The Choate-Weinberg Report

Even The Dems Can Learn From Sheriff Joe

We have some serious financial problems in Nevada.

The state and the counties are all facing serious revenue shortfalls—some of them actually real even after all the smoke and mirror government accounting.

We have a modest suggestion, the source of which may not be appreciated by certain groups, but, nonetheless, it has proven its value and cannot be overlooked.

Like him or hate him, Maricopa County (AZ) Sheriff Joe Arpaio has saved the taxpayers of that county millions and millions of dollars while increasing the level of services with his Sheriff’s Posse—a non taxpayer-funded organization through which citizens contribute their services to the County.

The radio operators run a very sophisticated communications operation.

The K-9 specialists train their own dogs and volunteer to supplement K9 Officers.

There is a Jeep Posse which can send hundreds of well equipped vehicles anywhere for a variety of policing activities.

In fact, a citizen who has a clean history can find many different ways in and around Phoenix, to volunteer and save tax dollars all at the same time.

You know who hates this idea?

Government employee unions. Like we should care.

Our question is why should this idea be limited to law enforcement?

Why can’t the State ask high dollar accounting firms to loan employees to the public utilities commission or the gaming commission to see if the state is getting its due from companies who are always armed with more and better accounting help than the state has?

Couldn’t the DMV use 40 or 50 extra volunteers at the offices it can’t run?

Why can’t Clark County—instead of hiring more $168,000 a year firefighters—use some volunteers, the way it works in rural departments?

And what about education at all levels?

Do you really think that you could not find volunteers to help teachers in the classroom?

Or even fully qualified teachers to teach specialty subjects?

(I can just hear the organizers from AFCSME, SEIU and the Nevada Education Association, now.)

The fact is that Americans love to volunteer.

And the reason we will have to ram this idea through the legislature and many County Commissions and School Boards is two fold.

First, it goes against the interests of the government employee unions which got Clark County Firefighters to $168,000 a year and use massive amounts of campaign contributions to keep getting people elected who will continue to feather their nests.

And second, there is always a prevailing smugness by many in government that somehow, they always know more than the citizens they purport to serve.

Not Sheriff Joe!

His Posse is a raging success.

Here’s a non Sheriff Joe reason to consider this.

Some years ago, the Oklahoma Corporation Commission got some volunteer help from high dollar accounting firms to audit the rate base of Southwestern Bell Telephone. They found pieces of equipment being included in the rate base from the 1940s which had, of course, long been disposed of and the result was a huge refund paid to the citizens by the company.

If ours is truly a government of the people, by the people and for the people, then the people ought to be able to volunteer to help the government and reduce the costs.

FRED WEINBERG

Time For The FCC To Fade To Black

As many people know, we have a comparatively large investment in the radio business and, as a result, I have been deluged with questions from readers and listeners about the Federal Communications Commission’s latest attempt to ignore the courts and Congress and to try and regulate the internet.

The concept was that it is the government’s role to regulate something which has created billions of wealth without any regulation whatsoever to date.

Just look what a great job they’ve done on broadcasting. Not.

The FCC was put into place in 1934 because back then, the technology was such that you could not put two 50,000watt radio stations in the same town on the same frequency.  Somebody had to decide who the winners and losers would be because, back then, we thought that spectrum was a scarce resource.

When I was going to college, the engineers I worked with used to laughingly tell us that you could not repeal the laws of physics.  Well, upon further consideration, not only have those laws been repealed but the winners from 1934 have become losers in many cases, run over by the freight train of technology.

Yet the FCC soldiers on.

Back when we considered the airwaves “scarce” and “owned” by the public, the FCC was charged with being the traffic cop and allocating their use.

Today, we’ve shoehorned so many broadcast frequencies into the spectrum (many times in the name of diversity) that in many large cities, two thirds or more of the broadcasters are losing money and watching a radio or television company go into bankruptcy is not unusual.

OK, I get that.  We’ve adjusted our business model to stay in smaller markets where folks appreciate their local radio stations and appreciate those who serve the community—things which can no longer be done when you have 65 competitors in Las Vegas or Phoenix. And let me make it clear that my complaint here is not the competition but the Government’s heavy thumb on the scale.

So the internet is now a new frontier.

It allows amazing things to happen.  In many cases amazing things for which there is not yet a commercial market.

The way new things take off in business is that you let them alone to grow and prosper.

The FCC has a different idea.  It wants to make sure that big rich companies who are successful can’t pay a broadband provider a little extra to carry their content at higher speeds.  Perhaps Netflix or Hulu which charge a monthly subscription fee.  Or, keeping in mind that most big, rich companies started out in someone’s garage with an idea, Google, Apple and Amazon.  They also seem to have the warped idea that crap from Wikileaks should have the same privileges because, well, they exist.  They call that by the innocuous name of “net-neutrality”, which is anything but.

So despite a court decision saying that a similar set of regulations was not legal and despite a bi-partisan majority of Congress refusing to make such regulations legal, the Obama appointees on the Commission (elections do have consequences and there are three Democrats on the five member Commission) rammed this through—sort of like Obamacare.

Here’s what is going to happen.

If, somehow, the courts allow this to stand, you will begin to see private networks develop that you can buy your way into from your house.  Those networks will compete with each other for customers but they will probably balkanize the internet because they will be run strictly for commercial purposes.

We might even go back to the days when you were an AOL or a Compuserve or a Prodigy subscriber (or in our case all three).

Now that might not be a bad thing in and of itself.

But right now, the internet works without the ham-handed regulation that the FCC is trying to impose.  Why create a whole new bureaucracy to solve a problem that does not exist?

Furthermore, despite what people who don’t own it are fond of telling you, information is not free.  It costs real money to collect information and to distribute it.  If there is no real business model for paying for that information than you end up with a situation where two thirds of the radio and TV stations in large markets are eventually going to disappear because they will be broke.

Please don’t misunderstand.  I’m not for government intervention to save radio and tv broadcasting, either.  Just pointing out that the last time the government got involved, they ended up creating a business model that will no longer work. And they want to keep it that way.

It’s time for Congress to remove the FCC from the regulatory scene.  Or at least to make it clear that its job is strictly to be an engineering traffic cop. We no longer need a bureaucracy which decides winners and losers.  Spectrum is no longer a “scarce” resource.  Neither is a wireline network.

Success in business requires profitability.  Profitability requires a minimum of regulation.

That is the opposite of what the Obama FCC is trying to ram down our throats.

And that applies to healthcare and automobile manufacturers as well.

FRED WEINBERG

Pima County AZ Sheriff Blowhard Kicks Off Lefty Rhetoric

Less than 24 hours after Arizona Congresswoman Gabrielle Giffords was shot at a constituent gathering by a 22-year-old high school drop-out nutburger named Jared Loughner, the screeching heads on the left seeking political gain from the tragedy were so loud that Ms. Giffords might have been able to hear them even though Doctors had her in an induced coma. (As this is written, she is still clinging to life.)

First out of the box was Pima County (Tucson) Arizona Sheriff Clarence Dupnik.

During a briefing on what had happened to the media, this guy who styles himself as the anti-Joe Arpaio said:

“Let me say one thing, because people tend to pooh-pooh this business about all the vitriol that we hear inflaming the American public by people who make a living off of doing that,” the sheriff said during the briefing. “That may be free speech, but it’s not without consequences.”

During an interview earlier in the day that aired on MSNBC via local NBC affiliate KPNX, Dupnik declared that “it’s time that this country take a little introspective look at the crap that comes out on radio and TV.”

As opposed, of course, to the crap which comes out of that self-righteous Sheriff’s mouth.

It happens that I owned five talk radio stations in 1995 in the great state of Oklahoma when Tim McVeigh blew up the Murrah Building, killing 168 people. The left-wing rhetoric was almost exactly the same.

Let me tell you what my then afternoon host, Pat Richardson, told a world-wide audience the next morning when a self-righteous twit from New York City asked what we in Oklahoma had told the children.

“I’ll tell you what I told my three-year-old,” said Pat.  “I said to my three-year-old that some nutcase blew up a building and we don’t do that in our family.”

The response from New York?

“That’s the worst of talk radio.”

Mind you that was almost 16 years ago.

So before all you self-righteous left-wing types get into high dudgeon over this tragedy, consider this:

Congresswoman Giffords may be a liberal Democrat but she is a staunch supporter of the Second Amendment.

Congresswoman Giffords’ last official act on the floor of Congress before this tragedy was to read the First Amendment as part of a GOP inspired reading of the Constitution for the first time ever on the House Floor. She crossed over party lines to join the Republicans to do so.

The shooter was a paranoid schizophrenic nut.

The same tragedy could happen to any 16 people anywhere in the United States precisely because we have a free and open society.

In short, whatever  happens in the future with Congresswoman Giffords’ medical situation, she is not and will never be a poster child for shutting down talk radio and conservative commentators on TV which is really what Sheriff Dupnik was screeching about.

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.”

Those were Congresswoman Gifford’s last words on the House Floor before she was shot.

We would hope blowhards like the Lord High Sheriff of Pima County don’t continue to try and make a mockery of that.

FRED WEINBERG

Who Gets Nevada's Next Casino License? Al Qaeda?

Back in the day, the Nevada Gaming Control Board took Frank Sinatra’s gaming license away from him for the Cal-Neva Lodge because of his alleged (and probably real but peripheral) connections with Sam Giancana.

There was a day when Las Vegas was heavily influenced by folks named Civila, Spilatro, Rosenthal, Siegel, Dalitz, Patriarca, Korshak, Costello, Lederer and, oh yes, the Teamsters’ Central States Pension Fund.

Harry Reid is reputed to have kicked all of those clowns out of Las Vegas in his years as the Chairman of the Gaming Commission.

Getting a gaming license these days involves hugely expensive investigations which place such licenses well out of reach of little guys.  It can cost a half a million just for the investigation.

All of which begs several questions:

If MGM Resorts is such a great licensee, how come they are allowed to have an association in Macau with one Pansy Ho, whose father is arguably the Sam Giancana of China and who has admitted that her father financed her empire?

In supposedly mobbed up New Jersey, MGM was forced to sell half of a casino it didn’t even operate because of that association.

In Nevada, not so much.

And then there’s MGM’s association with Sheikh Rashid Bin Mohammed Al Maktoum, ruler of Dubai and 50% partner in City Center.  He (or his company) also has an approval from the Gaming Commission to own up to 10% of MGM.

How does a guy who built a city in the Middle East with slave labor get a gaming license in Nevada where guys like Spilatro were chased out and ended up in shallow graves in Southern Indiana.

Finally (but certainly not least), there’s the latest gaming owner and operator in the strip, Deutchebank.

The bank which financed Auschwitz in World War II for one Adolf Hitler financed and then foreclosed on and now owns and runs a 3,000 room hotel on the strip.

If merely having financed Auschwitz was the only sin which the German bank engaged in during the last 65-years, that might be one thing.

But two weeks ago, the Wall Street Journal reported that this fine, upstanding example of the banking industry paid the government of the United States about $536-million (that’s a half a BILLION dollars or about one eighth of what they say they have in the Cosmopolitan) to avoid criminal prosecution for touting illegal tax shelters.

But, by God they have a Nevada Gaming license.

Adolf would be so proud.

Now I know what you might be thinking.

This guy is still fighting World War Two.  Or why shouldn’t we allow a casino company to take Arab money?  Or, is it possible he’s biased because he’s Jewish?

Candidly, I do think that I wouldn’t personally patronize either City Center or the Cosmopolitan because of their financing for that reason. I grew up visiting relatives who had serial numbers tattooed on their forearms.

But what really makes me mad from a business perspective is the fact that these guys can get gaming licenses with very cursory investigations while a little guy who wants to get into the gaming business is going to be forced to undergo a protological exam before he is going to be granted a license to run the smallest of casinos. And many are simply turned down.  Some because the gaming regulators don’t like their moral character.  Imagine that.

Frankly, in a state which has a billion dollar budget gap, it sure seems like a misallocation of resources.

Did the Gaming Commission send investigators to Dubai? Did they look at the slave labor issue? Why is Pansy Ho an acceptable business associate for MGM in Nevada but not New Jersey?  How can a foreign bank essentially plead guilty to a Federal felony but still get a gaming license?

When are we going to license the Russian mob?

How about the Iranians?

Or Al Qaeda?

Or have we already?

FRED WEINBERG