Inside Today's 6 News; The News Director's Blog

Why Simplot's Success Makes Me Bullish on America's Future

J.R. Simplot's passing Sunday at the age of 99 is being mourned by many, but this should also be a time to reflect upon and celebrate a great life well lived.  J.R. Simplot is the ultimate American success story.  He saw some of America's hardest times ... World Wars and The Great Depression ... yet through hard work, perseverance and some old-fashioned American ingenuity, Simplot made billions and certainly made a mark.  His story is an example of what makes me feel so great about the future of our nation.

There's an old adage on Wall Street that says, "Buy low, sell high."  America is feeling pretty low right now.  Not 'Great Depression' low, but consumer confidence is at its lowest point since the index was created.  Housing values are plummeting, gas is at $4/gallon and going higher, the war in Iraq is draining with the deaths of brave soldiers and the costs of war, new economic powers such as China and India are rising and so are fears of 'outsourcing' of jobs, the federal debt is exploding, and our current President will likely leave office with the lowest approval ratings in modern American history.

And yet, I don't believe I have ever been more optimistic about the future of America than I am today.  If America was a stock, my investment strategy would be to buy, buy, buy!!!!  Before you write me off as some sort of rah-rah 'homer' who sees the world through red, white and blue colored glasses, let me point to some evidence of America's emerging 'bull market.'

One is the Presidential campaign.  It seems now that the Democratic nominee for President will be an African-American.  Was that even fathomable four years ago?  Whether he eventually wins or loses, Barack Obama's ascension will shatter any notion of a color barrier for those minorities who believe the American dream still remains inaccessible to them.  That's not to say that racism will not exist in some dark corners of our nation, but just as Jackie Robinson opened doors for black athletes and Martin Luther King began the march to full equality for all races in America, I believe Barack Obama offers renewed hope to all that America truly is the land of opportunity for anyone willing to work for it.

Another reason for my optimism is ... believe it or not ... the skyrocketing cost of gasoline.   It is so painful right now, but within that pain exists an opportunity for our nation to achieve true energy independence and reap the incredible economic rewards that would come from that.  Much of our massive trade deficit today comes from the importing of expensive oil.  Its high cost is ushering in a new generation of 'energy entrepreneurs,' from nuclear power companies willing to invest billions to companies looking to tap geothermal energy and wind to even Google, which is investing billions into creating affordable solar power.  America's free-market system has thrived by rewarding those who find creative solutions to our nation's problems, and $4/gallon gas offers an opportunity for a home-grown economic revolution that would make us all richer.

I also see the United States primed for a revolution in health care with huge benefits both economically and socially.  I believe reform has been stalled because of Republicans reluctance to acknowledge and attack the issue, but that's changing.  The Presidential candidate with the best credentials and ideas on health care isn't Barack Obama or Hillary Clinton, but onetime Republican Presidential contender Mitt Romney.  All the major Presidential candidates, including John McCain, recognize reform is needed.  The fact Republicans are now engaged in this debate means it is inevitable, and I see innovative American solutions being employed that bring universal coverage while adopting the economies and customer service of a market approach.

Want more evidence of America's emerging bull market?  We live in a nation that is the most culturally and ethnically diverse in the world; with one of the most productive work forces ever; the world leader in the arts of music and film; with the planet's finest higher education system; a monetary system that rewards ideas with investment and feeds a culture of innovation; truly free speech and a free press; growing environmental awareness; some of the lowest taxes in the modern industrialized world; the world's strongest, most technologically advanced military; the most charitable and philanthropic society by a mile; the earth's greatest consumer economy; etc., etc., etc.  No other nation is in a better position to thrive in the future than ours!

America has and will always face challenges, and it is during those times when those taking stock of America sold us short.  Were there a place where they could put their money where their mouths were, those would be very poor men today indeed.  J.R. Simplot never sold America short, and his optimism made him rich in far more areas than just his bank account.

J.R. Simplot and Once Mighty Micron

As we chronicle all the dire problems of Micron, including a recent quarterly loss of $777 million less than a year after 7/7/07 when it laid off more than 1000 Boise workers (and can someone please tell me what it is with bad news from Micron and the number 7?) ... I can't help but think back to the days of Micron and J.R. Simplot.  Simplot is 99 now, a billionaire Idaho business legend whose once brilliant mind is probably incapable now of fathoming what is happening to the innovative company he helped put on the map.

I wish I could have met J.R. in his prime, but we all know of his legend.  The shrewdest of the shrewd.  A man who truly understood business and was a big believer in the American capitalist system.  An odd but effective choice to come to Micron's rescue when it needed seed money to survive, Simplot's investment would help propel Micron into becoming one of the most remarkable corporate success stories of its time.  Simplot would continue to be the company's biggest cheerleader, urging anyone within earshot to buy Micron stock.

But in the business world, things change fast.  Idaho Statesman columnist Dan Popkey wrote of Micron's changes last year in an article entitled, "Longing for the nimble Micron board of old."  Here's the link:

http://www.idahostatesman.com/popkey/story/115989.html

Popkey's article documents how business legacies are made, but how they are not made to last.  A company like Micron can live off the past success brought on by men like Simplot, Alan Noble and the Parkinson brothers for a time, but new management must continue to innovate and manage to build new successes if a company is to thrive or even survive.

And so I wonder how J.R. would rate Micron's leadership today.  How would he feel about a company that, as Shane Johnson's recent investigation detailed, was so brazen in its willingness to break the law to make a buck?  What would his view be of a 'homegrown' Idaho company that has outsourced so many jobs not only to China and Singapore but to Utah and Virginia?  What would J.R. say about the business acumen of company executives presiding over mounting losses that are approaching $2 billion over the past two years?  What would he say to a company President collecting millions in compensation while leading Micron to jaw-dropping losses, a man who some believe was clueless to the corruption within his own company?

Of course, I don't know the answers.  Maybe J.R. would endorse the company's current money-bleeding course and tolerate some of the company's past illegal excesses that threaten to cost it hundreds of millions more in civil lawsuits.    Maybe, but I doubt it.

Now, when people talk about the fate of Idaho's largest private employer, it is usually with a sense of resignation that Micron is a company that has lost its way.  Not only does its business strategy appeared flawed but its moral compass appears off kilter too.  Micron's faced hard times before.  I can never remember a time when the company itself has been held in such low regard by so many in our community.  Talk to anyone about Micron these days and the mood instantly turns somber.

It makes many yearn for the days when J.R. had his hand in Micron.  Of course, there is and will always be only one J.R. Simplot.  It's too bad.  Micron could really use him right now.

A Republican Candidate's Indirect Swipe at Governor Otter

Republican Idaho House candidate Julie Ellsworth wrote a rather interesting 'Reader's View' in the 'Idaho Statesman' Tuesday.  The first sentence included the line "...I am not going to adopt the "tax first" mindset on road funding."  Here's the link to her entire letter.

http://www.idahostatesman.com/readersopinion/story/379539.html

Ellsworth clearly doesn't like her opponent's position on the road funding issue.  In fact, the 'Statesman' endorsed Ellsworth's Republican opponent, Gail Hartnett, in part because Hartnett supports a hike in the vehicle registration fee to get our crumbling roads fixed and freeway expansion work in the Treasure Valley done.

So let's review.  Ellsworth:  Against raising registration fees.  Hartnett:  Supports raising registration fees.  Doesn't get any simpler than that, now does it?  After all, whose dumb idea was it to raise vehicle registration fees to pay for roads in the first place?  It was Governor Butch Otter's idea. 

Otter a "tax-first" Republican?  It would seem Ellsworth believes so!  She goes on to write "There are alternatives to raising taxes."  Would Ellsworth's friend Governor Otter really have proposed raising vehicle registration fees if he felt there were legitimate alternatives to closing a $240,000,000 PER YEAR road funding deficit?  Apparently Ellsworth thinks less of our Governor than many of us thought.  Ellsworth even writes about moving money from the general fund into transportation, something Otter says he considered and rejected because he knows that money cannot be made up elsewhere.

Reading Ellsworth's rhetoric, you would have a hard time believing she and Otter are even members of the same party.  The fact is ... they're not!

Otter is a member of the Republican Party that wants to govern this state and fix our highway problems.  Raising taxes is a last resort for them too, but in a low tax state with big highway needs, they realize there is no other way.

Ellsworth is a member of the Republican Party that wants to deny that we taxpayers may need to pay some more if we want to get out of gridlock.  They are the party that wants to maintain the status quo that's producing huge transportation shortfalls every year, and if the money runs out, they figure traffic in the Treasure Valley won't get THAT bad.  What they forget is a $100 hike in registration fees looks cheap when you're stuck in gridlock burning $4/gallon gas.

Boise voters kicked Ellsworth out of office two years ago, so she became a lobbyist.  She then successfully pushed a bill to make taxpayers pay to reimburse Cabela's for a freeway interchange they agreed to pay to have built at their store in Post Falls.  Gee, thanks Julie!  If Ellsworth is really concerned about Idaho taxpayers, that is an interesting way of showing it.  Maybe Ellsworth is only concerned about us taxpayers when she's actually running for office.

So if you are a District 18 voter on primary election day, your choice really isn't between Julie Ellsworth and Gail Hartnett.  It's a philosophical choice between Julie Ellsworth and Butch Otter.  Choose wisely!

The Very Last Race for the Cure

It was stirring seeing thousands of runners and walkers dressed in pink descend on Parkcenter Boulevard.  A new record for the Boise Komen foundation, and our live coverage was filled with inspirational stories of women who have beaten this insidious disease that inflicts young and old seemingly almost indiscriminately.  It's almost a 'terrorism disease,' a nagging concern for all women who realize they could become the one of every eight women in the U.S. who will contract breast cancer in their lifetime.  1-in-8!

Breast cancer is also hitting very close to home for us in the Journal Broadcast Group family.  K-HITS morning show host Margo Vaughn's treatment for breast cancer has been difficult, and she's discussed her struggles at length in another blog on this website.  Her wonderful sense of humor clearly gets her through the hard days, and hearing her on the radio and seeing her each morning on our 'Today's 6 News Good Morning Live' smiling and laughing gives us all inspiration and hope.

Which is why I don't want to see another 'Race for the Cure.'  By May of 2009, let's have a cure!  The 11th gathering at Parkcenter Boulevard could be the 'Race to Celebrate the Cure.'  A victory lap for everyone who ever donned a pink shirt and gave a few dollars to produce the cure that killed a killer.

I realize that's unlikely.  Researchers say we are making progress, but the medical race for a cure sometimes seems slower than the last person to cross the finish line on Saturday (which by the way, may have been Michelle Edmonds).

That can sometimes make us all despair a bit until you see thousands of people in pink descend on Parkcenter Boulevard united in their determination to do whatever they can to defeat breast cancer.  I'm proud to tell you I am not a member of the television station that has sponsored Boise's 'Race for a Cure' for 10 years, every year more successful than the last.  I'm also a member of the team that raised the most this year, Michelle's Militia.  We're a militia for a reason! ... because this is war, and we hope the few shells we lobbed in the battle against cancer Saturday hit their mark!  That battle against breast cancer is turning.  Time to make it a rout! 

Blatant Pandering in the Politics of Oil

The candidates who will get my vote this November will be those who stop pandering to me when it comes to the politics of oil.  All it has brought us is record high gas prices and a nation more dependent than ever on others for our energy needs.  That says a lot about how our government's short-term solutions can produce even bigger long-term problems.

Like when the U.S. government needed a clean air additive for gasoline after discovering MTBE has an odd effect of making groundwater poisonous.  What about ethanol?  Completely renewable, will help farmers by increasing demand for their crops, and grown here in the good ol' U.S.of.A so it would help reduce our dependence on foreign oil.  It's a win-win-win, right?

So where did we end up?  Record prices for many crops because so many acres are now being used for fuel, not food ... record high gas prices because ethanol really does nothing to make gas cheaper, and by the way ... taxpayers still subsidize the production of ethanol ... and to add insult to injury, we also subsidize farmers who have seen their crop prices explode.  I don't know how many orifices are in your body, but I'm pretty sure you are paying out of all them right now.

It speaks to the folly of quick, easy answers to complex problems such as energy policy.  Here are two more easy answers that make no sense.

Temporarily eliminate the federal gas tax.  Forget for a moment that the money this tax generates for our transportation infrastructure is critically needed.  A collapsing interstate highway bridge in Minnesota is not a sign you should pull back on your highway investment.  The individual savings from temporarily eliminating the federal gas tax aren't that great either.  Let's say you drive 1000 miles a month in a vehicle that gets 20 miles to the gallon.  That's 50 gallons of gas times the 18 cents a gallon federal tax equals a whopping $9/month.  And if you make the assumption that a lower cost of gas will lead to more consumption, you won't even save that much because gas prices will rise even faster.  Sorry John and Hillary, Barack is right on this one.

The second easy answer is to allow more domestic drilling in areas that are currently off limits like the Alaska National Wildlife Refuge.  This is one of Bill Sali's favorites, and he sends us press releases blaming Democrats for high gas prices because they refuse to budge on this issue.  That's because on this issue, the Democrats are right.  Everyone (including Sali I suspect) knows that drilling for more oil in Alaska will have a negligible impact on the price of a gallon of gas.  The problem is exploding world demand, and even if we doubled the domestic oil production tomorrow, America's limited refining capacity would keep prices very high.  Oil companies are just too smart to invest hundreds of millions of dollars for new refineries they suspect may be obsolete not far down the road.  Allow oil companies to drill for more here, and would they would just take the extra oil, sell it at a huge markup on the world market and pocket the cash.  I think they're making enough already.

Besides, in a turbulent world, oil is black gold we're treating too much like black tin.  There is a limited supply of it, and like gold in a vault, we're better off keeping some of our remaining domestic supplies untapped in case we really need them later.

The real answer ... the answer few politicians will give you ... is we have to get more serious about developing alternate forms of energy while mandating conservation, and if we can do that, the economic benefits to all of us would be enormous.

Just one example.  Let's say gas finally stabilizes at $5 a gallon, but the government works with automakers to develop affordable technologies that quadruple fuel efficiency.  That technology is closer than you think.  Get there, and suddenly a $5 gallon of gas is really costing you $1.25 because it goes four times farther.  But wait, it gets better.  Suppose instead of gasoline, your vehicle runs mostly on electricity.  Producing electricity costs a fraction of using gas for energy because of how it is generated and distributed.  Capturing energy from hydro or solar or wind or geothermal can be costly to start up, but there is savings long-term because the source of the renewable energy is free.

Some optimistically believe that in time, electric vehicles powered by renewable energy sources would be able to lower the cost of vehicle travel 10-fold ... meaning a $3.50 gallon of gasoline today would cost the equivalent of 35 cents in an electric vehicle.  Could you imagine the amazing impact that would have on our economy?  One-hundred percent of that energy would be home-grown, so dollars stay here instead of being exported to the middle east and other rather unstable oil producing nations, some of which support terrorists.

Makes you wonder why aren't politicians talking more about a home grown renewable energy policy.  It's because getting there will be hard.  The current political culture in the U.S. today assumes you and I are lazy and selfish.  That we are unwilling to sacrifice now for the greater good later.  That we will not vote for politicians who ask us to endure short-term pain for long-term gain.

If they're right, then no wonder so many politicians are blatantly pandering to us when it comes to energy.  I suppose the question to you and I is ... "Are they right?"

I don't think those pandering politicians are right, and that's why I'm not voting for them.  Will you?