October 09, 2008 in Current Affairs | Permalink | Comments (0) | TrackBack (0)
U.S. Treasury Fact Sheet: "Treasury will have authority to issue up to $700 billion of Treasury securities to finance the purchase of troubled assets. The purchases are intended to be residential and commercial mortgage-related assets, which may include mortgage-backed securities and whole loans. The Secretary will have the discretion, in consultation with the Chairman of the Federal Reserve, to purchase other assets, as deemed necessary to effectively stabilize financial markets."
September 21, 2008 in Current Affairs | Permalink | Comments (0) | TrackBack (0)
Luciano Pavarotti, the Italian singer whose ringing, pristine sound set a standard for operatic tenors of the postwar era, died early this morning at his home in Modena, in northern Italy. He was 71.
His death was announced by his manager, Terri Robson. The cause was pancreatic cancer. In July 2006 he underwent surgery for the cancer in New York and had made no public appearances since then. He was hospitalized again this summer and released on Aug. 25.
“The Maestro fought a long, tough battle against the pancreatic cancer which eventually took his life,” said an e-mail statement that his manager sent to The Associated Press. “In fitting with the approach that characterized his life and work, he remained positive until finally succumbing to the last stages of his illness.”
Like Enrico Caruso and Jenny Lind before him, Mr. Pavarotti extended his presence far beyond the limits of Italian opera. He became a titan of pop culture. Millions saw him on television and found in his expansive personality, childlike charm and generous figure a link to an art form with which many had only a glancing familiarity.
Early in his career and into the 1970s he devoted himself with single-mindedness to his serious opera and recital career, quickly establishing his rich sound as the great male operatic voice of his generation — the “King of the High Cs,” as his popular nickname had it.
By the 1980s he expanded his franchise exponentially with the Three Tenors projects, in which he shared the stage with Plácido Domingo and José Carreras, first in concerts associated with the World Cup and later in world tours. Most critics agreed that it was Mr. Pavarotti’s charisma that made the collaboration such a success. The Three Tenors phenomenon only broadened his already huge audience and sold millions of recordings and videos.
And in the early 1990s he began staging Pavarotti and Friends charity concerts, performing side by side with rock stars like Elton John, Sting and Bono and making recordings from these shows.
Throughout these years, despite his busy and vocally demanding schedule, his voice remained in unusually good condition well into middle age.
Even so, as his stadium concerts and pop collaborations brought him fame well beyond what contemporary opera stars have come to expect, Mr. Pavarotti seemed increasingly willing to accept pedestrian musical standards. By the 1980s he found it difficult to learn new opera roles or even new song repertory for his recitals.
And although he planned to spent his final years, in the operatic tradition, performing in a grand worldwide farewell tour, he completed only about half the tour, which began in 2004. Physical ailments, many occasioned by his weight and girth, limited his movement on stage and regularly forced him to cancel performances. By 1995, when he was at the Metropolitan Opera singing one of his favorite roles, Tonio in Donizetti’s “Daughter of the Regiment,” high notes sometimes failed him, and there were controversies over downward transpositions of a notoriously dangerous and high-flying part.
Yet his wholly natural stage manner and his wonderful way with the Italian language were completely intact. Mr. Pavarotti remained a darling of Met audiences until his retirement from that company’s roster in 2004, an occasion celebrated with a string of “Tosca” performances. At the last of them, on March 13, 2004, he received a 15-minute standing ovation and 10 curtain calls. All told, he sang 379 performances at the Met, of which 357 were in fully staged opera productions. In the late 1960s and 70s, when Mr. Pavarotti was at his best, he possessed a sound remarkable for its ability to penetrate large spaces easily. Yet he was able to encase that powerful sound in elegant, brilliant colors. His recordings of the Donizetti repertory are still models of natural grace and pristine sound. The clear Italian diction and his understanding of the emotional power of words in music were exemplary.
Mr. Pavarotti was perhaps the mirror opposite of his great rival among tenors, Mr. Domingo. Five years Mr. Domingo’s senior, Mr. Pavarotti had the natural range of a tenor, leaving him exposed to the stress and wear that ruin so many tenors’ careers before they have barely started. Mr. Pavarotti’s confidence and naturalness in the face of these dangers made his longevity all the more noteworthy.
Mr. Domingo, on the other hand, began his musical life as a baritone and later manufactured a tenor range above it through hard work and scrupulous intelligence. Mr. Pavarotti, although he could find the heart of a character, was not an intellectual presence. His ability to read music in the true sense of the word was in question. Mr. Domingo, in contrast, is an excellent pianist with an analytical mind and the ability to learn and retain scores by quiet reading.
Yet in the late 1980s, when both Mr. Pavarotti and Mr. Domingo were pursuing superstardom, it was Mr. Pavarotti who showed the dominant gift for soliciting adoration from large numbers of people. He joked on talk shows, rode horses on parade and played, improbably, a sex symbol in the movie “Yes, Giorgio.” In a series of concerts, some held in stadiums, Mr. Pavarotti entertained tens of thousands and earned six-figure fees. Presenters, who were able to tie a Pavarotti appearance to a subscription package of less glamorous concerts, found him a valuable loss leader.
The most enduring symbol of Mr. Pavarotti’s Midas touch, as a concert attraction and a recording artist, was the popular and profitable Three Tenors act created with Mr. Domingo and Mr. Carreras. Some praised these concerts and recordings as popularizers of opera for mass audiences. But most classical music critics dismissed them as unworthy of the performers’ talents.
Ailments and Accusations
Mr. Pavarotti had his uncomfortable moments in recent years. His proclivity for gaining weight became a topic of public discussion. He was caught lip-synching a recorded aria at a concert in Modena, his hometown. He was booed off the stage at La Scala during 1992 appearance. No one characterized his lapses as sinister; they were attributed, rather, to a happy-go-lucky style, a large ego and a certain carelessness.
His frequent withdrawals from prominent events at opera houses like the Met and Covent Garden in London, often from productions created with him in mind, caused administrative consternation in many places. A series of cancellations at Lyric Opera of Chicago — 26 out of 41 scheduled dates — moved Lyric’s general director in 1989, Ardis Krainik, to declare Mr. Pavarotti persona non grata at her company.
A similar banishment nearly happened at the Met in 2002. He was scheduled to sing two performances of “Tosca” — one a gala concert with prices as high as $1,875 a ticket, which led to reports that the performances may be a quiet farewell. Mr. Pavarotti arrived in New York only a few days before the first, barely in time for the dress rehearsal. The day of the first performance, though, he had developed a cold and withdrew. That was on a Wednesday.
From then until the second scheduled performance, on Saturday, everyone, from the Met’s managers to casual opera fans, debated the probability of his appearing. The New York Post ran the headline “Fat Man Won’t Sing.” The demand to see the performance was so great, however, that the Met set up 3,000 seats for a closed-circuit broadcast on the Lincoln Center Plaza. Still, at the last minute, Mr. Pavarotti stayed in bed.
Luciano Pavarotti was born in Modena, Italy, on Oct. 12, 1935. His father was a baker and an amateur tenor; his mother worked at a cigar factory. As a child he listened to opera recordings, singing along with tenor stars of a previous era, like Beniamino Gigli and Tito Schipa. He professed an early weakness for the movies of Mario Lanza, whose image he would imitate before a mirror.
As a teenager he followed studies that led to a teaching position; during these student days he met his future wife. He taught for two years before deciding to become a singer. His first teachers were Arrigo Pola and Ettore Campogalliani, and his first breakthrough came in 1961 when he won an international competition at the Teatro Reggio Emilia. He made his debut as Rodolfo in Puccini’s “Bohème” later that year.
In 1963 Mr. Pavarotti’s international career began: first as Edgardo in Donizetti’s “Lucia di Lammermoor” in Amsterdam and other Dutch cities, and then in Vienna and Zurich. His Covent Garden debut also came in 1963, when he substituted for and Giuseppe di Stefano in “La Bohème.” His reputation in Britain grew even more the next year, when he sang at the Glyndebourne Festival, taking the part of Idamante in Mozart’s “Idomeneo.”
A turning point in Mr. Pavarotti’s career was his association with the soprano Joan Sutherland. In 1965 he joined the Sutherland-Williamson company on an Australian tour during which he sang Edgardo to Ms. Sutherland’s Lucia. He later credited Ms. Sutherland’s advice, encouragement and example as a major factor in the development of his technique.
Further career milestones came in 1967, with Mr. Pavarotti’s first appearances at La Scala in Milan and his participation in a performance of the Verdi Requiem under Herbert von Karajan. He came to the Metropolitan Opera a year later, singing with Mirella Freni, a childhood friend, in a production of “La Bohème.”
A series of recordings with London Records had also begun, and these excursions through the Italian repertory remain some of Mr. Pavarotti’s lasting contributions to his generation. The recordings included “L’Elisir d’Amore,” “La Favorita,” “Lucia di Lammermoor” and “La Fille du Régiment” by Donizetti; “Madama Butterfly,” “La Bohème,” “Tosca” and “Turandot” by Puccini; “Rigoletto,” “Il Trovatore,” “La Traviata” and the Requiem by Verdi; and scattered operas by Bellini, Rossini and Mascagni. There were also solo albums of arias and songs.
In 1981 Mr. Pavarotti established a voice competition in Philadelphia and was active in its operation. Young, talented singers from around the world were auditioned in preliminary rounds before the final selections. High among the prizes for winners was an appearance in a staged opera in Philadelphia in which Mr. Pavarotti would also appear.
He also gave master classes, many of which were shown on public television in the United States. Mr. Pavarotti’s forays into teaching became stage appearances in themselves, and ultimately had more to do with the teacher than those being taught.
An Outsize Personality
In his later years Mr. Pavarotti became as much an attraction as an opera singer. Hardly a week passed in the 1990s when his name did not surface in at least two gossip columns. He could be found unveiling postage stamps depicting old opera stars or singing in Red Square in Moscow. His outsize personality remained a strong drawing card, and even his lifelong battle with his circumference guaranteed headlines: a Pavarotti diet or a Pavarotti binge provided high-octane fuel for reporters.
In 1997 Mr. Pavarotti joined Sting for the opening of the Pavarotti Music Center in war-torn Mostar, Bosnia, and Michael Jackson and Paul McCartney on a CD tribute to Diana, Princess of Wales. In 2005 he was granted Freedom of the City of London for his fund-raising concerts for the Red Cross. He also received the Kennedy Center Honors in 2001, and holds two spots in the Guinness Book of World Records — one for the greatest number of curtain calls (165), the other, held jointly with Mr. Domingo and Mr. Carreras, for the best-selling classical album of all time, the first Three Tenors album (“Carreras, Domingo, Pavarotti: The Three Tenors in Concert”). But for all that, he knew where his true appeal was centered.
“I’m not a politician, I’m a musician,” he told the BBC Music Magazine in an April 1998 article about his efforts for Bosnia. “I care about giving people a place where they can go to enjoy themselves and to begin to live again. To the man you have to give the spirit, and when you give him the spirit, you have done everything.”Mr. Pavarotti’s health became an issue in the late 1990s. His mobility onstage was sometimes severely limited because of leg problems, and at a 1997 “Turandot” performance at the Met, extras onstage surrounded him and literally helped him up and down steps. In January 1998, at a Met gala with two other singers, Mr. Pavarotti became lost in a trio from “Luisa Miller” despite having the music in front of him. He complained of dizziness and withdrew. Rumors flew alleging on one side a serious health problem and, on the other, a smoke screen for Mr. Pavarotti’s unpreparedness.
The latter was not a new accusation during the 1990s. In a 1997 review for The New York Times, Anthony Tommasini accused Mr. Pavarotti of “shamelessly coasting” through a recital, using music instead of his memory, and still losing his place. Words were always a problem, and he cheerfully admitted to using cue cards as reminders.
A Box-Office Powerhouse
It was a tribute to Mr. Pavarotti’s box-office power that when, in 1997, he announced he could not or would not learn his part for a new “Forza del Destino” at the Met, the house scrapped its scheduled production and substituted “Un Ballo in Maschera,” a piece he was ready to sing.
Around that time Mr. Pavarotti also made news by leaving his wife of more than three decades, Adua, to live with his 26-year-old assistant, Nicoletta Mantovani, and filing for divorce, which was finalized in October 2002. He married Ms. Mantovani in 2003. She survives him, as do three daughters from his marriage to the former Adua Veroni: Lorenza, Christina and Giuliana; and a daughter with Ms. Mantovani, Alice.
Mr. Pavarotti had a home in Manhattan but also maintained ties to his hometown, living when time permitted in a villa outside Modena.
He published two autobiographies, both written with William Wright: “Pavarotti: My Own Story” in 1981, and “Pavarotti: My World” in 1995.
In interviews Mr. Pavarotti could turn on a disarming charm, and if he invariably dismissed concerns about his pop projects, technical problems and even his health, he made a strong case for what his fame could do for opera itself.
“I remember when I began singing, in 1961,” he told Opera News in 1998, “one person said, ‘run quick, because opera is going to have at maximum 10 years of life.’ At the time it was really going down. But then, I was lucky enough to make the first ‘Live From the Met’ telecast. And the day after, people stopped me on the street. So I realized the importance of bringing opera to the masses. I think there were people who didn’t know what opera was before. And they say ‘Bohème,’ and of course ‘Bohème’ is so good.’ ”
About his own drawing power, his analysis was simple and on the mark.
“I think an important quality that I have is that if you turn on the radio and hear somebody sing, you know it’s me.” he said. “You don’t confuse my voice with another voice.”
Comment by Editor.
As a recent fan of Opera due mostly to Pavorotti's appearance at the Hollywood Bowl, several decades ago. I will miss him dearly. So long "Nessun Dorma".
Martin S. Friedlander, Esq.
September 06, 2007 in Current Affairs | Permalink | Comments (0) | TrackBack (0)
Today, Larry Craig apologized to everyone except the people he has most harmed by his actions -- gay Americans. His legacy will include his career-long work in opposing basic civil rights for gay and lesbian Americans, creating an atmosphere where it is unsafe for many to be honest about their lives.
Those in American politics who use anti-gay sentiments for political purposes must learn from this experience and reconsider their divisive tactics. Politicians like Larry Craig have helped to create a society that drives many men and women into the closet. Larry Craig's arrest, when coupled with the hypocrisy of seeking sexual encounters from the very men he actively legislates against, becomes merely the catalyst to expose the dishonesty and secrecy of anti-gay politicians who expect a community to harbor its own enemies within.
The time when politicians can stand with one foot on the platform of homophobia and the other in the closet has come to an end.Presented for consideration of my readers by:Martin S. Friedlander, Esq. Editor and Publisher
September 02, 2007 in Current Affairs | Permalink | Comments (0) | TrackBack (0)
From: Wolf.Stitzer@PhilosopherStone.com
Sent: 03 July 18:47
To: Steve.Holtzman@PhilosopherStone.com
Subject: Windsor buyout
Steve,
As you may know, the private equity industry has been having some problems with the Establishment over here and I wanted to run an idea by you: what about a leveraged buyout of the British monarchy?
You may not have seen, but Queen Elizabeth II is having some trouble with the upkeep of Buckingham Palace, where pieces of masonry are falling off the façade. Mismanagement and long-term underinvestment are clearly taking their toll. The House of Windsor is, of course, a great brand, and it is a screaming real estate play.
Fundamentally, what I’m thinking is that we could break up the business into an opco and a propco, leaving the current management with a figurehead role in the operating company and then doing a sale and leaseback on the property assets. After all, Her Majesty’s portfolio is seriously underleveraged. The Windsor family has a personal fortune estimated at £320 million tied up in properties such as Balmoral Castle, her home at Sandringham and the Duchy of Lancaster.
Then there is £6 billion-worth of property in the Crown Estate, which George III signed over to the Government in 1760. (What was with that guy and losing prime real estate?) There is no current price tag on Buckingham Palace, Windsor Castle and Holyroodhouse, but the one has a 40-acre garden in a perfect location for major property development in SW1, the other has 13 acres of land in the much sought-after London commuter belt and the third would be an excellent location for your next birthday bash, so let’s say we offer £2 billion a pop. The current management are currently remunerated at £37 million a year in the Civil List and their security costs are estimated at £100 million. We would have to take these costs on, but could offset them against any profits, thereby wiping out an tax liability.
So, if the assets are worth just less than £12.5 billion and we offer a 30 per cent premium, we could buy the monarchy, the chief executive and her team, as well as all the assets for about £16 billion, which is just a little more than Providence Equity and the Ontario Teachers’ Pension Plan are paying for that Canadian telecoms business, BCE. The reality is that it’s doable.
Of course, if we choose to pile on the debt, flip it and float the business in 18 months, we could always change the management. But I happen to know that the current executive team at the House of Windsor is fed up with the endless public disclosure that is required of them and might welcome the privacy that ownership by PhilosopherStone would give them. They are in a position not only to put skin in the game, but throw some ermine into the deal. I’m thinking Lord Holtzman – some real cash for honours. Anyway, my hunch is they would be amenable to a management buyout. Shall I go ahead and set up a meeting?
Lead Underwriter,
Martin S. Friedlander, Esq.
July 04, 2007 in Current Affairs | Permalink | Comments (0) | TrackBack (0)
How did a Chicago real estate tycoon win one of the country’s premier media companies — a chain of big-city papers, two dozen television stations and the Chicago Cubs — in a deal valued at $8.2 billion with an investment of only $315 million of his own money?
The Tribune Company, which owns The Los Angeles Times, The Chicago Tribune, The Baltimore Sun and other papers, announced yesterday that it had joined forces with Sam Zell to take the company private and pay shareholders $34 a share.
Despite being a late entrant, Mr. Zell managed to win the auction for Tribune over a rival team of Los Angeles billionaires, Eli Broad and Ronald W. Burkle, through a combination of savvy dealing and creative financial engineering. It was Mr. Zell who first proposed financing the transaction through an employee stock ownership plan, an arrangement that is typically used by much smaller companies.
Most of the company’s stock will be owned by the employees through the plan, but Mr. Zell, who becomes the Tribune chairman, will be the largest individual shareholder, leaving him with a major interest for his relatively small investment.
And Mr. Zell is a hometown player, not an inconsequential advantage when negotiating with a company characterized by a strong antipathy between the head office in Chicago and its biggest single asset, The Los Angeles Times. The deal will effectively buy out the members of the Chandler family, who became the biggest shareholders in Tribune when it bought the Times-Mirror Company in 2000 and whose loud complaints last June about the company’s sagging stock price set the auction in motion.
Mr. Zell, who has never owned a newspaper before, insists that his interest in Tribune is not editorial but economic. As part of yesterday’s announcement, the company said it would sell the Chicago Cubs at the end of the season. But otherwise Mr. Zell has said that he does not want to break up the company by selling off its individual properties or spinning off the television stations.
In a statement yesterday, he called himself “a long-term investor,” and added, “I look forward to partnering with the management and employees as we build on the great heritage of Tribune Company.”
Still David Geffen, the Los Angeles media mogul who made an early bid for The Los Angeles Times, made it clear that he would still like to acquire the newspaper. “I remain interested and open to talking,” Mr. Geffen said. Others have expressed interest in Tribune papers, including Newsday, The Hartford Courant and The Baltimore Sun.
Even Mr. Broad and Mr. Burkle may not be completely out of the picture. They were originally interested in buying The Los Angeles Times, and they still could make a higher bid for the company. Tribune set a relatively low breakup fee of $25 million so that if it wanted to take a higher bid — and avoid a possible lawsuit — it could dismiss its deal with Mr. Zell and pay him only $25 million.
Yesterday’s announcement closes a contentious 10-month chapter for the Tribune Company, which occupies the landmark Tribune Tower in downtown Chicago. And it could end the financial stake in Tribune of one of America’s great newspaper dynasties, the Chandlers, whose patriarch, General Harrison Gray Otis, founded The Los Angeles Times in 1884.
It also ends a labored auction in which little interest in the company materialized. Wall Street appeared to approve of the move, sending Tribune stock up 70 cents, to close at $32.81.
Mr. Zell, 65, the son of refugees who fled Poland on the eve of Hitler’s invasion, is a self-made billionaire who has thrived on buying distressed businesses, turning them around and selling them at a profit. Newspapers, which face declining revenues and dropping circulations, might fit that description. Like other newspaper owners, Tribune has been hammered on Wall Street in the last few years as advertisers and readers left newspapers for the Web.
So far, Mr. Zell has not presented a plan for how he might turn Tribune around. Nonetheless, he was not only the favored bidder, but Tribune executives actively encouraged him over the weekend to match a higher bid from Mr. Burkle and Mr. Broad, who were offering $34 a share to Mr. Zell’s $33. Only after raising his bid three times did Mr. Zell match the Burkle-Broad bid, and each time, Tribune executives pushed him to do so.
They wanted Mr. Zell for many reasons.
Dennis J. FitzSimons, the company’s current president, chief executive and chairman — who will cede the title of chairman to Mr. Zell when the transaction is complete at the end of the year — said in an interview that Mr. Zell offered the certainty of closing a deal. The company had been working with him for several weeks when a revised Burkle-Broad offer came in. His offer delayed the company’s self-imposed deadline of the end of March by only one day.
“The biggest thing we wanted to do was end this process, have a good outcome for shareholders and get focused on the future as opposed to the process,” Mr. FitzSimons said, weary of the long public deconstruction of Tribune’s management.
Others said that Mr. Zell’s legendary success in turning around distressed companies helped get him in the door.
As James O’Shea, the editor of The Los Angeles Times, put it in a note to his staff yesterday: “Sam Zell is a creative thinker and an inventive entrepreneur. A fresh shot of new thinking is not going to hurt us.” Mr. O’Shea added: “Mr. Zell also says he believes in the future of the news business. That is certainly good to hear.”
Mr. FitzSimons said that geography did not play a role in the selection of Mr. Zell, and that he had met the real estate mogul only in the last two months when Mr. Zell presented himself as a potential buyer.
But others close to the talks said that Mr. Zell’s Chicago roots gave him an advantage, particularly since the Burkle-Broad team was from Los Angeles. Tribune has been in an open feud with The Los Angeles Times, where the publisher and editor were forced out last year for taking public stands against cost cuts and where the newsroom, which could still see more job cuts, feels under siege. As a matter of pride, Tribune did not want to be seen as bowing to California, these people said.
Another related factor in Mr. Zell’s favor, they said, was that he was explicit about wanting to buy out the Chandler family, who had long been a thorn in Tribune’s side. Representatives of the Chandlers who sit on Tribune’s board abstained over the weekend from voting to accept Mr. Zell’s plan, but they have agreed to support the transaction when it comes up for a shareholder vote later this year.
Tribune executives may also have liked Mr. Zell’s plan because it keeps most of them in place. Mr. FitzSimons said he expected to stay as president and chief executive after the transaction is completed and that many of the current board members would serve on a reconstituted board. And he said Mr. Zell was not likely to be constantly looking over his shoulder.
“Sam is chairman of, what, five other companies, and his reputation is that he doesn’t micromanage,” Mr. FitzSimons said.
Given that Tribune’s core business is built on delivering news to readers in a clear and concise fashion, the deal the company announced yesterday was startlingly complex. Mr. Zell will invest an initial $250 million in Tribune shares and securities at a price of $34 a share. The stock ownership plan will also purchase $250 million worth of new Tribune shares, but at a discounted price of $28 a share. Then, in two stages, the company will spend $8.4 billion to buy back the shares, including Mr. Zell’s. He will then invest $315 million in new securities, including $90 million for a warrant to buy 40 percent of Tribune’s shares.
Tribune will then become an S corporation, which will exempt it from paying federal income tax. By not paying tax, the Tribune will greatly increase its cash flow, helping it pay down the mountain of debt it is taking on to finance going private. More important for Mr. Zell, only individuals who are United States citizens are eligible to invest in S corporations. That partly explains why only he, Mr. Broad and Mr. Burkle were in the auction at the end.
The stock ownership plan in particular fostered confusion among some employees. And the overall plan, with its assumption of $8.4 billion in debt in top of nearly $5 billion in existing debt, prompted bond rating services to downgrade Tribune’s standing. It also left some wondering how the plan would address the major issues facing the newspaper industry.
“There are a whole bunch of questions, and it’s not like Joseph Pulitzer just bought the company,” said Michael Hill, a reporter at The Baltimore Sun and chairman of the Sun unit of the Washington-Baltimore Newspaper Guild.
Employees’ chief concern, he said, was how their retirement plans would be affected by the stock ownership plan.
“If this means investing our retirement in the current Tribune management, I don’t think people will be very excited about that because there’s very little confidence in Tribune management,” Mr. Hill said.
Stan Simpson, a columnist at The Hartford Courant, said he was ambivalent about the news of Mr. Zell’s involvement. “The big issue is, does he have a vision for the new company and a plan for the digital age?” Mr. Simpson said.
Others said they worried that Mr. Zell would take an ax to the staffs at Tribune papers.
Mr. FitzSimons told employees yesterday in an electronic town hall meeting that was broadcast companywide that he expected some staff reductions in the next few months, which he hoped to accomplish mostly through attrition. In the interview, he said that he would not fill current vacancies in an attempt to stave off having to make further cuts. But, he cautioned, newspapers everywhere are facing the same challenges.
“We get the headlines, but it’s happening all across the industry,” he said.
The Tribune agreement still has some regulatory hurdles: any new owner needs waivers from the Federal Communications Commission to own newspapers and broadcast outlets in the same market, but the agency is involved in a major debate about whether to loosen those rules.
“The basis on which they have always sought their exemptions is that the Tribune Company has a special tradition of quality in journalism,” said Andrew Jay Schwartzman, president of the Media Access Project, an advocacy group that has been critical of efforts to deregulate the industry. “Zell can’t make those claims. He has no tradition of promoting journalism and he’s a cost cutter.”
But Blair Levin, managing director of Stifel Nicolaus & Company, said the challengers to the deal could face an uphill battle. He said that although the two Democrats on the commission may maintain that it was finally time to enforce the restrictions on cross-ownership, the three Republicans who are more critical of those restrictions would probably be more inclined to approve the Tribune deal.
Despite the potential hurdles, some analysts said they were relieved to see the process move forward and hoped that going private would give the company a much-needed break from the spotlight.
“It gives them a little time to look at the long-term view, reorganize the company and pursue its strategy without analysts commenting all the time,” said Edward Atorino, a media analyst with Benchmark Company. “The $34 a share is not a bad price, given the state of the world of newspaper companies. So Sam Zell could be a stabilizing force.”
EDITOR'S COMMENT
It is a sad day for major newspapers in this country when Sam Zell who made his fortune as a liquidator can buy a major media property for peanuts. The Chandler and McCormack families should turn over in their graves.
Martin S. Friedlander, Esq
April 02, 2007 in Current Affairs | Permalink | Comments (0) | TrackBack (0)
The American Way of Debt
Americans are awash in red ink. Consumer indebtedness is soaring, the savings rate is down to zero and people are filing for bankruptcy at record rates. To many observers, these are symptoms of cultural decline, from sturdy thrift to flabby self-gratification — embodied in the current obesity epidemic. The fattest nation on earth is also the greediest consumer of global resources and now is borrowing more than ever to satisfy its appetites. There is a large core of truth to this indictment.
But as the history of debt in America shows, condemnations of extravagance can obscure more than they illuminate. The equation of debt and decline assumes that once upon a time Americans lived within their means and saved for what they bought. This is fantasy: there never was a golden age of thrift. Debt has always played an important role in Americans' lives — not merely as a means of instant gratification but also as a strategy for survival and a tool for economic advance.
Yet our moral traditions have concealed this complexity. "Owe no man anything," St. Paul warned, and from the New England Puritans forward, legions of Protestant ministers made this their text. Indebtedness signified a sin against the Protestant ethic of self-control; it also threatened the ideal of independent manhood that underwrote the founders' vision of a virtuous republic. The indebted man "must smile on those he hates, he must extend his hand where he would strike, he must speak pleasantly with a curse in his throat," a Harper's contributor wrote in 1894. "He wears dependence like a yoke." Benjamin Franklin coined similar lessons in aphorisms later memorized by generations of Victorian-era schoolchildren: "The Borrower Is a Slave to the Lender." "Be frugal and free." The link with lost freedom was more than metaphorical: you could still be imprisoned for debt in many places (including New York City) down to the early 1900's.
Still, the case against debt was more principled than practical. Every generation of moralists imagined the same fall from financial rectitude. In their novel "The Gilded Age" (1873), Mark Twain and Charles Dudley Warner mourned the disappearance of the antebellum "horror of debt" amid the speculative borrowing of the post-Civil War years.
In 1924, the editor of The Saturday Evening Post complained that "the firmly rooted aversion to debt in any form which prevailed a generation ago has almost completely evaporated." In 1958, John Kenneth Galbraith noticed that "there has been an inexplicable but very real retreat from the Puritan canon that required an individual to save first and enjoy later."
In fact, debt is as American as cherry pie. For George Washington and Thomas Jefferson, debt was the price they paid to participate in the world of big-spending Southern planters. Among plainer rural folk, through most of the 19th century, cash was scarce, and country-store ledgers carried local peoples' debts for years, sometimes forever. Factory workers and laborers used debt to make ends meet, resorting to pawnshops, loan sharks, relatives and friends.
Even moralists admitted distinctions between good ("productive") debt and bad ("consumptive") debt. The other side of debt, after all, was credit — "Beautiful credit! The foundation of modern society," as Twain and Warner called it in "The Gilded Age." They had a point. The root of credit was credo — "I believe" — and faith was a necessary component of most transactions in an expanding economy. Borrowing money was "getting trusted," in the argot of Victorian commerce. Among businessmen, indebtedness was a sign that you were "a man of importance in the community," as a euphoric young John D. Rockefeller said after he was "trusted" by a Cleveland bank for $2,000. Not financial obligations but the failure to meet them was what made you "good for nothing."
Among the failures in the late 19th century were farmers, whose crop prices fell while they struggled to pay for threshers and combines. Desperate for relief from creditors, they demanded an expansion of the money supply through the free coinage of silver. The "money question" peaked in the election of 1896, when the Northeastern creditors' candidate, William McKinley, defeated William Jennings Bryan, the spokesman of the agrarian South and West. Those last two regions, a writer for The Atlantic Monthly observed, had "nothing in common but a lack of thrift." Imprudent borrowers took on debt "with only a speculative opportunity to pay" — and this, the magazine charged, violated the trust required to maintain the credit system. This rhetoric of "sound money" concealed a clash of interests between bankers and farmers, Wall Street and Main Street. It would not be the last time that moralism would mask class conflict in debates over monetary policy.
After 1900, the proliferation of mass-marketed products encouraged a more open tolerance for consumer debt. By the 1920's, millions of middle-class Americans bought durable goods on time payments — sewing machines, washing machines, radios, automobiles, houses. Lenders acquired legitimacy, reinforced by reassuring names like Household Finance Corporation or General Motors Acceptance Corporation. "Acceptance" implied membership in a national community of responsible borrowers. Indebtedness could discipline workers, keeping them at routinized jobs in factories and offices, graying but in harness, meeting payments regularly. Good consumers would be good producers. The economist who proposed this idea was Simon Nelson Patten, in "The New Basis of Civilization" (1907). By providing new sanctions for spending, Patten helped create a cultural landscape where consumer debt could find a decent suburban home. He predicted that workers' desires for things would not undermine their capacity for disciplined achievement, as generations of moralists had claimed; rather, the multiplication of wants would become part of the civilizing process, as workingmen and their wives would broaden their horizons and take pride in their accumulating possessions. Patten's New Basis began the project that E.R.A. Seligman would complete in "The Economics of Installment Selling" (1927) — the abolition of the distinction between "productive" and "consumptive" debt.
Patten was onto something. The disciplining power of debt was undeniable. Even during the Depression, while Americans cut back on new borrowing, they also denied themselves food and clothing to avoid repossession of refrigerators or real estate. "Oh, the tension in the house," one of Studs Terkel's informants recalled in "Hard Times," "when Pa used to scramble around trying to get enough money to pay that installment loan. That was the one degrading thing I remember." In 1932, a Harper's contributor observed that the middle-class homeowner "no longer has possessions but only obligations." This homeowner did not exactly represent an ethos of self-gratification.
The true fulfillment of Patten's vision depended on an economically secure working population. These conditions awaited the rise of strong industrial unions and the comparative prosperity of the post-World War II era. The acquisition of appliances, cars and houses was often financed on the installment plan or with the assistance of government agencies like the Federal Housing Administration. Thanks largely to union power, more fortunate workers could depend on steady wages that allowed them to pay off big-ticket items over time. Patten would have been pleased.
The upward spiral of earning and spending survived until the 1970's, when the midcentury ideal of corporate citizenship evaporated in the harsher climate of renewed international competition. Fearing foreign rivals, American business ended its implicit social contract with unions by seeking cheap labor in overseas markets. During the 1980's, while real income continued to stagnate for most Americans, the ascendancy of Ronald Reagan gave government sanction to unprecedented consumer spending. Reagan's rhetorical refusal of limits combined with the deregulation of the lending industry to detach dreams of luxury from previous constraints. As money worship mounted, job security disappeared and inequalities widened, pundits spoke of a new Gilded Age. By the 1990's, bloated icons of affluence proliferated: the gargantuan pseudo-military vehicle, the 10,000-square-foot hacienda. A bigger standard package of household goods demanded deeper debt and accelerated the pace of the consumer treadmill. No one wanted to look like a "loser."
But for many borrowers, debt has not been just about keeping up appearances. Less-affluent Americans have resorted to borrowing for groceries as well as cars. Public policies have intensified their plight. The freezing of the minimum wage, the tightening of unemployment insurance and workmen's compensation programs, the shifting of the tax burden from the rich to the rest — these changes have starved public services while leaving ordinary Americans more dependent than ever on debt. One of the most consistent statistical findings of recent years is that about half of all personal bankruptcies have been caused by medical bills. Whatever else our current indebtedness may signify, it is hardly a riot of hedonism.
Jackson Lears, editor of Raritan: A Quarterly Review, is the author, most recently, of "Something for Nothing: Luck in America."
June 13, 2006 in Current Affairs | Permalink | Comments (0) | TrackBack (0)
Scrambling to maintain its influence in a rapidly changing world economy, the International Monetary Fund yesterday adopted a plan aimed at reshaping itself to handle new challenges such as global trade imbalances and the rise of China.
The endorsement of the strategy by the IMF's policy-setting committee, which represents its 184 member governments, topped the agenda of economic policymakers gathered in Washington this weekend for the spring meetings of the monetary fund and the World Bank.
Part of the strategy involves making the IMF's governance fairer. In response to long-standing complaints that fast-growing countries such as China and South Korea are woefully underrepresented in the fund's decision-making bodies, the committee launched a process to reapportion voting power.
The committee also endorsed a proposal aimed at giving the IMF a more central role in dealing with global problems, including the massive U.S. trade deficit and corresponding surpluses in Asia and oil-producing countries. Rather than solely holding consultations with individual countries about their economic policies as it does now, the IMF also will hold consultations with top officials from groups of large countries about how their economic policies affect each other and the world.
At a news conference following the committee meeting, Rodrigo de Rato, the IMF's managing director, acknowledged that the organization has no power to force governments to change policies that have drawn widespread criticism for fueling the global imbalances. These include the U.S. budget deficit, which has helped spur the consumption boom in the United States, and China's system of pegging its currency to the dollar, which allegedly gives Chinese exporters an unfair competitive advantage because of the currency's low exchange rate.
"Of course the responsibility affecting government action is on governments, not international institutions," de Rato said, but he contended that by holding meetings at which "spillovers and linkages" of countries' policies are highlighted, "we can provide a framework in which consequences of actions can be seen more clearly, and also consequences of inaction."
The moves reflect a recognition that the growing clout of big developing countries requires that currency and other issues be addressed by groups broader than the Group of Seven major industrial nations, which have played a dominant role on such issues since the mid-1980s. The strategy endorsed yesterday also is a response to widespread concern that the IMF is in danger of losing its legitimacy and relevancy unless it changes.
Amid a strong global expansion and buoyant financial markets, there is little need now for emergency loans of the sort that the IMF dispensed in years past when crises erupted in countries such as Mexico, Thailand, Indonesia, Brazil and Argentina. In fact, most of the loans the IMF made have been repaid.
Furthermore, Asian countries in particular have accumulated immense hoards of dollars and other foreign currencies, which they say is partly to ensure that they never again have to rely on the IMF for loans. Many of those same countries also are upset about the IMF's voting system, raising the specter that one of the world's most dynamic regions could become alienated from the fund and undermine its status as an institution with global responsibilities.
Under the current formulas, for example, China has less than 3 percent of the votes, and South Korea about 0.75 percent, far below their relative proportions of the global economy. Countries with disproportionately high voting power include several European nations, and seven of the 24 seats on the IMF executive board are held by Europeans, including directors from Belgium, the Netherlands, Switzerland and Italy, who represent groups of nations.
The committee yesterday endorsed a plan advanced by de Rato for increasing the shares of a handful of the most underrepresented countries, which in addition to China and South Korea include Mexico and Turkey. Doing so would slightly reduce the voting power of other countries, including the United States, which has about 17 percent. U.S. officials said this week they would accept a small reduction, even though the U.S. percentage is already well below the U.S. share of the global economy.
But a fight looms over efforts to revamp the voting rules more fundamentally in time for the IMF-World Bank annual meetings in Singapore in September, because the Europeans are loath to give up their board seats.
China is demanding its place in history and all of the economic chambers of the world. It has become THE ASIAN CENTURY. WATCH OUT.
Martin S. Friedlander, Esq.
April 22, 2006 in Current Affairs | Permalink | Comments (0) | TrackBack (0)
I have been to China three times. Once in 1980, then again in 1985, and I have just returned from my third visit. These are my observations.
China, with India not too far behind has become a world power. They are competing with us on every level. They are making deals with every energy producing country in the world.
President Bush went to China with blinders on. He received the President of China with blinders on. He, with his greedy comrades, intent on spending our money and soldiers lives in Iraq, has made China and India, with Vietnam, Malaysia, Indonesia and Thailand not too far behind, THE ASIAN CENTURY. YES FOLKS, THE ASIAN CENTURY.
Martin S. Friedlander, Esq.
April 22, 2006 in Current Affairs | Permalink | Comments (0) | TrackBack (0)
The academic coup d'etat engineered by hard left members of the faculty of arts and sciences against Harvard's president Lawrence Summers has broad implications beyond Cambridge and even beyond the Ivy League. It represents a major victory for hard-left censors over reasoned discourse about controversial issues. The political correctness cops won a big victory, and reasoned discourse suffered a significant defeat.
If you don't believe me, just listen to the chief architect of the putsch, Professor J. Lorand Matory, who introduced the original resolution of no confidence that eventually led to Summers's ouster. Taking a victory lap last night on a local PBS talk show, Matory explained some of the reasons why he insisted on getting rid of the controversial and sometimes acerbic president. Listen carefully to Matory's words:
"He [Summers] was telling us we should be more patriotic. He was telling us that people who insist that Palestinians have rights should be quiet because they're being anti-Semitic."
The idea that a president should be fired because he believes in patriotism should shock every American. Moreover, Summers never defined patriotism as uncritical support for one's government. He himself was highly critical of many governmental policies and urged others to express criticism as well.
Now listen to what Summers actually said about Israel and the Palestinians, and you will see that Matory's statement about what "he was telling us" is an outright and categorical lie. Here's what Summers actually said:
"Of course academic communities should be and always will be places that allow any viewpoint to be expressed. And certainly there is much to be debated about the Middle East and much in Israel's foreign and defense policy that can be and should be vigorously challenged.
"But where anti-Semitism and views that are profoundly anti-Israeli have traditionally been the primary preserve of poorly educated right-wing populists, profoundly anti-Israel views are increasingly finding support in progressive intellectual communities."
"Serious and thoughtful people are advocating and taking actions that are anti-Semitic in their effect if not their intent."
Summers then gave several examples of academics who have "called for an end to support for [only] Israeli researches," who force Israeli scholars off the board of an international literature journal, and who "single out Israel for divestiture." He also pointed to students who equate Hitler and Sharon and who raise money for organizations that support terrorism. This is a far cry from demanding silence from those "who insist that Palestinians have rights."
The Matorys of Harvard now feel empowered. Indeed when I confronted Matory after his television show and offered $1000 to his favorite charity if he could prove that Summers had ever said that people who insisted that Palestinians have rights should be quiet, he began shouting at me that I was a terrible professor and suggesting that I was not qualified to teach at Harvard.
This is the sign of things to come. If you believe, as I do, in both Palestinian and Israeli rights, and support the two-state solution, while opposing the singling out of Israel for boycotts and divestiture, then you are not qualified to teach at Matory's Harvard. Of course no reasonable academic would want to teach at any academic institution over which Matory and his political correctness cops had any control.
Let's hope that no American university becomes what Matory and his ilk want Harvard to become.
Alan Dershowitz is a professor of law at Harvard. His latest book is Preemption: A Knife that Cuts Both Ways (Norton, 2006).
February 22, 2006 in Current Affairs | Permalink | Comments (0) | TrackBack (0)
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