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SEIFFE:  The Next Bail Out

Monday, November 17, 2008 

By Ralf Seiffe

News Item:

A California think tank has proposed bailing out the car companies by imposing new gasoline taxes.  Under the proposal, gas prices will be set by the federal government at a minimum, or floor price of $3.50 per gallon, regardless of the market value of the fuel.  The difference between the controlled price and the market price would be collected by the federal government and used to fund the automotive sector bail out.   In return, the automotive companies would be required to make more efficient cars and limit executive compensation.

This is brilliant!  The best and brightest on the Left have now determined how to directly transfuse the profitability of one disfavored industry into the failing corpus of another, more favored industry.  The proposed beneficiary is the Left’s new best friend, now called “Detroit”.  The name has replaced the archaic term “the unions”.  Their financial and public relations victim is their eternal boogyman, the oil industry.  The real beauty of this idea, however, is that the social engineers proposing the plan are using it to gratuitously inject their values into the transaction.  Just think, under this plan, the Left adds nothing to solve the problem; it simply adds conditions by making every driver pay more than would otherwise be the case. 

Over time, this transfer plan would have the same effect as AIDS-infected blood once had on unsuspecting victims; apparent near-term relief at the cost of a fatal long-term infection.  Nevertheless, if the Left is able to make this concept politically feasible, just think about what mischief the “public interest” sector could inflict on their enemies. 

The basics conditions necessary to move this new idea would include identifying the beneficiary industry, the host of this parasitic process and some tie between the two.   Preferably, the dying industry is one that’s a top-of-the-mind brand name enjoying some emotional connection with the public.  The victim industry must be very profitable and if it’s got a bad reputation with the public, all the better!

The trouble with the domestic car companies, according to their critics, is that they produce products of declining relevance.    The symptoms of this condition consist of falling revenues, declining margins, quality control issues and lay-offs.  The causes include management that is insulated from reality, labor with a sense of entitlement, and the rise of competitors with good products at a lower cost.      

But wait! Don’t these debilities perfectly describe conditions at The New York Times?  That company certainly qualifies as a top-of-the-mind brand which would be missed if it were to disappear. After all, how would the broadcast media find stories to report without it?  Despite the MSM’s addiction, evidence that The NYT is a product of declining relevance is certainly demonstrated by its advertising and circulation figures.  There have been lay-offs.  The fact that the paper supported Barack Obama so obviously shows the same intellectual integrity as a Chevy Citation’s build quality.

The causes are similar, too.  The management insulates itself with a tricky arrangement of common shares that operates a lot like the system that keeps the Ford Family in control.  The writing staff and the union craft workers feel as entitled as a Rouge engine plant worker and just as arrogant.  Worst, there are new information sources, like this one, that are faster, more transparent and more environmentally friendly.  They are beginning to displace the old Gray Lady.

So, The New York Times seems to be a perfect candidate for a bail-out.   Before searching for a host/victim however, we should remember that, as proposers, we have the right to insert demands that advance our cause as a condition of the transfusion.  There are many opportunities to meddle, like a restriction on the “newsprint footprint” or new downsizing regulations to make reading easier, for example, in a crowded café.  Others extortions could include compensation limits in the form of a single class of common stock so non-family shareholders could hold management accountable.  Finally, we could insist that the reportage be improved by imposing requirements that the paper print stories that are more relevant in a similar way that the car companies will be told to make “greener” cars.  The journalistic equivalent of greener cars might be asking the president-elect to explain his relationship to his Bill Ayers or what his relation with George Soros might be.

Other suggestions to intrude will certainly come forward but, what company should become the victim/host that will bail The New York Times?  Like the relationship between automotive and oil companies, there must have some connection with the newspaper business.  I suggest that Google be tapped, so to speak.  The linkage with Google is clear--The Atlantic suggests Google is dumbing us down--and eliminating the need for a nuanced, erudite newspapers like The Times.  Sort of like the high price of gasoline killing demand for Detroit’s most profitable vehicles and precipitating that crisis.   

These proposals are just suggestions but, the Left has a way of slowly making such idiocies acceptable to the public. They have their sights set on America’s productive sectors for special treatment and the prospective victims should take on a defensive position.  Exxon Mobil could buy the entire domestic automobile industry for what it earns in about six weeks and they could simply put the “Detroit” part of the industry out of business.  That would not change demand for fuel but would eliminate the need for a bail out.  This would keep them from becoming a victim of this crackpot suggestion for a lot less money and trouble.  Google could probably protect itself from the same danger by buying The Times and subjecting it to the same fate.

Ralf Seiffe advises business start-ups and product launches from Chicago, Illinois and is a political analyst and columnist for the Illinois Leader and Illinois Review.

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