Quotulatiousness

May 14, 2013

Is this week’s Scandalpalooza actually a “big bath” move?

Filed under: Business, Government, Media, USA — Tags: , , — Nicholas @ 13:22

Megan McArdle explains what a “big bath” is and how the current rash of scandals might be a political version of this financial accounting trick:

I confess, when I woke up this morning, I half expected to find that Obama had confessed to being one of our lizard overlords, or made an offhand mention of the time he’d had the CIA price out a drone attack on Mitt Romney’s headquarters. Between Benghazi, the discovery that Kathleen Sebelius has been leaning on insurers to finance their Obamacare PR, uncovery of a freelance political inquisition by the IRS, and last night’s revelation that the Department of Justice had been trolling through the phone records of AP reporters, this has been the most scandalicious week in living memory. I mean, sure, none of it rises to the level of Watergate. But while the gravity may pale in comparison, the volume is breathtaking. So breathtaking that it’s tempting to think that the administration is doing this deliberately.

In finance, there’s an art known as “Big Bath Accounting” which is used to manage earnings expectations. Here’s how it works: if you know you’re going to have a bad quarter, you look around for anything else that might go wrong in the future, and you decide to “recognize” that bad news now. Inventory looking a little stale? Write it down, man! Customers getting a little slow to pay? Now would be a good time to write off their accounts as bad debt. Is there some uncertainty in the projections about depletable assets like oil stores? For heaven’s sake, why not use the low end of the projections rather than the medium or high end? And we should really book some sort of charge to account for the risk that the Yellowstone supervolcano will explode, killing hundreds of thousands and covering the entire western half of the United States in volcanic ash, and in the process severely dampening demand for our premium line of Wyoming-themed memorabilia.

Corporations call this “cleaning up the balance sheet”. Accounting professors call it things I can’t print because this is a family blog.

Time to free the CBC

Filed under: Business, Cancon, Media — Tags: , , , , , , — Nicholas @ 11:04

In Maclean’s, James Cowan makes the case for liberating the CBC from the shackles of government subsidy, as it’s now out-competing private business in several fields:

The online success of the CBC should be laudable. Its website received an average of 6.2-million unique visitors last year, making it the most popular Canadian website. Around 4.3-million people visit the CBC News site each month, besting both The Globe and Mail and Huffington Post. Adding to this success is an ambitious five-year plan that will open digital-only news operations in cities like Hamilton and Kamloops and allocate 5 per cent of the overall programming budget to digital content. Once upon a time, it was only private TV and radio broadcasters who had reason to grumble about competing with the Crown corporation; in building its online empire, the CBC is taking on everyone from newspapers to Netflix.

In doing so, the CBC has strayed a long way from its original purpose: to sustain Canadian culture when and where the market cannot. The problem is, the CBC’s traditional funding model now allows it to build its digital empire unfettered by economic reality. In its last quarter, 60 per cent of the company’s expenses were paid by government subsidies while just 21 per cent of its revenue comes from advertising. All media companies are struggling to adapt to shifting consumer and advertising patterns brought about by the digital age; only the CBC had $1.2 billion in government cash to fund its experiments and ease the transition.

Broadcasters would argue the CBC has always operated from an unfair advantage. But the current scenario is different in several respects. For one, the Corp.’s legislated mandate to be “predominantly and distinctly Canadian” arguably placed it at a commercial disadvantage. Further, capital and regulatory requirements made it implausible for commercial broadcasters to serve many areas of the country. But nobody needs to ask the CRTC’s permission to create a website, and the startup costs for a digital service are far less than those of a television or radio station. If small cities like Kamloops need a local digital news service, that’s a need that could be plausibly served by entrepreneurs. The CBC is increasingly no longer complementing the market, but instead meddling within it.

In other Minnesota news, same-sex marriage becomes legal today

Filed under: Law, Liberty, USA — Tags: , , , — Nicholas @ 10:57

Jacob Sullum notes that Minnesota becomes the twelfth state to legalize same-sex marriage today:

Today Minnesota, where voters last fall rejected a constitutional amendment banning gay marriage, becomes the 12th state to give homosexual unions the same legal status as heterosexual unions. The state legislature approved the bill yesterday, and Gov. Mark Dayton plans to sign it this evening. Minnesota is the third state to legalize gay marriage in the last 10 days, following Rhode Island on May 2 and Delaware on May 7. The nine other states are Maine, Maryland, New Hampshire, Vermont, and New York, where legal recognition of gay marriage was approved by the legislature or by voters, plus Connecticut, Iowa, and Massachusetts, where courts required the change.

Minnesota Vikings unveil new stadium design

Filed under: Football — Tags: , , — Nicholas @ 10:31

It’s the Minnesota answer to the Crystal Palace:

New Vikings stadium 1

From the official press release:

The Minnesota Sports Facilities Authority (MSFA), the Minnesota Vikings and HKS Sports & Entertainment Group together unveiled the design of the State’s new multi-purpose stadium Monday evening in Minneapolis, a major milestone in getting the $975 million stadium built on time and on budget. The design package will now be submitted to the Minneapolis Stadium Implementation Committee and the City of Minneapolis for review.

Described as an authentic structure influenced by its Minnesota location, the new stadium exhibits a bold, progressive design that combines efficient functionality with stunning architecture. With a soaring prow, the largest transparent roof in the world, and operable doors that open to the downtown skyline, the facility’s openness and sleek geometric exterior will make it unlike any other stadium in the country.

Update, 15 May: Even though Bud Grant himself has approved the new design, the St. Paul Pioneer Press has at least one doubter on staff:

Sometimes the box that stuff comes in is more fancy and artsy and intriguing than the stuff. Football, for example, is dirty and gritty and brutally plain. But the new ballpark looks like one of those boxes made of space-age material with the acrylic cover and the item purchased, a watch or electronic device, settled into a bed of crushed velvet.

[. . .]

Football keeps doing this, building grand establishments that are antithetical to the game. The Vikings are named for, well, Vikings, who sailed around in crude boats and hit people over the head with clubs and chewed furiously on fermented shark meat. A real Viking would no more be at home in this glass palace than a group of Cub Scouts in a biker bar.

It looks like a glass palace, with so much roof acreage, but it isn’t even glass. The southern half of the roof will be made of a transparent ETFE ethylene tetrafluoroethylene membrane supported by steel. I hope so. The northern half of the roof will be made of a hard, opaque material. And to think, seven levels. Seven? Children have games that are designed to encourage their wonder and dexterity by allowing them to drop a colored ball at the top of a layered acrylic box and watch as the ball finds its way to the bottom. How many people will be lost in this place and left there overnight because they got lost trying to get from Level Seven to Level One with a little too much boutique beer on board?

Peter Worthington’s final column

Filed under: Cancon, History, Media — Tags: , , — Nicholas @ 10:00

It was suggested that Peter Worthington write his own obituary:

If you are reading this, I am dead.

How’s that for a lead?

Guarantees you read on, at least for a bit.

When the Sun’s George Gross died suddenly in March 2008, at age 85, there were few of his contemporaries left alive to recall the old days, when he was in his prime and his world was young. I was one of the few who knew him then.

After attending his funeral I half-facetiously remarked to the Toronto Sun’s deputy managing editor, Al Parker, that I had been around so long that no one was left who knew me back then, and I had better write my own obituary.

“Good idea!” said Parker with more enthusiasm than I appreciated.

I mentioned it to my wife, Yvonne, who approved.

So here it is, not exactly an obit but a reflection back on a life and a career that I had never planned, but which unfolded in a way that I’ve never regretted.

QotD: Litmus testing political scandals

Filed under: Media, Politics, Quotations — Tags: , , , — Nicholas @ 09:27

Dear friends in the media.

Come on.

I mean, come on.

You and I know what’s going with the Benghazi thing. Let me share something that I first put into play during the “was Anthony Weiner’s Twitter account hacked” debate, but that comes from watching the Lewinsky scandal, the where-did–Mark-Sanford-go scandal, the why-is-David-Wu-dressed-in-a-tiger-suit scandal, and a wide variety of wrongdoing committed by politicians:

When there is evidence of scandalous or bizarre behavior on the part of a political figure, and no reasonable explanation is revealed within 24 to 48 hours, then the truth is probably as bad as everyone suspects.

Nobody withholds exculpatory information. Nobody who’s been accused of something wrong waits for “just the right moment” to unveil information that proves the charge baseless. Political figures never choose to deliberately let themselves twist in the wind. It’s not the instinctive psychological reaction to being falsely accused, it’s not what any public communications professional would recommend, and to use one of our president’s favorite justifications, it’s just common sense.

Jim Geraghty, “The Mask Is Ripped Off of ‘Hope and Change'”, National Review, 2013-05-14

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