street will suffer more than anyone from a default and it will not let it happen. The public should know this, certainly Wall Street does.

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Jason Alderman: With Budgeting, Slow and Steady Wins the Race

July 27, 2011

Budgets are a lot like diets: No single approach works for everyone; overly complicated plans rarely work for long; and sometimes it takes a few tries before you get it right. One stumbling block for many people is thinking of a budget as a form of punishment rather than as a means to achieve their goals in life. Say you dream of buying a house: A budget shouldn’t serve as a constant reminder that you can’t afford a down payment; but rather, as a tool to help identify where the money goes each month so you can adjust your spending — and saving — accordingly. Getting started . If you’re new to budgeting or you haven’t been successful in the past, start slowly. First, for a few months write down every cent you spend: mortgage/rent, utilities, food (including snacks and coffees), gas, medical copayments, birthday presents, credit card interest, children’s allowances — the works. Also, divide annual expenses like insurance and income tax into monthly amounts and add them to the list. To help track what you spend, review your checkbook and credit card statements and hold onto all cash transaction receipts. Don’t feel compelled to categorize expenses at first; just total them up each month. It sounds tedious, but I guarantee you’ll be amazed by the bottom line. Eventually, you can start grouping expenses into categories, which will help identify items to trim. At the same time, track your income. If your pay varies from month to month, average it out for purposes of this exercise. Comparing money coming in versus money going out can be quite enlightening. Breaking even or losing money each month may mean you need to find additional income sources and/or aggressively alter your spending habits. You’ll probably ask yourself, “Do I really want to spend $60 a month on coffee?” and “How can I reduce my utilities bills?” Budgeting tools. Many tools are available to help track income and expenses. You can go the pencil-and-paper route by downloading a budget spreadsheet template (Google “Budget Worksheet” to find one you like). Interactive, online budgeting calculators that can help you plan for a variety of expenses also are widely available. For example, Practical Money Skills for Life , a free personal financial management program run by my employer, Visa Inc., includes budgeting calculators for everything from back-to-school costs to holiday expenses to retirement. Once you’re ready to go to the next level of managing your finances, many software packages and online account management services are available — some are free, while others charge a one-time or monthly fee. Among the more popular products are Quicken , Mint.com , Yodlee , Mvlopes and YNAB (You Need a Budget). Some, like Mint and Yodlee, can be accessed online, including by smart phone; others, like Quicken, must be accessed from a dedicated computer. Commonly available features include: Account aggregation, where you can import transaction information and balances from bank, credit card and investment and other accounts into one common database — this avoids having to go to multiple websites. Transfer money between accounts; some also allow online bill payment. Track, categorize and annotate transactions — also helpful when calculating income taxes. Some offer interactive charts and graphs to help visualize changes in spending and savings habits. Budgeting tools and tips. Setting goals and changing behavior . Start jotting down your short- and long-term financial goals. These might include buying a new car or house, saving for retirement and vacations, paying off debt, financing college and building an emergency fund for expenses like car repairs, broken appliances, unexpected medical bills, etc. Eventually you’ll need to figure out what those things will cost so you’ll know how much to save — and by when. It’s at this “behavioral change” point, when the compilation of so many long-term goals seems overwhelming, that many people give up on budgeting. Think about the tortoise and the hare: Slow and steady wins the race. You won’t solve all your financial challenges at once, but you can start whittling away at them. Over time, you’ll notice gradual improvements and be encouraged to up the ante — it’s like losing weight gradually and keeping it off versus drastic weight reduction. Here are a few suggestions: Once you’ve started categorizing expenses, look for items that stand out as extravagances you can trim or eliminate, at least temporarily (meals out, unused gym memberships or magazine subscriptions, unneeded shopping sprees, etc.) Ask insurance companies how much you can reduce premiums by raising deductibles. Always pay at least the minimum balance on loans and credit cards to avoid late charges. List accounts by interest rate and pay off those with the highest rates first. Create separate savings accounts for different long-term goals and have contributions automatically deducted from your paycheck or checking account — even if it’s only a small amount each month. Online banks and credit unions often will allow multiple accounts with no minimum balance requirements or service charges. Try not to borrow from one “account” to pay expenses in another. Especially don’t raid your retirement accounts — the tax implications alone are daunting. For more budgeting tips, visit MyMoney.gov , the National Foundation for Credit Counseling , Practical Money Skills for Life , or read my previous blog, Go on a Spending Diet . This article is intended to provide general information and should not be considered legal, tax or financial advice. It’s always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation. Follow Jason Alderman on Twitter: http://twitter.com/PracticalMoney

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Marshall Goldsmith: Why Hollywood is Placing its Bets on Viral Video

June 17, 2011

Summer blockbuster season is here, and Hollywood studios are pulling out all the stops to promote their big films. Aside from TV commercials, billboards, product tie-ins, and the usual ilk, Hollywood is trying something new this year to promote their summer flicks: viral video campaigns. In fact, Hollywood is leading the charge when it comes to this emerging marketing medium — combining their long-held creative and distribution prowess to produce slick viral videos that get shared by millions of viewers. This is such an interesting subject to me that I met with Dan Greenberg, CEO of social video ad company Sharethrough, recently to talk about some of the ways Hollywood is setting the pace for viral video. MG: What makes a video go “viral”? DG: Viral video is both an art and a science. The science behind making a video “go viral” involves creating content that’s likely to be shared, using new distribution techniques and social tactics to increase sharing, and optimizing content in response to sharing patterns. Videos that get shared have three main psychological motivators: emotion, identity, and information. Creating an emotional video that is touching, sad, funny, or scary will boost its chance of getting shared. Sharing feelings is a basic human need. If your video captures a human emotion, users will share it, because they are not just sharing your content, they are sharing the feeling your video has created. Videos that tap into people’s individual identity also get shared a lot. When you recommend a movie, band, or book to a friend, these recommendations partly define your tastes, thoughts, and personality. When creating a viral video, it’s important to ask: “When a user shares this video, what are they saying about themselves?” No one wants to share a video that would reflect badly on them, so viral videos tend to have messages that people want to align themselves with. If you want your video to go viral among a certain demographic, make sure the content maps to this group’s taste, sense of humor, or collective beliefs. Informational videos also get shared widely. People are hard-wired to teach, learn, and share information, and if they see an online video that contains interesting or useful information, they will be highly likely to share it. MG: What’s the “state of the industry” when it comes to viral video? DG: Viral video has moved from an experimental practice to an established, measurable marketing tactic that delivers real results. Videos that “go viral” aren’t just happy accidents anymore: when you see a video with over a million views, there’s typically some smart distribution and optimization strategies involved. We actually use the term “social video advertising” to refer to our category, because advertisers can now invest in making their video content go viral, just like they would invest in distributing a TV commercial. This is definitely becoming a much more mainstream practice; a few months ago, we crunched numbers at my company and found that the average viral video campaign budget tripled from a year earlier – which goes to show how seriously brands are taking viral video. Why is this approach becoming so much more common? Because people will watch videos that feel like “experiences” where they won’t watch videos that feel like ads. Your garden-variety video ad is typically just a TV commercial distributed on the web, which we’ve all learned to ignore. Social video is about content that people enjoy and will want to share. In the very near future, sharing will become the Holy Grail for advertisers. A shared view is not only “earned media” that advertisers don’t have to pay for, but studies also show that when a brand video is shared, viewers will spend up to three times more time watching it. MG: How has Hollywood led the pack around viral video? DG: When it comes to movies, word-of-mouth has always been a key factor in success. Hollywood has always found innovative ways to combine creativity and distribution to build buzz around a film. Viral video isn’t that different. It’s about creating exciting, engaging, thought-provoking content, then using innovative social distribution tactics to get people to share this content with friends. Hollywood understands perhaps better than any other sector that people embrace and share content, not ads. The old-fashioned movie trailer is actually a pre-cursor to viral video. People have been sharing movie trailers online before the term “viral video” even existed, and trailers are shared more than twice as often as other video content! Now Hollywood is leveraging this huge head start to create specific videos to boost movie buzz before and during a film release. Hollywood really gets the idea that great content gets shared. They start with creating gripping content, such as a trailer, then devise a distribution strategy to make sure that content is seen by as many people as possible. In the past decade, they’ve also learned how to distribute trailers online (sometimes “leaking” them) to boost viral sharing. Hollywood is now getting more sophisticated with trailer marketing, and taking full advantage of the flexibility of social video to distribute “red band” (racy or R-rated) clips, long-form trailers, and subversive, funny, or tangential viral videos that are only lightly connected to a film along with their standard trailers to keep things interesting. This non-standard content actually generates much higher rates of sharing than regular trailers because of the feeling of exclusivity as stand-alone content. Movie marketers are also taking steps to distribute videos to a social audience – the people most likely to watch and share their content. For example, Hollywood was among the first to test drive distribution of movie trailers into social games on Facebook. Movie marketers are also trailblazing trans-media distribution across tablets, mobile apps, video games, e-books and e-comic books, and other related online media. MG: What do you see coming down the pike from Hollywood? DG: Hollywood is already doing interesting work in measuring the impact of viral video. They are using advanced analytics to measure the reach and sharing patterns of video trailers among different demographics, then using this data to understand demographics and potential markets where they should first release films. Movie marketers were also among the first to measure social video metrics such as “sharethrough rate” — which measures the rate at which a video is shared — in order to quantify viral success. By measuring sharethrough rates, movie studios can better understand which trailers to use for online advertising campaigns targeted to specific demographics; which demographics to include in campaign targeting; and even which potential markets hold the most potential for high ticket sales. MG: What are some recent examples of innovative campaigns? DG: We loved Disney’s short original video they produced to promote the new Muppets movie Green With Envy that is a parody of The Hangover II — this is a great example of moving away from traditional trailers to more original content. Another great example of non-standard content is the interactive YouTube video page for Kung Fu Panda 2 that features a mix of videos of Jack Black and the animated main character, Po. We also think the promotion for Super 8 has really taken things to another level. For example, they actually placed an interactive video ad for the movie as a playable level inside of the video game, Portal 2. Look for more of this type of social video integration in the future, both on console games as well as inside social games on Facebook. If you want to find out more about viral videos and how you can use them in your business and leadership, Dan is presenting a two-hour workshop on making videos go viral on June 22nd at the Cannes Lions conference. This is a fascinating subject that is definitely key to a successful future.

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Two Areas Dominate Debate Over Financial Reform’s Implementation

June 12, 2011

WASHINGTON (Kevin Drawbaugh) – Global inconsistencies and industry resistance are clouding the outlook for world financial regulation reform in two key areas — swaps oversight and bank capital, both set for debate this week. More than two years since the devastating 2008 banking crisis, regulators from Washington and London to Brussels and Singapore are tightening the screws on high finance, with large Wall Street firms already moving to comply with new laws. Yet regulators’ efforts are moving on different schedules and along sometimes diverging tracks, with much at stake for global giants such as JPMorgan Chase, Bank of America, HSBC Holdings and Goldman Sachs. The lack of an international regulatory framework is a big issue. It allows banks to play nations off against each other by threatening to move their business elsewhere, while underscoring basic logistical challenges. How, for example, can national agencies police banks that are transnational? Such questions are not new, but on few fronts are they more problematic at the moment than in policing the $600 trillion off-exchange swaps markets, and in forcing banks to hold more capital on their books to better handle future crises. Both initiatives threaten existing business models and profits in the financial industry, which is working hard to protect itself behind a time-tested veil of talking points about unintended consequences and saving jobs. In the United States, that means pushing back — largely at the implementation level now that 2010′s Dodd-Frank reforms are the law of the land — against scores of new swaps rules. In Europe, the swaps crackdown is also being contested, as is an effort that is being coordinated in Switzerland to raise the capital standards of the world’s largest banks. Against this backdrop, the U.S. Commodity Futures Trading Commission will meet on Tuesday to focus on swaps rules. “LEGAL UNCERTAINTY” “There is some legal uncertainty surrounding July 16 and derivatives contracts,” including swaps, said Brian Gardner, policy analyst at financial group Keefe Bruyette & Woods. New swaps rules mandated by Dodd-Frank are supposed to take effect on July 16, but many still have not been finalized and probably will not be completed in time. Will pre-Dodd-Frank rules end on July 16? What should swaps markets do? Answers to these questions have already been provided by the U.S. Securities and Exchange Commission. “The CFTC is acutely aware of the issue and may signal on Tuesday how it intends to address the problem,” Gardner said. CFTC Chairman Gary Gensler will testify on swaps before a U.S. Senate panel on Wednesday, with European Union ambassadors meeting the same day to explore a political deal on swaps. Concerns were spreading last week among policymakers of transatlantic divergence and delay on swaps oversight. Failing to rein in swaps could expose the world economy to a replay of 2008, when credit default swaps played a central role in crises at Bear Stearns, Lehman Brothers and AIG. “At the end of the day, I don’t know how much this stuff matters because there are so many ways to go out and take a lot of risk with derivatives,” said Simon Johnson, business professor at the Massachusetts Institute of Technology and author of “13 Bankers,” a recent book about the crisis. The broad issue of international regulatory reform will be discussed on Thursday by a U.S. House of Representatives panel, with the heads of major regulatory agencies testifying, among them Federal Deposit Insurance Corp Chairman Sheila Bair. Bair’s agency is scheduled to meet on Tuesday to finalize new Dodd-Frank rules limiting bank holding companies from holding less capital than their federally insured bank units. Plenty of discussion, but few decisions, are expected next week on another topic — restricting commodity market speculation. A European Commission conference on this is set to begin on Tuesday in Brussels. (By Kevin Drawbaugh, editing by Matthew Lewis) Copyright 2011 Thomson Reuters. Click for Restrictions .

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Ian Fletcher: Why Johnny Can’t Innovate: The American Economy’s Most Surprising Deficit

May 28, 2011

I argued in a previous article why, despite America’s current obsession with government budget issues, the real key to bringing back our economy lies in a) fixing our trade deficit and b) restoring our capacity for innovation. Although the former problem has now grabbed significant public attention, most Americans seem to think that our national capacity for innovation is healthy and without problems. After all, we’re the home of Silicon Valley. So things must be going great, right? Unfortunately, no, and for the same reason that, as I explained elsewhere, our manufacturing sector isn’t healthy. While it’s true that there’s an enormous amount of innovation (and manufacturing) going on in this country, “enormous” is not, in and of itself, an adequate quantity. To figure out how much innovation (or manufacturing) is enough for America, the quantity must be measured against how much we need to maintain our living standard . And we are, in reality, falling short in both areas. As long as our manufacturing output is so small that we must run a trade deficit with foreign nations in order to satisfy our consumption desires, we aren’t manufacturing enough . As long as our innovation output is so small that American industry can’t keep pace with its foreign rivals and continues to inexorably surrender market share and technological superiority to them, we aren’t innovating enough. Yes, it’s nice that we have iPhones and other innovative American products. But for our economy to be truly healthy, we would have to be exhibiting that level of innovation in products across the board . Our cars would have to be as innovative as our iPhones. And our consumer electronics. And all the other by-no-means-low-tech products that increasingly aren’t even made in this country. Having a few superstar sectors in our economy simply isn’t enough to deliver the living standard that Americans want. To deliver this, we need an economy in which dozens of major metropolitan areas have the same sheen of prosperity, productivity, innovation and all-round economic sophistication that the San Francisco Bay Area has. That’s the vision to keep in your mind. Detroit as San Francisco. People forget how small Silicon Valley really is. According to the Labor Department, it only employs 225,000 people — in a U.S. economy with a labor force of 238 million . Unfortunately, the media in this country give so much excess attention to it — and the other fancy sectors of our economy, like Hollywood and Wall Street — that people mistakenly think it, and industries like it dominate the U.S. economy. Nice work if you can get it, but they don’t. What would it take to restore innovation to those sectors of the American economy that are deficient in it? The best analysis of this problem I know is by Gregory Tassey, the chief economist of the National Institute of Standards and Technologies, America’s only serious civilian industrial policy agency. In his book The Technology Imperative , and also in his essay , “Rationales and Mechanisms For Revitalizing U.S. Manufacturing R&D Strategies,” he argues that the key problem for U.S. innovation is what he calls the “valley of death” between pure science and commercialization. America remains strong (though in relative decline, compared to other nations) in pure science. We remain good at commercializing discoveries and inventions that can be sold for a profit. But we are weak at the vast area of research that falls between these two extremes. Before a new scientific discovery can reach fruition in actual products sold to customers, it must pass through many stages of research. And, crucially, much of this research cannot itself be turned to profit. But profiting from new discoveries is impossible unless this research is done. Because it is unprofitable, companies won’t, as a rule, engage in enough of this intermediate research. Therefore an economy that relies wholly upon private profit to finance innovation will fall short. This research isn’t academic science either, so don’t expect the professors to fill in. One way to look at this research is to call it useful but unpatentable ideas. Anybody who has ever talked to creative engineers, or patent lawyers, knows that a great many important ideas cannot be patented. Some are more discoveries than inventions. Others are too generic, or too easy to copy. Others consist simply in the painful process of trying and ruling out a hundred ways to implement some new fundamental principle in order to find the one or two ways that have a future. Other ideas are not the sort of things for which patents would be even relevant. In their case, one would ideally capture their value by means of proprietary technologies, first-mover advantage, or other commercial methods. But, for any of a dozen different reasons, one cannot. So if you do this research, somebody else can harvest the profits as easily as you can. The problem is a kind of “tragedy of the commons” applied to ideas. Historically, the only companies that engaged in this sort of research were very large companies with monopoly or quasi-monopoly power over their ultimate product markets: companies like the old AT&T with its Bell Labs, the old IBM with its Watson Laboratory, the old RCA with its Sarnoff Research Center, or the old Xerox with its Palo Alto Research Center. Because of their oligopolistic power, they were assured of a) capturing the value of whatever they discover, rather than having it swiped by a competitor, and b) bringing in enough money, over a long-enough time frame, to pay for expensive laboratories that may take years to produce results. There are still a few companies like this around, but not nearly enough to bridge the valley of death to the extent we need. So government has a legitimate role. This fact, of course, drives laissez-faire ideologues crazy. But it was recognized as far back as founding father Alexander Hamilton, whose Report on Manufactures , submitted to Congress in 1791, was partly about this very topic. (What constitutes high technology changes over time, but technological innovation has been the key to economic growth since the dawn of the industrial revolution.) During the Cold War, hundreds of billions of dollars, from the jet plane to the Internet, went into this sort of research. But because it was justified in terms of national security, not industrial innovation per se , we never really reached a solid understanding of what we was doing. So we never properly institutionalized it as a policy with an economic purpose. As a result, our efforts today in this area are pathetically small. For example, the Federal government’s Manufacturing Extension Partnership maintains a network of centers in every state designed to help American manufacturers adopt innovative technologies. One evaluation found that it generated $1.3 billion a year in cost savings for manufacturers and $6.25 billion in increased or retained sales — all for an annual federal outlay of only $89 million. A single Boeing 747 costs four times that. Another good but underfunded program is the Technology Innovation Program . An audit by the respected National Academy of Sciences vindicated its claim to generate economic benefits far exceeding its cost. One single $5.5 million grant, for example, seeded development of the small disk drive industry, which enabled creation of the iPod, the iPhone, TiVo and the Xbox. TIP’s 2012 projected budget? $75 million. Our rivals are far ahead of us in this game. Germany, where factory wages are now higher, and unemployment lower, than here, spends roughly two billion dollars a year on its Fraunhofer Gesellschaft . They even have a substantial presence in this country, to harvest useful American ideas for commercialization in Germany! To get our economy back on track, we need to stop dreaming that innovation is purely a self-financing private-sector game and start paying for the innovation we need. Either that, or we’re not going to get the economy we want.

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ProPublica: The Heroes Are Really Zeroes in HBO’s Too Big To Fail

May 25, 2011

By Jesse Eisinger , ProPublica HBO’s Too Big To Fail — I just caught up with it last night, thanks to HBO On Demand — is extraordinarily revealing about the financial crisis. Only its revelations are almost entirely inadvertent. The movie is set up in the Hollywood conventional way: A gang of misfits, each with a special expertise, is brought together for an impossible mission. There’s Treasury Secretary Henry Paulson, steely eyed at the moment of truth. There’s New York Federal Reserve head Timothy Geithner, the athlete (he doesn’t just jog, but also plays what appears to be squash). And then there’s Federal Reserve chairman Ben Bernanke, the professor with a heart of gold and secret knowledge of the Great Depression. Ostensibly it’s a story of their success against all odds. Michael Kinsley, reviewing the movie in the New York Times , labeled Hank Paulson [1] the “hero” of the account. Except that the movie actually depicts something entirely different: failure upon failure. Too Big To Fail the movie isn’t the story of how the Three Musketeers saved the global economy. It’s a story of how the three didn’t see the financial crisis coming; hadn’t prepared for it; made mistake after mistake as it was cresting; and then, in their moment of triumph, made their most colossal blunder of all. That, it turns out (whether or not Too Big To Fail knows it), is the true story of the financial crisis. How much did Curtis Hanson and the writers mean for that to be the story? Throughout, the characters drop hints about their missteps, but the plot unfolds like a financial “Die Hard,” with our intrepid heroes battling fiendishly powerful forces toward a happy ending. (Full disclosure in this era of transparency: I write a regular column [2] for DealBook, the New York Times section edited by Andrew Ross Sorkin, the reporter upon whose book [3] the movie was based.) Early on, Paulson complains to his staff that they have been behind on everything as the crisis began to emerge. And that’s true! The crisis actually started in the late summer of 2007 [4] . Paulson’s first effort, late that year, was to get a bunch of banks to assemble a giant off-balance-sheet concoction [5] that would save each individual bank’s off-balance-sheet monstrosity. It was a complete flop. In the movie, as bankers and government officials frantically try to save Lehman, Chris Flowers, the private equity investor and banking impresario, is depicted as informing Paulson and Geithner that AIG is teetering on the edge. In their fumbled response, he immediately grasps the truth. “They’re not on top of it,” he tells a confederate. And they weren’t. In real life, AIG had been struggling since the middle of 2007. Paulson and Geithner [6] of course had some inkling of the problems [7] at the world’s largest insurer. But they didn’t prepare for it. In the movie, the chief executive of General Electric, Jeff Immelt, places a terrified call to Paulson [8] saying that GE can’t borrow. GE is standing in for every Real American manufacturing company. We are reminded it makes light bulbs and washing machines. Paulson is shocked that such a stalwart could be having trouble borrowing. The reality, of course, is that GE was more a finance company than a manufacturer and was teetering because it financed those operations with billions of short-term borrowing. It is also true that Paulson, Bernanke and Geithner had no inkling of GE’s troubles until the very last moment and therefore had no plan to deal with it. Plans are, in the movie, almost nonexistent. The team of heroes races from crisis to crisis, as Bond goes from chase scene to babe, eventually stumbling on the evil SPECTRE [9] plot to take over the world. Intentionally or not, the movie is echoing real life. Despite warning signs [10] , Paulson, Geithner and Bernanke had no evident plans throughout the last half of 2007 and the first eight months of 2008. Not for how to resolve Lehman after Bear Stearns’ collapse, not for AIG, not for recapitalizing the banking system. Indeed, they asked Congress for $700 billion to implement the Troubled Asset Relief Plan [11] to buy toxic assets from the banks, and then, without any further discussion, abandoned that idea and injected capital into the banks. Many economists [12] and financial experts had been urging them to do just that, but when they finally hit on that as a solution, it was so poorly thought out that they gave the money to the banks on overly generous terms. This moment is depicted at the end of the movie, and because it is both a triumph in the conventional narrative sense, but also a major mistake by our heroes, it is the

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Leonardo DiCaprio Takes On Wall Street Criminal

May 11, 2011

The moneymen have been found to help tell the story of a high flying money man gone bad. “The Wolf of Wall Street,” a big screen adaptation of boiler room convict Jordan Belfort’s 2007 memoir, was announced earlier this year , with DiCaprio attached to star. On Tuesday, Red Granite Pictures agreed to purchase the rights to the book and finance the film , setting production in motion. Belfort spent years in the 80′s and early 90′s as a Wall Street trader, racking up both millions of dollars and a serious drug addiction, before a 1994 conviction for shady trading practices that lost clients hundreds of millions. When the film was announced in February, Martin Scorcese, DiCaprio’s longtime collaborator, was attached to direct — he originally optioned the book in 2007 — but as of now, no filmmaker has committed to getting behind the camera. DiCaprio will also soon star as another millionaire: the much more enigmatic Jay Gatsby a grand, potentially 3D, adaptation of “The Great Gatsby.” He’ll be joined by Carey Mulligan, Tobey Maguire and Isla Fisher, among others. For more, click over to The Hollywood Reporter .

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Netflix Earnings Show Impressive Growth

April 25, 2011

SAN FRANCISCO — Netflix Inc. attracted another 3.6 million customers to its video subscription service in the first quarter, the biggest growth spurt yet in a prosperous run that has established the company as a Hollywood power broker and Wall Street darling. The financial results announced Monday topped analyst forecasts. But management offered a cautious outlook that included a second-quarter earnings projection below analyst estimates. That caused Netflix shares to shed more than 5 percent in Monday’s extended trading. Netflix’s first quarter earnings nearly doubled to $60.2 million, or $1.11 per share, during the first quarter. That was up from $32.3 million, or 59 cents per share, at the same time last year. The performance was 4 cents per share above the average estimate among analysts surveyed by FactSet. Revenue rose 46 percent to $719 million about $13 million above analyst estimates. The company, which is based in Los Gatos, ended March with 23.6 million subscribers in the U.S. and Canada, up from 20 million at the end of 2010. The first-quarter surge left Netflix with more subscribers than long-established pay-TV channels such as CBS Inc.’s Showtime. Netflix charges $8 per month to stream movies and TV shows over high-speed Internet connections. Most customers pay a little more per month so they can also rent DVDS delivered through the mail. The company is trying to nudge its subscribers to stream video more frequently to help lower its postal expenses. In the process, Netflix hopes to free up more money to buy more compelling material for its streaming library, which is currently stocked with more than 20,000 movies and TV shows. Netflix spent $192 million on streaming rights in the first quarter, nearly quadrupling the amount spent at the same time last year. The company’s recent success emboldened Netflix to expand its streaming service outside the U.S. After entering Canada last fall, Netflix plans to begin streaming in another international market that management will identify later this year. The company is so confident about the next step in its expansion that it is already drawing up plans to move into another country early next year. Netflix ended March with 22.8 million subscribers in the U.S. The remaining 800,000 are in Canada. After adding more than 3 million subscribers in each of the last two quarters, Netflix expects its growth to taper off in the spring and summer – typically a tougher time to sell subscriptions because more people are taking vacation and spending more time outside. Netflix thinks it will add 1.3 million to 2.25 million subscribers in the second quarter. The company projected earnings as much as $1.15 per share for the period, below the average analyst estimate of $1.19, according to FactSet. The company’s shares fell $13.50, or 5.4 percent, to $238.17 in extended trading. After tripling last year, Netflix’s stock price had risen more than 40 percent so far this year before the reaction to management’s forecast.

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Scott Mendelson: You Say Slump, I Say ‘Smaller Movies With Legs’

April 21, 2011

If Fast Five and/or Thor fail to open to $50 million or more, then I’ll start to worry. If Pirates of the Caribbean: On Stranger Tides doesn’t open anywhere near $100 million and doesn’t clear $250 million, I’ll start to be concerned. If Harry Potter and the Deathly Hollows, Part II grosses under $260 million, I’ll maybe start panicking. But until any of those things occur, let’s stop whining about the week-to-week comparisons at the box office. We’re not in a “slump.” Yes, weekend-to-weekend figures have been consistently down behind last year’s respective weekends for much of 2011. But when you look at the numbers on a movie-by-movie basis, you actually notice something wonderful. A flood of mid-budget, adult-skewed movies have opened at or above expectations, and many of them have had the kind of legs you just don’t see anymore. That’s the Hollywood we claim we want, so why are we complaining? The key thing to remember here is that studios don’t care about the total weekend box office figures. They care only about how well their films did in relation to expectations and cost. And quite frankly, this has been a very cheap first 1/3 of a year. Alice in Wonderland may have grossed $332 million domestic, but it also cost $200 million. There are only two films this year that have cost even $100 million, the $120 million-budgeted The Green Hornet (which was supposed to open late last year) and the $130 million-budgeted Rango . One could argue that Rango will struggle financially due to its cost and marketing expenses (it’s cleared $234 million so far worldwide), but it’s also the best film of the year, so there’s that… The Green Hornet was such a surprise success ($228 million worldwide thus far) that we’ll probably get a sequel if Sony can keep the budget at under $90 million. But Battle: Los Angeles didn’t cost $150 million, it cost just $75 million. And Sucker Punch didn’t cost $175 million, it cost $85 million. Sure, both of those films may have underperformed somewhat. Sucker Punch ($78 million worldwide) was an arty experiment that no one understood , while Battle: Los Angeles ($192 million worldwide) promised Independence Day but delivered Black Hawk Down . But even the ‘under performance of Battle: Los Angeles will mean tripling its budget, because Sony was able to deliver top-notch special effects for bargain basement prices. And even Sucker Punch will equal its budget worldwide, meaning that the film has a shot at “the black” once the DVD and Blu-ray are released. Heck, even the relative underperformance of Red Riding Hood will still yield profits, since the gothic horror film cost just $40 million and has grossed $60 million worldwide thus far. Same thing with the would-be franchise starter I Am Number Four . Sure, there probably won’t be a sequel, but since the film cost Disney and Dreamworks just $60 million, it’s a rock-solid hit at $128 million worldwide. Your Highness will lose money, but Universal was smart enough to cap expenses at $50 million, so the bleeding will be minimal. One can argue that there was no animated sensation like How to Train Your Dragon ($494 million worldwide), but How to Train Your Dragon , which cost $165 million, was pretty much the only major animated film in the marketplace during the first half of 2010. This year, just between February and April, we’ll have SIX animated films: Gnomeo and Juliet (a stunning $175 million worldwide on a $30 million budget), Rango , Mars Needs Moms (the one unqualified mom of the season, with just $36 million worldwide on a $150 million budget), Hop ($111 million thus far on a $63 million budget), Rio ($170 million worldwide thus far on a $90 million budget), and Hoodwinked Too (opening in two weeks at a cost of just $25 million). That’s a total cost of $488 million for six animated films (average cost: $81 million), with a total so-far gross of $726 million worldwide thus far (with Hop , Rio , and Hoodwinked having lots of cash to still pull in). Pointing being, the various animated films that have opened to near $40 million have had to fend off copious competition and pretty much all of them are on track to be profitable despite that, because (in most cases) the studios were able to contain costs to a reasonable level. And that’s just the high-profile cartoons and youth-driven would-be blockbusters. The real story this year has been the surge in adult-driven genre pictures and their uncommonly reasonable budgets and uncommonly strong legs. After years where a major adult-targeted, star-driven thriller or genre picture was cause for celebration, this year has thus far been filled with just that. Imagine, films targeted at grownups with old-fashioned movie stars, relatively intelligent and literate screenplays, narratives that were wholly original or based on actual novels, and almost all of them budgeted at a price that allowed them to be profitable without reaching blockbuster status. Source Code (cost: $37 million/worldwide gross: $56 million thus far), The Lincoln Lawyer (cost: $40 million/worldwide gross: $55 million thus far), No Strings Attached ($25m/$144m), Limitless ($27m/$111m), Unknown ($30m/$114m), The Adjustment Bureau ($50m/$111m), Hall Pass ($35m/$63m), and Hanna ($30m/$23m in under three weeks with international still to come). Not all of these films were great, but all of them were moderately-budgeted, most of them received positive reviews, some of them were even R-rated, most of them had moderate opening weekends and solid legs, and all of them will make solid profits in relation to their reasonable costs. Sure none of them reached the heights of Alice in Wonderland or Clash of the Titans , but they never were expected to. And wasn’t it wonderful to have a season where old-fashioned potboilers took precedence over inflated special-effects epics and/or franchise entries? Isn’t it kinda wonderful that the unneeded cash-grab that is Scream 4 will likely get out-grossed (domestically at least) by a $1.5 million haunted house drama starring adult actors (Patrick Wilson and Rose Byrne), Insidious , that has dropped less than 30% two weekends in a row due to audience excitement and word of mouth (after three weekends, it’s already at $36 million off of a $13 million opening)? I don’t care if the cumulative weekend takes of these films have often failed to match the respective weekends from last year. Even if we agree that fewer people are going to the movies this year, we must acknowledge that the current crop of movies are much cheaper than years previous, and that they are attracting a consistent crop of older moviegoers, just the sort that have allegedly fled the marketplace. Summer will start next weekend, so the kids will get their big-budget fantasies soon enough and the pundits can all start whining again about how the movies are DOOMED, and everything is a sequel or remake or comic book-adaptation. But we know better, don’t we? If the summer of 2011, with a nonstop deluge of massive films that will arguably have to deliver massive opening weekends, doesn’t deliver expected blockbuster results, then we can start worrying. But the winter/spring of 2011 was not a failure at the box office. It was a successful return of smaller films aimed at adults, films that didn’t make most of their money in the first three days, movies that actually stayed in theaters long enough to allow casual moviegoers to check them out a month or so down the line, movies that existed as a movie first and a corporately-tied product second. Looks to me like 2011 has been a pretty terrific year thus far. One can only hope that summer 2011 is anywhere near as artistically and commercially satisfying…

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Starbucks CEO Offers Advice to LA’s Entrepreneurs: ‘You Can’t Be A Bystander’

April 7, 2011

On Tuesday evening, members of the Entrepreneurs’ Organization’s LA chapter gathered to honor Starbucks CEO Howard Schultz with the Entrepreneur of the Year Award at Hollywood’s Roosevelt Hotel. In town to promote his new book, Onward: How Starbucks Fought for Its Life Without Losing Its Soul , Schultz sat down for a Q&A with Huffpost’s Willow Bay. The Entrepreneur’s Organization describes itself as a “global network of more than 7,500 business owners in 38 countries,” with over 300 members in the Los Angeles chapter. Membership is by invitation only and members must make over 1 million dollars in profit per year. Amir Tehrani, EOLA’s Learning Chair, told Huffpost/LA that events like Tuesday’s Q&A with Howard Schultz are designed to provide members with an opportunity not only to network but to learn from some of the world’s most influential and successful entrepreneurs. Willow Bay: The title of your book is called Onward. I know it’s a word that’s layered in history and meaning for you. What does the word “onward” mean to you today? Howard Schultz: The word actually goes back to the past. I actually wrote an original kind of manifesto in 1986 and I can’t tell you with specificity why I closed the memo with the word “onward,” other than it’s a word about the future and a word about progress. And from that point on every written piece of material I’ve written for the company is closed with that word, and in many ways it’s a linkage to the past but its also about the future of the company. I think the last year and a half we’ve really tried to create a vision and aspiration for the future. I think “onward” connotes the words ‘progress’ and ‘future,’ and most importantly for me, preserves the relationship we have with the customers and our people with regards to the values of the company. WB: Why did you come back on as CEO of Starbucks in 2008? HS: I use a word to describe my relationship with this company, and it’s a word generally not used in business, and it’s Love. I love this company. I love what it represents, and I feel a deep level of responsibility to 200,000 families. There isn’t anything I will not do to preserve and enhance the culture and values of Starbucks. And when I speak in front of my people as I did two hours ago [in a company meeting], one of the things I say is when you are part of a company you have to have a voice, and what that means to me is you can’t be a bystander, and no matter where you are in the company—a twenty hour part-time barista or a manager of the state of California—If you see something that is inconsistent with the values of the company and you don’t speak up, you become a part of the problem. In a sense, I was the bystander for a while and I just couldn’t allow myself to drift through a sea of mediocrity. I had to do something and I was faced with a difficult challenge because I wasn’t the CEO, but I was torn between not having responsibility and at the same time watching something I love so much go awry. WB: Whose advise, whether its positive or constructively critical, do you seek, do you follow, do you embrace? HS: Well first of all I was willing and actively pursuing anyone who could give me advice during the [2008 financial] crisis, and I think very few people actually had answers. The issue of managing through a crisis is you have to be decisive even if you don’t have perfect information. But I got great advice from Michael Dell, and he was very helpful. He shared with me something when I came back [in 2008 as Starbucks’ CEO] that he loosely described as a ‘transformational agenda.’ When I saw that, I realized that I would have sixty days to prepare myself before coming back, so I had a data plan already in place. The transformational agenda is essentially one single piece of paper that [helped]–whether you were a part-time barista or president of a division–you understand exactly what company was going to try and do and you also knew, relatively speaking your role and responsibility and you could see yourself in it. Jim Sinegal, the founder of Costco, gave me fantastic advice because we were going down the wrong track. We brought him in to look at our plan and he said “you know, I don’t want to be rude but this is exactly the wrong thing to do.” This was my idea, and he was right. His advice was the cost of losing your core customers and trying to get them back post-recession would be much greater than trying to find new customers, so we completely shifted and focused specifically on recognizing and rewarding our core customers. That was fantastic advice. And that evolved into the Starbucks Rewards program, which is a big, big idea today. Twenty-two, twenty-three percent of all transactions happen on that Starbucks card. Just in the last 90 days we launched mobile payment at Starbucks, and we became the number one company in all of America in terms of mobile payment frequency of dollars spent. WB: Starbucks is one of the biggest brands on Facebook and Twitter. You’ve also told Charlie Rose that you have a unique ability to communicate with your customers in that space. Can you share what you know about social media with us? HS: In its early stages, I think companies believed [social media] is an opportunity to sell more stuff, and that’s a dangerous road. And I think one of the reasons we’ve been more successful on facebook specifically is we don’t use or view that as a channel for commerce. We use that channel as an opportunity to share what it is we do, how we do it, why we do it. These channels are a viable opportunity to lower cost of traditional communication, but these are also a reservoir of trust. Every time you try to sell something [on social media], which we do from time to time, you are taking a withdrawal out of that reservoir. I think we’ve succeeded because we view social media as an opportunity to make a deposit to the equity of the brand, rather than a withdrawal. This is a channel to build authenticity and communicate effectively, but you have to be honest with your intent… It’s a new day and the rules of engagement have changed, and we can’t hold onto the past. That’s the bottom line. WB: You’ve started companies, you’ve been a manager of a massive global brand, and you’ve been a turnaround specialist. Did you need a different skill set for each one of those three different roles? HS: I never took classic business classes in college, so I don’t have the background that any of the people running large companies have. So what do I have? I feel like sometimes I can smell something or have an intuitive sense. At my best I’m a merchant. I think turning around a company during a crisis—there’s no blueprint, there are no rules. I think so much of it is intuition and being decisive and trying to find your footing…I don’t have any secret sauce and I’m no smarter than anyone else. I will say I have surrounded myself with unbelievable talent that has made my job easier. WB: You wrote “I have come to think of myself as at my best as a leader when Starbucks is being challenged or fighting for survival. I am comfortale and enjoy a rugged, steep ascent.” Times are not as challenging right now [as they were in 2008], so where does that leave you right now as a leader? HS: The challenge I have right now is not allowing human behavior and the human condition to relax. The stock price is two and a half dollars away from the all-time high at Starbucks. And everyone looks at that and says ‘well, everything’s fantastic.’ Bullshit. No, this is a fragile issue, and I think the challenge we all have as leaders is maintaining that intensity. And that is a challenge, but also I’m incredibly excited about what it is in the future and what’s behind the curtain. I also think it’s my job to think about the future and about succession. I think succession from Starbucks in the future has to come from within. Also, I think I have a responsibility to my wife. She has sacrificed a tremendous amount over the last two and a half years to allow me to do this, and I made certain promises to her. WB: Any that you’d like to share? HS: Uh, no. Audience Member: How does an entrepreneur starting out find balance between following your dream to success and risking everything, especially with a family? HS: That is the most critical question because you’re trying to balance your own dream and aspiration with the responsibility you have to your family. In the beginning I didn’t have a salary for almost a year and a half. My wife was eight months pregnant with our first child. She’s from Ohio. Her father came to Seattle to talk to me, and he literally said to me “my daughter’s eight months pregnant, she’s still working, you’ve got to stop.” We had two stores open but we kept losing money, and I went back into the house and I told my wife and she said “no. We’ve got to see this through.” If she would have blinked on any level, I think it would’ve been over. So I think you have to have a partner that’s willing to see this through with you. What I want to say is the following: sometimes the difference between seeing your dreams through is not following strong enough or long enough, and the worst thing that can happen is you get to an age where you get bitter because you gave up too early or you keep looking back. And what I tell young people is don’t let anyone, even your parents, tell you your dreams can’t come true. If I took you to where I grew up, you couldn’t believe that I could get here. And I got here because, and I know this sounds kind of trite, because the American Dream is still alive and well.

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Electric Car Pioneer, Richard H. Griffiths, Joins EVCARCO, Inc. as Chief Communications Officer

March 15, 2011

FT. WORTH, TX–(Marketwire – March 15, 2011) – EVCARCO, Inc. ( OTCBB : EVCA ) ( OTCQB : EVCA ) announced today that well known electric vehicle marketing expert, Richard H Griffiths, has accepted the position of Chief Communications Officer. Mr. Griffiths, http://en.wikipedia.org/wiki/Richard_H._Griffiths , is an electric vehicle marketing expert as well as a Senior Government Advisor for the U.S. State Department, Government of Colombia, Republic of Tanzania and the Kingdom of Thailand. He will develop strategic relationships with governments, Hollywood celebrities and persons of influence in North America and globally. Mr. Griffiths has been successful in getting electric vehicles on media shows such as Regis and Kelly, FOX, CNN and was featured on the History Channel as one of the early pioneers of

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Dan Mirvish: Is Warren Buffett the Next Harry Winston? Ask Anne Hathaway

March 10, 2011

Last week I wrote about the curious phenomenon known as ” The Hathaway Effect ” — when Anne Hathaway is in the news, the share prices for Warren Buffett’s Berkshire-Hathaway go up (most likely because of robo-traders reacting to the Hathaway name in the news). There was an international reaction to the story (including BoingBoing , Time magazine and the evening news in Canada ). But one of the more curious responses was from one of Berkshire-Hathaway’s official blogs in Buffett’s homebase of Omaha. In the ” Berkshire-Hathaway Annual Shareholder Meeting” blog run by Omaha-based Borsheims jewelry store (which is owned by Berkshire-Hathaway), it reads: The Omaha World Herald had a really fun and interesting article today about the connection between actress Anne Hathaway and Warren Buffett… Here’s a link to the article: Wait Till She Names a Child Berkshire I can think of another connection, too! Anne Hathaway likes to wear jewelry, and Berkshire Hathaway’s Borsheims loves to sell jewelry! Shop our looks fit for an actress. So come next Oscar season, will Warren Buffet be the next Harry Winston, decking out Hathaway and other Hollywood starlets in million-dollar jewels? If so, will they have to go to Omaha for a fitting at Borsheims or will Warren set up shop on Rodeo Drive? (I asked Anne Hathaway’s publicist, Steven Huvane at Slate PR, for a response but he demurred.) Among the other unintended consequence of “The Hathaway Effect” is that since writing about it, it appears to have become a self-fulfilling prophecy that proves my original point: On March 3, the first full trading day after the story got wide circulation last week, Berkshire-Hathaway’s stock rose by 2.05% . I know some have commented that Berskire Hathaway stock goes up everyday anyway, but on the contrary: The day before, it was down .51%, and the day after it was down 1.40%. Meanwhile, Anne Hathaway’s IMDb STARMeter number shot up 85% in the last week (she’s now #7 on the list). And out of full disclosure, perhaps it is worth noting that my own IMDb STARmeter rating rose by 39% in the last week, too. Now that’s some Hathaway Effect!

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Richard Grenell: Hollywood Follows Wall Street?

March 4, 2011

Hollywood is supposed to be the place where people take risks. It’s the place where the industry types push the limits anew and create something fresh from the faint. It’s not supposed to be a place where yesterday is the standard. But this week, the Hollywood establishment made two choices that puzzled the forward looking — the Oscar for Best Picture went to the safest movie The King’s Speech , and the studio heads picked ethically challenged Chris Dodd to lead the Motion Picture Association of America (MPAA). In the press release announcing his appointment as the new MPAA Chairman and CEO, studio heads credited Dodd as “battle-tested” and experienced at “consensus-building”. But for anyone paying any attention to what’s happening in Washington these days, he’s one of the last people Hollywood needs representing them in the nation’s capital. For the last 30 years, Dodd has been a polarizing partisan in Washington. He’s a “proud Democrat” who considers bipartisanship a talking point rather than a philosophy. In fact, when The Hill — one of two daily newspapers focused on Capitol Hill — surveyed every Senator in 2009 for their opinions on bipartisanship among their ranks, Dodd was named the third least bipartisan member of the Senate. The studio heads are obviously partisans themselves but they shouldn’t also be foolish. A simple study of the political lay of the land for 2012 shows the Democrats in the Senate headed for a major defeat. If polls are accurate, Dodd will be expected to deliver votes from the majority Republican Party he has trash-talked for three decades. While political expediency may seem inconsequential to Hollywood, it’s a critical issue inside the Beltway. The Democratic Party has long embraced Hollywood — supporting legislative agendas, making major campaign contributions and tolerating its creativity when critics complain the entertainment industry is out-of-touch with America. And Hollywood’s outreach to conservatives has been almost non-existent. The one-sided strategy is a big risk and having Dodd lead it is even more dangerous. As revolutions in technology and international distribution continue to risk Hollywood’s current status quo, the last person the industry needs as its spokesman is banking specialist Dodd. Sending Dodd to Washington means Hollywood is looking to replicate Wall Street’s behavior of the last decade. Dodd gave us the multi-billion dollar bailouts and failures of AIG, Bear Stearns and Countrywide from his perch as Chairman of the Banking Committee. Why would Hollywood studio executives want to create the sequel if the original flopped? American taxpayers have seen this movie before. Grenell and Chase are Principals at Capitol Media Partners, an international strategic media affairs firm based in Los Angeles.

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Video: Epstein Says Disney’s `Toy Story 3′ Gets Profit `Award’

February 25, 2011

Feb. 25 (Bloomberg) — Edward Jay Epstein, author of “The Big Picture: Money and Power in Hollywood,” talks about the profitability of the film industry and the outlook for the Academy Awards on Feb. 27. He speaks with Lisa Murphy on Bloomberg Television’s “Fast Forward.” (Source: Bloomberg)

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Man Gets 2 Years Prison For Disney Insider Trading Plot

January 28, 2011

NEW YORK (By Bernd Debusmann Jr) – A man who admitted to scheming with his girlfriend to try to sell inside information about Walt Disney Co to hedge funds was sentenced on Friday to 27 months in prison. Yonni Sebbag was sentenced in New York after pleading guilty last August to one count of wire fraud and one count of conspiracy. Sebbag, a 30-year-old Moroccan citizen, also faces deportation after his release from prison. His girlfriend, Bonnie Hoxie, admitted to the same two charges in September. Prosecutors said the pair had tried to sell information to more than 30 hedge funds about Disney’s upcoming earnings and possible mergers, which Hoxie learned about as an assistant to the company’s corporate communications chief. They were arrested after several funds reported their activities to authorities. Among the leaks were details of possible advanced talks over a sale of Disney’s ABC television network, prosecutors said. Disney has called references to such talks “false.” More than a dozen family members and friends from Morocco and France were in attendance at his sentencing. Sebbag’s lawyer had sought a sentence of no more than a year in prison, saying Sebbag’s was desperate after the cafe he ran in Hollywood began losing money and he had become addicted to gambling. The U.S. Securities and Exchange Commission filed civil charges against Hoxie and Sebbag last May. The SEC said Hoxie had told Sebbag she coveted expensive shoes and a $700 Stella McCartney handbag. (Additional reporting by Jonathan Stempel; Editing by Lisa Von Ahn) Copyright 2010 Thomson Reuters. Click for Restrictions .

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Planet Hollywood Eyes 551M Loan Extension

January 3, 2011

Planet Hollywood Resort Casino is seeking a longterm extension on its defaulted commercial mortgage loan

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REZN8 Appoints Iconic Inventor, and Entrepreneur, Robert S. Block Chairman of the Board

December 20, 2010

HOLLYWOOD, CA–(Marketwire – December 20, 2010) – REZN8, the Hollywood based company that recently signed an agreement to become a wholly owned subsidiary of Stereo Vision ( PINKSHEETS : SVSN ), has appointed iconic inventor and serial entrepreneur, Robert S. Block (Bob) as Chairman of the Board.

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Alan Lewis: Getting a Grasp on the New Normal: How Change Can Boost Your Business

December 15, 2010

Today, most organizations believe they are not working as well as they used to. Their leaders blame the rapid and unpredictable changes that are going on around them. But many of them have failed to grasp one fundamental truth: change is the new constant. To be successful in the 21st century requires accepting that change is here to stay. Consider the case of Netflix. The company is nearing the end of one of its most successful years – its stock prices have doubled, the subscriber base jumped by 52 percent in the third quarter and its site now accounts for 20 percent of all Internet traffic during the typical American evening. While so many of its competitors (i.e. Blockbuster, Hollywood Video, etc.) are struggling, Netflix has shown a great affinity to reacting and responding to today’s environment – adapting its services to the internet and mobile devices. Like Netflix, companies across industries are seeing constant change as a tunnel to innovation, success and sustainability. And one of the most critical components for success is now the ability to build a culture that can adapt and thrive in change. As the founder and chairman of Grand Circle Corporation for the last 25 years, I have seen my fair share of change. After all, our organization operates in one of the most volatile and unpredictable industries on the planet: international travel. We realized early on that change is a persistent condition every successful organization must address. But beyond the travel industry, every business environment is fraught with levels of uncertainty. Leaders must remember to look outside their companies – that way, when a big change does happen, they’re not blindsided or caught off guard. While there’s no way of anticipating what tomorrow will bring, leaders should strive to stay ahead of the change in their industry by spotting trends in their embryonic stage. How so? Actively seek information, pay special attention to what your customers are saying and stay close to forward-thinking business professors – this won’t necessarily give you 20/20 vision into the future of your company, but you’ll be ahead of the game in many ways. As other companies feel the sting and see the advantages of mastering change, there are five lessons that have helped Grand Circle thrive and grow – despite the unpredictable environment – that can be applied to any organization: Flexibility Trumps Efficiency – Focus on fostering flexibility within your organization; it will help ensure that those around you are behind and a part of the change in your company. Mission and Vision Creates Inspiration – Inspire those around you with a mission and vision that supports growth and change. Values, Not Structures, Drive Effective Organizations – Values should be at the base of your corporate culture; if there’s too much emphasis on structure, you’re not leaving any room for change. Investments in People and Learning Create Advantage – Allow your employees to grow and change as your company continues to evolve and take on new areas of competency. Relentless Measurement of Excellence is Essential – Make sure you’re keeping a pulse on the progress of your organizations; you’ll be able to see what strategies are yielding results. As the “new normal” emerges – companies must be prepared. Change is right around the corner. Are you ready? Alan Lewis is owner and chairman of Grand Circle Corporation, the largest U.S. direct market tour operator of international vacations for older Americans and co-author of “Driving With No Brakes.”

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Mike Green: Saving Ebony-Jet: One Million Facebook "Likes"

November 26, 2010

You’re invited to participate in a bold experiment to help preserve an important piece of Black American history. It’s simple, yet, in the 21st century, simplicity has become the most powerful tool of innovation. You can help preserve an iconic symbol of Black American achievement by clicking the Facebook “like” button at the top of this blog post. Then tell your friends and family to do the same. Alternatively, you can leave a supportive comment below. It’s for a good cause. An important cause. There’s no Million Man (or Woman) March. There’s no need to brave frigid temperatures and inclement weather. You don’t even have to contribute money. Step 1: Click the Facebook “like” button or leave a supportive comment (or both). Step 2: Send this blog post to your friends and family, asking them to do likewise. Step 3: Revel in the knowledge that you have helped preserve an iconic symbol of African American media history. Saving Ebony-Jet Headquarters The Johnson Publishing Company — owners of the iconic African American media brands, Ebony and Jet magazines — has sold its building headquarters, located at 820 S. Michigan Avenue in Chicago. Columbia College recently purchased the 110,000 square foot historic headquarters of Ebony-Jet for an undisclosed amount. The Johnson Publishing Company is planning to move its media operations to a new location within the next 18 months. Headquarters of the Johnson Publishing Company as featured in Ebony Magazine , September 1972. Click here for full photo gallery . Preserving the iconic headquarters of Ebony-Jet has become a common focus of numerous debates across the landscape of Black America. Reactions to the sale have ignited emotion-filled discussions. Some believe a part of Black American history is being sold. Others, like Eric Easter , the former vice president of digital and entertainment for Ebony-Jet , believe the history lives on within the brand, not just within the building. Easter argues: “For anyone decrying some great loss of history, I would argue that the history is secure. More important than Johnson Publishing owning the building or residing in it, is that the building even existed for its time. It stands as a major achievement. Historians and preservationists should be more concerned that the landmark does not get torn down and that its story be told prominently and correctly.” Columbia College is planning to honor the Johnson family with some tangible recognition in the building that pays homage to past achievements. That’s a respectful transition and end to a bygone era. But we (as in you and I) can do more. Mr. John H. Johnson (left) meets with the building’s architect, John Moutoussamy. Click here for full photo gallery . City and Media: Chicago’s Black Founders For those who are unfamiliar with Ebony and Jet magazines, and have little knowledge of the Johnson family’s media empire, the words “iconic” and “historic” may seem a bit far-fetched. To the uninitiated, the widespread emotional reverberations may seem like over-inflated reactions to sensible decisions made by Linda Johnson Rice , Chairman of Johnson Publishing Company and daughter of John H. Johnson , the company’s founder. Linda Johnson Rice, chairman and CEO of Johnson publications including Ebony and Jet magazines. Outside of the spotlights of White media and the common knowledge of many White Americans, the building at 820 S. Michigan Avenue was instantly adopted in 1972, into the minds and hearts of millions of Black Americans, as a proud symbol of Black achievement in the face of institutionalized racial oppression and degradation. The building stands as a monument of one Black family’s success in a White-dominated media industry. It stands tall on prime real estate in Chicago, where White financiers had such a strong foothold, that the last Black man to build a business structure on such coveted land was Jean Baptiste Point du Sable , the city’s first permanent resident in 1779 . When Black media were reporting the facts regarding lynchings, Jim Crow, redlining, disparities in public education and numerous insights into the infrastructure of White power, throughout every sector of society, most White media ignored such stories. Black media have historically reported the stories most White media would not report. Still, when the issue of race relations is raised today, the dismissive reflex in pointed palms of raised White hands reveals the relative small amount of knowledge about Black America that permeates White America. Today, millions of minds remain closed to any information that threatens to destroy pristine paradigms constructed by White media over the past century. Johnson’s 11-story media office tower in Chicago was completed in 1972, eight years following the Civil Rights Act of 1964 and just four years in the wake of the assassination of Dr. Martin Luther King Jr. The lobby of Ebony-Jet headquarters at 820 S. Michigan Avenue in Chicago. Click here for full photo gallery . The Ebony-Jet headquarters in Chicago became a symbol of achievement in spite of the stumbling blocks and closed doors that threatened every step of the process. In like manner to the monumental reaction to the election of President Barack Obama, the establishment of a Black-owned building in the business sector of Chicago’s famed loop in the early 70s became a source of pride for Black Americans who seldom saw much in media of which to be proud. Symbol of Black Pride and Black Beauty Model Charmayne Caldwell poses for photographer Isaac Sutton in the photography studios at the Ebony-Jet headquarters in 1972. Click here for full photo gallery . In the 20th century evolution of media, the Ebony-Jet empire was a media brand that reached all of Black America. It chronicled our achievements. It heralded our heroes. It turned a spotlight upon our issues, our families, our relationships … our daily lives. In Ebony-Jet , we saw beautiful Black people. White media showcased beautiful White people. It lauded White heroes. It proclaimed White America as trustworthy, wealthy and strong. White media held White America up as a symbol of freedom, justice and moral leadership for the world to admire and emulate. Neither before nor after the Civil Rights Movement did White media see our daily struggles or achievements. But Ebony-Jet did. Muhammad Ali with his wife and family were featured in the September 1972 issue of Ebony. Click here for full photo gallery . In the pages of Ebony-Jet , Black families saw scholars, university and corporate leaders, politicians, college and pro athletes, Hollywood celebrities and extraordinarily talented musicians … all of whom had Black faces. Many of those important faces and stories didn’t exist outside of the lens of Ebony-Jet . The magazines held up mirrors of positive images of Black life in America and we stared into our own reflections and smiled. In the face of rampant racial discrimination on every level — political, legal, health, financial, employment, entrepreneurship, education, military — Black America looked for something to make us smile. Ebony-Jet did more: It made us proud. Mrs. Eunice W. Johnson stands in her office, which showcases some of the many pieces of African art that exist throughout the building. Click here for full photo gallery . Giving Thanks Today, this iconic media brand is transitioning from 20th century to 21st century operations. A part of that requires it to shed some of the heavy costs associated with the 20th century. The sale of the Ebony-Jet headquarters building, of which the JPC only uses 40 percent of available space, is a done deal. But this is the 21st century. The JPC is considering preserving the historic building as it is today, inside and out, in digital 3D. The final product will provide a navigable, interactive 3D replica of the historical décor and artifacts within the building that can be accessed online. The JPC employees enjoyed complete meals in the building’s cafeteria for only $1 a day. Click here for full photo gallery . There are costs associated with such technology, of course. But, there is no cost for you to support the digital preservation plan. Just click the Facebook “like” button at the beginning of this post or leave a supportive comment below. Few opportunities come along in our lives in which we can make such a profound difference with the click of a mouse. This moment is your opportunity to make a difference and say thanks to Ebony-Jet for the support it has given us for generations. If you support the idea to preserve the JPC headquarters as a digital 3D replica, click the Facebook “like” button or leave a supportive comment. Then spread the word. It’s never been easier to participate in preserving Black American history. And we cannot expect anyone but us to care enough to preserve what is important to us. Let’s push the Facebook “like” number to one million or more. Let’s show our appreciation to Ebony-Jet for its work in preserving our history by supporting the preservation of its history.

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Video: Andreessen Channels Ovitz in Creating New VC Funds

November 5, 2010

Nov. 5 (Bloomberg) — Bloomberg Businessweek’s Brad Stone discusses the influence of Michael Ovitz, the founder of Hollywood’s Creative Artists Agency, on Marc Andreessen, founder of venture capital firm Andreessen Horowitz LLC. Stone speaks with Scarlet Fu on Bloomberg Television’s “InBusiness with Margaret Brennan.” (Source: Bloomberg)

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Video: Andreessen Channels Ovitz in Creating New VC Funds

November 5, 2010

Nov. 5 (Bloomberg) — Bloomberg Businessweek’s Brad Stone discusses the influence of Michael Ovitz, the founder of Hollywood’s Creative Artists Agency, on Marc Andreessen, founder of venture capital firm Andreessen Horowitz LLC. Stone speaks with Scarlet Fu on Bloomberg Television’s “InBusiness with Margaret Brennan.” (Source: Bloomberg)

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Models International Hires Industry Veteran, Christine Clayton, to Head Company and Catapult It to Next Level

November 1, 2010

BEVERLY HILLS, CA–(Marketwire – November 1, 2010) –   Models International , a wholly owned subsidiary of Hollywood Studios International ( PINKSHEETS : HYWS ), has hired 20-year fashion and modeling industry expert, Christine Clayton , as the agency’s new Managing Director. “With Christine’s extensive experience, far-reaching relationships and knowledge of the industry inside and out, we have found the perfect fit to take the agency to the next level,” said Steven Saxton , CEO and Chairman of Hollywood Studios International.

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Inder Sidhu: They Might Be Giants: Management Insights From San Francisco’s Boys of Summer

October 28, 2010

” Misfits and castoffs .” That’s what some are calling San Francisco’s surprise World Series contenders, the Giants. After defeating the Philadelphia Phillies four games to two for the National League Championship, the team takes on the Texas Rangers this week in the 104th edition of Major League Baseball’s Fall Classic. Fans in the Bay Area could not be more delighted. This year’s team features a lovable cast of characters with back stories that could have been conjured by a Hollywood screenwriter. Take ace relief pitcher Brian Wilson. He sports a menacing pirates beard, dyed jet black to intimidate opposing batters. Then there’s fastball specialist Tim Lincecum, known as “The Freak” for his powerful arm and boyish looks. San Franciscans have especially warmed to outfielder Cody Ross, the the NL Championship Series MVP. Ross joined the team in mid-summer after being dumped unceremoniously by the Florida Marlins. Instead of sitting home watching TV, he now finds himself starring on it. I could go on, but you get the point: The Giants roster is filled with individuals that other teams either overlooked or did not want. So how did the organization turn them into winners? Simple: it provided opportunities for individuals to shine while building a foundation of cohesive teamwork. While that might sound easy, anyone who has ever managed a team knows it isn’t. In organizations that prioritize the collective, new ideas are often smothered and groupthink frequently prevails. When this happens, individuals lose their drive to aspire for greatness. As a result, mediocrity often settles in. Similarly, organizations dominated by superstars have their own problems. When jumbo-sized egos take over, teams lose their unity and sense of purpose. Without shared organizational goals, individuals focus more on their own glory than on team pursuits. When this occurs, internal strife often results. Giants fans need only think back to the last time San Francisco was in the World Series to be reminded of this. The year was 2002, the height of the Barry Bonds era. Though the all-time career leader in home runs, Bonds is one of baseball’s most polarizing figures. When he was the Giants’ highest paid player, Bonds wouldn’t pose for the team picture or ride the team bus. He had his own trainer, his own chef and his own PR spokesman. Bonds won five MVP awards as a Giant, but he never led his team to baseball’s ultimate prize. To be fair, neither did San Francisco’s more beloved Hall of Fame players, including Willie Mays, Orlando Cepeda, Willie McCovey, Juan Marichal and Gaylord Perry. Try as they might, these legendary superstars could not produce both the team cohesion and individual excellence that the 2010 Giants have. Give credit to team manager Bruce Bochy for doing both . In his four years with the team, he has convinced his players to aim high, work collaboratively and check their egos at the door. Specifically, he has experimented with the lineup, providing an opportunity for different players to have their moment in the spotlight. Take rookie Buster Posey. When first called up from the minors, he played backup catcher. But Bochy convinced the young player he could achieve greatness if he got in better shape and improved on his hand speed. Posey did and worked his way into the starting lineup. After batting .305 for the year, he’s now a candidate for league Rookie of the Year. While inspiring individual performers to aim high, Bochy has also promoted an atmosphere of inclusion and camaraderie. That’s inspired stars such as Wilson to spend more time bonding with teammates. He, for example, is a regular at the dominoes table in the locker room with his teammates. Bochy’s insistence that stat leaders and role players stand together has helped him to make some difficult choices. In the post season, he dropped the team’s highest paid player, pitcher Barry Zito, from the active roster due to inconsistent play. Recognizing that the decision was controversial and could divide team loyalties, the affable Zito stepped up and expressed his support for the decision. ” My heart and soul is in this clubhouse ,” Zito said afterward. “I have no other options in myself than to pull for every one of these guys.” You can bet they remembered his unselfishness as they took the field last night against the Rangers. Superstar performers or team players? In San Francisco, it’s nearly impossible to tell them apart. Managers everywhere should take note. Inder Sidhu is the Senior Vice President of Strategy & Planning for Worldwide Operations at Cisco , and the author of Doing Both: How Cisco Captures Today’s Profits and Drives Tomorrow’s Growth . Follow Inder on Twitter at @indersidhu .

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Robert Creamer: Wall Street Hopes to Use Republicans to Re-Purchase Congress

October 15, 2010

For many years the “titans” of Wall Street could pretty much have their way with Congress. They — and their huge campaign contributions — had convinced the Republicans, and many of the Democrats — that what was good for Wall Street, was good for the country. Then came the financial collapse in September, 2008, and the sudden realization that the emperor of Wall Street didn’t have any clothes. Turned out that the policies that allowed reckless Wall Street traders to run wild — and gave a tiny number of Wall Streeters the ability to claim a bigger and bigger share of our national income — weren’t actually so smart for the rest of us. Democrats in Congress and the Obama Administration turned on Wall Street and — from Wall Street’s point of view — had the “audacity” to pass legislation that reined in the recklessness that had cost eight million Americans their jobs. Many among the Wall Street types — who actually think of themselves as the “masters of the universe” — were shocked. They — and much of the conventional wisdom in Washington — assumed that the Wall Street reform bill would be watered down into thin gruel by the massive army of lobbyists they sent to do battle on the Hill. Wall Street spent almost a half-billion dollars lobbying to stop Wall Street reform. But the bill actually got tougher and tougher as the battle went on. That was because Progressives held political ground so high on the issue that even the most “moderate” members of Congress were terrified to stand up for the Wall Street elite. But this November, the Wall Street Empire plans to strike back. According to Politico : The vilification of bankers, what one bank lobbyist called the ‘show trials’ of congressional hearings and especially the outcome of financial regulatory reform has prompted an all-out effort to wrest Congress from Democratic control, several financial industry insiders told Politico.” Karen Klugh, spokeswoman for the American Financial Services Association, told Politico : “Our target ratio for the 2010 cycle is 80-20 Republicans…” She said this ratio, “reflects our deep concerns with the work of the 111th Congress.” You betcha. And the amount Wall Street is directly investing in campaigns is almost certainly just the tip of the iceberg. It is likely dwarfed by the massive secret contributions they have made to the various Republican attack groups. And you can bet they are encouraging their partners in the huge outsourcing deals — on which they make billions — to pony up as well through secret contributions to the Chamber of Commerce that can spend unlimited amounts to distort the records of their Democratic targets. Many of those contributions, as ThinkProgress has documented, come from foreign corporations that profit from outsourcing of American jobs. The thing that is especially galling about Wall Street’s approach to politics is that it so brazenly plays upon the fears of the very people who are often the biggest victims of their greed. It is no small irony that the very people whose recklessness caused so many everyday working class families to lose their jobs – who have systematically skimmed off a larger and larger portion of our national product and left smaller and smaller pieces of the pie for everyday Americans – are now stoking the anger caused by their own actions and directing it toward Democrats who have brought them to account. In the Tea Party fantasy world everyday Americans are oppressed by bureaucrats with eyeshades who go to work on the Washington Metro. They are abetted by crunchy academics who spend their days dreaming up “social engineering” schemes in their offices at Yale or Harvard. And their oppressive regime is supported by liberal news anchors and the nihilistic denizens of Hollywood who spend their nights in hot tubs surrounded by Playboy Bunnies. That is the Tea Party version of class warfare; everyday Americans versus these “elites.” This is a very convenient mythology for Wall Street. It ignores the existence of the real “elites” in America. They aren’t the bureaucrats who go to work on the Metro but rather the men and women who go to work in chauffeur-driven limousines, jet around the country in Gulfstream G-Vs, and make more on the first day of the year, before lunch, than a minimum wage worker makes all year long. The gang on Wall Street wants normal Americans to forget that they — and the top one percent of the population — control 34.6% of net assets, compared to only 15% for the bottom 80%. They want you to ignore that 42% of the financial wealth is controlled by the top 1% of the population, compared to only 7% controlled by the bottom 80% — or that 62% of the business equity that controls corporations is in the hands of the top 1% compared to only 7% for the bottom 80%. Remember all of the reckless speculation in financial securities that sunk the economy? Well 61% of financial securities are owned by the top 1% — and just 2% by the bottom 80%. And when it comes to income, the share going to the top 1% had grown from 12.8% in 1982 to 21.3% in 2006 while the percent going to the bottom 80% shrunk from 48.1% to 38.6%. When you look at numbers like that, in broad strokes it’s pretty obvious why the economy sunk into recession. The greed of the top 1% sucked the buying power out of the rest of the population who were needed as customers to keep levels of demand high enough so that investors found it profitable to expand employment, create jobs and generate more consumers to demand more goods and services. Their greed killed the goose that laid the golden egg. Of course the latest example of the consequences of Wall Street’s reckless greed is the mortgage foreclosure documentation disaster. Seems that they were in such a hurry to make more and more on their exotic mortgage-backed securities that they simply neglected to properly document the changes in ownership for the mortgages they packaged up and sold on financial markets. Why would the brilliant graduates of some to the finest universities in America make such an obvious mistake? You have to assume it’s because they figured that they would make their millions and pass the risk of their actions on the “the market” at large rather than take the time and expense to do it right. Now that their actions have come to light they may once again threaten the stability of the financial system. And let’s remember that when you fall behind in your credit card payments, these same guys are the first to invoke every provision in the fine print of your credit card agreement so they can charge you a fortune in fees. But when it comes to transferring titles of mortgages correctly, turns out they couldn’t be bothered. One more example of how Wall Street thinks it’s exempt from the rules that apply to the rest of us. Now, Wall Street is trying to harness the anger of ordinary people — who are furious because of the economic disaster that Wall Street itself created — to allow them to use the Republicans as a vessel to take back the control of Congress. It’s up to us to stop them. The plain fact is that there are more of us than there are of them. But if we don’t vote, we don’t count. Time for Progressives to get out of a defensive crouch and march — along with everyone we know — to the polls. As the MTV s slogan says: Vote again in 2010. In most jurisdictions early voting has already begun. The time to vote is now. I know a guy who trades on Wall Street, call him George, who is absolutely disdainful of ordinary Americans. He thinks that anyone who can’t get rich, like he is, must be a chump. He’s happy to exploit anyone and anything to make money for himself. Don’t let George make us all into chumps. Don’t let Wall Street use the anger caused by the economic disaster that they themselves caused, to elect Republicans and take back control of Congress. Robert Creamer is a long-time political organizer and strategist, and author of the recent book: Stand Up Straight: How Progressives Can Win, available on Amazon.com .

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Henry Blodget: Here’s Why Yahoo And AOL Should Immediately Merge

October 4, 2010

The two struggling Internet giants of the 1990s, Yahoo and AOL, should merge. Immediately. (In fact, it’s ridiculous that they haven’t already). This idea isn’t new — we’ve been calling for it for three years, and, according to Kara Swisher, “big investors” are now calling for it , too. “Big investors” want Yahoo and AOL to merge, AOL CEO Tim Armstrong to become CEO of the combined company, and Yahoo CEO Carol Bartz to become Chairman (which would be in keeping with what Yahoo’s board is discussing anyway ). We would certainly be open to that idea — assuming Tim can persuade us that he is tough enough to quickly and efficiently make the big restructuring moves (and cuts) that the combination would require. But the management structure isn’t as important as the combination itself. Here’s why the companies should merge: Yahoo and AOL are both in the same business, and it is a business that benefits greatly from scale. Yahoo and AOL are both basically media companies. They both use technology extensively, but their core competency is producing content to attract an audience and then selling display ads against that audience. They also both operate duplicative mail, instant-messaging, sports, finance, news, maps, and other services, all of which currently compete with each other. That is senseless. By combining, Yahoo and AOL would achieve greater scale and reduce duplication. There are currently 4-6 big generalist destination web sites, and that’s at least two more than there should be . The big destination sites are: Facebook, Google, Yahoo, Microsoft, and AOL (and, increasingly, Twitter). Facebook and Google have clearly differentiated businesses. Yahoo, Microsoft, and AOL don’t — they’re still trying to be all things to all people. By investing hugely in Bing, Microsoft has picked its horse: It wants to compete with Google in search. Yahoo and AOL, meanwhile, have outsourced search to focus on content and display ads. That leaves Yahoo and AOL as the major competitors in content and display advertising. They both would be stronger — and they both would eliminate a major competitor (in the US) — if they combined forces. There is huge and needless duplication of services at AOL and Yahoo: “Portal” page, finance, sports, entertainment, celebrity gossip, games, mail, instant-messaging, ad network, search window (outsourced), chat, etc. There is no reason for these services to be duplicated. And by splitting the market, Yahoo and AOL are splitting the market and thus losing more ground to their competitors. Take “mail,” for example. Yahoo Mail and AOL Mail are critical traffic drivers to both company’s content empires. They keep users coming back many times a day. But both Yahoo Mail and AOL Mail have lost ground to Gmail, Facebook, and Twitter, and Microsoft Outlook is still a major competitor. Left on its own, AOL Mail will die: AOL just doesn’t have the resources to keep it competitive with the offerings of far-richer companies like Microsoft and Google. Yahoo Mail may survive, but it would have a better chance with the added scale and resources of being combined with AOL Mail. And the same can be said for instant-messaging, voice-chat, and all of the other areas above. AOL is affordable, even for Yahoo. AOL’s enterprise value is about $2.4 billion. Yahoo’s is $16 billion. Yahoo could probably get AOL for $3 billion, maybe $3.5 billion. That’s only 20% dilution. And if Yahoo didn’t want to take the dilution, it could always buy AOL for cash. Yahoo doesn’t know what to do with its cash anyway. (It might have to borrow a bit of money to pay cash, but money is free right now. Alternately, it could sell off its Alibaba stake and raise the cash that way. The stake adds no strategic value whatsoever.) The combination would be instantly accretive for shareholders. In combining, Yahoo and AOL could not only boost revenues, but cut hundreds of millions of dollars of costs. Both companies are already gushing cash, so the combination would immediately goose cash flow. The combination will eliminate a major competitor for both companies–both in display advertising and, importantly, in the consolidation of the burgeoning online content industry. AOL just bought TechCrunch for ~$40 million. Yahoo should also have bought TechCrunch — and we suspect that AOL’s move might just wake Yahoo’s M&A team up. In future sales, therefore, AOL and Yahoo might be competing with each other for companies like TechCrunch. That will drive prices up… unless they’re working together. Combining AOL and Yahoo would make the combined platform a “must buy” for any display advertiser. The display market isn’t growing as fast as the search market, but it’s still a huge and fast-growing market. Right now, the two companies’ sales forces are duplicated. They needn’t be. And the combination would offer advertisers even greater reach, inventory, and targetability. This, in turn, would reduce content production costs as a percentage of revenue. The combined search businesses would have (slightly) more leverage to get better terms with Google or Microsoft. AOL only owns 3 percent of the US search market, but that 3% is still worth ~$500 million a year. Search is an economy-of-scale business, so the added scale would likely allow the combined company to squeeze better terms out of Microsoft or Google. The combined distribution business would have more leverage with Hollywood, the music industry, and other content creators. Why is the cable industry so powerful? Scale. Once again, the more people you reach, the more valuable you are as a distribution platform. This combination would bring more distribution scale. AOL’s New York media headquarters would give Yahoo an even stronger beachhead in the media and advertising capital of the world. New York still matters, especially in this industry. Yes, putting the two companies together would be challenging and require painful cuts. But it’s not rocket-science. And it also wouldn’t involve combining enormously different cultures and businesses, the way, say, the disastrous AOL Time Warner merger did. These two companies are essentially in the same business. As long as management took a disciplined approach to the integration, the merger would stand a good chance of being very successful. Unless it radically refines and focuses its business, AOL must combine with someone — Yahoo or Microsoft. There is no way it can survive as a generalist all-things-to-all-people brand when it is so much smaller than everyone else in the business. Yahoo has less need to do this deal — Yahoo already has enough scale — but the combination would help Yahoo. And, as discussed, it would also eliminate a major competitor. Merging Yahoo and AOL is not “the answer” to both companies’ woes. Once they combine, they’ll still have to execute. But it’s a good step toward for both companies. They should do it immediately. See Also: These are the world’s 100 most valuable digital startups >

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Chip Conley: Apple & The Oakland A’s: They’re Both Playing Moneyball

September 28, 2010

As we round the bases for the last two weeks of Major League Baseball, it’s worth noting that big league managers may know more about 21st century leadership than Fortune 500 CEO’s, with the possible exception of Steve Jobs. Remember Michael Lewis’ bestseller Moneyball about how Oakland A’s General Manager Billy Beane remade the game of baseball by looking at new metrics as a means of determining which players had the greatest impact on his team’s success? Like Steve Jobs’ Apple in the battle against Microsoft, The A’s had high odds against them with a team payroll that was just one-third of what a bigger market team like the New York Yankees could pay their players. So, Billy Beane reevaluated the conventional wisdom that stolen bases, runs batted in, and batting average were the most important statistics to consider when selecting players for a team. Doing rigorous statistical analysis — and using a certain amount of gut wisdom — Beane was able to show that little-considered stats like on-base percentage or slugging percentage were bigger indicators of offensive success than some of the historical numbers that most teams used. The Oakland A’s soon leveraged their intellectual competitive advantage by selecting bargain players who helped them in a series of improbable playoff runs. Sadly for the A’s, the rest of the league caught up and teams like the Boston Red Sox parlayed these “Sabermetrics” — what Beane called these unique numbers — into the World Series. The A’s were back where they started, a perennial also-ran. Most business leaders are using 20th century metrics to create 21st century success. We were taught to “manage what we can measure” and, generally, what’s most easily measurable are the more tangible aspects of life. In business, this translates to metrics like profitability and cash flow — clearly important, but outputs in actuality, not the inputs that create success in the modern company. Today’s most valuable business assets often don’t appear on a balance sheet, an accounting relic that is 500 years old. In our knowledge economy, it’s not the tangible factories or equipment that creates sustainable success, it’s the intangibles like innovation, employee engagement, brand reputation, and customer evangelism that drive market performance. Stock analysts suggest that 80% of Apple’s value doesn’t appear on its balance sheet. The balance sheet is the output, just like the baseball standings are the results of how you’ve invested in your inputs. We’re living in a new era. And yet, we’re using the old metrics. Nearly two-thirds of the world’s GDP now comes from the intangible service industry — as opposed to tangible industries like manufacturing or agriculture — where competitive advantage isn’t about who’s the biggest, but who’s the smartest. Savvy business leaders are learning how to measure those intangible assets like loyalty and reputation — there are even social media benchmarks for your company now — so that they can modernize what they’re managing. What are the inputs or “Sabermetrics” in your business that you’ve been ignoring? Fortunately, Hollywood is a step ahead of most business leaders, as they realize that Moneyball defines our 21st century world of underdogs looking for a leg up. You’ll see Brad Pitt playing Billy Beane next year when Sony Pictures brings this epic story of “what counts” to theaters around the world. Let’s hope a few business execs sneak off on their lunch hour to learn this leadership lesson on the big screen.

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Danny Schechter: After Larry Summers, What? Will We Continue to Go Down Hill?

September 26, 2010

Summers Packs His Bags As The Recession is Said To Be Over And Media Buries Reports on Financial Crime As the November election approaches, the White House seems to be ending its Rip Van Winkle-like slumber and has begun crawling out of the bubble of its own making. Many fear it’s a bit late. The shakeup of President Obama’s economic team is long overdue. As Larry Summers slithers back to Harvard to save his tenure and write his book, he is likely to be replaced by exactly the wrong kind of person — a business executive, appointed to try to appease the Repugs and the Right. (Summers was paid $586,996-a-year at Hahvard and picks up all kinds of consulting deals on the side from Wall Street.) This maneuver won’t work of course because nothing Obama does will ever please them because they need him as their piñata, and a symbol of failure. He claims to see that but just can’t seem to get his appeasement gene in check. Notes the Naked Capitalism blog, “As much as some will be pleased to see Larry gone (he was a leading advocate of bank-friendly policies), his replacement is certain not to represent a change in philosophy… he has made the cardinal mistake of trying to please everyone and has succeeded in having no one happy with his policies.” Journalist Robert Scheer hopes “Summers will have time to reflect on the dismal arc of his split tenure in government service. Thanks to the banking debacle he did so much to initiate back in the Clinton years, the nation now has more people living in poverty, 43.6 million of them, than ever in our history. Americans have witnessed the disappearance of $11 trillion of their net worth, $1.5 trillion in the second quarter; the debt has risen alarmingly; unemployment is stuck at 9.6 percent; and trillions of dollars in toxic pools of housing stock are still held by the banks to be thrown into the housing market fire sale anytime home prices promise to edge upward. Behold what brilliance has wrought.” Financial journalist Michael M. Thomas believes that Summers like a gunslinger hired to clean up a town did what he was hired to do arguing, “Summers is leaving because he made sure real reform was discussed–but not accomplished.” “Larry Summers was tasked with making sure the kind of backlash that in 1933 unleashed Ferdinand Pecora on Wall Street didn’t happen in 2009. I think Larry Summers was tasked with marginalizing Paul Volcker, who could thus serve the new administration as moral window-dressing without actually causing trouble. I think it was understood from the outset that any meaningful economics program must involve taking Wall Street to the woodshed, and that this must not be allowed to happen.” Bob Woodward’s book on Obama focuses on an internal war over policy for the Afghan war. That may be mild compared to the revelations to come on the debates over what to do about the economy. (Woodward offers one telling detail about Obama’s approach describing how he laid out his plan in the form of a financial terms sheet used on Wall Street.) To “balance” his appointment of Elizabeth Warren, the President has nominated Jack Lews to head the Office of Management and Budget. Bernie Sanders says he will not support him because “I found too many echoes of the failed policies of the past in his responses to my questions on trade policy, Social Security, deregulation of banks and other issues.” Even as the rats jump ship. The National Bureau of Economic Research which took a year to admit that the country was in recession now says the Recession is over, a conclusion that is not widely shared especially because the structural, systemic and political problems that caused the crisis have not been remedied. The respected Chilean Economist Manfred Max-Neef says the US economy is “underdeveloping.” Others still fear a total collapse. But now that recovery has been pronounced — even if there has been no job creation — the media has a good excuse to move off the subject, to assume the best, and avoid investigating how the crisis happened, who benefited and who lost and is still losing, The issues I have been raising about the crimes of Wall Street have been brushed under the rug, even by filmmaker Oliver Stone from whom one might have expected a deeper critique in his new Wall Street Film, Money Never Sleeps . The Village Voice , who you would expect would welcome it, says Stone lets the “bad Guys off the hook?’ “If barely prosecuted, the real players in our last crash face a long pop-culture pillorying. That is not, however, how Stone works; regarding power, his conclusions are best summed up by the hippie chick at the Lincoln Memorial in Nixon: “You can’t stop it, can you? Even if you wanted to. It’s not you. It’s the system.” Floating off on a faux-naïve happy ending this time, one takes the lesson that there are no villains–or that villains are all there are.” So a generic indictment of “the system” substitutes for any exploration of the way that system actually worked, not just to make greed good but to hurt millions of people worldwide who lost jobs, homes and hope, plunging millions worldwide and here at home into deepening poverty. I personally gave Stone a copy of my investigative film Plunder The Crime of our Time months ago, but he seems to have brushed it off focusing instead on a miasma of slick Hollywood production values. (Disclosure: I made a documentary, Beyond JFK , for Oliver’s company and he was in it, that was back in 1992.) I have been getting some visibility for my DVD and companion book The Crime of our Time but not in mainstream media. Earlier this week, at a book launch, A Tea Party activist showed up for my spiel and took me to task loudly for being dismissive of her movement. But after we talked, I was pleased that she became open to my concerns and even, get this praised me as “fair and balanced.” I was surprised. You can hear some of our exchanges and a storm of debate on Between The Lines radio that I was also broadcasting over during my talk. The Tea Party people, by and large, don’t seem very angry with Wall Street. And as for the Republicans, Huff Post reports, “The Republican Party’s 21-page blueprint, “Pledge to America,” was put together with oversight by a House staffer who, up till April 2010, served as a lobbyist for some of the nation’s most powerful oil, pharmaceutical, and insurance companies, including AIG.” Short of a major deepening of the crisis in the next few weeks, the election will soon constitute all the news all the time. While voters are said to be angriest about the economy and Obama’s failures to stem the tide, the media will not devote much time or energy to educating the public about the deeper issues. Not when so many pundits and election insiders are fighting for face time on TV. Political blather and polls are back. Economic crime is downplayed. Unfortunately, one of the most important stories of our time is about to be buried again. News Dissector Danny Schechter made Plunder The Crime Or Our Time and wrote the companion book The Crime of our Time . See Plunderthecrimeofourtime.com . Comments to dissector@mediachannel.org.

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Bill Maher: New Rule: Rich People Who Complain About Being Vilified Should Be Vilified

September 24, 2010

New Rule: The next rich person who publicly complains about being vilified by the Obama administration must be publicly vilified by the Obama administration. It’s so hard for one person to tell another person what constitutes being “rich”, or what tax rate is “too much.” But I’ve done some math that indicates that, considering the hole this country is in, if you are earning more than a million dollars a year and are complaining about a 3.6% tax increase, then you are by definition a greedy asshole. And let’s be clear: that’s 3.6% only on income above 250 grand — your first 250, that’s still on the house. Now, this week we got some horrible news: that one in seven Americans are now living below the poverty line. But I want to point you to an American who is truly suffering: Ben Stein. You know Ben Stein, the guy who got rich because when he talks it sounds so boring it’s actually funny. He had a game show on Comedy Central, does eye drop commercials, doesn’t believe in evolution? Yeah, that asshole. I kid Ben — so, the other day Ben wrote an article about his struggle. His struggle as a wealthy person facing the prospect of a slightly higher marginal tax rate. Specifically, Ben said that when he was finished paying taxes and his agents, he was left with only 35 cents for every dollar he earned. Which is shocking, Ben Stein has an agent? I didn’t know Broadway Danny Rose was still working. Ben whines in his article about how he’s worked for every dollar he has — if by work you mean saying the word “Bueller” in a movie 25 years ago. Which doesn’t bother me in the slightest, it’s just that at a time when people in America are desperate and you’re raking in the bucks promoting some sleazy Free Credit Score dot-com… maybe you shouldn’t be asking us for sympathy. Instead, you should be down on your knees thanking God and/or Ronald Reagan that you were lucky enough to be born in a country where a useless schmuck who contributes absolutely nothing to society can somehow manage to find himself in the top marginal tax bracket. And you’re welcome to come on the show anytime. Now I can hear you out there saying, “Come on Bill, don’t be so hard on Ben Stein, he does a lot of voiceover work, and that’s hard work.” Ok, it’s true, Ben is hardly the only rich person these days crying like a baby who’s fallen off his bouncy seat. Last week Mayor Bloomberg of New York complained that all his wealthy friends are very upset with mean ol’ President Poopy-Pants: He said they all say the same thing: “I knew I was going to have to pay more taxes. But I didn’t expect to be vilified.” Poor billionaires — they just can’t catch a break. First off, far from being vilified, we bailed you out — you mean we were supposed to give you all that money and kiss your ass, too? That’s Hollywood you’re thinking of. FDR, he knew how to vilify; this guy, not so much. And second, you should have been vilified — because you’re the vill-ains! I’m sure a lot of you are very nice people. And I’m sure a lot of you are jerks. In other words, you’re people. But you are the villains. Who do you think outsourced all the jobs, destroyed the unions, and replaced workers with desperate immigrants and teenagers in China. Joe the Plumber? And right now, while we run trillion dollar deficits, Republicans are holding America hostage to the cause of preserving the Bush tax cuts that benefit the wealthiest 1% of people, many of them dead. They say that we need to keep taxes on the rich low because they’re the job creators. They’re not. They’re much more likely to save money through mergers and outsourcing and cheap immigrant labor, and pass the unemployment along to you. Americans think rich people must be brilliant; no — just ruthless. Meg Whitman is running for Governor out here, and her claim to fame is, she started e-Bay. Yes, Meg tapped into the Zeitgeist, the zeitgeist being the desperate need of millions of Americans to scrape a few dollars together by selling the useless crap in their garage. What is e-Bay but a big cyber lawn sale that you can visit without putting your clothes on? Another of my favorites, Congresswoman Michele Bachmann said, “I don’t know where they’re going to get all this money, because we’re running out of rich people in this country.” Actually, we have more billionaires here in the U.S. than all the other countries in the top ten combined, and their wealth grew 27% in the last year. Did yours? Truth is, there are only two things that the United States is not running out of: Rich people and bullshit. Here’s the truth: When you raise taxes slightly on the wealthy, it obviously doesn’t destroy the economy — we know this, because we just did it — remember the ’90′s? It wasn’t that long ago. You were probably listening to grunge music, or dabbling in witchcraft. Clinton moved the top marginal rate from 36 to 39% — and far from tanking, the economy did so well he had time to get his dick washed. Even 39% isn’t high by historical standards. Under Eisenhower, the top tax rate was 91%. Under Nixon, it was 70%. Obama just wants to kick it back to 39 — just three more points for the very rich. Not back to 91, or 70. Three points. And they go insane. Steve Forbes said that Obama, quote “believes from his inner core that people… above a certain income have more than they should have and that many probably have gotten it from ill-gotten ways.” Which they have. Steve Forbes, of course, came by his fortune honestly: he inherited it from his gay egg-collecting, Elizabeth Taylor fag-hagging father, who inherited it from his father. Of course then they moan about the inheritance tax, how the government took 55% percent when Daddy died — which means you still got 45% for doing nothing more than starting out life as your father’s pecker-snot. We don’t hate rich people, but have a little humility about how you got it and stop complaining. Maybe the worst whiner of all: Stephen Schwarzman, #69 on Forbes’ list of richest Americans, compared Obama’s tax hike to “when Hitler invaded Poland in 1939.” Wow. If Obama were Hitler, Mr. Schwarzman, I think your tax rate would be the least of your worries. Bill Maher is host of HBO’s “Real Time with Bill Maher”, Friday’s at 10:00PM

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