Across the Great Divide

Paper Profits.

Neal St. Anthony reports on a recent decision by the Star Tribune's parent Avista Capital Partners not to make a quarterly interest payment to its second-tier debt holders.

George Singer, a veteran bankruptcy attorney with Lindquist & Venum who is not connected to the Star Tribune, said Avista's decision to withhold payment to the junior debt holders likely was made with the approval or encouragement of the senior lenders who would get paid first in a bankruptcy. The senior debt has traded among banks for as little as 56 cents on the dollar while the second-tier debt has traded for as little as a dime on the dollar.

Also, junior creditors often exchange their debt for equity through a financial restructuring.

"The banks say: 'Don't make any payments to subordinate debt holders.'" Singer said.

Notice it's the banks telling Avista to pay them, but hold back on paying others. That's today's wealth creation, where banks specialize in restructuring debt rather than growing businesses and funding innovation.

There's the economy in a nutshell. Today's financial industry — which is a major industrial sector, lobbyist and problem child — is all too often about leveraging debt and laying off risk on the suckers — whether they're workers, local governments or junior debt holders. It's not about investing in the fundamental business, but figuring out ways to divert profits to pay off increasingly untenable layers of debt until one owner finds the next more ruthless or gullible one.

I'm reminded of a recent interview with economist Michael Hudson, who said:

Our tax laws have shaped the marketplace to favor the debt-financed buying and selling of real estate, stocks and bonds rather than new direct investment. Advocates of this financialization of saving and investment depict it as a viable mode of wealth creation, but the effect is simply to de-industrialize the United States. And this is the tragedy of our economy today.

...

As the debt overhead grows exponentially, it siphons off more and more money from being spent on production and consumption. For the financial sector, this is applauded as being the miracle of compound interest. The volume of loans keeps on growing by purely mathematical principles, without much regard for the economy's ability (or inability) to generate a large enough surplus to pay.

More and more wages, corporate profits and tax revenues have to be earmarked to pay creditors. These creditors then turn around and lend out their flow of debt service to yet new borrowers. This involves finding more and more risky markets, while the debt becomes heavier and heavier.  

To pay the carrying charges on these debts, wage earners cut back consumption while debt-wracked companies cut back on new capital investment, research and development. State, local and federal governments also pay interest on their deficits by cutting back on spending to maintain infrastructure or improve services. These cutbacks shrink the domestic market, leading to lower investment and hiring.

All this is applauded as the magic of the marketplace in allocating resources. But it's the financial sector that is doing the applauding, not industry.

 

Russert, Potatoes and Joy.

This story delves into the factors that might have contributed to Tim Russert's fatal heart attack at age 58. Cardiologists disagree somewhat on whether his condition could have been predicted and his death prevented.

The signs were mixed, but on a lot of tests he came up okay:

There was no family history of heart attacks.  Though he had high blood pressure, drugs lowered it pretty well, said his internist, Dr. Michael A. Newman. His total cholesterol was not high, nor was his LDL, the bad type of cholesterol, or his  C-reactive protein, a measure of inflammation that is thought to contribute to plaque rupture. He did not smoke. At his last physical, in April, he passed a stress test, and his heart function was good. Dr. Newman estimated his risk of a heart attack in the next 10 years at 5 percent, based on a widely used calculator.

It didn't take a lab to tell Russert that he had one easily tracked risk factor. He was fat, and his form of exercise was an exercise bike, a particularly joyless form of pounding oneself into shape favored by TV junkies.

“You want to be sure your blood pressure and lipids are controlled, that you’re not smoking, and you have the right waist circumference,” Dr. Smith said.

The article doesn't mention stress, either.

For all his vaunted love of family and friends, Russert also exhibited characteristics of being a workaholic. Trust me, this is an observation, not a criticism. Give the man who loves his work the job of losing weight, and that's one daily task that may not get done. Not if a dinner at a steakhouse with a source is the alternative.

People like Russert simply don't have room in their lives for chores. Give them a healthy way to find joy, and they may have a fighting chance.

Coleman Ad in the Eye of the Beholder.

In his first TV ad of 2008, Sen. Norm Coleman said sometimes getting things done means "bridging a partisan divide" and that "it's not good enough tuh, tuh tear somethin' down."

I agree with the sentiment.

His campaign says his second ad "highlights Norm Coleman's 30-year commitment to bringing people together to get things done in Minnesota."

But here I beg to differ. This one is about something else entirely.

I'm not going to jump in where others have already questioned the recent spot — suggesting the Colemans were edited together in the 30-second kitchen skit. Instead, I'll focus on what the ad  says — visually and subtextually. It amounts to the same thing.

Campaigns can deny they've implanted suggestive images in their political ads, but that doesn't mean they're not present.

Given that "Got It" has the production values, scripting and staging of a broadcast ad, and what I know of the ad industry, I have to believe every prop, movement, shadow, stutter, reflection, camera angle and edit has been carefully considered.

The explicit theme is Coleman's independence as a Senator and his readiness to "get things done." It's one of those soft, introducing-the-candidate ads that appear early in campaigns, like Al Franken's "Mrs. Molin" and Mark Kennedy's "About Mark."

The spot begins with a jaunty intro of 50's era domestic comedy music which continues to run underneath. It cues a viewer response of "this is light-hearted, not serious" and evokes pre-sex-revolution television in which hapless husbands were subservient to their stay-at-home wives.

Coleman's wife, Laurie, has a commanding, well-lit position in the foreground. She jumps right to the ostensible message: there are "some people" who'll "say he's a rubber stamp for the president, but he's been ranked as one of the most independent senators." This is the factual hook leading to a supporting point about Norm opposing some legislation that aided oil interests and sets up a joke about his supposed lack of domestic independence.

But the subtext is really about something else — I have to agree with the green-screeners on this — the Coleman's relationship. Yes, there are unusual dimensions, but don't believe the rumors, it says. Underneath, this Ozzie and Harriet, the Cleavers, Samantha and Darren.

Laurie, dressed more primly than viewers may be accustomed to seeing her, is bathed in golden light, while the darkly dressed Norm moves from shadow to sunlight far in the background. This violates the cliche of the candidate being face-to-face and within hugging distance of others with whom he seeks to demonstrate a close relationship. (Compare the distance between Colemans at home, this industrial kitchen shot from Blogs [sic] for Norm!, and the archetypal image of the concerned candidate holding forth to wrapt constituents. )

Though separated by a dark, oddly reflective expanse, the couple has matching, pure white coffee mugs the size of soup bowls, with  heart-shaped tapering sides. Laurie cradles hers with a two-handed grip designed to highlight her wedding ring, twisted slightly to show off the rock in a close up.

Norm sips. Laurie never does.

In a bit of stage business to keep Norm from disappearing until his cue, he pretends to drink his coffee, pours himself a partial refill and then goes back to the newspaper at the far end of the island. Midway between them is an overflowing bowl of fruit, a symbol of fecundity and sign that the entire family must be around to consume so much bounty before it rots.

Norm's reflection, a dark, inverted Narcissus, extends around the bowl, facing his wife across the chasm, his heart a red apple bursting in silent supplication.

Although the kitchen has all the stripped down sterility of a TV lifestyle program or cooking show set, it maintains a few tiny swatches of color to warm the scene of faux domesticity in the black and white world.

An unclaimed juice glass on the island subtly proclaims the Coleman's life together is more than half full.

As the punch line nears, Laurie tosses a command over her shoulder. Norm immediately looks in her direction and offers a conciliatory open palm. She never faces her husband.

Compare this to the knee-to-knee interaction between Mark Kennedy and his wife in the 2006 ad, where she is affectionate rather than dismissive of her husband's foolish choices.

Coleman then makes an odd move for a man preparing to take out the garbage. Instead of heading forward  into the kitchen and closer to his wife, he turns away toward the living area.

We next see him outside at his dumpster, leather jacket zipped up against late spring chill, and I want to ask: What kind of Minnesotan puts on a coat before taking out the garbage?

Coleman actually looks better and more natural in this ad than in so many of his appearances where he alternates talking out of the corner of his mouth and insincerely flashing his milli vanilla choppers. The bags under his eyes are missing in the soft lighting. He seems less horse-faced, and his  swaggering chuckle after dunking the baggie gives a better sense of the man's charm.

You can disagree with this semiotic reading. It's offered partly in fun. But I guarantee you, none of what I've described escaped someone's professional eye before this commercial was cut.

SUV-Hating Liberal Media Strikes Again.

Samantha Binetti, 40, and a female friend were hitching the camper to the SUV they had borrowed when "something went wrong" and the vehicles somehow came apart, Fillmore County Sheriff Daryl Jensen said Tuesday.

Binetti was trapped under the SUV and died at the scene, despite efforts by fellow campers at Forestville/Mystery Cave State Park to free her, Jensen said.

— Star Tribune

Mitch is at a loss over this story...

Not saying that substituting “SUV” to imply an active, malevolent presence in the story, or even just to differentiate it from, say, cars, trucks, minivans and what-not is a way of skewing the coverage of this story toward a political end…

…although I’m at a loss for any other motivation to ascribe to myself.

Well, let me try. Here are the other stories of the day that reported vehicular accidents.

An earth-scraping vehicle used for construction fell off the back of a truck crossing over the freeway on Hwy. 53 Wednesday morning.

Police say a teenage driver who lost control of her car while scrambling to capture her pet gerbil wasn't cited for an accident that hospitalized two people. Lt. Dave Caron said the gerbil escaped from its cage while the 17-year-old driver was southbound on state Route 51 Tuesday morning.

Making a grab for the fuzzy escape artist, the driver veered off the road and hit a stranded truck hooked to another truck by jumper cables.

Police said a minibus crashed into the side of the prime minister's Mercedes after it had crossed a busy downtown intersection.

A Farmington teenager who allegedly told friends last fall about a ploy to crash her car for the insurance money faces criminal charges stemming from a collision that injured two people a few weeks later.

According to a criminal complaint filed Tuesday, Christopher Kelly Anderson, 25, was driving his BMW around 2:10 a.m. when he hit a vehicle parked on the 22800 block of Zion Pkwy., then ran from the scene.

Clearly, the first story was written to incite hatred against large vehicles used to tow camping trailers that are difficult to lift off of people.

Truth, Indeed.

Gary Miller catches MPR's typo.

Senate Republicans defeat attempts to tax “excessive oil company profits.” GOP Sen. Norm Coleman and DFL Sen. Norm Coleman voted for the bill.

Then adds a great stinger.

Quantity Over Quality.

You may have noticed that this blog regularly links to stories at the New York Times and, less frequently, the Washington Post, LA Times and Wall Street Journal. You know, national newspapers of record that still act like the Style page isn't their most important product.

Now this:

A panicked Sam Zell has pressed the self-destruct button at Tribune Publishing, having announced a plan yesterday that calls for steep cuts in the number of news pages, printed pages, and the journalists producing those pages across its various newspapers. From here on out, the ratio of ad-to-edit pages has been capped at 50-50, meaning the Los Angeles Times will begin slashing 82 news pages from the paper each week. Eager to prove that his blood runs colder than even Rupert Murdoch's, Zell had his No. 2, COO Randy Michaels, explicate on a conference call with investors and press that the average journalist at the LA Times produces 51 pages per year, while his or her counterparts in Hartford, Conn. produce 300 pages. You can draw your own conclusions, but they seem pretty clear to us: what Tribune needs is harder working reporters (from a quantity-over-quality point-of-view) and fewer of them. As Michaels put it on the call: "If you work hard and are producing a lot for us, everything is great." And if not, you're dead and you just don't know it yet...

I seem to remember that at our local Star Tribune, a reporter was quoted about how he scanned blogs and news services daily to produce about nine items per edition, and if we weren't pushing quantity so hard here at ATGD, I'd look up that reference for you.

It's bad enough when the local paper is feeding at the blog trough for content, but when the national papers throw in the towel, well, that means us leeches may have to go to work.

Making Up for Lost Opportunity.

Disappointed Hillary backers who say they plan to vote for John McCain in protest at her treatment may decide to go with Bob Barr after they read this story in the Daily Mail.

McCain's pursuit of present wife Cindy and his divorce from his first wife after a crippling car accident have been reported in the U.S., but — after the New York Times muffed its story about inappropriate relations with lobbyists and CBS used suspect documents to report on George Bush's fly boy days — mainstream media will reamin cautious covering in depth any part of McCain's early history that challenges his heroic image.

Former presidential candidate Ross Perot was an early leading advocate for POWs. He financed the medical care for Carol McCain after the accident that occurred while McCain was in captivity. Perot is not a McCain fan, calling him "the classic opportunist — he's always reaching for attention and glory. Other POWs won't even sit at the same table with him."

Perot's beliefs about McCain and POWs are controversial and not likely to achieve traction in the coming campaign. But his view of McCain's character may get more airing. Even Carol McCain, who supports her ex for president, says:

"My marriage ended because John McCain didn’t want to be 40, he wanted to be 25. You know that happens...it just does."

Obama, striving for a different style of politics, is unlikely to allow his campaign to dredge up this stuff. If he says his campaign should be about positions on issues, then that holds for the other guy, too. But in the  post-Bill Clinton political era, it won't stay just in the British tabloids.

Bridge Closing Leads to News and Geography Lesson.

A whole passel of commentators have taken a shot at the same thing, pretty much in the same way — the irony of Minnesota closing a bridge across the Mississippi that is currently being celebrated with a commemorative stamp.

News Cut's Bob Collins, however, moves beyond the irony, asks a more interesting question and answers it. Where's Wisconsin in all of this?

How to Look Like a Dork in Norway.

Bluestem Prairie knows how this works. A blogger has an original insight, does her due diligence, reports the story first, soon has news organizations and oppo bloggers crawling all over her pages, and voila — the story shows up all kinds of places without her name attached.

Reader Hal Davis, who knows how news rooms work, sent me this link that codifies the rules for stealing stories. I  could've rewritten the post a bit and passed it on without attribution, but by breaking the Golden Rule — Media outlets can only steal outright from other media outlets that are not their direct competitors, and do not fall in their same class — I'd be admitting I wasn't The Gawker's equal.

*****

If you believe the widening wealth gap is inevitable, you are excused from having to experience any moral qualms or make apologies about being filthy rich. After all, it's about math.

“[O]n a macro level it inevitably happens that the rich get richer. And then at some level the rich get richer on a geometric basis. Jeffrey’s point is that this whole issue is—it’s just mathematics at this point. This is the nature of a successful economy. The more successful the economy is, and that would be the goal of everybody, a successful economy, the greater the discrepancy actually is.”

*****

No, this is not turning into a bike blog. It's just that bikes (or any other obsessively examined activity) can provide an analogue or provide an object lesson for everything else in the world. Case in point from Jim:

I heard some economist on NPR today saying that one sign of recession is that repair-oriented businesses tend to do well. If that's true, and if the recent business trends at HC are any indication, we are most certainly in a recession. We're neck-deep in "repairs" (our repairs tend to go far beyond simply fixing broken things), but selling bikes, especially some of the pricier models, has gotten more difficult.

*****

Okay, maybe riding the Trondheim bike lift isn't as dorky as a recumbent or a stairlift. But I'm pretty sure it's also a lot less necessary, especially on hills like this one.  [via Mississippifarian]

Identity Crises.

Our social identity as a member of a community has given way to an individual identity as a homeowner with sovereignty over our property.
— Janna Caywood, Minnesota Journal [pdf]

*****

Artist Geoffrey Raymond has been painting portraits of Wall Street figures and placing them in public so passersby can annotate them. His latest is former Bear Stearns CEO Jimmy Cayne. The failed Bear Stearns was folded into J.P. Morgan on Friday, and as Cayne's speech to employees was met with silence, Raymond was outside.

Raymond intended to sell the portrait on eBay, but he's already received an offer he couldn't resist. No word on whether it was from an art lover or Cayne hater or both. [h/t She muses]

*****
The Strib has a story about two Best Buy employees who've written a book about the Results-Only Work Environment (ROWE) "which allows employees to put in their hours whenever, wherever and however they want, as long as the work gets done."

I agree with the premise of hiring the right people and trusting them to get the job done, with a minimum of oversight and mandatory meetings.  But I'm skeptical that ROWE's results are as rosy as portrayed.

First, it doesn't work for all jobs, which may cause problems that have yet to bubble up in the culture. And what message does it send to customers? We're available for you 24/7? Or it's all about us?

Second, it contributes to the general noise pollution as ROWEving workers carry on conversations from non-work settings like beaches, restaurants, airplanes and parks. I had to endure a long sales call in a store last month as the caller worked his way around the shelves. Maybe he was entirely focused on winning the business on the other end of the call, but it sure didn't look like it where I stood.

Third, when you need to get people together it becomes more of a production. I have a friend who works for Best Buy. He left his old position three weeks ago and took some time off. Now, he'll be in Minneapolis, but in three weeks he flies back to his former office so he can attend his going away party.

*****
The online Star Tribune's search engine apparently doesn't recognize phrases in quotes very well. Or maybe it searches for subtext as well.

Looking to do a quick count of the space dedicated to Sex and the City in the last week — at least nine stories with photos covering several pages by my recollection — I found this story on the first page of hits: "Coleman calls on GOP to be party of hope and toughness."

*****

I thought of the SATC PR splurge when I read Gail Dines claiming the distinction between soft core vs. hard core pornography has changed. Pop culture is the new soft core porn.

According to Dines, who is working on a book titled Slut Culture, Playboy magazine invented the modern porn industry, she says, by putting "high-class" women in a context with "high-class" products. Hefner's genius was understanding the line of explicitness that attracted male readers without driving away the high dollar advertisers.