The Choate-Weinberg Report

There Will Never Be Enough Money For Jim Rogers

I have a great deal of respect for Higher Education Chancellor Jim Rogers.

He is one of those guys that, agree with him or disagree with him, puts his money—which he made himself—where his mouth is, picks up the biggest bat he can find and swings away.

He took the Chancellor’s job for $1 a year and has done, by most accounts, a credible job for an outsider—although he may have contracted a bit of the Stockholm Syndrome from the folks who he’s in charge of.

Jim is mad as hell about the 36% budget cuts that the state’s educational system is going to have to endure in the current economic downturn.

You see, our state’s tax base largely depends on how well our citizens are doing economically.

We depend on sales taxes, gaming taxes, a very limited payroll tax, a bank payroll tax and that always popular tax, a real estate tax.

Well, real estate is in the toilet, a function of some really dumb banking ideas, people are spending less money on stuff, killing the sales tax which in turn is hurting employment numbers, thus the limited payroll tax.

Now Jim’s solution to the problem of a 36% budget cut is "a new and productive tax system".

OK

Here’s the problem.

We always seem to get back to the concept of changing the state’s constitution and imposing a state income tax.

Right now, if the people don’t do well, neither does the state’s governmental apparatus.

You would think that would be an incentive for the state’s governmental apparatus to insure the citizens would do well.

But Nooooooo (as John Belushi would have said).

While mere common folks are getting laid off, the state has a governmental pension plan which threatens to eat a chunk of every resident’s wallet.

I’m not one of those people who thinks we need no government.

But I do believe that which governs least governs best.

And I also DO believe that we have a responsibility to educate our youth. Coming from a family of educators (who worked at all levels) I could have no other viewpoint.

But I would observe that funding is only part of the equation.

And I would also observe that you cannot fund a state’s government by bankrupting its citizens.

One thing I have seen in my 43 years of working in the media is that government (and, by extension, education) always expands to consume all the available money and then always asks for more. It’s the nature of the beast.

So, as much as I respect Jim Rogers, I am against any tax system which doesn’t deal with the reality of the economic condition of the people who are being taxed.

Sure, we probably need a higher funding level for education. Wouldn't it be nice if UNR were as highly regarded as USC?

Jim, after all, is a pretty good businessman and he can count. He knows what that would cost.

But you cannot tax people into the ground and, lest you think that corporations actually pay taxes, just remember that it is a fact that any taxes levied on businesses are actually paid by their customers. Us.

What the legislature and the Governor really need to do is to concentrate on improving the state’s economy. The tax revenue will follow.

FRED WEINBERG

Stocks For The Big Bankers

Maureen Dowd of the New York Times is urging that many of our so-called top banking leaders be put into old-fashioned Puritan-type stocks that are placed on the public square where they can be shamed. I can understand why she is so angry.

Earlier this week we learned that the CEO of Merrill Lynch handed out $4 billion on bonuses three days before his company was taken over by the Bank of America. His generosity was funded by the federal bailout. He also spent more than $1.8 million redecorating the office of the man he succeeded. He told the media the old style just didn’t seem to fit what he envisioned as Merrill’s image.

Well, that’s for sure. The company was broke and a table and a chair was all they could afford until the federal monies came along.

Unfortunately, Merrill’s leadership is not the only one playing fast and loose with your and my tax dollars. The Associated Press announced just after Christmas that 116 banks that were recipients of the bailout monies had given $1.6 billion of bonuses to 600 of their top executives. That averages out to $2.6 million each.

What kind of logic, other than fraud, can justify taking public money and distributing it among 600 highly paid executives who were responsible for driving their banks into near or complete bankruptcy?

Their answer, of course, is that unless they paid out these big bonuses those executives would go elsewhere. But that defies logic. These executives drove their companies into the ground. If they are such hotshots then they can go out and get similar big paying jobs. But they can’t. Don’t the Board of Directors of these big financial companies read the newspapers and understand that banks and Wall Street are firing tens of thousands of people? Does anyone think that these insiders have such special talents that they cannot be replaced?

And by the way, where were the Boards of Directors? I think they were collecting their fees and acting like potted plants. I have friends who have lost 95 percent of the value of their stocks in the Bank of America and elsewhere. I think they are completely justified in suing those Boards for malfeasance.

As for the U.S. Treasury, why are they giving money to some banks that are publicly proclaiming that they do not need the monies. They are using our money as their capital and then buying firms, here and abroad. If that is the game, I have many friends, including the publisher of this paper, who are better business people and could make better use of the public’s capital.

One more thing about the Treasury: why weren’t they watching the banks? The annual report of the Comptroller documents that as mid-2008; the top three U.S. banks had issued more than $160,000,000,000,000 ($160 trillion) in derivative contracts against their assets of $4 trillion.

Think about that – they are leveraged 40 to 1. The amount of their deficit is roughly equivalent to the next 10 years of the U.S. Gross Domestic Product. Are you willing to labor for another decade just to pay off their obligations? I’m not.

Banking is so out of whack that for the first time in many years I actually find myself agreeing with Dowd – put those people into stocks, then, into jail.

Shame. Shame. Shame.

PAT CHOATE

An Inauguration Letter To President Obama

Dear Mr. President:

You’ve probably read a few letters like this in the past few days, but the events of January 20 are pretty heady and maybe—just maybe—you could use one more reminder that, in fact, you really do NOT walk on water and that the most important thing you will learn as you get older is what you do not know.

You have impressed us and certainly you have earned your shot at, perhaps, the most important job you can actually seek in the world.

You have joined the ranks of world leaders and you have in your hands the hopes, dreams and expectations of millions of citizens of the greatest nation on the face of the Earth.

When you land somewhere in Air Force One, you carry with you the full weight of a nation which is the longest lived experiment in self-government in history and, as you have correctly noted, you are the President of the United States of America—not just the Democrats or the Republicans.

Anybody who watched you take the oath of office and then head over to occupy a house which was built by slaves and did not feel a lump in their throats either has no feel for our shared history or no understanding of how far we’ve come just since you were born, the year Etta James sang "At Last."

The reality is now that’s all yesterday’s news.

You need to hit the ground running and job one is our national security.

I know that the economy seems like a number one issue, but the fact is that there’s not a heck of a lot you can do about it. One thing that you can and should do is to "encourage" Congress to repeal the bankruptcy bill which was passed some years ago in a bipartisan example of the strength of the Wall Street and big banking lobby.

The bill essentially gutted the ability of the average middle class person to simply go bankrupt.

It was a precursor to some really bad practices by the very same banks, which are now largely owned by, well, us.

Beyond that, you should look at helping small businesses because, every time a small business goes under, real people lose real jobs and as a job generator, small business beats the big three automakers any day of the week.

But, other than those items, there’s not really anything a President can do except become the cheerleader in chief—and we know that you can do that.

It is in the area of national security, however, that you can shine.

President Bush left you with an unbroken seven year record since 9-11 of domestic security. He practically did it over the dead bodies of your Democratic colleagues.

Remember, we’re not fighting the Russians or the Chinese or anybody who remotely understands the concept of mutually assured destruction.

We’re dealing with people who think nothing of strapping on a suicide vest and killing themselves to kill us.

I know that you campaigned on the side of the left who somehow think that if we’re just nice to those people, they’ll leave us alone.

You seem practical enough to not actually believe that.

The men and women of our military deserve nothing but our best. It appears we have turned the corner in Iraq and that we have challenges in Afghanistan. You have assembled a solid team in both the State and Defense Departments. Don’t tie their hands for political reasons.

George W. Bush was re-elected in 2004 largely because he followed his convictions and was unconcerned about politics.

You do the same and maybe even guys like me could be persuaded to vote for you in 2012.

FRED WEINBERG

Truth Acknowledged – Finally

President Obama’s inaugural speech was inspiring for he explicitly stated the obvious, "The challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time."

My fear does not concern his understanding that we have problems. Rather, I am worried about the advisors he has chosen.

The United States Trade Representative was the former Mayor of Dallas and an Austin lobbyist for a major Texas law firm. He might be a great Secretary of HUD, but he is totally unqualified for the top U.S. trade job.  His appointment means that these massive U.S. trade losses, one of the central issues that must be addressed in any recovery program, will be ignored.

The Rubin/Rahm Team in the White House consists of the people who created much of the current economic mess with their policies of unfettered globalization and financial deregulation. Now, they have been invited back to solve the problems they created.   They certainly did not understood what they were doing then and have neither said nor done anything subsequently that suggests that they know how to proceed.  Giving $300 billion of meaningless tax cuts to secure the GOP votes is so despicable that I am barely able to contain myself.  Obama won by promising to be different and capitulated on that one even before taking the oath of office.  And the GOP is so in the pocket of corporations that they cannot perform their most basic function -- being the loyal, honest opposition.

Just before the inauguration, the Obama team was on TV talking about "fixing" the entitlement programs.  Social Security is fully funded for another 40 years and if we had a national health care system, we could deal with Medicare systemically.  The funds are in U.S. Treasury securities. But our elites want to correct the "system" but defaulting on those Treasury bonds and cutting the benefits of America’s working people.

The infrastructure projects in the Obama recovery plan will reward many of those same contractors who plundered military construction in Iraq.  The very idea that a handful of Members in Congress must fight for Buy America provisions is an insult to our unemployed.   Nonetheless, the likely outcome is that the design and engineering work will be outsourced, cheap/defective materials will come from abroad, and the Obama Administration will never inspect contractors to ensure that they employ Americans.  This program is going to be a major magnet for more illegal immigration.

The TARP bailout is legalized theft.  Congress completely abrogated its oversight/normal legislative processes.  In late December, 600 bankers from 116 banks that took TARP monies got $1.6 billion in bonuses.  How can banks that are "broke" pay out such rewards. The answer, of course, is the banks are not changing. They just using our monies. Meanwhile, two million working people will lose their homes this year.

Indeed, our economic crisis is real, serious, and multi-faceted. As President Lincoln had to go through a number of generals to get one who could win the Civil War, I fear that President Obama will be forced to go through a number of economic advisors before he can reverse our economic decline.

PAT CHOATE

We Do NOT Want President Obama To Fail

I don’t know about you, but I’m getting more than a little sick of the far Left and the far Right partisans who simply want to gain a political advantage at the other side’s expense.

I, personally, really don’t care if the ideologues on the right think that Caroline Kennedy isn’t qualified to be a Senator and I really don’t care if the ideologues on the left think that George W. Bush is a dummy.

A long time ago in my career, I came to the conclusion that the vast majority of people who are elected to office run with the best of intentions and do not get up every day and ask themselves what they can do to screw the taxpayers.

There are, of course, exceptions.

While he is entertaining, as an example, the Governor of Illinois is such an exception.

So is the convicted Senior Senator from Alaska.

Ironically, one is a Democrat and one is a Republican, which pretty much proves that corruption is a bipartisan sport.

That said, while I don’t agree with much of the politics of the incoming administration, I do truly believe that they are taking office with the best of intentions, they are as patriotic as their opponents and they love this country as much as anybody.

Barack Obama has actually hewed very close to the promises he made on the campaign trail.

There are Republicans in his new cabinet, he appears—having hired as his Chief of Staff Rahm Emanuel, a former member of the Israeli Defense Force—to be prepared to be pro-Israel, he has not taken an isolationist position in the world and he has hired a relative hawk as Secretary of State.

These are not the moves of someone whose intentions are to dismantle the United States or who believes that we are somehow the bad guys.

There are people on the right who are suggesting that somehow, Obama is the Manchurian Candidate who got elected.

And there are people on the left who are all upset that Obama appears to be be a pretty conventional centrist after all.

I doubt that we are going to agree with or like a lot of Obama’s policies.

But one thing is for sure. We do NOT want him to fail.

He won the election fair and square. That’s how we do things in America. In four years, we get to revisit that decision.

In the meantime, he is the President of the United States of America and we owe the country our respect for the office. He’s not just the President of the Liberals. When Air Force One lands in a foreign land, he represents all Americans and I have to tell you that I would be just as irritated with the Dixie Chicks if they were to say the same thing to a foreign audience about him as they said about President Bush.

I think that most Americans are tired of the incessant bad-mouthing of opponents that goes on every day in Washington.

There was a time when at 5pm, the Republican and Democratic leaders of the House and the Senate sat down, had a drink and worked things out.

You can blame the 24-hour news networks, the constant coverage and the partisan news media if you want for that lack of civility.

But I think the answer is far simpler.

We have politicians who think that we enjoy watching them act like thugs.

The sooner we disabuse them of that notion, the better.

FRED WEINBERG

Thank You George W. Bush!

Since this is the final print edition of the Penny Press, I want to take this space to say thank you to a person which this nations owes a great deal.

That would be George W. Bush.

I know that the mainstream media has little or no regard for the 43^rd President of the country, but the fact is that he was in office for eight months when some crazy people flow two planes into the World Trade Center and a plane into the Pentagon.

It is fashionable in some circles to blame this President for just about everything including the attack.

I suspect history will take a more measured approach to the eight year tenure of Bush.

For starters, there has been no attack on the United States since 9-11.

Did we make some mistakes in prosecuting a war on Terror?

Of course.

But the fact remains that we have not been attacked and if you are going to blame Bush for everything else, you should be intellectually honest and give him credit for that.

George W. Bush did what he thought was right. He was re-elected by a fairly large margin in 2004.

That goes to show that the voters of this nation are pretty independent.

After all, they also just elected Barack Obama.

All other things being equal, I would rather have a President who I disagree with but who firmly believes that he is right than a finger-in-the-wind.

Bush was perfectly willing to lose the 2004 election.

The voting public appreciates that sort of attitude.

Let’s also understand something else.

Nobody of either party who gets elected to that office is a dummy.

Unless, of course, you firmly believe that everyone who disagrees with you is dumb.

George W. Bush is certainly not intellectually challenged.

All of that bull came about after he held a very high public approval rating during and after 9-11. The Democrats decided that demonizing him was the only way to ever win high office again.

They did a pretty good job.

But now the shoe is on the other foot.

I will make it much better than even money that George W. Bush will never, ever do to Barack Obama what, say, Jimmy Carter did to him.

I have said this before and I need to reiterate.

No real American roots against their President and, by extension, their country.

Barack Obama has a real opportunity to become a great President.

He’s smart enough and he appears to be a pragmatist.

It would be a terrible shame if the Right begins to try to do to Obama what the Left did to Bush.

Ultimately, our founding fathers got it right.

We must all hang together or we will surely all hang separately.

It is a lesson we may have to learn the hard way.

FRED WEINBERG

We Quit—Sort Of

By FRED WEINBERG

Editor and Publisher

This will be the last Penny Press we print.

That doesn’t mean we’re disappearing, and it doesn’t mean that the faltering economy has struck us down, but we are making some changes in our business model and there is an indirect tie to the economy.

As many readers know, we started this newspaper in 2003, when we had sold KRLV in Las Vegas and had to honor a non-competition agreement despite the fact that the people who bought the radio station from us weren’t paying us.

After a protracted battle in bankruptcy court, we won and by that time, the Penny Press had taken on a life of its own.

It may well be some of the most fun we have in a week.

But, shortly after we won the battle of KRLV, we also got back into the radio business, buying stations in rural Nevada, Colorado and New Mexico.

The problem is that there are only 24 hours in a day and only seven days in a week.

And the economic problem is that when priorities must be set, the radio station company is the 800 pound financial gorilla.

So, the dilemma, which faces many small businesses, is how to prioritize the commodity that fuels a business—the owners’ time.

As much fun as putting out a newspaper is, the time required to make it an economic success is roughly the same time that it requires to run a company which has or is building 10 radio stations.

And the money involved in the 10 radio stations is a significant factor.

So, we have decided to shelve the printed edition of the Penny Press.

However.

We have a very active web site.

That stays.

It seems that during the existence of the print edition of the Penny Press, we have been discovered on the internet.

When we first started, we knew that we needed a web site. We didn’t know why but we knew that we needed one.

Turns out that all this internet stuff has brought us readers from around the world.

So, we’ll keep putting the Penny Press together, putting it up on the internet, emailing out our lead story and editorial and, hopefully, selling a little advertising in the process.

Now, about those radio stations.

I have also decided to move up to Winnemucca to personally take charge of KWNA-AM and FM after almost 15 years in Las Vegas.

As it happens, our manager there is leaving and I’m getting sick of driving 45 miles each way down the 95 every day. So I’m heading North.

I’ve always liked Northern Nevada and the towns we own radio stations in.

There’s a lot to be said for places where gated communities are the exception, not the rule and people wave at the police with all five fingers.

I’m, apparently, not the only one.

During a period of population decline in Las Vegas, places like Winnemucca have actually grown. It’s what happens when a community still has a solid local economy and welcomes new residents with more than traffic jams.

And when was the last time you heard of four of seven county commissioners outside of Las Vegas spending time in a Federal Prison?

That said, I have a close friend who says that once you live in Las Vegas for more than six months, you may leave but you’ll always come back.

We’ll see.