Coyote Blog

Readers of this blog know that I consider most campaign finance laws to in fact be carefully crafted incumbent protection acts.  Incumbents in major political offices get millions and millions of dollars in free advertising just from their day-to-day ability to get on the evening news.  This free publicity combined with strong name recognition means that upstarts often have to seriously outspend the incumbent to have a chance of defeating them.  So campaign finance laws act as a powerful protection device for these incumbents, limiting the amount upstarts can spend while in no way limiting the incumbents's ability to use their office (and taxpayer money) to shamelessly promote and publicize themselves.

And there is no one better at using elected office to shamelessly publicize himself than new NY Governor Eliot Spitzer.  So absolutely no one should be surprised at this:

Moving swiftly in his efforts to change the culture of
Albany, Governor-elect Eliot Spitzer said Thursday that he would
unilaterally stop accepting campaign contributions greater than
$10,000, which is less than a fifth of the $50,100 in individual
donations currently allowed by state law.

Mr. Spitzer also said that from now on he would refuse to take
advantage of several notorious loopholes in the state's campaign
finance laws that allow corporations and limited liability companies to
circumvent donation limits by contributing through subsidiaries and
other related entities.

Note that he only took these steps just days after he was elected governor the first time.  Spitzer knows that no one can probably offset the PR advantage he wields, but to be on the safe side, this is the opening shot to make sure that no future challenger is going to have the cash to threaten his position in office.

Generally, Eliot Spitzer irritates the hell out of me.  But I will say for one brief period in college, Spitzer, as the butt of a huge campus-wide joke, brought be great mirth.

Nearly every dystopic novel I have ever read usually has an all-powerful state that insists on televisions everywhere in all public and private spaces to spew government propaganda and rebellion-soothing-entertainment at the masses.  (Example:  Richard Bachman / Stephen King's Running Man, which is a much better novel than a movie.)

I am reminded of this every time I go to an airport.  Why is it every airport feels the need to have CNN blaring from televisions spaced out every 20 feet or so.  You can't escape it or turn it off.  Do they really think I am so much of a moron that I can't entertain myself or even sit quietly without video Valium blaring at me every second.  Can't we maybe have some little quiet TV-free rooms, like the smoking rooms spaced around the airport?

I am an active computer gamer and much of the talk in the community is the uproar EA has caused by putting ads in Battlefield 2042.  Much of the discussion is not fact-based, but just panicky rumor-mongering, but one can see how much people don't want advertising pushed at them.  Which is funny to me, because ubiquitous TV in airports seems a much more annoying push than a few ads in a game.

Many marketing analysts will argue that the famous Pepsi challenge advertisements helped Coke as much as Pepsi, by defining it in consumers minds as the standard to which other beverages should be compared, and by giving it nearly as many mentions to support name recognition as Pepsi gave itself.   The GAO reports that anti-drug advertising may be encountering the same type failure:

A Government Accountability Office report on research tracking the
impact of the federal government's $1.2 billion anti-drug ad campaign concludes
that "the evaluation provides credible evidence that the campaign was
not effective in reducing youth drug use, either during the entire
period of the campaign [1998 to 2004] or during the period from 2002 to
2004 when the campaign was redirected and focused on marijuana use."
The GAO adds that "exposure to the advertisements generally did not
lead youth to disapprove of using drugs and may have promoted
perceptions among exposed youth that others' drug use was
normal....Westat's evaluation indicates that exposure to the campaign
did not prevent initiation of marijuana use and had no effect on
curtailing current users' marijuana use, despite youth recall of and
favorable assessments of advertisements." In fact, during some periods
and for some subgroups, exposure to the ads was significantly
associated with an increased tendency to smoke pot.

Per the WSJ($):

The Internal Revenue Service dealt a serious blow to
organizations that provide down-payment assistance to home buyers in a
ruling that could curtail the ability of lower-income U.S. citizens to
purchase homes.

In the past eight years or so, a number of large
nonprofit organizations -- including Nehemiah Corp. of America, of
Sacramento, Calif., and AmeriDream Inc., of Gaithersburg, Md. -- have
doled out hundreds of millions of dollars of cash down-payment
assistance to mostly low- and moderate-income home buyers. According to
industry estimates, as many as 625,000 people were assisted by such
groups with their down payments between 2000-05. The programs have been
widely viewed as helping to increase the nation's homeownership rates,
which rose to 69% last year from 67% in 1999.

Why?  A lot of the tax code is skewed to promote home ownership.  So why is the IRS penalizing a program that seems to make a lot of sense?

In its ruling yesterday, the IRS said these aid groups funded largely
by home builders and other sellers no longer qualify for tax-exempt
status because the benefits of the programs are going to sellers and
profit-making entities. In its statement, the IRS said it has found
"that organizations claiming to be charities are being used to funnel
down-payment assistance from sellers to buyers through self-serving,
circular-financing arrangements."

Uh-oh.  Its those nasty profit making ventures again.  What's going on here?  Basically a home-builder gives the down payment for a home to a charity which in turn gives it to a buyer who in turn gives it back to the home-builder.  Let's say the down payment is 10%.  This arrangement acts as if the home-builder is giving the buyer a 10% discount, just circuitously.

So why is it so circuitous?  Why don't they just give the discount directly?  Is it some kind of tax dodge?  The answer to the latter is probably not.  From a corporate tax standpoint, the current circuitous charity method produces a 10% charitable donation on a 100% price sale.  The discount approach just produces a 90% price sale.  Tax wise, these are equivalent.  So why doesn't the home-builder, if it wants to be generous to low-income buyers, just give them the discount?

The answer is, because the government does not allow it! 

The majority of home buyers affected by this ruling are those who
qualify for mortgages insured by the Federal Housing Administration, a
federal agency responsible for aiding first-time and lower-income home
buyers. Under FHA guidelines, home buyers seeking mortgages must have
their own funds to use for a down payment or they can get assistance
from a relative, employer or a charity. They can't get assistance
directly from the seller.

The only argument against this practice made by the IRS is that the price of the house is increase by a fee added in the process by the charity that facilitates the transaction.  But this is one of those classic government regulatory jobs where the result that instead of getting a home with a bit of extra fee in the transaction, people will instead not be able to get a home at all.  No one points to anyone being hurt, and in fact the article points out that 35% of FHA loans depend on these charities for down payments.  (There is also some hint that this process may increase default rates, but the only evidence is that default rates for this type of transaction are up --  but default rates on mortgages are up across the board right now.)

And, by the way, what is wrong with charity by a business that, in addition to helping out a charitable cause, also helps out its business?  For example, my company gives coupons for free one-day jetski rentals at Lake Havasu all the time to charity auctions in our area.  We do it to support charity, but also because it provides us some free advertising and often people who win the certificate also show up with friends who become paying customers.  So what?  Is my charity tainted because I have created a win-win? 

I am seriously late on this one, but I still want to show my support for Lance Dutson, author of the Main Web Report, who is being sued by an advertising firm and harassed by the state government for uncovering some really dumb activities at the state tourism board.  A summary of what he found is here, and the story of the lawsuits is here.

This story rings absolutely true with me.  Given our significant experience with government agencies, I have seen time and time again that when government bureaucrats embark on an activity out of their traditional comfort zones (in this case, Internet pay-per-click advertising, a new activity for most of us) they tend to combine lack of training with total arrogance that they know exactly what they are doing.  Within my company we have dubbed this "condescending incompetence", and we see it all the time.

In this case, Mr. Dutson points out that by bidding up the price in Google adwords of travel-related terms, they are actually hurting Maine travel businesses, both by driving up their advertising costs and by diverting clicks from an actual tourist business to a government site.  And how could any sensible cost-benefit analysis lead to paying over $15 to get one (1) viewer to the government tourist web site?  The answer is, it can't.  The only thing that can drive this behavior is ignorance combined with a skewed incentive system (e.g. some bureaucrat wanted a line in a performance review or PowerPoint chart that said their web site was top-ranked on every key Google search).  And he rightly points out some disturbing conflicts of interest at the advertising agency, as well as the total bonehead maneuver of putting an adult phone-sex number in the ad copy.

By the way, I despise state tourism agencies.  Most of the money they spend is a waste and the rest goes to directly benefit a few cronies.  Most of our local dollars go to high-profile expenditures that gets the governor some extra media buzz but does zero to get anyone new to the state.   And note that I run a business that depends 100% on tourism.  These state expenditures do nothing for me.  In some cases, my customers pay as high as 12% lodging taxes (e.g. tax and bureaucracy hell Mono County, California) to fund tourist boards who don't even advertise the types of operations I run (campgrounds and marinas).

Frequent readers will now that I have long warned of government-funded health care acting as a Trojan horse for micro-management of our personal lives, the logic being that if our lifestyles or behaviors make us less healthy, then the government that funds medical care may claim an interest in regulating those behaviors.  I often post examples of this phenomena, the most recent of which is here.

This installment comes via Reason, and looks at the NYC Health Commissioner Thomas Friedan's new fascism to prevent diabetes program.  I am not sure I even need to comment on the following for you to get the picture:

New York City is at the forefront of this new public health movement. In
January, city health officials began
requiring
that medical testing labs report the results of blood sugar tests for all
the city's diabetics directly to the health department. This is first time
that any government has begun tracking people who have a chronic disease.
The New York City Department of Health will analyze the data to identify
those patients who are not adequately controlling their diabetes. They will
then receive letters or phone calls urging them to be more vigilant about
their medications, have more frequent checkups, or change their diet....

So what could be wrong with merely monitoring and reminding people to take
better care of themselves?  New York City Health Commissioner Thomas Friedan
has made it clear that it won't necessarily end there. If nagging is not
sufficient to reduce the health consequences of the disease, other steps
will be taken. Friedan
argues
that "modifications of the physical environment to promote physical
activity, or of the food environment to address obesity, are essential for
chronic disease prevention and control." Friedan envisions regulations for
chronic disease control including "local requirements on food pricing,
advertising, content, and labeling; regulations to facilitate physical
activity, including point-of-service reminders at elevators and safe,
accessible stairwells; tobacco and alcohol taxation and advertising and
sales restrictions; and regulations to ensure a minimal level of clinical
preventive services."

The NYC health department starred in a previous post for their brave attack on restaurants that give patrons too much for their money.

Via Instapundit, comes this story of the Pennsylvania legislature declaring vendetta on local media:

Team 4 has a voicemail recording of Democratic State Rep. Tim Solobay,
of Canonsburg, saying that state lawmakers are preparing an all-out
assault on the media. Solobay hints that the first volley is a bill
that would start charging sales tax on all advertising in Pennsylvania.

Solobay left the voicemail message for editor Cody Knotts, who works at The Weekly Recorder, in Claysville, Washington County.

In
the message, Solobay says, "But you know, for the most part, the
majority of the legislative feeling about the media right now is if
there's something they can do to screw them, you can imagine it may
occur."

Apparently, the legislature is pissed the media embarrassed them last year over a pay raise:

Like many newspaper editors in Pennsylvania, Knotts wrote prolifically
last year about the 16 percent pay raise that lawmakers took, and then
gave back under heavy media pressure.

Then, last month, he
learned of a bill in Harrisburg that would hit the media hard --
lifting the sales tax exemption on advertising, along with some other
services.

If true, this is clearly a disgusting abuse of power, but probably only unique because someone was willing to actually admit the tit for tat.

However, I am left with mixed feelings.  The media generally cheer-leads every tax increase, and is the first to join the bandwagon of slamming corporate profits and poo-pooing corporate "fat-cats whining about tax increases that cut into their huge profits" - you know the drill.

So I am less than sympathetic when I hear a media guy saying this:

Knotts said the plan would cause some businesses to stop advertising.

"We
don't have a big profit margin," said Knotts. "We're sitting at around
3 or 4 percent, maybe, and it's going to cut that down to where we're
losing money and then how can we stay in business."

Media executives in Pennsylvania, including those at WTAE-TV, have been lobbying lawmakers to kill the advertising tax.

Guess what - my profit margins in camping are thin as well, and my customers get hit not only with the 6-8% sales tax you are probably facing but also lodging taxes as high as 14%.  I have never ever seen a media outlet in any city or state in which we operate oppose a lodging tax increase.  Or take oil companies, who media companies revel in slamming.  Oil companies make average margins in the 5-8% range, but get hit with sales and gas taxes as high as 30% or more.  Or what about Wal-mart?  Wal-mart has margins in the 3-4% range - have these media companies ever opposed sales taxes at Wal-mart? (hah!)  So after supporting every tax you saw come along and slamming every other business as greedy profiteers, excuse me if I don't cry many tears when you get hoist on your own petard.

Last week when I hosted Carnival of the Capitalists, I noticed that bots were submitting Conservative Cats form with spam entries - like having "cheap viagra" in all the fields.  Then, this week, I found that at an application site for camp host jobs that I run has been getting the same type of spam.  I am not talking about email - I am talking about data base entries coming back with spam in them.

Why?  I presume someone went through the time to program the bots, but what does it accomplish to dump your cheap viagra url into a bunch of online forms for memberships and applications.? Its just some sysop who is going to see it.  I can't believe this sells anything -- for me, its more like graffiti than real advertising.

Update: OK, I am clued in.  Apparently it is comment-spam bots that think these forms look like blog comments and are filling them in to try to get the site-link SEO bounce.  So now I need to figure out how to make my form look less like a blog comment form, I guess.

Again, via Reason's Hit and Run:

Yesterday an Institute of Medicine committee released a report on food marketing and children that called for
congressional action "if voluntary efforts by industry fail to successfully shift
the emphasis of television advertising during children's programming away from
high-calorie, low-nutrient products to healthier fare." According to The New York Times, the IOM report "links TV ads and
childhood obesity." According to The Washington Post, it says "TV ads entice kids to
overeat."

It is amazing that the human race has made it this far given that our children are raised by two entities, "TV" and "Congress", who are so often bickering with each other over how to best accomplish the task. 

I have a proposal.  I think we should nominate some smaller group of adults, maybe two on average, to take over the care, feeding, and education of children until they reach adulthood.  Though its probably not an absolute requirement, maybe we could have one of these adults be a female and one a male, to make sure children can draw on the experience and insights of both genders.  These individual child protective guardians could actually live with the children, helping them to avoid making bad decisions about diet, entertainment, and many other life issues.  This would drive accountability for raising children down much closer to the individual level, and relieve from "TV" and "Congress" the need to micromanage decision-making from afar.

Per Reason's Hit and Run:

House Judiciary Committee Chairman F. James Sensenbrenner (R-Wis.), who never
saw a criminal penalty that couldn't be improved by making it harsher, has introduced a bill that would impose a three-year mandatory minimum sentence
on anyone who, with an expectation of financial gain, "assists, encourages,
directs, or induces" two or more foreigners to illegally reside in the U.S. The
penalty rises to five years if the encouragement leads to a crime punishable by
more than a year in prison. Families Against Mandatory Minimums notes that "the five-year mandatory minimum will nearly always
apply because the bill would also increase the maximum penalty for illegal entry
to a year and a day and provides mandatory minimum penalties of one to 10 years
for those who reenter the country following deportation." Sensenbrenner's
committee is scheduled to vote on the bill today, without any hearings.

So if I accept paid advertising on my blog, and then I publish this, am I a felon?

I suppose a large number of Americans must support the free speech restrictions embodied in McCain-Feingold and other campaign finance laws, or they wouldn't have passed.  The logic of such laws is apparently to reduce the influence of "big-monied interests" in elections, I suppose by being able to saturate media with their point of view.

So here is my question - have you ever met anyone (other than John Kerry with his Iraq vote) who thought that they had been duped or unduly influenced by election advertising?  Have you met anyone who says "yep, I voted for the guy with the most ads instead of what I believed in?"

The fact is that I have never met such a person, even among those who support campaign speech restrictions.  Their position is always that they are of course too smart to be gulled by the ads but "a lot of other people are not as smart".  But who are these other people?  They are like the friend of a friend who swears his grandmother put her cat in the microwave to dry it off.  They don't exist.  The fact is that no one thinks that they personally are unduly influenced by campaign ads, but they think everyone else is. 

Here is a rule of thumb:  When supporters of a law take the position that "This law is not necessary for me but for all those people who are not as smart as I am", it is a bad law.

Today, on the final day of their 2006 term, the Supreme Court ruled in the Olek vs. New London case:

Washington --  The Supreme Court on Thursday ruled that
local governments may seize people's advertising space -- even
against their will -- for alternate advertisers who promote economic development or higher taxes

It
was a decision fraught with huge implications for a country with many
areas, particularly the rapidly growing urban and suburban areas,
facing countervailing pressures of government budget deficits and free speech
rights.

The 5-4 ruling represented a defeat for some Connecticut
residents whose advertisements in the local paper against recent property tax hikes were rejected by the city council in favor of ads for several pro-taxation groups.

As a result, cities have wide power to replace advertising that might favor lower taxes or oppose certain community projects with messages more in the public interest.

Local officials, not federal judges, know best in
deciding whether speech will benefit the community,
justices said.

"The city has carefully formulated an economic
development that it believes will provide appreciable benefits to the
community, including -- but by no means limited to -- new jobs and
increased tax revenue," Justice John Paul Stevens wrote for the
majority.  "We established in Kelo that local governments have broad power to seize property when that seizure serves to maximize taxation, and certainly this applies equally well to unwanted advertising that might work against maximizing tax revenues."

He was joined by Justice Anthony Kennedy, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer.

At
issue was the scope of the Fifth Amendment, which allows governments to
take private property through eminent domain if the property is for "public
use."  The majority observed that using advertising space in favor, rather than against, public policy certainly qualified as "public use".

Fred Olek and several other homeowners in a
working-class neighborhood in New London, Connecticut, filed suit after
city officials announced plans to remove their newspaper advertisements opposing the upcoming ballot initiative to raise property taxes.

New London officials countered
that the tax initiative served a public purpose of boosting
economic growth that outweighed the homeowners' speech rights, even
if the area wasn't located in North Korea or Cuba.

Justice Sandra Day O'Connor, who has
been a key swing vote on many cases before the court, issued a stinging
dissent. She argued that "This makes me so mad, I could, I could... aw, forget it.  I'm retiring this year to a Pacific island anyway, so y'all are free to screw up this country as much as you want".

Justice Scalia wrote a separate dissent, making the argument that "I have no problem with government limitations on speech per se, but given the fact that 3 readers of this paper lived out of state, such powers per Raich reside with Federal and not local authorities"

Local authorities were careful to point out that Olek was fully compensated at market rates for the removed advertising.  Olek shot back that he was in no way compensated for his loss of free speech rights or participation in the democratic process.  Justices in the majority were unpersuaded by Olek's argument, however, pointing out that in Kelo, the homeowners were in no way compensated for their emotional attachment to their homes nor for their loss of the right to dispose of their property as they wished, "so there".

Frequent readers of this site may know that my day job is running a company that manages recreation sites under concession contract to a number of public landowners, including the US Forest Service.  I take a lot of pride in this job, as our company helps keep recreation facilities open that the government might not have the personnel or the skills or the money to run.  The Forest Service's budget gets cut about every year, such that tax money comes nowhere near covering the cost of managing recreation sites.

Of late, the Forest Service has begun looking to actually close some recreation facilities:

The cash-strapped
U.S. Forest Service can no longer afford to maintain many of its parks
and has started ranking recreational sites, including campgrounds and
trail heads, for possible closure.

Supporters of public lands generally hate the onset of fee-based recreation, and wish it was still possible for all public recreation facilities to be free.  This was a realistic goal back when recreation facilities were cheap to run, but today campgrounds and other such facilities can be tremendously expensive(a single large campground might cost as much as a half million a year to operate), in large part due to actions by the same people who support free use of public lands.  Some examples:

• 50 years ago, campgrounds labor was essentially free because it could be staffed with volunteers.  With current labor laws, this is no longer possible (even if people still want to volunteer), and a large campground can require hundreds of thousands of dollars of labor to maintain each year, even at minimum wage.
• 50 years ago, people in the outdoors just drank water from a stream or out of the hand pump.  Today, in certain complexes, we spend tens of thousands of dollars keeping water systems in compliance with complex state laws.
• 50 years ago, if someone tripped over a root in the forest or twisted their ankle on a rock, they accepted that as a normal risk of being out in nature.  Today, everyone calls their lawyer.  Each year, campground visitors file millions of dollars of lawsuits for accidents once thought to be normal hazards of nature.
• 50 years ago, active timber sales in the forest helped fund recreation programs.  Today, timber sales in many forests are at an all time low, due in large part to opposition by nature lovers

So, I admit I don't know the person who said this:

"They will close
those sites the public has always enjoyed but which they cannot afford
because they are not profitable," said Scott Silver of the Bend group
Wild Wilderness. "It's the complete perversion of the meaning of public
lands."

But I would bet quite a bit that he supports some or all of the laws and government regulations listed above that make running recreation facilities so much more expensive than 50 years ago.

Update: By the way, though I might disagree with Scott Silver on the necessity of use fees at developed facilities like campgrounds or boat ramps, he is dead on in certain respects:

• Politicians love to fund splashy new recreation projects, but hate to fund basic maintenance.  This means that at the same time campgrounds and facilities are closing due to lack of maintenance dollars, new facilities are being opened all the time.  This strikes me as absurd. 
• Recreation facilities on public lands are missing the boat when they attempt to emulate private operations too much.  There are plenty of KOA's next to the interstate with pools and video game rooms.  Campgrounds on public lands have typically taken a different approach and served a different niche, that of providing a more primitive experience closer to nature, and I think its a mistake when they move away from this approach.

Unfortunately, as is often the case, I will never be able to see eye-to-eye with such groups because they refuse to acknowledge that as a private company I can be anything but Darth Vader with secret plans to put up a Walmart in Yosemite or put up billboards along a nature trail.  Crusading socialists often have the funniest ideas about the profit motive.  For example, if I make most of my money at a recreation site catering to people who want a wilderness experience, why in the world would I do anything to interfere with that experience?  It does not matter what the situation or the facts or the company, the first arguments are always that private companies just want to take a natural setting and put up advertising, then build a shopping mall.

By the way, Mr. Silver sees conspiracies among the private recreation companies.  I have sat on some committees in the "evil" organizations he cites, and I will tell you with complete assurance that these groups would have trouble crafting a successful plan to buy a 6-pack of beer from the local 7-11, much less shape government policy to their ends.  But maybe I got left out of all the really cool SPECTRE-type meetings. 

Politicians seem to love the movie business, or so I infer from the rash of proposals of late to subsidize the movie business. 

New York City seems to have been first out of the blocks, with this program to provide tax rebates and free advertising for shooting movies in NYC.  The article tells us this is the only industry being so targeted at this point by NY.  Why?  Why are movie jobs and movie makers somehow better than every other kind?  Maybe its because they think the movies provide good advertising for NYC, like the great light they cast on the city in movies like this and this.

Anyway, the trend got my attention when our own Arizona governor lamented that Arizona is no longer home to as many movie shoots as it once was decades ago.  Far be it for me to suggest that this is probably more of an issue of westerns going in and out of style (since about a majority of movies shot in Arizona were westerns).  Nevertheless, Napolitano is pushing ahead with her plan to improve the net income line of Hollywood studios by subsidizing production in Arizona.

Finally, via Reason, we see that Hollywood is worried that it is being left out of the subsidy competition, by actually paying companies to film in LA:

Mayor James K. Hahn on Thursday announced a plan he hopes will keep Hollywood in
Hollywood "” by paying film production companies to shoot in Los Angeles.

Hahn's proposal, which was inspired by a program that New York City
adopted in December, would use as much as $15 million in public funds to
reimburse companies that make a movie in Los Angeles, paying them 5% of their
production costs or up to $625,000.

OK, so one would think that all these locations have struggling media and production industries.  But in fact, just the opposite is true.  In New York:

But Wylde thinks film is just the tip of the iceberg. The city's entire media sector is growing explosively, she notes. From Time Warner to Hearst to Bloomberg LLP, media firms account for $13 billion in city wages, 50% more than tourism.

And, in LA:

Last year, however, film, video and television production in Los Angeles
actually reached record highs. Entertainment Industry Development Corp. issued
permits for 52,707 location production days "” one day representing a single day
of work on a single project "” a 19% increase over 2003.

Doesn't sound like they are in much trouble.  Their film and media businesses are already growing explosively to record highs.  So why do they need a subsidy?  Doesn't exactly sound like the New England textile business.

Look, at the end of the day, this is about politicians handing taxpayer money to powerful media people, people who have the ability to disproportionately influence public opinions and things like ... elections!  This is a barely disguised campaign expenditure, except for the fact that taxpayers pay the bill.

I wrote more about the idiocy of subsidizing corporate relocations to one's state or city here.

Update:  Match Welch has more

Should Maureen Dowd have the right to more political speech than I?  Should George Will enjoy more rights than you?

I signed the petition from the Online Coalition opposing speech limits in the blogosphere.

We are concerned about the potential impact that Judge Colleen
Kollar-Kotelly's decision in the U.S. District Court for the District
of Columbia in Shays v. FEC, 337 F. Supp. 2d 28 (D.D.C. 2004) and the
FEC's upcoming rulemaking process may have on political communication
on the Internet.

One area of great concern is the potential regulation of bloggers
and other online journalists who distribute political news and
commentary exclusively over the web. While paid political advertising
on the Internet should remain subject to FEC rules and regulations,
curtailing blogs and other online publications will dampen the impact
of new voices in the political process and will do a disservice to the
millions of voters who rely on the web for original, insightful
political commentary.

Under the current rules, "any news story, commentary, or editorial
distributed through the facilities of any broadcasting station,
newspaper, magazine, or other periodical publication," is exempt from
reporting and coordination requirements. It is not clear, however, that
the FEC's "media exemption" provides sufficient protection for those of
us in the online journalism community.

As bipartisan members of the online journalism, blogging, and
advertising community, we ask that you grant blogs and online
publications the same consideration and protection as broadcast media,
newspapers, or periodicals by clearly including them under the Federal
Election Commission's "media exemption" rule.

I have always been opposed to McCain-Feingold's limitations on political speech, so my objection to current law goes beyond just extending the media exemption to blogs.  I support a broader extension of the media exemption from political speech restrictions to -- call me crazy -- all citizens, something I thought the First Amendment took care of but I guess we have to fight for again.  Actually, what might be more useful is to fight for an elimination of the media exemption altogether - this would likely raise such a howl from the media that McCain-Feingold (also known as the incumbent and MSM protection act) would soon be overturned.

Welcome to the Carnival of the Capitalists.  Many thanks to Silflay Hraka for starting the Carnival of the Vanities, of which this is a spin-off, to showcase smaller blogs to a wider readership.  Look for future Carnivals of the Capitalists at these sites (you can submit articles here):

While you're here, feel free to look around -- this post will tell you more about what I do at Coyote Blog.

For this week's Carnival, I have decided to take a bit of a risk, and, in true capitalist fashion, I have taken on a sponsor for this week's Carnival:

This Carnival of the Capitalists is Proudly Sponsored by"¦ ACME Maker of fine anvils for over 50 years

Continue reading ‘Carnival of the Capitalists’ »

Over the last several days, more revelations have emerged that the Bush administration seems to be spending unprecedented amounts of taxpayer money for third party PR support of administration policies.  There is nothing that makes me madder than politicians using my money to help cement their own position in office.  For all the majesty of the office, the President is still the taxpayers' employee, and we should expect an honest accounting of his performance and programs.  What makes this even more ridiculous is that the US Presidency is the greatest bully pulpit in the world -- no one gets more of a chance to get his/her point of view into the public domain than the President.  But Bush is generally a crappy communicator, so he has squandered this opportunity and is forced into paying others to speak for him.

Often business people like myself lament that the government needs to be run like a business - meaning more focus on efficiency and productivity and process improvement.   But there are a number of ways the the government is NOT like a business.  The key difference is that a private company can, at the end of the day, give outsiders the brush-off.  As a private company (with no public stock float) I don't have to tell anyone anything about the decisions I have made or why I made them.  I am not only allowed but expected to pay money (in the form of PR, sales, advertising, etc.) to  put a public spin on my products and services -- this is called marketing.  The government, of course, is not supposed to do this.  They have an accountability to everybody.  (actually, even CEO's of public companies are not supposed to do this either, at least with their shareholders, but they do).

The Bush administration wants to believe they are still running their own private business, rather than a public trust.  They have used 9/11 and the war on terror as excuses to pull a veil of secrecy over decision-making, data, and even mistakes that often have little to do with national security.  They have set a number of unsettling precedents around managing their public image, and their payments for PR and good press fall into this category.

I thought I had written myself dry on this topic with this long post, which got a lot of nice links around the blogospere.

However, this article by Michelle Cottle quoted approvingly by Kevin Drum is such a great example of government-as-mom fascist control of individual decision-making that I had to link it:

As a nation, Americans are apparently too stupid (or stubborn) to recognize that Big Macs and Big Gulps aren't the foundation of a healthy diet, but thanks to several gazillion dollars in direct-to-consumer drug advertising, we all consider ourselves experts in pharmacology.

....No matter what kind of qualifiers, disclaimers, and helpful tips Merck scrawls across Mevacor's box (or, more likely, crams onto a package insert printed in type so tiny it will make your eyes bleed), a fair number of self-medicating geniuses will think that the best way to prevent heart disease is to take two Mevacor for every six pieces of fried chicken they plan to eat that night. Don't laugh. It will happen and happen frequently.

It must be so wonderful to be in Ms. Cottle's shoes, to have your life so absolutely perfectly put together that you have both the time and the superior intellect to take over my life as well.  In two short paragraphs, she manages to highlight a number of statist tendancies that it took me thousands of words to describe.  At the same time, she makes a hash of my categorization scheme by simultaneously combining traits of three of my four categories, including Nanny's (you can't be trusted with your diet), technocrats (we can make more informed medication choices for you than you can yourself), and socialist-progressives (you are merely an zombie reacting mindlessly to advertising).  Wow.

I am spending the day filing all our sales tax returns (10 states, 4 counties) and have noticed something about state and county tax collectors and treasurers.  They put their name all over everything.  Take Lake County, Florida.  The sales tax form says "BOB MCKEE" and in little letters underneath that it says "Lake County Tax Collector".  The pre-addressed envelope is to BOB MCKEE.  I have to make my sales tax check to, you guessed it, BOB MCKEE.

Why is BOB MCKEE's name all over this?  What happens when BOB MCKEE retires or fails to get reelected?  Isn't the county stuck with a huge printing bill to replace all the forms and send out new ones?  And, assuming this is an elective office, don't BOB MCKEE's political opponents object to tens of thousands of dollars of free advertising paid for by the county.  Heck, I can't always name all my Congressman here in Arizona but I sure as hell know that BOB MCKEE is the tax collector for Lake County, Florida.  Conversely, I don't know who the head of the IRS is and I certainly don't address my checks to him or her on April 15.

By the way, this is just one example.  I get sales and property tax forms and such from many many counties in 10 states and it is much more the rule than the exception that the person, rather than the office, dominates the letterhead.  Stupid.  And, given the taxpayer subsidy implied for the incumbent, mildly corrupt.

The results are in, and they were entirely predictable. McCain-Feingold has been a disaster. Its restrictions have in no way decreased the amount of money being spent in this election. Rather, it has funneled huge amounts of money into negative advertising attacking a person or position (legal) and away from supporting and illuminating the positives of candidates (illegal). It has shifted money from groups with high disclosure requirements (the political parties and candidates) and dumped it into groups with no reporting requirements.

Most troubling, it has created a Federal Bureaucracy around deciding what political speech is legal and what is illegal. Is advertising Fahrenheit 9/11 legal? Is a 60 minutes anti-Bush documentary using forged documents illegal? Is an anti-Kerry documentary by Sinclair illegal? As Jonathon Rauch puts it in Reason:

Now it is official: The United States of America has a federal bureaucracy in charge of deciding who can say what about politicians during campaign season. We can argue, and people do, about whether this state of affairs is good or bad, better or worse than some alternative. What is inarguable is that America now has what amounts to a federal speech code, enforced with jail terms of up to five years.

This is perhaps the worst assault on the first amendment since campus speech codes. Where is the ACLU? Oh yeah, they supported McCain-Feingold.

UPDATE

Another interesting article about the Sinclair situation here.

The workers compensation program in Florida is broken. In a previous post, I discussed why, almost no matter how broken it is, workers comp is still better than an alternate world without it. Sometimes, though, Florida tests me on this.

If you don't know, Florida is one of a couple of states (California and New York are others) that national carriers of workers comp insurance avoid because it is such a mess. Fraud is high, costs are high, benefits are low.

I found a new reason to dislike Florida workers comp today. Apparently, there are lawyers out there in Florida advertising that a worker will never get their fair shake out of the insurer unless they hire a lawyer. We have an ex-employee who was injured in a vehicle accident while at work. A claim was filed, and the workers comp system is processing the claim (though a bit delayed due to 4, count them 4 hurricanes to hit Florida in one month). So, for some reason, the employee has hired a lawyer. I do not know what he will get with the lawyer, but this is an awful trend, because the only redeeming feature of the workers comp system is that it keeps lawyers and their costs out of it. I have no idea how the lawyer gets compensated, but I am sure at some point, I will be paying his fees one way or the other. If the employee is paying for him directly, I really feel bad for the employee, because I don't know what value he is getting for his money.

So, the lawyer, putting in a good 15 seconds of work (which he probably bills an hour or two for) pulls a xeroxed set of discovery questions and sends them to me. There are thirty four questions, all with things I have to look up or xerox and send to him. None of them are tailored to this case, so most will end up being irrelevent and all my info gathering a waste of time. So, not only is there the cost of the attorney's fees adding to the process, but the externalities of the cost of my and my employees' time to feed him with data. All to probably get the same recovery for the patient the system would have given him without intervention.

This is what I really dislike about the law profession nowadays. They are the only people except for the government who can arbitrarily demand a ton of my time calling up data that no one will ever look at. Other people try this - for example, some vendors have sent me huge credit applications that would take weeks to complete - but in their case I can say "no" and tell them if they insist, they don't get my business. Lawyers and the government, though, can demand arbitrarily intrusive and time-consuming document collection and there is not a thing I can do about it.