Category: US business

Another thing voters rejected Nov. 3

James Freeman:

President Donald Trump didn’t start the dishwasher rebellion. But after hearing the legitimate complaints of consumers, he has led this nonviolent movement to an entirely peaceful series of victories for common sense.

Two years ago this column noted that a band of stout-hearted liberty advocates at the Competitive Enterprise Institute was petitioning the government for a redress of dishwashing grievances. Federal regulations on appliances were making household chores more difficult, time-consuming and expensive. Team Trump took up the cause and began to seek public comment on how to improve the rules. Numerous consumers shared their views, including someone named Gregory, who wrote to the Department of Energy:

Please mother of God, allow someone to make a dishwasher that will get my dishes for a family of 5 clean enough, fast enough to empty the dishwasher by bedtime! Currently, to get a load clean, we have to run it on the hour long cycle, then the four hour cycle to get them clean. This saves neither time, water or electricity.

The Trump administration has now reformed not just dishwasher rules, but other bureaucratic annoyances as well. This week the Department of Energy reports it has completed two additional final rules:

The first rule ensures that Americans can have access to high-performance, time-saving clothes washers and dryers. The second rule ensures access to showerheads that can provide enough water for quality showers.

“Today the Trump Administration affirmed its commitment to reducing regulatory burdens and safeguarding consumer choice,” said Secretary of Energy Dan Brouillette. “With these rule changes, Americans can choose products that are best suited to meet their individual needs and the needs of their families.”
The department is concerned that cycle times for washers and dryers could become very long in the future—reducing the value of these critical time-saving devices. The final rule on washers and dryers allows manufacturers to offer new products that meet consumer demand for clothes washers and dryers that have shorter cycle times. The rule establishes separate product classes for residential clothes washers and clothes dryers with cycle times of less than 30 minutes (45 minutes for front-loading clothes washers)…
“Today’s final rulemakings allow consumers to choose products that can make their lives easier, more comfortable, and save them time,” said Deputy Secretary of Energy Mark W. Menezes. “That time and effort saved can be better spent on the more important things in life.”

“This is good news for those who like a more powerful shower, as well as those who like a less powerful government,” summarizes Ben Lieberman of the Competitive Enterprise Institute.

Amen.

You are reading the work of the household’s dishwasher, so I can’t attest to that. I can attest that modern clothes washers and dryers are crappy, taking too much time to clean, not always adequately rinsing, and frequently needing more than one cycle to completely dry clothes. Energy efficiency completely misses the point if things have to be washed and dried twice because they’re not adequately designed.

Of course, the presidential administration that finally took the side of consumers over radical environmentalists is leaving Jan. 20, to be replaced by an administration from a party that bends over for the tree-huggers. This rule probably will be changed in minutes after Jan. 20.

 

 

The unneeded post-COVID economic fixes

James Freeman:

The arrival of a highly effective vaccine seems like as good a time as any for politicians to consider pausing their massive interventions in the U.S. economy. The Journal’s Peter Loftus, Melanie Grayce West and Christine Mai-Duc report:

The first U.S. Covid-19 vaccinations outside of clinical trials began Monday, kicking off the most urgent mass immunization campaign since polio shots were rolled out in the 1950s…

Pfizer is shipping out nearly three million doses in this first wave, with more expected in coming weeks. Pfizer expects 25 million doses will be available in the U.S. by the end of the month.

Another Covid-19 vaccine, from Moderna Inc., could add to the supply of doses this month if it is authorized, which could happen later in the week. Both vaccines are given in two doses, three or four weeks apart.

…Federal officials expect about 100 million Americans will get immunized against Covid-19 by February or March. The general public could be inoculated in the spring or summer.

Stocks rallied Monday morning on the vaccine news. And for some reason many investors also seem to want another round of debt-fueled Washington spending. It seems likely that at some point there will be a reckoning in the value of the dollar and/or the size of federal tax bills from the 2020 Beltway Covid response. But for now unfortunately the question is whether the response should be expanded still further. Fortunately not everyone is eager to accept Beltway premises.

“Do We Need More Stimulus?,” asks Donald Luskin of TrendMacrolytics in an investment research note today. Mr. Luskin writes:

In client calls this week, we’re hearing a strong consensus that the economy is in a sustainable V-shaped recovery, and that 2021 will be a very good year. We’re not going to say this consensus is wrong. Indeed, it’s what we were nearly alone in predicting all the way back in March and April… Will there be short-term setbacks? Of course, and the formation of a consensus is what usually provokes one…
If anything, our biggest difference from the optimistic consensus is that we’re now thinking past recovery to expansion, and we don’t see it as a stretch that 2021 could be a downright boom.

A downright boom? Mr. Luskin continues making his case:

US households have accumulated $2.5 trillion in personal savings this year, unable or too cautious to spend the prior stimulus money. That’s a moneybomb of pent-up demand equal to 11.8% of GDP, and it will detonate next year when the “third wave” of Covid-19 tops out and 50 million inoculations with the new vaccine are administered through January.

State and local politicians have devastated businesses they consider nonessential, but a lot of money is still sloshing through the economy. We just need to let people use it. Big banks are certainly flush with cash and ready to lend if politicians will allow businesses to operate. And the Journal’s Orla McCaffrey reports that small banks are also in great shape:

Profit at community banks—small, local lenders—jumped 10% in the third quarter from the same time last year, according to the Federal Deposit Insurance Corp. Total loans rose 13.4% in the third quarter, compared with 4.9% for the industry. Deposits surged 16.7%. Noncurrent loan rates have risen slightly this year but are still far below levels seen during the last financial crisis.

Do you think Donald Trump will get any credit for any of this? Of course not.

Biden’s tax and money lies

Joe Biden claims that he will not raise middle-class taxes if he’s elected president tomorrow (or whenever the election becomes official).

Biden is lying as much as he is lying about the bad effects of Biden/Harris policies on your wallet.

Example number one from Jordan Davidson:

A new study shows that Democratic Presidential Nominee Joe Biden’s proposed economic plan would significantly hurt the long-term American economy if implemented.

While many mainstream media outlets claim Biden’s plan will target the wealthy and save the middle-class money, the 50-page study released by the Hoover Institution shows different results.

“Economists have paid too little attention to the economic effects of the Biden plan,” said Casey B. Mulligan, professor of economics at the University of Chicago. “Our report, which focuses on taxation, health insurance, regulation, and energy policy, suggests that these effects are potentially very large indeed.”

The study conducted by a group of financial and economic experts including Mulligan, former Chief Economist of the White House Council of Economic Advisers, and Kevin Hassett, Chairman of the Council of Economic Advisers since 2017, demonstrates how Biden’s plan will hurt everyone.

“We conclude that, in the long run, Vice President Biden’s full agenda reduces full-time equivalent employment per person by about 3 percent, the capital stock per person by about 15 percent, real GDP per capita by more than 8 percent, and real consumption per household by about 7 percent,” the report stated.

If Biden’s proposed changes are implemented, the economists warn that, according to the Congressional Budget Office’s projections, 2030 may yield “4.9 million fewer employed individuals, $2.6 trillion less GDP, and $1.5 trillion less consumption in that year alone.” The economists also note that the median household income in 2030 would fall by $6,500 despite Biden’s promises to prioritize the middle class.

In the study, the economists’ main findings center on three conclusions. First, that for Biden to achieve the “ambitious plans to further cut the nation’s carbon emissions,” 1.3 million net additional energy workers will need to be added into the transportation and electrical industries.

“Biden’s plans are ambitious,” says Mulligan. “Unless people drive a lot less, the electrification of all or even most passenger vehicles would increase the per capita demand for electric power by about 25 percent. Simultaneously, more than 70 percent of the baseline supply (i.e., electricity generated from fossil fuels) would be taken offline and another 11 percent (nuclear) would not expand.”

The study also concludes that “labor wedges are increased by proposed changes to regulation as well as to the ACA.” Because of the subsidations, the study found the average marginal tax rate on labor would rise by 2.4 percentage points.

“Labor falls primarily due to new and high implicit taxes associated with more generous health insurance assistance delivered in the framework of the Affordable Care Act (ACA),” the study reads.

“Our quantitative findings for the ACA should be no surprise given what had been found for previous efforts in the U.S. and other countries to expand health insurance coverage,” the study adds.

Lastly, the study concludes that Biden’s plan “reduces capital intensity by increasing average marginal tax rates on capital income.”

“Biden’s plan to raise personal income and payroll tax rates would push their federal rates from below 40 percent to, often, above 50 percent, and these are on top of state income taxes,” the study states, which would hurt small businesses, their employees, and consumers substantially.

While Biden and his VP Nominee Kamala Harris previously promised that they will not “raise taxes on anyone who makes less than $400,000,” they have also promised to repeal the tax cuts made by President Trump, which gave 80.4 percent of all taxpayers a cut and 91 percent of the middle quintile a cut.

“On Day One, Joe Biden will repeal that tax bill. He will get rid of it,” Harris said during the vice presidential debate in early October.

Repealing a tax cut is a tax increase, as those who enjoyed Barack Obama’s allowing the Great Recession payroll tax cuts to expire should know.

Example number two is from John Joyce: posts something determined accurate by Politifact:

Did you know Biden wants to get rid of something called “stepped up basis”? How does this affect you! When your parents pass and leave you the family house, normally you would inherit that property at what it is worth today. If you were to sell that house you would only pay taxes on the gain from what it is worth today and what it sells for. If Biden does away with “stepped up basis,” you will inherit the property for what your parents paid for the property. If you decide to sell you will pay taxes on the difference between the original purchase price and what it sells for today. Here is what this looks like!
Inherited House at Current Value – $200,000
Sells for $205,000

Taxable income = $5000

Taxes Due – 20% of $5000 = $1000

Profit to you = $204,000

Biden Policy

Inherited House at original purchase price – $40,000

Sells for $205,000

Taxable income = $165,000

Taxes Due – 20% of $165,000 = $33,000

Profit to you = $172,000

If your parents were to have sold this property prior to passing, they would have paid no taxes because it was their primary residence.

So much for helping the middle class get ahead.

My educated guess would be that at least 95% of Americans don’t even know Biden has proposed this. We are talking tens of thousands of more tax dollars for the average sold after inheritance! Wow, google “Biden stepped up basis” and educate yourself because this is a biggie!

Example three and more come from the Wall Street Journal:

‘I don’t see red states and blue states,” said Joe Biden in the final presidential debate, borrowing a line from Barack Obama. He must not have examined the policies that he and Democrats in Congress are pushing that would do disproportional harm to Republican states, especially in the South, while favoring Democratic states. Let’s examine four policies in particular:

• A $15 national minimum wage. Mr. Biden supports it and House Democrats last year voted to raise the federal minimum in $1.10 annual increments to $15 per hour in 2027 from the existing $7.25 floor.

Mr. Biden says a federal $15 minimum won’t harm small businesses. But the labor market isn’t national. It varies by state and region based on the dominant industries, labor supply and cost of living. The Labor Department says 21 states plus Puerto Rico had a $7.25 minimum wage as of Sept. 1. Ten of those are Southern states with lower per capita incomes than the Northeast or West Coast.

Their small businesses would be hurt far more than New York ($11.80 minimum wage) and California ($12), where the state minimum is already headed to $15. Seven blue states and 28 cities have imposed a minimum of $15 or higher that will kick in over the next seven years.

A new study from the Employment Policies Institute (EPI) estimates the House legislation would result in two million job losses across the U.S. Fewer than 10% of the losses would be in states with a Democratic governor and legislature. Layoffs would be especially heavy in Texas (370,664), Pennsylvania (143,402), Florida (133,328), North Carolina (121,581), Ohio (108,312) and Georgia (106,427). They’d also be high in 16 other states where the minimum wage isn’t set to rise above the current federal floor.

Labor makes up a smaller share of business operating costs in blue states because rents and utility bills are higher. Businesses in wealthier areas also have more flexibility to raise prices to offset higher labor costs. Most workers on the job for more than a few months earn more than the minimum wage, and a higher minimum discourages businesses from hiring less-experienced workers—or those with criminal backgrounds.

The EPI study estimates that about 60% of job losses from a $15 federal minimum wage would occur among workers between the ages of 16 and 24. No matter. Liberals want to equalize hiring burdens nationwide so Democratic states aren’t less economically competitive.

The blunt reason some people don’t make $15 per hour is either because they don’t provide $15 per hour of value to their employer (labor costs are the number one cost of small businesses), or they cannot be replaced by someone who will work for less than $15 per hour. Employees who don’t like that should improve themselves. The purpose of a business is to provide goods or services to its customers, not to employ people.

• Banning right to work nationwide. That’s also the logic behind the plan to abolish right-to-work laws in the 27 states that prohibit employers from requiring workers to join unions. Most right-to-work states are in the South and West, though West Virginia, Wisconsin and Michigan joined the club more recently.

Right-to-work states have added more jobs and population this past decade, though they also tend to impose lower taxes and other burdens. Boeing announced a few weeks ago it would consolidate its 787 Dreamliner assembly in right-to-work South Carolina after shifting some production there a decade or so ago from Washington state to avoid strikes by its machinist union.

States have been able to pass right-to-work laws since Congress passed the Taft-Hartley Act in 1947. Democrats want to repeal that right to help unions in non-right-to-work states.

• Restoring the state and local tax deduction. The pandemic is accelerating the flight of businesses and high-earners from blue states. By capping the SALT deduction at $10,000, the 2017 tax reform exposed the well-to-do to the full pain of high taxes in blue states. Democrats want to restore the full state-and-local tax (SALT) deduction, albeit with much higher federal tax rates.

In 2017 California, New York and New Jersey accounted for 40% of SALT deducted, according to IRS data, with only 20% of the country’s population. Texas, Florida, Arizona, South Carolina and Montana accounted for about 20% of the U.S. population and a mere 10% of the SALT deducted. Red states tend to have much lower income and property taxes.

• Another bailout for state politicians. House Democrats passed the Heroes Act in May that provides $915 billion to state and local governments. Senate Republicans oppose this blowout after the $150 billion in direct aid plus $90 billion for schools, public transit and Medicaid that flowed to state and local governments under the Cares Act in March.

Democrats will certainly pass another bailout in 2021 if they win the election. This will amount in effect to a red-state subsidy for public-union governance in states like California, Illinois and New York. The Heroes Act would also help blue states by raising the federal Medicaid match by 14 percentage points, and overall bailout funds are mostly allocated based on state population and unemployment.

Democratic states that stayed locked down longer and have higher unemployment have drawn more federal aid. According to our calculations based on Bureau of Economic Analysis data, annualized per capita government transfer receipts in the second quarter after the Cares Act passed were significantly higher in New Jersey ($14,033), Illinois ($9,223), New York ($9,030), California ($8,673), Washington ($8,511) and Oregon ($8,258) than Texas ($6,450), Indiana ($6,085), Tennessee ($5,430), Florida ($5,399), Georgia ($5,353) and Arizona ($5,326).

Mr. Biden is right when he says the government shouldn’t pit states against one another. But he ignores that the national policies Democrats are pushing have the effect of systemically discriminating against red states.

While this state veers politically like someone who has had too many Brandy Old Fashioned, the vast majority of this state outside the Axis of Evil (Madison and Milwaukee) is politically and culturally conservative. So votes for Biden are votes to hurt a majority of this state.

The real COVID catastrophe (which is not about a virus)

Antony Davies and James R. Harrigan:

It has been five months since the American people were told they would be under house arrest for three weeks to “flatten the curve.” Under the guise of protecting us from Covid-19, America’s politicians completed one of the greatest nonviolent power grabs in US history, pushing the lockdowns well beyond the initial three-week prediction, thereby taking control of 330 million lives.

To justify this, they shifted the goal posts from flattening the curve, to halting transmission of the coronavirus entirely. Some even talked about maintaining lockdowns, at least in part, until a vaccine is developed. That could take years.

Quelle surprise.

How did it come to pass that a nation of 330 million was effectively imprisoned, with virtually every sector of the economy shut down either in part or in total? The answer to this question is as clear as it was wrong: In the early days of Covid-19, politicians and experts lined up to tell us that, if we did nothing, up to 2.2 million Americans would die over the balance of 2020.

As of late August, there have been fewer than 170,000 Covid-19 deaths in the United States. If the 2.2 million projection was accurate, then the US lockdown saved in the neighborhood of 2 million lives. But at what cost?

In early March, the Congressional Budget Office predicted that the economic output of the United States economy over the period 2020 through 2025 would total $120 trillion. Just four months later and because of the Covid lockdown, the CBO reduced its projection by almost $10 trillion. That $10 trillion difference is income Americans would have earned had the lockdown not happened, but now won’t.

Economists outside the CBO have estimated this loss at almost $14 trillion. For perspective, the median US household earns $63,000. A $10 trillion loss is equivalent to wiping out the incomes of 30 million US households each year for more than five years.

Our desire to keep people safe, no matter the cost, has already resulted in 10 million Americans being unemployed. By the time things have returned to normal, the total price tag, just in terms of lost incomes and adjusted for inflation, will have exceeded the costs of all the wars the US has ever fought, from the American Revolution to Afghanistan – combined.
And the costs are staggering. As of August, estimates from Chambers of Commerce indicate that around one-third of the 240,000 small businesses in New York City have permanently closed. If that ratio holds for small businesses elsewhere, we could see around 10 million small businesses close permanently across the country. Major retail bankruptcies in the US have been every bit as disconcerting.

All in, the effort to save two million lives from Covid-19 will end up costing us somewhere in the neighborhood of $7 million per life saved. People generally assume the lockdown was worth this massive cost, but there are a couple of things to consider before drawing that conclusion. First, for the same cost, could we have saved even more lives than we did by doing other things? Second, how plausible was the prediction of two million dead in the first place?

If saving lives simply, rather than saving lives from Covid-19 were our goal, we could have likely saved more than two million lives and at a lower cost. How so? For every $14,000 spent on smoke and heat detectors in homes, a life is saved. For every $260,000 spent on widening shoulders on rural roads, a life is saved. For every $5 million spent putting seat belts on school buses, a life is saved.

Each year, 650,000 Americans die from heart disease, 600,000 die from cancer, 430,000 die from lung disease, stroke, and Alzheimer’s. To fight these diseases Congress allocated $6 billion for cancer research to the National Cancer Institute and another $39 billion to the National Institutes of Health in 2018.

The lockdown will cost us more than three hundred times this amount. For a three-hundred fold increase to NCI and NIH budgets, we might well have eradicated heart disease, cancer, lung disease, and Alzheimer’s. Over just a couple of years, that would have saved far more than two million lives.

The lesson here is a simple one: There is no policy that just simply “saves lives.” The best we can do is to make responsible tradeoffs. Did the lockdowns save lives? Some people claim they did – at a cost of $7 million per life saved if the initial estimates were correct – while others fail to establish any connection between lockdowns and lives saved.

Regardless, there are all manner of other tradeoffs here. The lockdowns didn’t just cost millions of people’s livelihoods, they also cost people’s lives. Preliminary evidence points to a rise in suicides. Nationwide, calls to suicide hotlines are up almost 50 percent since before the lockdown. People are less inclined to keep medical appointments, and as a result life-saving diagnoses are not being made, and treatments are not being administered. Drug overdoses are up, and there is evidence that instances of domestic violence are on the rise also.

But what if the lockdown actually didn’t save 2 million lives? There is strong, if not irrefutable, evidence that the initial projections of Covid-19 deaths were wildly overstated.

We can refer to a natural experiment in Sweden for some clarity. Sweden’s government did not lock down the country’s economy, though it recommended that citizens practice social distancing and it banned gatherings of more than 50 people. Swedish epidemiologists took the Imperial College of London (ICL) model – the same model that predicted 2.2 million Covid-19 deaths for the United States – and applied it to Sweden. The model predicted that by July 1 Sweden would have suffered 96,000 deaths if it had done nothing, and 81,600 deaths with the policies that it did employ. In fact, by July 1, Sweden had suffered only 5,500 deaths. The ICL model overestimated Sweden’s Covid-19 deaths by a factor of nearly fifteen.

If the ICL model overestimated US Covid-19 deaths merely by a factor of ten, the number of Americans who would have died had we not locked down the country, but instead practiced social distancing and banned gatherings of more than 50 people, would have been around 220,000.

To date, the CDC reports around 170,000 covid deaths in the United States. In other words, adjusting – even conservatively – for the ICL model’s demonstrated error, it appears that the $14 trillion lockdown perhaps saved about 50,000 US lives. If that’s the case, the cost of saving lives via the lockdown was not $7 million each. The cost was over a quarter of a billion dollars each.

Finally, there is mounting evidence that even if targeted closures had been necessary, a general lockdown wasn’t. Eighty percent of Covid-19 deaths in the US are among those 65 and older. Even if ICL’s flawed model had been correct, and we had been facing the possibility of 2.2 million deaths, only 400,000 of those would have been among working-age Americans. That’s less than two-tenths of one percent of working-age Americans. Social distancing and mandatory masks might have reduced that further. We could have quarantined the elderly, saved nearly all the lives that even the most dire predictions anticipated, and let the economy continue on as usual.

But we didn’t.

Of course, in March, we knew a lot less than we do now. In the face of 2.2 million likely deaths, many claimed that locking down the economy was the right thing to do. Over the subsequent weeks, as data emerged that the threat was far less deadly and far more focused than it had at first appeared, politicians could have released the lockdown.

But they didn’t.

They didn’t because politicians invariably feel the need to “do something.” Despite volumes of evidence from disparate fields like economics, social work, ecology, and medicine, it never seems to occur to politicians that sometimes doing less, or even doing nothing, is by far the better approach. Why should it occur to them? When politicians act and their actions do more harm than good, they always say the same thing: “Imagine how bad it would have been had we not acted.”

But this time, we have evidence. We can compare what happened where politicians reacted with a heavy hand to what happened where they reacted with a light touch. And the evidence we have so far points to the same conclusion: Our politicians destroyed our economy unnecessarily.

This won’t stop our politicians from congratulating themselves, of course. Nothing ever does. When the next crisis comes along they will land on the same sorts of heavy-handed solutions they did this time. The only thing that will chasten them is the anger of the American people. Politicians did far more harm to Americans than Covid-19 did, and that’s what the American people need to remember next time our politicians start down the same pointless road.

Because they will.

Wall Street Journal vs. New York Times and other cowards

The Wall Street Journal reported last week:

A group of journalists at The Wall Street Journal and other Dow Jones staffers sent a letter on Tuesday to the paper’s new publisher, Almar Latour, calling for a clearer differentiation between news and opinion content online, citing concerns about the Opinion section’s accuracy and transparency.

The letter, signed by more than 280 reporters, editors and other employees says, “Opinion’s lack of fact-checking and transparency, and its apparent disregard for evidence, undermine our readers’ trust and our ability to gain credibility with sources.”

The letter cites several examples of concern, including a recent essay by Vice President Mike Pence about coronavirus infections. The letter’s authors said the editors published Mr. Pence’s figures “without checking government figures” and noted that the piece, “There Isn’t a Coronavirus ‘Second Wave,’” was later corrected.

The letter says many readers don’t understand that there is a wall between the Journal’s editorial page operations, which have been overseen by Paul Gigot since 2001, and the news staff, which is overseen by Editor in Chief Matt Murray. Mr. Murray was also copied on the letter.

The letter proposed more prominently labeling editorials and opinion columns on the website and mobile apps, including the line “The Wall Street Journal’s Opinion pages are independent of its newsroom.” It also suggests removing opinion pieces from the “Most Popular Articles” and “Recommended Videos” lists on the website, and creating a separate “Most Popular in Opinion” list.

The letter also proposes that “WSJ journalists should not be reprimanded for writing about errors published in Opinion, whether we make those observations in our articles, on social media, or elsewhere.”

Reporters should not be expressing opinions on media-owned social media accounts.

The letter doesn’t challenge the right of the editorial page to offer its own opinions and analysis.

“We are proud that we separate news and opinion at The Wall Street Journal and remain deeply committed to fact-based and clearly labeled reporting and opinion writing,” said Mr. Latour, chief executive of Dow Jones & Co. and publisher of the Journal. “We cherish the unique contributions of our Pulitzer Prize-winning Opinion section to the Journal and to societal debate in the U.S. and beyond. Our readership today is bigger than ever and our opinion and news teams are crucial to that success. We look forward to building on our continued and shared commitment to great journalism at The Wall Street Journal.”

Messrs. Latour and Murray earlier received letters from journalists seeking more diversity in the newsroom and voicing concerns regarding hiring practices and how stories involving race are covered by the Journal.

Among the other examples the latest letter highlighted was an opinion article titled “The Myth of Systemic Police Racism,” which the letter’s authors said was one of the paper’s most read articles in June. The article argued that the “charge of systemic police bias was wrong during the Obama years and remains so today.” The letter says the piece “selectively presented facts and drew an erroneous conclusion from the underlying data.”

In their opinion.

The letter said that many “employees of color publicly spoke out about the pain this Opinion piece caused them during company-held discussions surrounding diversity initiatives” and added that if the “company is serious about better supporting its employees of color, at a bare minimum it should raise Opinion’s standards so that misinformation about racism isn’t published.”

The letter also said that “Opinion has also published basic factual inaccuracies about taxes,” citing two specific articles.

Opinion pages recently have become subjects of newsroom controversy.

In early June, James Bennet stepped down as editorial page chief of the New York Timesfollowing widespread criticism in the newsroom and on social media of an opinion column by Sen. Tom Cotton (R., Ark.) that called for the government to deploy U.S. troops to cities to deter looting following the May 25 police killing of George Floyd. Mr. Bennet was succeeded by Kathleen Kingsbury, now acting editorial page editor for the Times.

Bari Weiss, a well-known editor and writer for the Times’s opinion section, resigned on July 13, writing on her website that she had been bullied by colleagues and that her work and character were “openly demeaned on company-wide Slack channels where masthead editors regularly weigh in.”

A spokeswoman for the Times said at the time that it is “committed to fostering an environment of honest, searching and empathetic dialogue between colleagues, one where mutual respect is required of all.”

The Wall Street Journal editorial section replied:

We’ve been gratified this week by the outpouring of support from readers after some 280 of our Wall Street Journal colleagues signed (and someone leaked) a letter to our publisher criticizing the opinion pages. But the support has often been mixed with concern that perhaps the letter will cause us to change our principles and content. On that point, reassurance is in order.

In the spirit of collegiality, we won’t respond in kind to the letter signers. Their anxieties aren’t our responsibility in any case. The signers report to the News editors or other parts of the business, and the News and Opinion departments operate with separate staffs and editors. Both report to Publisher Almar Latour. This separation allows us to pursue stories and inform readers with independent judgment.

It was probably inevitable that the wave of progressive cancel culture would arrive at the Journal, as it has at nearly every other cultural, business, academic and journalistic institution. But we are not the New York Times. Most Journal reporters attempt to cover the news fairly and down the middle, and our opinion pages offer an alternative to the uniform progressive views that dominate nearly all of today’s media.

“Most Journal reporters attempt to cover the news fairly and down the middle.” Coming from fellow WSJ employees that should have left a mark.

As long as our proprietors allow us the privilege to do so, the opinion pages will continue to publish contributors who speak their minds within the tradition of vigorous, reasoned discourse. And these columns will continue to promote the principles of free people and free markets, which are more important than ever in what is a culture of growing progressive conformity and intolerance.

As a reader I have to wonder about the WSJ reporters who do not “attempt to cover the news fairly and down the middle,” and wonder why they are still employed. Say, the “more than 280.”

The WSJ is one of the few national news media outlets (and in state daily newspapers there are none) that actually gives conservative viewpoints fair treatment, let alone express the correct conservative point of view.

 

The news media and conservatives

Former U.S. Rep. Jason Chaffetz (R–Utah):

This may come as a surprise to those who assume that all news media are liberal, but if you live outside of a major city, think for a moment about your small- to mid-sized hometown newspaper, not The New York Times. This kind of journalism—local papers that are rooted in communities—is disappearing, and the places most at risk of losing their local news are places where a lot of conservatives happen to live.

COVID-19 has wrought havoc on newsrooms, and massive layoffs continue to occur at newspapers across the country. But even before the pandemic, the crisis in local journalism was well established. There are more than a few credible studies that have examined the situation, finding that the news media industry saw a 68 percent decrease in its primary source of revenue between 2008 and 2018, and that 47 percent of newsroom staff have been lost since 2004.

The causes of the decline are pretty straightforward. People still want local news. But most people now consume news primarily online, and the digital space is dominated by a handful of Big Tech companies who gobble up almost all of the advertising revenue. Equally important, online news consumption is subject to the vagaries of Big Tech algorithms, which decide what news people get to see and when.

Which local sources are most at risk? More than 200 U.S. counties have no local newspaper at all, and another 1,500 have only one local news source, most often a weekly newspaper. These “news deserts” are dominated by rural and suburban areas that have a high concentration of conservative voters.

Ohio’s Highland County, where 76 percent of residents voted for Donald Trump in 2016, has only one newspaper, the Hillsboro Times-Gazette. The Hillsboro Times-Gazette is a strong conservative voice for the county and endorsed Trump in 2016, but it is subject to the same forces that have caused 138 local Ohio papers to close since 2004.

While some U.S. publishers can turn to readers for direct support, it is harder for papers like the Hillsboro Times-Gazette. In Highland County, 48 percent of households live in poverty or are struggling to make ends meet, according to a 2017 report from the United Way. People who can barely cover the essentials, such as rent and groceries, are unlikely to have the disposable income that would allow them to jump over paywalls.

The Bowling Green Daily News in Warren County, Kentucky, faces similar challenges. The county’s only paper, The Bowling Green Daily News, not only serves to inform locals of the goings-on in their community, but also provides access to conservative voices and viewpoints that readers might not find in other regional publications. Unfortunately, 18 percent of county residents live below the poverty line, making it hard for the people who rely on The Bowling Green Daily News to make up for the revenue lost to Big Tech.

Local papers like these work to keep their communities informed, while also demonstrating an understanding of their readers’ conservative viewpoints. That understanding is harder to come by as news deserts grow and local publishers struggle to stay afloat. There is no grand political conspiracy at work here; many of these communities are subject to a wide range of forces that are damaging to their economies, including deindustrialization and the migration of prosperity to coastal and suburban areas.

But the loss of local newspapers has two particular and profound effects. First, it tears at the fabric of communities, leaving the field wide open for political corruption and malfeasance of every form.

That right there is your first reason to support your local newspaper.

Second, it ensures that the news people see is dominated by urban and coastal sources that have much less understanding of the people who live and work in rural and suburban communities. Google and Facebook may decide what news you see when you’re online, but if there is no local news source to begin with, it won’t matter how well their algorithms are attuned.

So how can we save local news? One easy way to ensure continued access is to subscribe to your local newspaper and, if possible, advertise there. But even that may not be enough. Some folks have advocated for direct government subsidies for news publishers. I personally don’t believe that it’s a good idea for the fourth estate to be on the government payroll. It certainly isn’t a conservative idea.

I prefer a much less government-intensive solution: the Journalism Competition & Preservation Act, which wouldn’t require the government to spend any tax dollars. The bill, with four Republican senators and three Democratic senators as co-sponsors, simply gives news publishers the ability to solve their own problems by giving them the right to work together to negotiate with Google and Facebook for a better deal for the use of their news content.

As legal expert Adam White of the American Enterprise Institute explained in the conservative publication National Review, antitrust law is designed to protect consumers from monopolistic power, and allowing newspaper publishers to band together to negotiate might be the best way to accomplish that goal.

It is currently impossible for any individual publisher to stand up to the tech giants. Since Facebook and Google benefit disproportionately from free local news content, they should have to negotiate like any other company for that deal, and return more of the value back to the people who deliver it in the first place. News consumers will then have continued access to the full variety of media sources they prefer.

But most important, my fellow conservatives should understand that local journalism is essential to having our voices heard—and if Congress refuses to act, the news sources that disappear first may well be the ones that most reflect our views.

The coronavirus’ real heroes

During the Pandemic of 2020 the term “hero” has been applied to health care workers and EMTs (including paramedics) who have cared for people who have been hospitalized for COVID-19, in the same way the word was applied to police officers, firefighters, EMTs and the military in the wake of 9/11.

Ken Langone writes about another group deserving praise:

When future historians tell the story of this pandemic, I hope American capitalism is not so despised and maligned by the professoriate that they leave out the pivotal role private enterprise and individual autonomy played, not just in slowing and ultimately defeating the virus, but in getting the country back to work.

It was individual Americans who started socially distancing in March, as COVID-19 took hold in Italy and many mayors and governors were still calling fears of contagion from China overblown, if not bigoted. By the time our leaders came around to the crisis, millions of American workers and their employers were already taking steps to keep each other safer. And while Republicans and Democrats in Washington played politics with financial aid aimed at blunting the great economic pain necessitated by shutdowns, thousands of businesses, trade associations, and patrons were starting relief funds for the most heavily impacted.

Among the companies that could stay open, I will admit I am biased in my pride for one in particular.

Home Depot, the company I helped found, boosted wages and doubled overtime to acknowledge the valor of workers who wanted to stay on the job during some very scary times. Knowing that kids were at home because schools were closed, Home Depot expanded paid time off to help parents and made hours more flexible for older workers who were deemed at risk for COVID-19 infection. Many other companies offered similar incentives.

When it came time to attack the virus itself, businesses around the country showed the same decency and ingenuity, quickly repurposing to meet demand for personal protective equipment (PPE) such as masks and gowns for frontline medical workers. Apparel company Brooks Brothers and MLB uniform tailor Fanatics switched their stitch to make masks. So did hockey company Bauer and retail stores David’s Bridal and Jo-Ann Stores. A NASCAR team, North Carolina-based Stewart-Haas Racing, helped its neighbors by putting idle racing transports back on track, delivering 2 million medical masks to Novant Health facilities in North Carolina, South Carolina, and Virginia. Whiskey and vodka distilleries, especially small, locally owned ones, switched to making bottles of alcohol-based hand sanitizer.

Cutting-edge manufacturers used 3-D printers to make PPE. Charlottesville-based women’s shoemaker OESH made a mask that had soft edges, making its seal as strong if not better than what would be provided by N95-rated masks. There wasn’t time for FDA approval (which is a question we should take up later), but the skillful engineering made the mask a success.

One Delaware company, ILC Dover, worked with the National Institute for Occupational Safety and Health to shorten the regulatory review process from one month to a week. That way the company could make its new Powered Air Purifying Respirator hood, which provides 100 times the protection of an N95 mask, available to health-care workers attending to patients with COVID-19.

National big-box stores, corner-store pharmacy chains, and delivery services really stepped up in hiring temporary workers. Wal-Mart, Walgreens, CVS, Costco, 7-Eleven, Ace Hardware, Dollar Tree, Dollar General, Domino’s, Pizza Hut, Papa John’s, Instacart, FedEx, UPS, and grocery chains around the country all upped their hiring to meet demand and provide opportunities to the recently unemployed.

Perhaps most strikingly of all, tech companies have really shined. Amazon, Uber Eats, GrubHub and dozens like them made it possible to keep a social distance while keeping the homestead supplied with groceries and supplies. Tech companies didn’t just keep us fed, they kept us on the job. Employers used existing, but often untapped, IT capabilities provided by companies such as Zoom, Microsoft, Apple, and Google to transform a cubicle and conference-room workforce into a remote team interacting through a camera and video screen. In the short term this kept a company’s productivity up, and long-term applications could create a more flexible workplace that could better support parents or employees who want to live in a rural area.

Of course, the biggest heroes are yet to earn their fame. Hard at work are the world’s leading scientific and research minds toiling for vaccines and treatments. Eli Lilly, Johnson & Johnson, and Moderna all have billion-dollar investments into fast-tracking a cure.

Throughout this entire ordeal, which is far from over, our blinkered press has focused on the negative, on anecdotes of price gouging, temporary supply-chain disruptions and shortages, and companies that saw outbreaks in the workplace.

But it takes a special kind of dumb to look at all the institutions that came up short under the pandemic and put free enterprise anywhere near the top of the list. Our free-enterprise system is the best at allocating resources and responding to crises. The private sector should be praised, not demonized, for its efforts during this pandemic. The examples are numerous, and they keep on coming.

The best thing the government did, arguably, is get out of the way. Government watchdog Americans for Tax Reform has identified more than 600 rules or regulations that were changed to give companies the room to innovate and adapt to meet the demand for equipment and other goods created by the pandemic. My hunch is these are probably 600 regulations that do not need to come back once this is over.

We are not a perfect country, but we do have something that will always help us prevail — either over a pandemic or the next pitfall we encounter. We have regular people who dare to do heroic things.

Americans don’t need to be told what to do, and companies don’t need command-and-control regulation to do what’s best for a community. That’s because Americans’ entrepreneurial spirit is the biggest factor flattening the curve.

 

The Biden (formerly Obama) taxes

Dan Mitchell:

After Barack Obama took office (and especially after he was reelected), there was a big uptick in the number of rich people who chose to emigrate from the United States.

There are many reasons wealthy people choose to move from one nation to another, but Obama’s embrace of class-warfare tax policy (including FATCA) was seen as a big factor.

Joe Biden’s tax agenda is significantly more punitive than Obama’s, so we may see something similar happen if he wins the 2020 election.

Given the economic importance of innovators, entrepreneurs, and inventors, this would be not be good news for the American economy.

The New York Times reported late last year that the United States could be shooting itself in the foot by discouraging wealthy residents.

…a different group of Americans say they are considering leaving — people of both parties who would be hit by the wealth tax… Wealthy Americans often leave high-tax states like New York and California for lower-tax ones like Florida and Texas. But renouncing citizenship is a far more permanent, costly and complicated proposition. …“America’s the most attractive destination for capital, entrepreneurs and people wanting to get a great education,” said Reaz H. Jafri, a partner and head of the immigration practice at Withers, an international law firm. “But in today’s world, when you have other economic centers of excellence — like Singapore, Switzerland and London — people don’t view the U.S. as the only place to be.” …now, the price may be right to leave. While the cost of expatriating varies depending on a person’s assets, the wealthiest are betting that if a Democrat wins…, leaving now means a lower exit tax. …The wealthy who are considering renouncing their citizenship fear a wealth tax less than the possibility that the tax on capital gains could be raised to the ordinary income tax rate, effectively doubling what a wealthy person would pay… When Eduardo Saverin, a founder of Facebook…renounced his United States citizenship shortly before the social network went public, …several estimates said that renouncing his citizenship…saved him $700 million in taxes.

The migratory habits of rich people make a difference in the global economy.

Here are some excerpts from a 2017 Bloomberg story.

Australia is luring increasing numbers of global millionaires, helping make it one of the fastest growing wealthy nations in the world… Over the past decade, total wealth held in Australia has risen by 85 percent compared to 30 percent in the U.S. and 28 percent in the U.K… As a result, the average Australian is now significantly wealthier than the average American or Briton. …Given its relatively small population, Australia also makes an appearance on a list of average wealth per person. This one is, however, dominated by small tax havens.

… It’s worth noting that even Greece is seeking to attract rich foreigners.

The new tax law is aimed at attracting fresh revenues into the country’s state coffers – mainly from foreigners as well as Greeks who are taxed abroad – by relocating their tax domicile to Greece, as it tries to woo “high-net-worth individuals” to the Greek tax register. The non-dom model provides for revenues obtained abroad to be taxed at a flat amount… Having these foreigners stay in Greece for at least 183 days a year, as the law requires, will also entail expenditure on accommodation and everyday costs that will be added to the Greek economy. …most eligible foreigners will be able to considerably lighten their tax burden if they relocate to Greece…nevertheless, the amount of 500,000 euros’ worth of investment in Greece required of foreigners and the annual flat tax of 100,000 euros demanded (plus 20,000 euros per family member) may keep many of them away.

The system is too restrictive, but it will make the beleaguered nation an attractive destination for some rich people. After all, they don’t even have to pay a flat tax, just a flat fee.

Italy has enjoyed some success with a similar regime to entice millionaires.

Last but not least, an article published last year has some fascinating details on the where rich people move and why they move.

The world’s wealthiest people are also the most mobile. High net worth individuals (HNWIs) – persons with wealth over US$1 million – may decide to pick up and move for a number of reasons. In some cases they are attracted by jurisdictions with more favorable tax laws… Unlike the middle class, wealthy citizens have the means to pick up and leave when things start to sideways in their home country. An uptick in HNWI migration from a country can often be a signal of negative economic or societal factors influencing a country. …Time-honored locations – such as Switzerland and the Cayman Islands – continue to attract the world’s wealthy, but no country is experiencing HNWI inflows quite like Australia. …The country has a robust economy, and is perceived as being a safe place to raise a family. Even better, Australia has no inheritance tax

Here’s a map from the article.

The good news is that the United States is attracting more millionaires than it’s losing (perhaps because of the EB-5 program).

The bad news is that this ratio could flip after the election. Indeed, it may already be happening even though recent data on expatriation paints a rosy picture.

The bottom line is that the United States should be competing to attract millionaires, not repel them. Assuming, of course, politicians care about jobs and prosperity for the rest of the population.

That applies to Wisconsin too. Democratic wins in legislative races in November are likely to result in tax increases, as they did after the 2008 election, after which Democrats controlled all of state government. The result was three deficits, a delayed recovery from the Great Recession, and a Republican sweep in 2010.

Even after eight years of Scott Walker and Republican control of the Legislature, Wisconsin ranks poorly in individual …

… and corporate income taxes …

… and (inevitably) property taxes …

… while relatively low only in sales taxes:

Don’t ruin an election with a recovery!

Over the past year there have been predictive election models based on economic numbers that predicted a Donald Trump win in November.

Then came the coronavirus, and with unemployment now at double digits models are predicting a Joe Biden win.

(Which makes you wonder (1) what Biden and the feds would be doing differently if president now and (2) how the economy would be better if Biden were president and all the liberal wish list things like higher taxes, eliminated student debt, higher taxes, more government spending, higher taxes, the climate freakout, higher taxes, single-payer health care and higher taxes were reality.)

So Politico reports:

In early April, Jason Furman, a top economist in the Obama administration and now a professor at Harvard, was speaking via Zoom to a large bipartisan group of top officials from both parties. The economy had just been shut down, unemployment was spiking and some policymakers were predicting an era worse than the Great Depression. The economic carnage seemed likely to doom President Donald Trump’s chances at reelection.

Furman, tapped to give the opening presentation, looked into his screen of poorly lit boxes of frightened wonks and made a startling claim.

“We are about to see the best economic data we’ve seen in the history of this country,” he said.

The former Cabinet secretaries and Federal Reserve chairs in the Zoom boxes were confused, though some of the Republicans may have been newly relieved and some of the Democrats suddenly concerned.

“Everyone looked puzzled and thought I had misspoken,” Furman said in an interview. Instead of forecasting a prolonged Depression-level economic catastrophe, Furman laid out a detailed case for why the months preceding the November election could offer Trump the chance to brag — truthfully — about the most explosive monthly employment numbers and gross domestic product growth ever.

Since the Zoom call, Furman has been making the same case to anyone who will listen, especially the close-knit network of Democratic wonks who have traversed the Clinton and Obama administrations together, including top members of the Biden campaign.

Furman’s counterintuitive pitch has caused some Democrats, especially Obama alumni, around Washington to panic. “This is my big worry,” said a former Obama White House official who is still close to the former president. Asked about the level of concern among top party officials, he said, “It’s high — high, high, high, high.”

Furman’s case begins with the premise that the 2020 pandemic-triggered economic collapse is categorically different than the Great Depression or the Great Recession, which both had slow, grinding recoveries.

Instead, he believes, the way to think about the current economic drop-off, at least in the first two phases, is more like what happens to a thriving economy during and after a natural disaster: a quick and steep decline in economic activity followed by a quick and steep rebound.

The Covid-19 recession started with a sudden shuttering of many businesses, a nationwide decline in consumption and massive increase in unemployment. But starting around April 15, when economic reopening started to spread but the overall numbers still looked grim, Furman noticed some data that pointed to the kind of recovery that economists often see after a hurricane or industrywide catastrophe like the Gulf of Mexico oil spill.

Furman’s argument is not that different from the one made by White House economic advisers and Trump, who have predicted an explosive third quarter, and senior adviser Jared Kushner, who said in late April that “the hope is that by July the country’s really rocking again.” White House officials were thrilled to hear that some of their views have been endorsed by prominent Democrats.

“I totally agree,” Larry Kudlow, head of the White House National Economic Council, replied in a text message when asked about Furman’s analysis. “Q3 may be the single best GDP quarter since regular data. 2nd half super big growth, transitioning to 4% or more in 2021.” He called Furman, whom he said he knows well, “usually a straight shooter. Hats off to him.”

“I have been saying that on TV as well,” said Kevin Hassett, a top Trump economic adviser, who pointed to a Congressional Budget Office analysis predicting a 21.5 percent annualized growth rate in the third quarter. “If CBO is correct we will see the strongest quarter in history after the weakest in Q2.”

Peter Navarro, a Trump trade and manufacturing adviser who’s a Harvard-educated economist, called the high unemployment America is currently facing “manufactured unemployment, which is to say that Americans are out of work not because of any underlying economic weaknesses but to save American lives. It is this observation that gives us the best chance and hope for a relatively rapid recovery as the economy reopens.”

(Asked about his new fans in the White House, Furman responded, “They get the rebound part, but they don’t get the partial part.”)

A rebound won’t mean that Trump has solved many underlying problems. Since the crisis started, many employers have gone bankrupt. Others have used the pandemic to downsize. Consumption and travel will likely remain lower. Millions of people in industries like hospitality and tourism will need to find new jobs in new industries.

The scenario would be a major long-term problem for any president. But before that reality sets in, Trump could be poised to benefit from the dramatic numbers produced during the partial rebound phase that is likely to coincide with the four months before November.

That realization has many Democrats spooked.

“In absolute terms, the economy will look historically terrible come November,” said Kenneth Baer, a Democratic strategist who worked in a senior role at the Office of Management and Budget under Obama. “But relative to the depths of April, it will be on an upswing — 12 percent unemployment, for example, is better than 20, but historically terrible. On Election Day, we Democrats need voters to ask themselves, ‘Are you better off than you were four years ago?’ Republicans need voters to ask themselves, ‘Are you better off than you were four months ago?’”

One progressive Democratic operative pointed out that recent polling, taken during the nadir of the crisis, shows Joe Biden is struggling to best Trump on who is more trusted to handle the economy. “Trump beats Biden on the economy even right now!” he said. “This is going to be extremely difficult no matter what. It’s existential that we figure it out. In any of these economic scenarios Democrats are going to have to win the argument that our public health and economy are much worse off because of Donald Trump’s failure of leadership.”

The former Obama White House official said, “Even today when we are at over 20 million unemployed Trump gets high marks on the economy, so I can’t imagine what it looks like when things go in the other direction. I don’t think this is a challenge for the Biden campaign. This is the challenge for the Biden campaign. If they can’t figure this out they should all just go home.”

The Biden campaign seems to recognize the challenge. “The way that Biden talks about the economy is not just tied to the Covid crisis, it’s also about the things that Donald Trump has done to undermine working people since the day he took office,” said Kate Bedingfield, Biden’s deputy campaign manager. “But secondly, it’s also highly likely that under any economic circumstances in the fall, Trump is likely going to be the first modern president to preside over net job loss.”

Between now and Election Day, there will be five monthly jobs reports, which are released on the first Friday of every month. The June report, covering May, is likely to show another increase in unemployment. But after that, Furman predicts, if reopening continues apace, the next four reports could be blockbusters. “You could easily have 1 to 2 million jobs created a month in those four reports before November,” he said.

He added, “And then toward the end of October, we will get GDP growth for the third quarter, at an annualized rate, and it could be double-digit positive economic growth. So these will be the best jobs and growth numbers ever.”

Furman noted that there is one major obvious caveat: “If there’s a second wave of the virus and a really serious set of lockdowns, I wouldn’t expect to see this. But I think the most likely case is the one I just laid out.”

When Obama ran for reelection in 2012, during the recovery from the Great Recession, he was able to point out that the unemployment rate was dropping about 1 point every year. But in a V-shaped recovery it would be much faster. “The Trump argument will be he’s producing the fastest job growth and fastest economic growth in history. If he has any ability to do nuance he would say, ‘We are not there yet, reelect me to finish the job,’” Furman said. “The Biden argument will be the unemployment rate is still 12 percent and even with those millions of jobs we are still down 15 million jobs and the only way for this to be fixed is new economic policies.”

Austan Goolsbee, a predecessor to Furman as chairman of the Council of Economic Advisers in the Obama White House, said the recovery would be more like a reverse check mark, rather than a V, and that Biden and Democrats would need to point out that the explosive numbers predicted for the late summer and fall will not erase all of the damage.

“I view it as Trump left the door open and five rats came into the kitchen and you’re going to brag, ‘Look I got two of the rats out?’” Goolsbee said. “There’s a high risk you look completely out of touch if you still have double-digit unemployment rates.”

Sen. Chris Coons (D-Del.), who is close to Biden, said he’s been studying numerous economic forecasts and isn’t convinced a V-shaped rebound is certain. “It seems pretty unlikely to me that we’re going to have a really robust recovery in the next few months,” he said. “Of course, we all hope there will be. Frankly, no matter what the recovery looks like, I expect President Trump to either take credit for things he had nothing to do with or to avoid blame for things he helped cause.”

Furman is an economist, but he had some strategic advice for the Biden campaign. “Don’t make predictions that could be falsified. There are enough terrible things to say you don’t need to make exaggerated predictions,” he said. “The argument that we are in another Great Depression will look like it was overstated. Trump can say, ‘Two million deaths didn’t happen, Great Depression didn’t happen, we are making a lot of progress.’”

A quid pro quo, or burying the lead

Daniel Greenfield starts with the perspective of skepticism about the media (which is a reasonable attitude) but then …

Even while the media is blaring stories about the abuse of the Payroll Protection Plan loans from the Small Business Administration, its own industry took millions in loans and wants billions more.

Unlike many small businesses which were forced to shut down because of the lockdown, the media has been wrongly listed as ‘essential’ and exempted from the shutdowns, but that hasn’t stopped it from taking money that should have been used to compensate small business owners who can’t stay open.

It should be noted that “the media has been wrongly listed as ‘essential’ and exempted from the shutdowns” is, in order, an opinion and a statement that varies depending on where you are.

Even when the media operations cashing in on the SBA loans aren’t anyone’s idea of a small business.

The Seattle Times maxed out its PPP loan with a $10 million payout. The Seattle Times is not only Washington State’s largest daily, but its parent company, the Seattle Times Company, owns two other papers, and had, as recently as 3 years ago, put out 7 papers. It also owned multiple newspapers in Maine which it sold off for over $200 million. It had two printing plants, one of which it sold. The Rotary Offset Press, which it still owns, continues to print a variety of magazines and newspapers.

But while the Seattle Times is, like the New York Times, a multi-generational family property, the McClatchy Company owns 49.5% of voting stock and 70.6% of voting stock in the Seattle Times Company. McClatchy has dozens of papers and had revenues of over $800 million in 2018.

While McClatchy has operated at a loss and filed for Chapter 11, it’s not a small business. Neither is the hedge fund likely to run it which is partially backed by, among others, CalPERS, the California Public Employees’ Retirement System, the largest and most politically correct pension fund in the country.

Is this really a small business?

Despite the façade of family ownership, national chains have owned much of the Seattle paper business since the Great Depression with McClatchy taking over from Knight Ridder. Even if you ignore all the wizards behind the Emerald City paper’s curtain, the Seattle Times Company has 849 employees.
How was the Seattle Times able to max out the SBA’s PPP loan? Double and triple standards.

If you deal in fresh fruit and have over 100 employees, according to the SBA, you’re not a small business. If you supply toys, you’re limited to 150 employees. But if you’re a newspaper publisher, you can have up to 1,000 employees and still be considered a small business.

That’s how a company that owns 3 papers, a printing plant, and its silent partner is one of the largest news publishers in America, was eligible to grab loans intended to keep small businesses afloat.

The Seattle Times wasn’t unique among the media in seizing loans meant for shuttered small businesses.

The Tampa Bay Times got an $8.5 million loan, close to the max. The Times Publishing Company also puts out 10 papers, a few magazines, and Politifact, a site which claims to ‘fact check’ politicians, but frequently makes false claims, puts out spam, and smears conservatives.

The Company is owned by the Poynter Institute for Media Studies, which is funded by leftist billionaires like George Soros and Pierre Omidyar.

And just to make matters worse, the Poynter Institute, which is officially a non-profit, also got a stimulus loan of $737,400 to cover its coronavirus “business losses”.

Poynter notes that as, “a nonprofit with under 60 employees, Poynter qualified for the loan.” But Poynter’s documents suggest that its newspaper business had $123 million in revenues with assets of $43 million.

That’s not a small business.

The Tampa Bay Times and its shady operations, the intermingling of non-profits and for-profits, is already suspect on its own. It should not have been taking money meant for small businesses.

But the media has been eager to pig out on small business loans even as it attacks public companies that took PPP loans.  Axios, a media venture by Politico bigwigs, with around 200 employees, funded by venture capital and investment firms, including Jeffrey Katzenberg, the Hollywood tycoon with a net worth of $750 million, and NBCUniversal, scored a $5 million PPP loan.

But this obscene piggery isn’t enough for the media which wants a much bigger exemption.

Senator Maria Cantwell, Senator Amy Klobuchar, and Senator John Kennedy dispatched a letter urging a waiver on the affiliation rule “which restricts assistance to companies owned or controlled by larger entities.” This would potentially allow huge multi-billion-dollar conglomerates like Gannett to raid money intended for small businesses even as they lobby politicians to shut those businesses down.

The senators falsely claimed that keeping the media going was “essential to public health”.

Affiliation waivers would lift the 1,000-employee limit and allow newspapers owned by national chains to apply for loans as if they were small businesses. It’s the equivalent of having every Starbucks outlet claim that it’s just a small business serving the local community and won’t pass the money upward.

The media has been shaming other corporations that took PPP loans, yet it is entirely without shame.

There ought to be no more sanctimonious lectures about corporate bailouts from Democrats who want to bail out billion-dollar corporations while small business owners can’t get inside the front door. If affiliation rules are waived for the media, Gannett’s thousand plus newspapers would be ready to raid the SBA for loans that would likely never be repaid, while justifying the looting by arguing that the media is suffering because small businesses can’t afford to take out as many ads in local papers as before.

The media has already managed to loot at least $23.5 million meant for small businesses. Affiliation waivers would turn PPP loans into a bailout for media conglomerates that would be worth billions.

The media has already been allowed to operate while actual small businesses were shut down, even though there’s been a coronavirus infection spike in the media which, as far as we know, killed several people.

Evidence?

It’s used its megaphone to push for more shutdowns of local businesses as non-essential even as it demands the right to raid the money intended for those businesses to fund its massive operations.

Enough.

National media chains on the verge of bankruptcy want to exploit small business loans intended for coronavirus relief to keep their broken business model going for another few years before they fold.

The PPP loan program was not designed as a bailout for media giants and their pension fraud.

The Seattle Times, the Tampa Bay Times, Poynter, and Axios ought to be pressured into returning the money they took. And while that may never happen, any effort by politicians to apply affiliation waivers to the media ought to be fought as an obscene cash grab from small businesses to lefty corporations.

It is a good question to ask why businesses of five to 10 employees haven’t been able to give PPP loans while much larger “small” businesses have.

To say, though, that every media outlet is the same is false. To assert that no one needs reporters delving into what their local governments are doing with their tax dollars is ignorant and foolish.

On Giving Tuesday yesterday the Poynter Institute posted:

Today on #GivingTuesdayNow we humbly urge you to consider a gift to support the journalists in your community working tirelessly and at personal risk to help you navigate the COVID-19 health and economic crisis. We are grateful for their skill in providing useful, reliable information about all aspects of the pandemic in these times of confusion and social stress. We need them to continue to tell the stories of the sick, the dying, the health care heroes and those working to move us forward. The value of this journalism is immense.

Your dollars, if you can swing it, are deeply appreciated, particularly given the economic pressures faced by local news companies.

But how about something even better? Don’t just give. Engage.

Buy a subscription to your local news website or newspaper. Become a sustaining member of the local public radio or television station, or your favorite nonprofit news website. If you have the option to patronize an advertiser who spends money with a local news source, please consider. You know what’s better than journalism supporters? Customers.

When the audience has skin in the game, there is an implicit compact with the journalists that together we can help improve a community. Such engagement runs deeper than just the money. We’ve long said journalism helps us participate in democracy.

When the coronavirus hit, local news organizations were already at-risk with “underlying health conditions.” The fragmentation and even evaporation of advertising revenue long before the pandemic forced significant retrenchment and left the local news industry with an uncertain future.

With revenue in freefall, publishers were forced to significantly cut costs, including news coverage, while asking the audience to pay more for the product. That’s a hard balancing act, for sure.

A byproduct of the tension has been an unhealthy indifference. According to a study by the John S. and James L. Knight Foundation, 86% of Americans believe in the value of local news, yet only 20%paid for a subscription or membership to a local news organization. Even those who say they value journalism are becoming bystanders, and in the process settling for a weak sauce of coverage, at times, from their preferred local news source.

The Knight study found more than 60% of Americans believe their community news sources aren’t doing enough to keep an eye on local officials. They want more coverage of education, drug addiction and housing.

A report last year by the nonprofit education news site Chalkbeat said there were no full-time education beat writers in locales as big and complicated as Newark or throughout the communities of Silicon Valley. Might not more paying customers demand better?

Today’s newsroom leaders have a deeply difficult task in covering their communities with substantially fewer journalists than before. But how the remaining resources do get deployed is a choice.

Combine your patronage with engagement — write letters, leave comments, attend events, call in story tips — and you become part of the equation in making the choices mean the most for your community.

The coverage of coronavirus by local journalists has struck a blow against indifference. Today we recognize the exceptional energy, relevance and sophistication that journalists have brought to the crisis and its consequences. Every member of a local news company is serving their community. …

An enduring theme of American journalism is that it helps move us off the sidelines, get involved, demand action. In these confusing times of crisis, it’s useful to remember that journalism is part of the democracy toolkit, and we need not feel powerless.

I wish I could endorse 100 percent of that statement. But too many in the media refuse to admit that their previous work might not have been connecting with their readers. (Recall my list of reporter engagement, or lack thereof, where they work.) The problems of the media are not merely due to shrinking advertising base or corporate ownership, even though advertising has been shrinking thanks to the Internet, and the managers of big media companies don’t always make the right decisions.

There has, for one thing, been too much commentary (in print or online, particularly on Twitter) from reporters whose commentary brings into question their objectivity. The corollary is the arrogance of some reporters who bristle whenever they are questioned by their readers. (That may be more a personality flaw than a flaw in the profession. Everyone needs thicker skins, including reporters, who you’d think would be immune to the slings and arrows of contrary comment.)