The Obamamercial

I watched the Obama infomercial last night and kind of enjoyed it. (It's up on the Obama site.) I doubt it changed any minds, but Ad Age didn’t name him "Marketer of the Year" for nothing. As any marketer knows, it’s nearly impossible to tell which thing you do is the one thing that really matters. You have to do lots of things and let the totality of your efforts carry the day.

The things he has done (or that have been done by others in support of him) online in the form of viral marketing and YouTube videos have been especially effective, but even those things take a back seat to his personal ability to communicate. These skills are going to be sorely needed, and tested, in the coming months.

But the main thing I thought as I watched last night was that the infomercial format is much more effective than the faux debates we suffered through. My proposal for 2012 is a series of dueling infomercials. Over a five week period each candidate would submit a series of weekly thirty-minute videos to various networks. Each video would deal with a different broad theme, e.g., health care, energy, foreign policy, etc. No other rules. The candidate can sit and speak to the camera, but would be free to include visual aids, charts, guests – whatever. If the candidate wanted to use part of the time to slam the competition it would be his call, but the more time doing that, the less time available for making that week’s case.

This time could be paid for through public financing. I think most networks would actually be happy to donate the time if they were permitted some flexibility on when the videos were broadcast.

The photo? Ron Popeil -- father of the infomercial. Here’s a link to the Ronco web site in case you are struck with a sudden urge to own a five-tray food dehydrator.

Time Inc. Seeks Government Money

Time Inc. Seeks Government Money
Publishing Giant Too Big to Fail?
AP – New York, October 28, 2008

Time Incorporated, the world’s largest magazine publisher announced today that it is seeking $3 billion in Federal aid as it suffers from the recent upheavals in the economy.

Time CEO Ann Moore stressed that the money was not a hand-out, but instead would be used to buy ad pages in struggling magazines such as Time, People and Fortune. “This money will be invested in ad pages promoting various government initiatives, which will result in a positive ROI for the people of the United States. We expect participation in important government programs such as food stamps, aid to dependant children, and Medicaid to rise significantly – not to mention enrollment in the armed forces by people with reduced job prospects,” continued Moore, “but these programs will only work if people know about them, and that’s where Time Inc. comes in to play.”

Time is believed to need the money in order to stay in business until it can develop an effective internet strategy. The growth of online media has taken a big bite out of Time’s advertising and subscription revenues and they have yet to find an effective means of fighting back. “It’s only been 12-13 years since the internet came at us out of nowhere,” said Ms. Moore, “and we can hardly be expected to have adapted to such a radical shift in consumer behavior -- from people reading stuff on paper to reading stuff on a computer --in so little time.”

Some industry analysts note that Time Inc. is still quite profitable, throwing off in excess of $1 billion in cash each year, but Jeff Bewkes, CEO of Time Warner (Time’s parent) protests that the parent company needs that money to fund other TW projects such as the movie remake of Get Smart, HBO’s The Life and Times of Tim, and of course CNN’s The Situation Room, with Wolf Blitzer. Bewkes claims these products, “are necessary to preserve the American way of life. Take them away and the terrorists will have won.”

Bye bye big boy

Lost to me in all the election and economic news was the announcement by GM last week that they will cease development of the next generation of their big SUV platform, the one that underpins Escalades, Suburbans and Yukons. The reason is the $2 billion developmental costs. These monsters, plus smaller SUVs and trucks, provided all of GM’s profits for the last 20 years, but no one wants them now. Just a year ago the Janesville, Wisconsin plant that made the big ones produced 20,000 a month. Last month it made 3,000. They are closing the plant before Christmas.

I was at the dealer yesterday having my car serviced, and while I waited I sat in an ’08 Escalade and fantasized. I felt like I was behind the wheel of the Starship Enterprise. This baby had everything, including power, retractable running boards, and an $80,000 price tag. However, a few minutes later I watched a salesman walking a prospect around the beast and overheard him say that they’d get it down around $65k – and that was his opening offer.
I know these things are bad for the environment and a danger to all the rest of us on the road in lesser vehicles, but I felt like Tony Soprano while I was sitting in it, and I think I’ll miss them when they’re gone.

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Well, once I decided to vote for Obama I supposed it was just a matter of time before I started admiring French social policies. I was watching CBS Sunday Morning today (median age of viewers: deceased) and they had a segment on the French health care system. They spend half as much per person, everyone has health care, most services are either free or very low cost, and they have lower infantile mortality rates and beat us in most measures of wellness. I’m sure there are negatives that went unreported, but you have to wonder when we are going to actually do something about our own system. Will Obama & Co. come through?

The calm before the storm

Is it just me, or does anyone else feel like they’ve finished nailing the plywood over the doors and windows, stocked the basement with canned goods and bottled water, and now there is nothing to do but sit and wait until the hurricane reaches shore?

The Dow opened down almost 500 points this morning. Yesterday Alan Greenspan repudiated 40 years of economic beliefs and all but predicted Depression II. “It ain’t over ‘til isn’t over,” but it seems likely Obama will win, which for him could end up being the ultimate example of being careful what you wish for because you just might get it. I’m already feeling sorry for the guy.

Where is all the money going to come from to fix everything? Health care, social security, Medicare, infrastructure, the wars, the existing national debt – the list is endless. And one thing I know is that raising the capital gains tax and getting rid of the Bush tax cuts for the better off among us isn’t even going to put a dent in this list. And all the above is before the promised Obama middle class tax cuts and relief for mortgage defaulters.

I could sure use some good news. At the moment I’d settle for a Buckeye win over Penn State tomorrow night – that’ll get me out of bed and back in the office Monday, al least.

The d’blank poll and more miscellany

With just two weeks to go I am curious to know how everyone is handicapping the race. Cowboy-up and give us your predictions. The most accurate prediction of the final Electoral College vote, stated in a comment to this post, will win something of marginal value, as yet to be determined. As a reminder, there are a total of 538 votes with 270 required to win. Your predictions must be made no later than Tuesday October 21 at 11:59 PM EST. If you don’t feel like going public, just vote in the poll above my photo to the right.

Many of you wouldn’t be caught dead reading William Kristol, but his NY-Times column this morning is a very interesting look at the American psyche and well worth reading.

The picture above is called "Study in B&W." It hangs in my office and was painted by my bro Gaga, who has more for sale if you like this one. You can see them on his site. I just put it up ‘cause it looks purty.

I’m going out of town for a couple of days. Talk to you later this week.

Lucinda et al

Joe Nocera’s column in the Times today described a really innovative idea for giving homeowners some relief from the credit collapse. In short, owners of homes that are worth less than the mortgage would give them back to the bank, but the bank would have to rent the home at market rates to the former owners for five years. At that point the former owners could repurchase the home at the value at that time. It costs the government nothing, people aren’t kicked out into the street, and both buyer and seller suffer a little, which is probably as it should be. Nocera’s explanation is more complete and compelling. Read it here.

The most irritating and pathetic recent example of how celebrity trumps substance was Senator McCain’s embarrassing appearance on David Letterman to apologize for pulling out of a scheduled appearance a couple of weeks ago in order to go to Washington during the Congressional credit debates. Letterman has skewered McCain nightly since then, in the most unflattering terms possible, until McCain was forced into his mea culpa. So a self-important, goofball acting like a 3-year-old throwing a temper tantrum can force a major party Presidential candidate to drop everything to come on his juvenile show, where he then ambushes (and I think this is the appropriate term in the case) him with question about his relationship with G. Gordon Liddy. Candidates used to make pilgrimages to visit Harry Truman, Eleanor Roosevelt and Dwight Eisenhower. Now it’s Oprah, Ellen, Dave and Jay.

If you think the financial crisis is under control, read this recent Fortune article on the $55 Trillion (yes – with a T), totally unregulated market in credit default swaps. The casino-like nature and size of this “financial weapon of mass destruction,” as Warren Buffett calls all derivatives, makes the sub-prime mess look staid and petite.

I’m loving the new Lucinda Williams album, “Little Honey.” Don’t buy it unless you love great country/rock/blues, kick-ass guitar-playing and a voice like a angel from down below.

I change my mind

I plan to vote for Barack Obama. Nothing I heard last night on the Joe the Plumber Show makes me think either candidate is likely to interject anything new into the conversation, so this seems like the time to make it official.

I believed everything I wrote in support of John McCain at the time I wrote it, and I still believe our country would be much better off today if he had beaten Bush in the 2000 primaries and gone on to win the Presidency -- but I think his time has passed.

I’ve been very disappointed that he did not move to the political middle and fight for the independent vote, which I thought he had a very good chance to win. Selecting Governor Palin was, for me, a complete deal breaker, and according to the polls, the same was true for millions of other Americans, which has to bring his judgment into question. I’ve also been put off by the anger that seems to eat at him.

But mine will not be an anti-McCain vote. I have reasons for selecting Obama, some of which are policy and logic-based, and some are just my personal instincts. (This might be a good time to say that I don’t consider myself anything other than an ordinary voter who happens to write a blog.) Here are my “fact based” reasons:

I am less fearful of Obama’s health care plan than of Senator McCain’s, which I think will take health care away from more people than it will help.

Obama is more likely to make a serious effort to develop alternative energy options, which is a crucial political act to free us from the tyranny of dependence on imported oil and the despots who control it.

Obama has shown a cool and steady demeanor through-out the primaries and the general election campaign that makes me feel he would not panic in difficult times. While I find him aloof and cold, perhaps it’s time to elect the candidate with whom it would be less fun to have a beer.

Obama is a greatly superior communicator, who writes and speaks in simple, declarative sentences; and he seems to understand the power of communicating well. We’re in for some challenging times over the next few years and the ability to communicate well in order to persuade and lead the public is going to be more important than ever.

It is also time to give the other half of America a chance at the helm. Millions of Americans feel they were cheated out of a victory in 2000 by the Electoral College, an antiquated and anti-democratic system that negated the popular vote. Nearly 80% of Americans are dissatisfied with Bush’s leadership, and the people who voted against him should have a chance to test their own man and his policies against the country’s challenges; otherwise, we risk making the wedge that divides us too great to ever bridge.

I’ve voted in nine Presidential elections and I’m 5-4 so far. But I regretted three of the five “winners” before his term was over, so I have some trepidation about making any pick. What if Obama turns out to be an old-fashion entitlement liberal who turns over the money-printing presses to Nancy Pilosi? I don’t think he will, but that would be a disaster from which we might never recover. On the other hand, the same could be true if a President McCain actually did “bomb, bomb Iran.” Who knows? In the end it is all a crap shoot. At some point you just have to roll the bones and hope you don’t crap out.

But finally, a part of me wants Obama to win just because I like the way it renews and confirms the essence of the American story. We elect a man of mixed race who rises from welfare, to Harvard, to the White House. He unites a divided country, puts people ahead of politics, ends the war, restores prosperity and discovers the secret to wringing unlimited energy from ragweed.

Only in America, my friends.

Interesting discovery

As you probably know, many wealthy people who enter politics place their financial assets into blind trusts that are managed by a third party who has the authority to buy and sell assets on behalf on the trust owner, but without informing the owner of these transactions. The theory is that if politician A, let's say the Secretary of the Treasury, doesn't know that he owns shares of General Motors that he will be free to make decisions that might affect GM either for the good or for ill, without having to consider what is in his best interest ahead of what is in the country's best interest.

I just learned that to compensate the trust holder for relinquishing control over his finances, he is exempt from paying capital gains taxes on sales made from the trust. Some are estimating that this exemption might provide a tax savings of up to $200 million for Hank Paulson during his tenure as Treasury Secretary. Nice perk, and it certainly makes "public service" more attractive.

Can't forget the motor city...

When I was growing up in Warren, Ohio in the '60s, it had about 65,000 inhabitants and General Motors employed nearly 30,000 people there, building cars, truck engines, and assembling wiring harnesses. Those jobs paid high union wages and offered excellent health and retirement benefits (hence the local nickname, Generous Motors). Today the population is about 45,000 and the GM payroll is down to under 5,000 – and many of those jobs have been downgraded in pay and benefits.

We all drove GM cars back in the day; partly out of loyalty but also as part of an endless feedback loop in which you could not sell a used car unless it was a GM model, and no one would buy something they couldn’t sell later.

My grandfather gave me my first car -- a big, black 1948 Cadillac, so decrepit my parents wouldn’t let me drive it. Next came a 1952 Chevy followed by a chocolate brown 1972 Buick Electra 225 with a chocolate brown interior and vinyl roof. Then a ’71 Olds 442 succeeded by a ’71 Chevy Impala Super Sport – fire engine red, chrome reverse wheels and a sreamin’ small block V8 engine that got about 8 miles to the gallon if I babied it. Someday I’d like to have the car in the photo above, ('59 Caddy Eldorado) or maybe a new ‘Vette.

When I moved away from Ohio I lost my automotive way and owned a succession of European sedans. And while they were nice cars, driving them always made me feel vaguely pretentious and disloyal to my heritage. So a few years ago I went back to my GM roots and now have three pieces of “Detroit Iron” in the driveway. They are all nice cars. They’ve been trouble-free and each was much less expensive than their Japanese or European counterparts. So don’t hesitate to drive American. It won’t hurt and it might make you feel good.

This is all on my mind today because I had a drink last night with an old friend from Detroit, and we were talking about how S&P had just downgraded GM, and raised the possibility of bankruptcy, which would just be unimaginable to me. (In the last year the stock has gone from $40 per share to $5.) We talked about how many of our old friends from home depend on GM or Ford for either their job or their pension. And these are just about the last blue collar jobs in America that can support a truly middle-class life. It would be unbearably sad to see that disappear.

Global financial crisis spreads

You may have already heard about the troubles in Japan: Yesterday the Origami Bank folded. Sumo Bank has gone belly up. Bonsai Bank announced plans to cut some of its branches. Yesterday, it was announced that Karaoke Bank is up for sale and will likely go for a song, while trading in Kamikaze Bank shares was suspended after they nose-dived. Samurai Bank is soldiering on following sharp cutbacks. Ninja Bank is reported to have taken a hit, but they remain in the black. Furthermore, 500 staff at Karate Bank got the chop, and analysts report that there is something fishy going on at Sushi Bank, where it is feared that staff may get a raw deal. And finally, there has been a tidal wave of foreclosures at Tsunami Bank.

The Blitzkrieg Bank, after expanding rapidly through a series of hostile takeovers in Poland and Czechoslovakia, found its expansion plans stalled when its credit and cash supply lines were stretched to breaking as it entered the highly competitive Russian market. The Gasuntheit Bank has found the recent economic climate very chilly. The Shadenfrued Bank avoided making loans in the risky subprime mortgage markets, and is now very sorry to hear about the troubles plaguing its competitors. The Löwenbräu Bank was drunk with profits from marketing CDOs but now finds itself suffering from a serious default hangover.

Have any of you heard of similar problems in the global economy?

I deserve a major tax cut

I deserve a major tax cut for watching another one of those faux debates last night; another infomercial masquerading as a “town hall” meeting. The rules were set by the candidates, designed to protect them from themselves, and then they couldn’t stick with them.

What they should do is put the two of them on a stage with two chairs hooked up to electric wires (nothing lethal) leading to hand controls operated by a live studio audience of uncommitted voters who would crank up the amps when they hear an answer they don’t like. Booing, catcalls, and loud laughing would be encouraged.

In all seriousness I found both candidate’s understanding and sense of urgency about economic issues very much wanting. I hope they are just too timid to speak up and not actually that shallow.

That said, Senator Obama looks increasingly Presidential, while Senator McCain looks increasingly desperate. At least he didn’t go rhetorically postal last night, which might have ended the whole party.
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The Sarah Palin poll closed last night (look to the right). The turn out was modest but the results were pretty conclusive.

Why they love Sarah

Forgive me from the outset as I am going to lump all of you reading this into the “you” that doesn’t love Sarah, and tell you why I think “they” do. What is interesting about the topic is you are both focusing on the same things, but like the blind men describing an elephant, you see very different creatures.

You see a person you consider to be undistinguished. She doesn’t talk like you. She didn’t go to the right schools. She runs a bumpkin state and before that a mini-bumpkin town. She’s got a pregnant teenage daughter, and a husband who seems more interested in racing snowmobiles and hunting, than having an actual job.

You say, “This is a big country,” and then ask, “Can’t we do better? What’s wrong with electing the elite?”

“They” see someone like them. Someone who understands their lives, and say, “Elect the elite? Those are the people who got us into this mess in the first place. Maybe it’s time for one of our own.”

They think that way because the major financial institutions are run by the best and brightest with advanced degrees from the best business schools. They hired the top mathematicians, physicists, and computer scientists money could buy to create ultra-sophisticated algorithms “guaranteed” to keep credit swaps in balance. We all know where that led.

All of this was overseen by the political elite. Again, there’s no real need to replay how well that worked out.

Our pharmaceutical and health insurance industries are run by the same business elites, with the help of certain doctors (still the ultimate elite title to many Americans) who sell their opinions and support for drugs and procedures of questionable value and safety.

Lawyers are the fight promoters of the America economic system. They pit one group against another and make the rules so complicated they are often the only winners.

Middle class Americans want their children to have better lives, and understand that education is the key. But the education system is run by another group of elites, and in their system the cost of higher education has risen by more than double the cost of living for more than 20 years, until the cost of a year at an elite college exceeds the annual income of the average American household.

So they ask, “Could someone who is one of us possibly make things worse?”

I can almost hear your shouts of “ABSOLUTELY!” And I agree, they could, so allow me to suggest you refrain from the strategy of belittling and demeaning the Governor. Aside from being uncharitable and unattractive, it is hugely counter-productive; because when you belittle her, you belittle those who are supporting her – and more importantly, those who are on the fence. When you say she isn’t good enough or smart enough you are saying the same about her supporters, and not surprisingly, it angers them and reinforces their sense of having been disenfranchised and marginalized by the country’s elites.

Sarah Palin has given you all the ammunition you need in the form of the policies she supports and the political goals she proposes. Argue against them with vigor and passion if you want to win. Make fun of her accent and her family if you want to spend another eight years on the sidelines.

No train wreck

Well, I admit it, like most NASCAR fans, I tuned in last night in hopes of seeing a 10 car crash but got another snore-fest instead. I don't know if I can take two more of these "debates." Whatever these things are, they certainly aren't debates; they're more like really long infomercials with no video footage or third-party endorsements. I didn't learn anything new, neither candidate revealed any new character flaws of significance -- what was gained here? And this is the format the networks gave us. The debates were a lot more interesting when the League of Women Voters ran them, which gives you some insight into why no one watches network TV anymore.

My questions for tonight’s debate

Senator Biden, given the current difficult economic times, I’m sure many Americans would like your advice on how to stretch a household budget. Perhaps you could tell us how, on a combined $250,000 income, and despite your annual, after-tax Amtrak commutation expense of over $13,000, you and your wife managed to build a 6800 square foot lakefront home on four acres? Aside from cutting back on the double-mocha lattes, how do you swing those payments? (see today’s New York Times for the full story.)

Governor Palin, have you ever read a newspaper?

What are your questions?

Note: A special note of congratulations is due to Congress, whose approval rating among the American people has fallen to 15% in the most recent Times/CBS News Poll. It took a special effort to come in under George Bush’s record-tying 22%, but you did it!

The house is on fire

I’ve become convinced that the bail-out is necessary, although as you may have heard, according to Congress, it is no longer a Wall Street bail-out; it is now a “middle class tax cut, Main Street economic stabilization plan,” or some such nonsense. If these guys were as creative at problem-solving as they are at Orwellian language distortion we’d be in good shape.

The simplest and best analogy I’ve heard was Obama’s, who said if you lived next door to an odious person who smoked in bed and left candles burning all night long, and his house caught on fire, you wouldn’t stand around saying, “serves him right.” You’d call the fire department and grab a garden hose, because no matter how big a jerk he was, and no matter how badly he deserved it, it would be in your best interest to act. First of all, the fire could spread to your house, and even if it didn’t, a burned-out hulk sitting next door would depress values for everyone on the block.

I had time to read the papers cover-to-cover this morning, and there were at least a dozen examples, at every level of the economic ladder, where the credit crisis is starting to hurt everyone – not to mention the trillion-dollar meltdown in the Dow this week. It seems clear that action in necessary. Unfortunately, the power to act is in the hands of the Detroit City Council – er, I mean Congress. God knows what sort of monstrosity they will ultimately inflict on us.

Charlie Rose is interviewing Warren Buffett live at 9:00 pm EST tonight on PBS. Maybe he can make some sense out of all this.