Wednesday, March 28, 2012

Ah, those nostalgic sounds of yesteryear...the 1990s!


It's truly odd how sounds we once took for granted can now send us into spasms of teary-eyed nostalgia...the noise a 5.25-inch floppy disk made when you loaded it into the A: drive of a computer, the various Windows boot-up sound signatures, even the wonderful noise we once heard while turning the dial (yes, dial!) across the AM radio broadcast band. (That "noise" is what inspired many of us to enter the hobby of amateur radio and/or pursue careers in broadcasting.)


Well, here is a nice article that actually provides examples of twenty different iconic technological sounds that a lot of us grew up with but that our kids will probably not have ever heard or remember.

Listen and those of my generation will get all misty-eyed while enjoying that lovely music we once heard while accessing the Internet via phone line dial-up or the beeps and bops of a spirited game of Pong.


Don Keith N4KC

Saturday, March 17, 2012

I'm from the government and I am here to protect YOU!

Those of you who follow this blog--all three of you--know that I sometimes can't resist the temptation to go off topic and get all political on you guys.  Sorry.  But I justify that by noting that technological change is not the only kind that can radically affect our daily lives.  So can the actions of "we, the people," sometimes known as the "government."

I have blogged before about my concerns over the current tact of our national government--executive, judicial, and legislative, all equally to blame--toward increasing its size and power as well as its influence over we poor, helpless citizens.  OK, I know some of us need the help.  And I agree that it is a legitimate function of government to come to the aid of those who most need it.  But I don't agree that such assistance and protection should be used to the extent that it interferes with the rights and freedoms the rest of us hold so precious.  Or be so cumbersome and overbearing that it prevents the greatest economic system in the world's history from being all it can be.

I also have noted that in my current business, we have seen near-oppressive government regulation, all in the name of protecting citizens from alleged abuse from others in our space.  A solution in search of a problem?  Yes!  I know there are those--including some few in our business--who would bilk people and take advantage of the gullible.  But I also know there are plenty of rules in the books already to punish those scoundrels.  Enforce them!  Don't punish the good guys to get at the few.  And don't at the same time penalize the very people they say they are trying to help.

The latest boondoggle to raise my ire is an interesting article about Richard Cordray, the director of the newly-minted Consumer Financial Protection Bureau.  Were you even aware of this fine governmental agency that is charged with protecting you from the big, bad banks and credit card companies and others who earn their living by loaning money to people?  Did you know that since its humble beginnings late last year it has already hired 800 people.  At least CFPB is doing its part to solve the country's recent unemployment problems by providing nice careers in government for all those folks. 

The article states: The agency is making rules and conducting reviews of financial institutions such as banks, mortgage brokers and issuers of credit cards.“We’re just getting under way, but I believe we have strong authority … to address these problems,” Cordray said, noting that the Consumer Financial Protection Bureau is the first government agency that can regulate a wide variety of financial institutions.

Well.  "The first government agency to address these problems."

What happened to the Federal Deposit Insurance Corporation, the Federal Reserve Board, the Office of the Comptroller of Currency, or the Federal Financial Institutions Examination Council?  Or the National Credit Union Administration, the Office of Foreign Assets Control, the Office of Thrift Supervision, or the Financial Crimes Enforcement Network in the U.S. Department of the Treasury?  Or the banking and financial regulatory and enforcement agencies that exist in every single state in the Union?

Apparently none of them are doing squat to protect consumers so we need another agency to do it.  One that is just getting started with a mere 800 employees.

No, in its extreme concern that we, the poor, ignorant consumers are being fleeced and flummoxed, the Obama administration and enough members of Congress as necessary have created yet another agency to do what all those others have already been created to do but apparently are not.  The reason for creating the CFPB? 

According to the article:  The middle class is getting hammered,” he (Cordray) said, noting that household debt has risen to about $12.5 trillion. More than half that debt is in the form of credit card debt.  “The backbone of this country, the middle class, is under pressure,” Cordray added.

So, because idiots go out and run up monstrous debt on their credit cards, buying things they don't need, we have to anoint yet another Federal agency (with 800 employees and a ton of serious governmental clout) to rain down some serious hell on the scurrilous bastards who are willing to loan those idiots all that money.  The free market side of me says, "So what if banks and other institutions are willing to take that chance?"  Could it be because, with the Fed keeping interest rates at historical lows, this is about the only way left for banks to make money?

Government--MY government and yours, too--should get out of the way.  Allow the market to flush out the idiots.  Enforce sensible regulations, equally and fairly and certainly.  Assure nobody is lying or misleading would-be borrowers.  Hit--and hit hard--anyone using deceptive lending practices.  Require existing agencies to do their jobs. 

But please don't start drafting arbitrary, kneejerk regulation to solve perceived problems and create ad hoc agencies that will exist forever and ever, amen.  Neither the mountain of rules nor the alphabet soup of agencies and the ever-mounting list of "czars" will ever go quietly into the night.

Think I'm exaggerating?  Ask your hometown banker how things are going out there.  Check with just about any small-businessman.  Look at the tremendous amount of cash most companies are stowing away because they are so skittish about governmental meddling in their industries that they are reluctant to invest and expand and hire.  Try to start a new business, borrow capital, or bring a new product to market.  Heck, just try to do your own income taxes if you want to witness government regulation that is out of control.

Quick example of how silly this all is, and why hastily-drafted and ill-conceived regulation creates far more problems than it ever solves: in my business, our customers (students) are able to borrow money from the Federal government to pay for their education.  (Thank goodness for this program or I never could have afforded a college education, nor could many, many others.  If it is properly administered, the taxpayer not only gets well-educated and skilled workers to enhance the tax roles but even makes a few dollars on them in the form of interest when they repay their loans.)  However, in their infinite wisdom, the people who oversee the Title IV loan system have included a serious flaw that encourages abuse.  Based on their "needs," students can borrow far more money than just the cost of tuition and books.  They are able to borrow for what is termed "living expenses."  As an authorized, accredited Title IV school, we are not allowed--by Federal regulation--to limit the amount of money our students borrow.  Many of them see this as cheap money with much lower interest rates than the payday loan operations charge, so they borrow every drop they can, despite our vigorous counseling.  This has created a whole culture we call "check chasers," people who enroll, borrow all they can, then drop out of school.  Then they come back next quarter and do it all over again.  Our schools don't stand for this.  We don't continue to admit students who obviously don't intend to attend class beyond "check day."  Not only is it not right for them to do so, but it also would affect our retention/graduation rate, which is set very, very high by our accreditor.  But thanks to YOUR government's rules, we cannot prevent anyone from borrowing to the hilt. 

Yet the Department of Education and agencies like the new CFPB want to blame us for the mess in which some of these folks find themselves.  And for the staggering rate of student loan debt.

As I've noted often, when the government shows us they can run simple things like railroads (AMTRAK) and mail delivery efficiently, then I'll be more positive about them running other things.  Again, we need regulation.  And we need somebody to enforce those rules.  But how many arbitrary regulations and huge agencies (with acronym names and overlapping responsibilities) can they force down our throats before the entire economy strangles?

I'm afraid we are about to find out.

Don Keith

(Note: comments in this blog are solely the opinions of the author and do not necessarily reflect those of his employer or anyone else.)

Monday, March 12, 2012

Change, change, change...change of fools...part deaux

Sorry to get into a rut here, but I just learned about yet another long-time, loyal, and fabulously successful broadcaster who was shown the door by one of today's brilliant broadcast operators.  His only sin was staying with the same company for four decades, making it millions of dollars, and, maybe, earning more money than they wanted to pay him.

That fine, fair, forward-thinking operator: the publicly traded Cumulus Broadcasting.  There is a reason that many in the industry dub them "The Cloud People," and it has nothing to do with their company name.  Here's what I mean.

On the same day that the loyal, proven broadcast manager was jettisoned, the company's Q4 financial results were reported in the industry trades.  God's gift to radio lost another $13 million during the quarter while cutting their way to success.  But its CEO, Lew Dickey, assured stockholders that, what with their recent acquisition of another dim-bulb of a radio company, better things were on the horizon:  "The integration of CITADEL into CUMULUS is ahead of schedule as we have achieved 100% of our stated run-rate synergies in the first 100 days. With this large and transformative acquisition, we have built a true platform company with multiple organic growth drivers, including compelling new content, that will enable us to generate significant free cash to rapidly de-lever our balance sheet." 

Lord, that's poetic!  Lew wins—hands down!—the “Most Buzz Words Crammed into a Single Statement Award” for the year. For those unfamiliar with the terms, here’s a translation:

“Run rate synergies”—If it draws a salary fire it. If it does not directly keep the transmitter on the air, cancel it. If it has any chance of earning a sales bonus, shoot it.

“Transformative acquisitions”—Purchasing legendary and highly successful radio stations and promptly emasculating their management so they’ll leave without severance, cutting anything that requires writing a check, whether it’s a good thing or not, and quickly transforming some of the only broadcast properties in the business that were doing it correctly and breaking them all the way down to the Cumulus standard, thus assuring and hastening the demise of a truly magical entertainment and advertising medium. That, my friend, is “transformation!”

“Platform company”—a model company that will be studied by business schools and Wall Street analysts for decades to come, all in order to learn how to strangle the life out of a group of living, breathing broadcast properties yet still find a way to pay staggering bonuses to the people who committed the crime.

“Multiple organic growth drivers”—I believe my grandpa called this “fertilizer.” And most of our fertilizer came from the area of the barn where the mules resided.

“Compelling new content”—Adding a couple more out-of-work disk jockeys to voice track more stations, while changing the rotation on the same 300 songs once a moon-phase to reflect whatever the corporate VP of programming ordains.

“Free cash”—Not, as generally believed, the prize in a radio station contest. They don’t do those anymore. People will listen to whatever they put on the air because it is there and free, and broadcasters don’t have to promote themselves. What else are they going to listen to? Satellite? Their iPods? The Internet? Give me a break! “Free cash” in this context is what the company believes it will generate when it has fired all its creative talent, de-incentivized (and chased away) its management and sales staff, canceled all the tools its former programmers and sales management might have been able to use to actually generate business without ratings, and brought to a halt any expenditure not totally necessary to keep the doors open and the lights on. And if all this actually does generate some “free cash,” they can go out and buy some other group or two and show them how it is done in the 21st century.

“De-lever our balance sheet”—Wall Street-speak for as long as you hold the majority of the stock and nobody else has enough of those worthless certificates to challenge you, and you continue to promise stockholders and analysts that things will get better soon, what with all that spectacular “political” and “auto” and “retail” spending out there just beyond the horizon, then nobody can do a damn thing about it.

Don Keith