The Economy Hub
With Michael Hiltzik
What a lobbyist does: The Lanny Davis/Roger Goodell NFL edition

Yes, the best defense is a good offense, but sometimes a bad defense is just a bad defense. Sometimes it even makes things worse. For an example, let's look at the defense mounted for NFL Commissioner Roger Goodell by noted Washington lobbyist Lanny Davis.

Davis went on CNN over the weekend, and on the network's website Wednesday, to defend Goodell against the hordes baying for his head. CNN specifies that Davis hasn't represented the NFL or Goodell himself, though he has represented the NFL's Washington Redskins in the controversy over the team's refusal to dump its manifestly racist moniker. That's a cause in which Goodell has supported team owner Dan Snyder, who is intent on keeping the name.

Davis has also represented Bill Clinton, Alex Rodriguez, and Penn State.

Davis' first move as Goodell's ostensibly unsolicited defender is to acknowledge that the commissioner blew things, big-time, in his initial handling of the Ray Rice affair. Rice is the Baltimore Ravens running back who...

Read more
Question of the day: Is BP run by children?

Federal Judge Carl Barbier of New Orleans already has ruled that BP is guilty of "gross negligence" and "willful misconduct" in the 2010 Deepwater Horizon oil spill disaster in the Gulf of Mexico. His Sept. 4 finding exposed the British oil firm to as much as $18 billion in penalties.

Given that further proceedings on the case are still scheduled before Judge Barbier, it probably have been wise of BP not to tick him off any further.

This message was lost on the company's lawyers. After issuing his ruling, he granted them permission to file a reply brief, as long as it was no longer than 35 pages, double-spaced -- 10 pages longer than court rules usually allow. Nevertheless, they tried to snow him by reducing the line spacing on their word processor. The maneuver allowed them to squeeze the equivalent of six extra pages into the brief.

I know! Childish, right? As Elliot Hannon of Slate observes, "It’s an odd approach when trying to prove yourself un-reckless." In any event, Judge...

Read more
The NFL scandal shows why you shouldn't get your news from the PR dept.

The purchase and sale of news reporters by powerful institutions and influential people are hardly a new phenomenon. But like all manifestations of disproportionate wealth, it's been raised to glorious new heights during the early 21st century.

Not only are journalists suborned by "access" into seeing things their bidders' way--access to company CEOs, access to entertainment and sports stars, advance access to the next Apple product--but increasingly they're directly employed by the companies they're supposed to be covering objectively. 

The folly of these arrangements is now vividly on display, thanks to the travails of the National Football League. As Stefan Fatsis documents in a superb piece at, some of the nation's most experienced and dedicated football reporters have downplayed the Ray Rice scandal in their work. Why? Because they work for 

Others, like Peter King of Sports Illustrated and Adam Schefter of ESPN, have been accused of uncritically taking the...

Read more
Why did it take so long for CalPERS to dump its lousy hedge funds?

That big thunderclap you might have heard Monday afternoon rumbling from California to the New York island (apologies to Woody Guthrie) was the sound of CalPERS, the nation's largest public pension fund, dumping its entire portfolio of hedge fund investments.

The faint murmur that followed was a chorus of investment market analysts wondering, "What took it so long?"

The announcement that CalPERS would shed its entire $4-billion holding in hedge funds is notable, because the giant institutional investor had long been a fan of what it had come to categorize as "absolute return strategies" funds. In fact, CalPERS was a pioneer, launching its hedge fund portfolio back in 2002. 

Its turnaround now has the flavor of the disclosure that the emperor -- for hedge funds once reigned over the institutional and affluent client market -- has no clothes. The CalPERS announcement stated that the decision was "not based" on the program's performance. This is a little odd, because the hedge funds'...

Read more
The Salaita case and the Big Money takeover of state universities

Responding to an academia-wide furor about the firing of a faculty member over a series of provocative tweets on Israel and Gaza, the University of Illinois board of trustees last week took a vote on the case.

They voted 8 to 1 to uphold the firing. This can rightly be seen as a blow to the very concept of academic freedom, but there's another sinister undercurrent to the case: there's evidence that major donors put pressure on the board and the university administration to dump the professor, Steven Salaita. If so, it wouldn't be the first time that financial donors have tried to manipulate university administrations into doing their bidding, but it's certainly one of the most disturbing examples of a bad trend.

First, the background. As we reported last month, Salaita is a respected scholar in American Indian studies and Israeli-Arab relations whom the University of Illinois hired away from Virginia Tech and placed in a tenured position. Salaita's moving expenses to the university's...

Read more
Here's the most hypocritical remark made yet about Dodgers TV fiasco

Time Warner Cable, which paid more than top dollar to secure Dodgers telecasts well into the future and then managed to prevent millions of Dodger fans from seeing the games on TV during this (possibly) pennant-winning season, is backing down.

As my colleague Meg James reports, TWC will broadcast the potentially pivotal final six Dodger games of the season on free TV, via KDOC, starting Sept. 22. This is the least TWC can do -- and we do mean the least.

But as though in true bad-PR fashion, here's how they described their action (the speaker is Dinni Jain, Time Warner Cable’s chief operating officer):

"Time Warner Cable is part of this community and we’re Dodger fans too. Angelenos love their Dodgers, and we’re happy to give them a way to watch their beloved team during this pennant chase."

If a more hypocritical statement has been uttered during this season-long fiasco, I'd be interested in knowing what it is.

Time Warner Cable isn't part of this community. It's a New York corporation...

Read more
Another Wall Street alarm: Income inequality hurting states' bottom lines

Economic analysts at Standard & Poor's sounded the alarm last month on how rising income inequality was putting a damper on U.S. economic growth. They've now followed up that finding with a report outlining its dampening effects on state tax revenues

The bottom line, the S&P analysts say, is that as more income flows disproportionately to top earners, state tax collections fail to keep pace.

"From 1980 to 2011, average annual state tax revenues growth fell to 5% from 10%," the analysts say in their draft report; "meanwhile, the share of total income for the top 1% of earners doubled" (to 20% from 10%).

Making state income tax more progressive by increasing marginal rates at the top can help, as California and numerous other states have found, but only to a limited extent. That change also comes at the expense of increasing revenue volatility (as California also has experienced). The reason is that incomes at the top are more dependent on capital gains, which are naturally more...

Read more
Tesla is taking Nevada for a ride

The state of Nevada, of all places, should understand the gambler's adage about how if you can't pick out the sucker at your card table, it's you.

Despite that, the state Legislature has approved a massive giveaway to Elon Musk's Tesla Motors to build a lithium-ion battery factory in the desert north of Reno.

Tesla will get more than $1.25 billion in tax breaks and other incentives. That includes up to 20 years of exemptions from sales, payroll and property taxes; $125 million in tax credits Tesla can sell to other companies; and $8 million in electricity discounts. The sum doesn't include millions of dollars in infrastructure improvements — schools, highways and so on — that Nevada taxpayers will be shouldering.

How eager was Nevada to land this project? The offer is more than twice what Musk was seeking from the five states, including California, competing for the factory. Musk told analysts on July 31 that he expected the winning state to provide "maybe 10%" of its estimated cost of...

Read more
Your most important NFL game day analysis tool tracks player arrests

Many years ago, I was a cub reporter covering the New York statehouse during a period of amazing corruption. In Albany, the late great investigative reporter Jack Newfield quipped that the arrest rate in the state legislature was higher than it was in the South Bronx. On a metaphorical level, he was right enough.

That brings us to the National Football League and what may be the single most important analysis tool for the 2014 season. It's an interactive chart, based on data gathered by USA Today sportswriter Brent Schrotenboer, showing arrests of NFL players since 2000.

"Nifty" is an overused term in tech-dom, but this interactive chart qualifies. You can mix and match the data by team, position, crime, defense or offense. And it's in full color.  There are 730 entries. Is that is a lot or a little for a league the size of the NFL? Number-crunchers, the floor is yours.

This is not to make light of the seriousness of NFL players' interactions with the criminal justice system; only to...

Read more
A 'fact-checking' website doubles down on its Social Security errors

It's natural for a self-described "fact-checker" to circle the wagons when his fact-checking is called into question. So the defensive reaction of Dana Tims, the author of a "fact-check" about Social Security that we questioned earlier this week, is understandable.

Unfortunately, Tims, who writes for the PolitiFact Oregon website sponsored by the Portland Oregonian, compounded the faults of his original post when he responded Friday to my analysis. Tims' original post criticized Sen. Jeff Merkley (D-Ore.) for saying that "Social Security has never contributed one cent to the [federal] deficit." Tims labeled that "half true." In fact, it's 100% true.

In his follow-up responding to my analysis, Tims added a new error, misrepresented my argument and failed entirely to address the factual misstatements in his original post.

Let's take these issues up one at a time.

We'll pass lightly over the fact that my first name is Michael, not "Thomas," as Tims has it. More seriously, in my original...

Read more
RIP: The Apple iPod, 2001-2014

Quietly, even stealthily, Apple this week brought about that moment that many of its most loyal followers dreaded would happen: It killed off the iPod.  

Oh, the name lives on for now, attached to a suite of weird late-generation devices -- the Shuffle, the Nano, the Touch -- but when the Apple Store came back online Tuesday after going dark for the company's new-product launch, the last vestige of its original hard-drive click-wheel iPod was no longer for sale. 

Few people even noticed the absence of what the company had ultimately dubbed the iPod Classic. Fewer will lament its passing, even though it marked a revolution in portable music. There was its incredibly capacious storage of 160 gigabytes, enough to hold the entire music library of all but the most obsessive music collectors; its elegant design in almost all its incarnations over six generations (or maybe seven, depending on how you count); its class.

Over the years I've probably owned six iPods, not counting those we bought...

Read more
Is Apple stepping into a huge regulatory morass with Apple Pay?

Whether Apple Pay is the mobile payment service everyone's been waiting for, or something no one wants, won't be known until it's formally rolled out and given time to either thrive or wither away. 

But Adam Levitin, a financial regulation expert at Georgetown University law school, raises a question that Apple itself may not have pondered: does Apple Pay make the company a financial institution subject to regulation by the Consumer Financial Protection Bureau?

If so, that's a huge deal, because the CFPB has the authority to delve into the operations of regulated companies far beyond specific financial products. The agency could look into allegations of "unfair, deceptive and abusive acts and practices" anywhere in Apple's operations: there's nothing in the law, Levitin observes, that says "the unfair, deceptive or abusive acts and practices has to have any relationship with the consumer finance business."

And not only the CFPB can weigh in. "Read literally," Levitin writes, the...

Read more