Tuesday, September 20, 2011

Where did this headline come from?

This is a small mystery about media. I read Google News on the internet. It's a good place to get links to news stories, and you can customize it to get more links to online news that you like and trust. I believe the program also learns from your browsing habits from the news page; if you click links on the New York Times, they'll give you more times links in the future. Naughty, but probably not evil.

Well, about 10 minutes ago, I saw a headline and link on Google News:

This seemed to me a "commercial" headline for some reason. If the air crash victims at the airplane race "shared love of aviation" then perhaps it wasn't so bad that they died sudden, violent deaths while enjoying the entertainment. And scanning the headlines, I thought this (of all the headlines I read-- Google News also aggregates headlines) seemed kind of self-serving, so I clicked the link, thinking I'd catch someone who was writing news for commercial purposes.

What did I find at the CBS News link? Different headline:

Washington man among 11 dead in air show crash

So, this is my small media mystery. The question is, where did the headline on Google News come from? Has Google figured out a way to sell headlines, which they attach to existing news story links? Maybe the link changed behind the scenes using some Ajax trickery. [Ed. Ajax is the programming language in which part of the news page is written.]
Of course, there's also the possibility the "shared love" headline was just written by some hapless copy boy, or whoever it is who writes headlines for display on the internet, and the page got linked incorrectly for a moment in the Google news page code (it disappeared altogether when the Google news page refreshed 5 minutes after I first saw it). [Ed. It was about 6:00 pm, 9/20/11, it's not clear when I'll actually post this.] Possibly it was not meant to be marketing propaganda. It's also possible the headline came from CBC.ca, which inadvertently supplied the graphic on the Google News headline.

Is this a software glitch? Or a shady capitalist conspiracy to manipulate the news? [Ed. I know now, after writing this whole post, that the first choice is correct.]

Please note: if this idea is commercially viable, to sell headlines on Google News, I hereby claim a share of any profits, or at least hereby establish prior art. 

Thursday, September 15, 2011

Financial crisis solved. You're welcome.

Attention American businesses. Businesses are not in peril. They are not suffering because of taxes and regulations. Business growth has been crimped because Americans don't have money to buy the products American business offers. People aren't working, so they're not buying. And they won't be buying again until they're working again at fair wages. It's as simple as that.

This week the census bureau released data on the percentage of our population in poverty, which has risen to roughly 15%. In 2010 47% of US children live in poverty. Almost a million people lost or dropped their health insurance in the last year. One American in six lives below the poverty line, which is defined as $20,000/yr for a family of four. Unemployment has been near 10% for more than a year.

Meanwhile, our economy seems hell bent, not on enriching the populace as a way to grow business and prosperity, but instead on creating more and more poor people. This is a clear symptom of the growing income divide between the richest Americans and the rest of us. But the reasons people are poor, and getting poorer, are worth examining.

1. Poor people pay more, and a higher percentage of their income, to interest rates, fees, and service charges. Banks and credit card companies, as well as payday loan outfits, check cashing services, pawn shops, rent-to-own, loan sharks, and other financial companies who provide services to the poor, reap great profits from the poor and financially naive.

One reason banks continue to foreclose on bad mortgages is the quick accumulation of expensive transaction and legal fees, and interest rates that soar arbitrarily. Between the legal fees and the mostly unregulated bank service and collection fees, always levied and collected by third party "servicers," these punitive burdens add to the woes of a borrower's already financially disastrous home foreclosure, and support a small and growing niche business for independent servicers. It was the servicers, not the banks, who got in trouble for robo-signing mortgage documentation produced for court proceedings. Many of these servicers originated the mortgages whose failures brought on the recent banking crisis of 2007-2008..

This-- the profitability of collecting generous fees on foreclosures-- is why the financial sector is fighting the newest banking regulations. Their fight is the reason Elizabeth Warren is running for the Senate from Massachusetts against the recently elected Republican Scott Brown, rather than heading the new consumer protection board she created. The financial lobby would not allow her nomination to pass, ever. Because she wants to protect people from the avarice of lenders.

2. A second stimulator of poverty is the astronomical cost of healthcare. More bankruptcies are caused by catastrophic medical bills than by defaulted mortgages. Un-covered medical bills are, after job loss, the most common cause of mortgage default. Many Americans are covered by employer supplied medical insurance, and though most are paying more out-of-pocket-- through higher premiums, deductibles, and co-pays-- at least the insurance keeps medical costs manageable.

One reason insurance keeps prices in control is because insurance companies are allowed (encouraged) to negotiate prices with caregivers. They agree up front that, for instance, $65.00 is the charge for an X-Ray. This leaves the suppliers-- radiology clinics, hospitals, and large practices-- free to assign any price they want to the public. If my insurer is XHealth Inc, then I am charged from the XHealth price list. My X-Ray will cost $65, even though the next patient in line, not covered by XHealth, could be charged $150.

In this perversely inverted system, the poor pay the most for health care because they don't have the benefit of insurance company negotiated prices, which apply to me even when I'm paying out-of-pocket. Many blame the medically indigent for the high cost of health care, but that is blaming the victim. Healthcare is highly profitable for insurers and for providers, especially for the pharmaceuticals business. The worst served in the system are patients, and the worst served patients are the poor.

3. Business in the US is not in peril. American businesses are making higher profits on higher revenues and paying relatively lower taxes, measured both as a percent of their profits and as a percent of the GDP, than at anytime in the last 100 years. Worker productivity is up, and payrolls are down. Estate taxes, capital gains, and marginal tax rates are the lowest for corporations and the uber-wealthy they've been in 60 years. Apple is rolling in money, Google is committed to fifty billion dollars, mostly cash, for acquisitions, of Motorola among others.They may be looking at Sprint.

The problem American business is experiencing is a direct result of the pauperization of the American consumer. In 2007 there were ~7 million more jobs, several million fewer citizens, and a large charge of cash in circulation from unhealthy consumer speculation in (their own) real estate, specifically financing future gains in home prices for cash to spend today. That was 2007, just after Enron, and before Bear Stearns and Bernie Madoff and Iceland and Lehman Brothers and the giant vampire squid.

When Americans can work, business will thrive. Tax coffers, especially in hard hit state and local governments. will be filled. It's cheaper to pay for primary care for the indigent, than for emergency room care when their condition turns acute. It's cheaper to educate our citizens than to deal with the problems of their ignorance. Military aid is not generosity-- almost all US military aid is in the form of gift cards-- the recipient will have to go to Lockheed or Raytheon of Boeing or General Dynamics or Colt to redeem their merchandise. A billion to Egypt is generous, but to the arms manufacturers and not to the Egyptians.

And here's a hint. cutting the taxes of the rich so they'll create demand for products doesn't work. The rich buy iPads, from each of which Apple makes perhaps 30% profit, and benefits almost no Americans (besides investors) from the manufacturing operations. And the iPad is a great product! But buying an iPad is not going to help the average out-of-work American.

And just because he's poor, a citizen does not thereby become a financial punching bag.