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

The Power of the People on Politicians

Something strange happened last week.  A House committee held an oversight hearing on the financial meltdown ... and Rep. Bill Sali showed up! 

Sali, you may recall, skipped similar committee hearings a couple of weeks ago.  He derided them as 'political theater,' and one of his aides accused Committee Chairman Rep. Henry Waxman (D-California) of 'grandstanding' by calling AIG execs in front of his committee after the government bailed the insurance company out to the tune of $85 billion.

As I blogged then, if that was 'grandstanding,' I wanted more!  That's because at the hearings, we learned that AIG execs spent $440,000 on a spa retreat the week after it was bailed out.  And Bill Sali missed it!

We also learned AIG fired one exec who lost billions of dollars, then retained him as a consultant for $1 million/month.  It was eye-popping, newsworthy, and an example of the kind of oversight we need from Congress, and Bill Sali wasn't there!  As I blogged at the time, I wasn't too concerned about Sali's absence, but I also wasn't too keen on how insulting he was to those who did show up.

So when 'Waxman the Grandstander' decided to call former Fed. Chief Alan Greenspan to add to the 'political theater' with his testimony last week, imagine my surprise to find Bill Sali WAS there!

So why did he show up this time?  I'm guessing he was feeling some political pressure after the media (including 'Today's 6) reported on the hearings and Sali's decision to skip it.

But if you think this blog is about the power of the media, you're wrong.  It's about the power of something much bigger.

You see, as with the AIG hearings, these latest hearings did produce news.  Greenspan testified he did not anticipate the reckless behavior of financial institutions, thinking execs would have self-regulated more to protect shareholders.  Sali even got Greenspan to admit that he believes 40% percent of regulation tends to miss the mark, but probably to Sali's dismay, the normally libertarian Greenspan appeared to be implying more regulation of the financial sector is needed.  And this time, Bill Sali was there to hear it!

But why would Sali show up for the grandstanding, political theater if he thought it was grandstanding political theater?  It wasn't because of the power of the media in a tight race.  It's because of the power of the people.

The media is just the messenger.  It is the response of everyday people that has impact, and it was clear Sali skipping the AIG hearing touched a nerve with ordinary Idaho voters who want Wall Street held accountable for this financial mess.  We in the media can report all we want on certain issues, but if people don't care, the issue will not gain traction. 

That's one reason why I think some of John McCain's attacks on Barack Obama have fallen flat, like the Bill Ayers controversy.  Ayers is a former member of the 60's radical domestic terrorist group 'The Weathermen' who later became a college professor and served on a board with Obama early in his political career.  While McCain and his Vice-Presidential nominee Sarah Palin have talked a lot about the association and it has been reported extensively, it is clear many Americans who aren't already voting for McCain just don't care.  Frustrating for the Republicans, so they and their supporters lash out at the media.  It's easy to blame the messenger when it is the message itself that isn't resonating.

How Obama has outflanked McCain in the PR wars is by talking almost exclusively about the one thing most Americans do care about, the troubled state of our economy.  McCain's finally focusing on it more as well, and lo' and behold, polls show the race is tightening.

6 Economic Myths Exposed by This Financial Crisis

To use an old sports analogy, winning is great, but you learn more from the losses.  With our economy on its biggest losing streak since the Great Depression, it is time we look at some economic 'truisms' that have turned out to be complete myths.

Myth #1:  Lower taxes always spur economic growth.  Taxes are lower now than they've been in decades and have done nothing to prevent this economic meltdown.  That's not to say higher taxes are better, but if 100% taxation is socialism, 0% taxation is anarchy.  We need to strike a balance that actually pays for government services, something we haven't done for too long.  Want to keep social security, medicare, farm subsidies, or want to start a war in Iraq?  Fine!  Figure out a way to pay for them.

Myth #2:  Free trade is the key to worldwide economic growth.  The economies of scale you get from free trade are the reason that what was once a $3000 flat screen costs you less than $1000 today.  But 'free trade' comes with a cost, because much of free trade is unfair trade.  Whether it be massive currency manipulation by countries like China to makes exports cheaper or foreign government subsidies that prop up their otherwise uncompetitive industries, many American companies find themselves fighting the free trade battle with one hand tied behind their back.  The result is they are forced to export jobs overseas, and that's not healthy for our economy.

Myth #3:  The markets can make up for our nation's financial shortcomings.  Remember when the idea of allowing people to invest part of their social security benefits in the stock market was hot?  Can we now conclude once and for all what a monumentally bad idea that was!  You think we're big into bailouts now, just imagine what we would be doing to bailout social security had some of it been invested in stocks!  It's just one of many ideas politicians who know we have a problem came up with to avoid making tough decisions (ie, raise taxes or cut benefits).

Myth #4:  China, India and the EU are marginalizing America as the engine of the world economy.  It's an idea called 'de-coupling.'  That the consumer economies of the world make them less dependent on the United States.  Well, throw that out the window.  China especially is hurting.  Exports are way down and thousands of jobs are being lost everyday.  Half of its booming toy industry as been wiped out virtually overnight, and with a weak social safety net, it is not unthinkable that China could see a starvation crisis if things don't turn around.  The American economy has caught a very bad cold, and it risks giving the world financial pneumonia.

Myth #5:  Deregulation is always better.  This one is so obviously a myth, I don't even have to say much about it.  Even former Fed Chief Alan Greenspan admits he was wrong on this one, believing the financial markets were better self-regulated.  Regulation is like the umpires in a baseball game.  It helps assure the playing field is level, and that teams like the Rays and Phillies can still get to the World Series over the fat cat Yankess and Red Sox.  Markets only grow if ordinary investors (you and me) can be confident the game isn't rigged against us.  It's a balance.  You don't want 18 umpires on the field, but you certainly don't want too few either.

Myth #6:  Help the rich, and riches will 'trickle down:'  Before this crisis hit, we had the greatest disparity of wealth in America since the time just before the Great Depression hit.  That's not a coincidence.  What we could use right now is the wisdom of Henry Ford, who many credit with jump starting our modern middle class economy a century ago when he began paying workers the then astounding sum of $5/day.  His logic ... it doesn't make sense for me to mass produce cars if there aren't people out there who can afford them.  Middle class wealth is the key to a thriving economy.

The American middle class economy is a modern miracle that has helped create wealth not only here but worldwide.  If we want to preserve it, we need to be smarter about how we manage it and stop clutching to myths that don't serve us.

The Campaign Ad John McCain Should Make

CNN had this interesting gimmick when they broadcast the debates.  They gave undecided Ohio voters a dial they could turn up when they liked what they heard and down when they didn't.  The choice of the state was interesting because no Republican has won a Presidential election without winning Ohio, yet if the CNN graph is to be believed, undecided Ohio voters ... especially women ... hate it when one guy attacks the other.  The meter plummets, and during the debates, that was especially true of John McCain's attacks on Barack Obama.

An article in the conservative Wall Street Journal last week made the case that McCain's attack strategy on television is also turning many voters off.  Here's the link.  http://online.wsj.com/article/SB122411284505038359.html

McCain is even resorting to a tactic he publicly denounced when he ran for President eight years ago.  'Robo-calling.'  Highly negative phone calls made by computers to likely voters in swing states, but far from earning more voters, the feedback indicates it has horrified them instead.  Suddenly, McCain finds himself having to defend once 'safe' states like North Carolina, Virginia and West Virginia.

It looks like desperate tactics by a desperate man, and that isn't the real John McCain.  If he wants to mount the most historic comeback in Presidential politics, he needs to change tactics just like he pushed for with the surge to turn the war in Iraq.  I think he should 'go positive.'

There's some evidence it can work.  In Minnesota, Republican Senator Norm Coleman was dropping like a rock in the polls against Democrat Al Franken (yes, the same Al Franken who was a former comedian on Saturday Night Live and wrote the best selling political book "Lies and the Liars That Tell Them" ... THAT Al Franken).  Coleman saw his one-time double-digit lead turn into a 5 point deficit, but the feeling now is that his campaign is regaining momentum.  What did he do?  He pulled every negative campaign ad off the air and asked his opponents (there's an independent in the race as well) to do the same.  Will it be enough to save his seat?  We'll find out November 4th, but Coleman realized not changing his tactics would have led to certain defeat.

So how could John McCain do the same?  By using ads to point out his biggest strengths and differences with Obama in a positive way.  It might go like this.

"I'm John McCain, and on November 4th, I know you face an important choice.  I have nothing but respect for my opponent , but if elected, he would face enormous pressure from a Democratic Congress to spend more and raise taxes.  In this time of crisis, we can't afford it.  I'll work with Congress, but pledge to veto any bill that spends more and takes us deeper into debt.  My support of the surge in Iraq also shows I have the judgment to lead America in dangerous times.  Yes, America needs change, but we need the right kind of change, and that is why I'm working so hard to earn your trust and your vote."

What does he have to lose?

Owning Up to a Big Mistake

On Saturday night, October 12th, we reported on our late news that the former President of Idaho State University had been shot and killed by a gunman in Colorado.  That was not true.  Former ISU President Michael Gallagher's wife Floyce was shot and killed along with his good friend Dr. Terry Fine.  Through my investigation of this mistake, I suspect what happened is a news employee inadvertantly confused Fine with Gallagher. 

That's an explanation.  It is not an excuse.  There is no excuse.

And so to anyone we misinformed out there, I offer a sincere apology and want you to know the person who made the mistake will be held accountable for it.

Sometimes, I think news organizations can come across as arrogant for somehow projecting the image that we don't make mistakes, and for refusing to own up to them when we do.  Not at 'Today's 6 News.'  Like all news organizations, we are made of human beings and as such, we will make mistakes from time-to-time.  We have processes to prevent them, but they are not going to be 100% failsafe.  When a serious mistake does go on the air, we at 'Today's 6 News' feel we have three obligations.

1. To correct the record so that you the viewer are not left with a misimpression.
2. To acknowledge the error publicly so that you know we hold ourselves accountable to you.
3. To hold those who make such mistakes accountable to help insure they are not repeated.

There are those out there who like to use the fact we will publicly admit our mistakes against us, and that's fair game.  My personal philosophy is you the viewer will give your trust to a news organization that is willing to admit when it makes a mistake rather than one that isn't.

Micron ... Steve Appleton ... and the $700B Bailout

Let's start this blog with a 'what if.'  Let's say you own a large company worth billions and you hire someone to run it.  He seems like a nice, knowledgeable guy, but things start going very wrong.  Before you know it, your company is losing $4 million every day!  What's worse, the company has admitted to criminal price fixing under your guy's watch, leaving you on the hook for millions in legal fees and potentially hundreds of millions of dollars in settlements.  How long do you let him keep his job?  Months?  Years?  Until he bankrupts you and your company?

While you are pondering that, let's look at how local politicians are using Micron's current financial woes that have led to thousands more layoffs to justify their votes on the $700B bailout bill (I'm sorry ... financial rescue plan ... my bad).

Sen. Larry Craig, who voted for the bailout ... errr ... rescue bill sent this statement.  "It is obvious today with the Micron announcement that Idaho producers who sell in world markets are not immune.  These were the kinds of concerns I looked at over two weeks ago when I decided it was time for Congress to act, hopefully to forestall a credit meltdown."  Rep. Bill Sali, who voted against it, said this.  "Clearly the Micron job losses and today’s continued global stock selloff are evidence that the $700 billion bailout passed by Congress is not the right medicine to solve our economic problems."

Two Republican politicians making connections.  Two exactly opposite views.  So what is the connection between Micron's money-losing ways at the $700 billion 'whatever you want to call it' bill?  There isn't one.  My point is that both Craig and Sali are ignoring an important connection that does tie Micron to our current economic crisis.  America has a 'corporation crisis.'

This was clear during the AIG hearings that Rep. Bill Sali skipped out on.  Congressional investigators revealed that not only had AIG execs arranged for a $440,000 retreat the week after the government bailed the company out ... they also reported that a high ranking exec within AIG they allege caused a majority of the losses was given a big 'golden parachute' when he was fired, then was retained on a consulting contract for $1 million a month!  The CEO reportedly even publicly and illegally lied about AIG's financial health.  Talk about CEO incompetence!  So where was the Board of Directors, the people who are supposed to represent AIG shareholders (who ended up losing most everything)?  What in the world was the Board of Directors doing during this entire mess?  The answer ... nothing! ... betraying the very stockholders whose investments in AIG they were supposed to be defending.

American corporations are in so much trouble today because we have created a system whereby many CEO's are held accountable to no one.  Boards of Directors at several U.S. companies have become rubber stamps for Chief Executive Officers no matter how incompetent they may be.

Micron is a clear example of this.  Despite how dismal CEO Steve Appleton's performance has been or how close to bankruptcy he takes Micron, his millions in compensation remains secure.  In fact, the one board member who dared to say that perhaps Appleton should be removed for his poor performance was forced to step down.  The message?  Lose billions of dollars running Micron Technology = keep your job.  Question the wisdom of keeping CEO losing billions of dollars running Micron Technology = lose your job.  The message could not be any clearer.

The system worked better back in the days when large investors in corporations routinely sat on their boards.  J.R. Simplot was on Micron's board when he had a large stake in the company.  It was his way of defending and growing all the money he had put into it.

That's a rarity nowadays.  The proliferation for 401K's and large pension funds that invest in public companies leaves few large individual stakeholders.  What's worse, these funds are heavily diversified.  They typically don't invest large percentages of their money in one company, giving them less of a say in their performance.  If a CEO does poorly, these funds simply move their money somewhere else, but the CEO often gets to stay.  In this vacuum, the CEO can even get a big say in who sits on the Board of Directors, in essense picking his own bosses.  What a sweet deal!

If the American economy is to thrive in the cutthroat international business world, we need a system that rewards smart people who are held accoutable running our companies, not dumb, greedy ones who are not held accountable running them into the ground.

Should Appleton have been held accountable for his poor performance and fired a long time ago?  Of course!  But in Micron's case, I get the feeling he'll be there to the bitter end.  I'm hoping there isn't a 'bitter end,' but the way Micron has performed under Appleton's leadership to date, it is probably prudent that we fear the worst.

Rep. Bill Sali and 'Political Theater' of the Absurd

Walt Minnick's campaign is blasting opponent Rep. Bill Sali for not attending a House committee hearing investigating the $85 billion dollar bailout of insurance giant AIG.  Sali spokesman Wayne Hoffman said Sali skipped the hearing because Democratic Chairman Henry Waxman has a reputation for 'grandstanding,' and later Sali himself characterized the hearings as 'Political Theater' where no legislation was being considered.

I don't agree, especially after we learned that AIG execs went on a $440,000 retreat to an upscale California resort the week after the government bailed the company out.  That's 'grandstanding?'

Or how about the revelation that AIG's top executives publicly said the company was on sound financial footing when auditors were telling them the exact opposite behind the scenes.  As ABC Investigative Reporter Brian Ross noted, that's the exact thing that put Enron executives in prison.  'Political Theater?'  Really? 

Oh, and we also learned the employee who apparently caused most of AIG's losses was given a golden parachute and a million dollar a month consulting contract.  If Congress sold tickets to this kind of 'Political Theater,' we would balance the budget in weeks.

This is indicative of the sort of things that gets Sali into trouble.  A new Walt Minnick ad where local Republicans state publicly why they are voting for the Democrat features a retired General who says of Sali, "He's too confrontational."  I think that resonates with a lot of people.  One conservative Republican even told me she's voting for Minnick just to get Sali out of office so she can vote for a less of a ... well ... 'confrontational' (she used a different, less flattering adjective) Republican two years from now.  Governor Otter has also criticized Sali during an interview with 'Today's 6 News' about his lack of pragmatism, sentiments Rep. Mike Simpson seemed to echo during the bailout bill debate.

Sali's political posture is pretty clear.  If put to a vote, Sali would have never approved of the bailout of AIG.  Sali is a firm believer in 'sink or swim' capitalism and I suspect believes these AIG executives earned every bad thing they have coming to them.  But because he is ideologically opposed to government interference in private commerce, he also sees no need for Congress to aggressively question the heads of private companies.

Sali's pragmatic problem is the government did go ahead and bail out AIG ... even adding $35 billion more to the package ... and now has a responsibility to practice strong oversight to protect taxpayer dollars.  Just because Sali lost the argument doesn't mean he as our representative has no responsibility to Idaho taxpayers who are now on the hook.

Sali also doesn't serve his cause by insulting rather than saying nice things about Democrats when they do good work.  After all, knowledge is power, and what we learned from the AIG hearing will help us repair this awful mess we find ourselves in.  That's not 'grandstanding' or 'political theater.'  That's public service that could one day lead to important legislation.  I'm not saying Sali should apologize, but would a nice note be too much to ask?  "Dear Henry.  Great work on the AIG hearing!  Wish I could have been there to see you make those greedy bastard CEOs squirm.  Bill."

Minnick's camp is making some mischief because it is a big issue, but also in part because in a tight race, they would prefer Sali stay in Washington then campaign for re-election here.  There were a lot of empty seats at the AIG hearing from Republican and Democratic Congressmen alike who are locked in tight election fights.  Sali being there probably would not have really added much and I don't think him skipping the hearings is that big a deal. 

Sali's rhetoric, however, is a big deal.  Confrontational statements that belittles Congressional oversight of private companies that are being bailed out in the billions sends the wrong message.  Whether he agrees with what's going on or not, taxpayers can't afford representatives in Congress who aren't willing to closely watch every penny our government now has at stake.

Grading Idaho's Politicians on the $700B Bailout

The most insightful analogy I heard about the big bailout bill was by a financial expert on one of the cable channels.  He criticized those who voted against the bill because they were afraid it would reward Wall Street mismanagement, saying, "When your 3-year-old lights the curtains on fire, the first thing you do isn't scold him for his terrible mistake.  There's plenty of time for that later.  You have to worry about getting the fire out first."  I would add that you also don't micromanage the firemen.  You trust at that moment they have the expertise to get the job done.  There's plenty of time to review performance later.

Virtually anyone you talk to with any real knowledge of the situation says our financial system is on fire.  We either choose to fight the fire or we don't, but decisions had to be made and a bailout bill was passed.  So how did Idaho's politicians rate in fighting this blaze?  Here are my grades, starting with the House.

Rep. Mike Simpson, (R) 2nd District.  Grade, 'A':  Simpson voted for the bill twice.  His political courage and leadership reflects why he is the most influential Idahoan in the current Congress.  Simpson knows this proposal is unpopular back home, but to his credit, he made his decision publicly based on what he thought was best for the nation.

Debbie Holmes, (D) Running against Simpson.  Grade, 'A+':  Holmes is running a doomed campaign against Simpson.  Her fundraising is minimal and is her visibility, but when Simpson cast his first vote, she publicly thanked him for having the courage to cast his vote for what he believed was best for the country instead of what was politically popular.  A+ indeed!

Rep. Bill Sali, (R) 1st District.  Grade, 'A':  Sali voted against the bill twice, earning criticism from Rep. Simpson and reflecting what Gov. Butch Otter lamented in a recent 'Today's 6 News' interview is Sali's overall lack of pragmatism.  I would contend Sali was never elected to be pragmatic.  He sells himself to voters as a politically conservative  ideologue and was true to his ideals with his vote.  Sali is right to say this has the potential to be a huge expansion of government.  He's probably also correct that this may fundamentally change our American capitalist system.  Sali held firm to his principles with his vote.

Walt Minnick, (D) Running against Sali.  Grade, 'F':  Minnick also opposed the bill, then criticized Sali anyway, saying he as a former businessman understood the flaws in the bill better than Sali.  Yet during the bailout debate, Minnick also praised his friend Treasury Secretary Henry Paulson as someone he trusted, saying, "Paulson's approach has won the support of Democrats and Republicans alike. If we can do it on this issue, we can do it on others."  That's great except Minnick's friend's proposal didn't win his support, and unlike Holmes, Minnick refused to praise Sali for casting a vote he agreed with.  This was a chance to stand tall, but in a tight race, it appears Minnick chose to take the politically popular position instead while also refusing to credit his opponent who did the same.  If Minnick admires bi-partisanship, he didn't walk that walk.

Sen. Larry Craig, (R):  Grade, 'A':  Craig was a man of few words and bold action in this debate.  He gave straightforward reasoning that invoked an image of the most powerful politician in Idaho before a sex scandal stained his legacy and crippled his clout.

Sen. Mike Crapo, (R):  Grade, 'C':  Crapo voted against the bill because he felt it didn't contain enough taxpayer protections.  Crapo gets a 'C' because I believe he is truly concerned about taxpayer exposure, but then cast a vote that hurt most taxpaying Americans even more.  His vote came after the House had rejected a $700B bailout and saw $1.1 trillion in market wealth evaporate.  Taxpayers with 401K's working for publicly held companies lost in that deal and would have likely lost a lot more had Crapo prevailed.  His reasoning seemed flawed because it didn't take the bigger picture into account.

Lt. Gov. Jim Risch, (R).  Seeking Craig's Seat:  Grade, 'F':  Risch said he would not have voted for the bailout after putting out a press release hailing the Senate's version as a better bill.  It reminded me of an argument I once had with a Risch campaign staffer about elections and leadership.  The staffer told me the Risch campaign's philosophy was that "Governing is about leading but campaigns are about winning."  My retort was "Governing is about leading and campaigns are supposed to be about convincing voters you are ready to lead."  Risch went to D.C. to attend the bailout hearings for PR reasons, then sat on his hands until the Senate vote was over.  It fits his "playing not to lose" campaign.  Risch will win, but his campaign performance to date is not reflective of a man who is ready for this very big job in very important times.

Larry LaRocco (D), Running against Risch:  Grade, 'B':  I'll give LaRocco credit for supporting a politically unpopular bill he appears to genuinely feel is right for America, but I'm downgrading him for grandstanding.  During the crisis, LaRocco held a news conference entitled, "LaRocco to announce America's path back to prosperity" in a news release that went on to say, "LaRocco has a comprehensive plan that solves the immediate crisis, ensures improved oversight, and promises new growth in Idaho." It is naive to think anyone is going to look to a Democratic Senate Candidate from Idaho to solve this crisis.  There was one question before the nation.  'Yea' or 'Nay.'  Craig understood that. LaRocco didn't.

Thoughts of an Undecided Voter

One month to election day, and I just cannot get off the fence.  Last night's Vice-Presidential debate didn't help much.  If anything, it made me more undecided.  I was leaning McCain until last night.  Joe Biden's remarkable performance wowed me.

Many in our conservative, Republican state rooting for the native Idahoan may disagree, but the debate last night was a Democratic blowout.  Biden had better command of his facts and showed the kind of passion and discipline I cannot recall seeing from him before.  He also seemed way more personable at times than the hockey mom.  His demeanor more confident, his smile more relaxed.  Every time I thought Sarah Palin was going to score points, like when she talked about sitting around the table talking about the issues that have impacted her and her family, Biden would give an even more compelling response, talking about losing his wife, raising his kids as a single parent and the financial struggles of his own parents.

Biden also showed remarkable restraint.  When Palin butchered the name of the commanding general in Afghanistan, Biden gave a knowing smile but did not correct her.  When Palin attacked his record, Biden protested she had it all wrong and dared her to look it up.  She instead backed off by saying the TV pundits would do it for her, the same TV pundits she derides most every day.  Weak.

When Obama picked Biden, I condemned the pick as too safe and not very visionary.  My image of Biden was of the long-winded all-too-communicative long-time Senator who said lots but couldn't make a point.  My thinking was if this was an example the kind of decisions Obama was going to make, maybe he isn't ready to lead.  By contrast, I thought McCain's pick was bold, sort of like a football coach taking a chance on the up-and-comer he can build upon rather than the grizzled veteran who looks back with more enthusiasm than he looks forward.  During the V.P. debate, Joe Biden took my entire theory and put it on its ear.

Pundits praised Palin for her lack of serious slip-ups.  No 'deer in the headlights' moments for her.  True, but that's a very low standard for the person who would sit a heartbeat from the Presidency.

Of course, no matter what I decide, it won't matter.  Idaho's 4 electoral votes will go to McCain.  It's a lock, so why blog about my 'undecided-ness?'

It's because it is reflective of why I think McCain is in a lot more trouble than people realize.  He just pulled his campaign out of Michigan, a state political experts were at one time saying could be to 2008 what Florida was to 2000 ... the key state for victory.  Suddenly, the McCain electoral math is looking very daunting, with Obama now appearing to have locked up as many as 250 of the 270 electoral votes he needs for victory.

A month is a lifetime in politics and McCain can certainly come back.  But if he has trouble closing the deal with someone like me ... someone who has never voted for a Democratic Presidential candidate in his lifetime, but who now feels the country is most certainly on the wrong track and does need change ... he won't win this election.

McCain has two debates left.  Outside of some unfathomable Obama meltdown, they represent his two last, best chances to win.  Political ads won't do it.  Political rallies won't do it.  He has to land decisive hay-makers in the debates.  I know I'll be watching ... closely.