Man Without Qualities

Saturday, February 28, 2004

Asahara To Hang

Death penalty foes in this country and Europe often try to create the impression that the United States is the only developed nation now employing the death penalty. That impression, of course, is false, as this FT report demonstrates:

Shoko Asahara, the half-blind guru of Japan's Aum sect, was on Friday sentenced to death by hanging, nearly nine years after followers of his religious cult terrorised Tokyo by spraying deadly gas on the city's subway. ... On Friday, more than 4,000 people drew lots for the 38 seats in the court's public viewing gallery. Several people handed out anti-death penalty leaflets, though a majority of Japanese support the death penalty in this case.

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Wednesday, February 25, 2004

Pathetic ... And Bound To Lose V: Choices

There has recently been something of a boomlet in articles pointing out that Senator Kerry has not released the records of his military service. Sometimes the observation is coupled with a suggestion that those records might show that the circumstances of his Purple Hearts and Silver Star are less than heroic. Frankly, the circumstances under which John Kerry served in Vietnam were - in the large - so immediately hazardous to him, that picking at the details of that combat record seems a lot more likely to be shameful to the pickers than it would be to Senator Kerry. Suppose, for example, such picking "revealed" that Kerry was thought to have experienced some periods of bad judgment in fire? At one point, for example, he left his craft to pursue a hostile combatant - leading to an expression of some exasperation from a superior officer. So what? So what if other, even more questionable examples of combat judgment can be identified? There can't be many more demeaning tasks than trying to second guess a junior officer in the heat of battle. As Oprah says: Let's not even go there, girl.

But some of those records might still be significant in evaluating some of Senator Kerry's non-combat choices in the Navy. For example, Lieutenant John Kerry served aboard 50-foot aluminum boats known as PCFs (from "patrol craft fast") or "Swift boats" (supposedly an acronym for "Shallow Water Inshore Fast Tactical Craft"). Although some critics of Kerry have (unfairly, in my view) asserted that Swift boat duty "wasn't the worst you could draw," Swift boat duty was plenty dangerous. But the unreleased records might be significant as a means of verifying claims made by Senator Kerry and reporters friendly to the Senator that the young man chose to leave the safe haven of his aircraft carrier for the danger of Swift boats. Was this a true choice? What other choices did John Kerry have at that point? Was he told that he could stay, safe and sound, on the carrier (the story he and his supporters tell) or was he told that he must "choose" from among several dangerous alternatives, Swift boat service being just one? The unreleased records might properly shed light on that kind of choice. Senator Kerry is rather mysteriously quoted by the Globe as describing one of "choices" this way: Kerry experienced his first intense combat action on Dec. 2, 1968, when he "semi-volunteered for, was semi-drafted" for a risky covert mission. What the heck does that mean? The Globe also notes:

Kerry initially hoped to continue his service at a relatively safe distance from most fighting, securing an assignment as "swift boat" skipper. While the 50-foot swift boats cruised the Vietnamese coast a little closer to the action than the Gridley had come, they were still considered relatively safe.

"I didn't really want to get involved in the war," Kerry said in a little-noticed contribution to a book of Vietnam reminiscences published in 1986. "When I signed up for the swift boats, they had very little to do with the war. They were engaged in coastal patrolling and that's what I thought I was going to be doing."

But two weeks after he arrived in Vietnam, the swift boat mission changed -- and Kerry went from having one of the safest assignments in the escalating conflict to one of the most dangerous.

Yet, Kerry supporters continue to maintain that he volunteered for dangerous service. Is that so? Did he have another chance to avoid dangerous service after he arrived in Vietnam? How else does one account for this passage, from the first of the same Globe series:

[Kerry] read a book about President Kennedy's World War II experiences on a patrol boat, PT-109, which one day would help inspire Kerry to volunteer for duty on a Navy patrol boat in Vietnam.

But the Globe say that Kerry volunteered for Swift boat service to avoid dangerous service at a time the swift boats ... had very little to do with the war.

The fact is that John Kerry has demonstrated a rather ugly habit of seriously misrepresenting himself and his major choices - and allowing others (especially at the Boston Globe) to do that favor for him, uncorrected by the Senator (and now the New York Times). There is, of course, his notorious decades-long impersonation of an Irishman in a state where that matters politically, an impersonation which the Globe substantially advanced, but where he now admits has no Irish heritage. Then there is this kind of coverage from the Boston Globe:

Kerry initially thought about enlisting as a pilot. But his father, Richard Kerry - a test pilot who served in the Army Air Corps - warned him that if he flew in combat, he might lose his love of flying. So Kerry, who sought in so many ways to emulate John Fitzgerald Kennedy, took to the water, just as his idol served on a World War II patrol boat, the 109.

This passage, and the entire Globe article in which the passage appears, completely omit all reference to the fact that at the time John Kerry made this Air Force/Navy decision, he was facing a draft into the Army, which his parole board had refused to extend so that he could study in Paris. The effect of the omission is to create the "he disagreed with the war, but felt he had a patriotic duty to join the armed services and go to Vietnam" myth that Senator Kerry has exploited so effectively throughout his political career. While the circumstances of John Kerry's joining the armed forces do not detract from his courage in combat, neither does his courage in combat imply that he joined the armed forces because he felt he had a patriotic duty to. The fact is, JFKerry - like WC Fields - had always wanted to see Paris, no doubt Philadelphia would do, but he was faced with a vastly less appealing choice by decision of his local draft board.

John Kerry's hero, the Irish-American JFK, provides an interesting parallel. There is no evidence that the real JFK sought to avoid military service - quite the contrary. But one might ask how did it come to be that a man with a bad back who was the son of a hugely wealthy and influential Democrat found himself commanding a PT boat in the middle of the Pacific war zone. JFK and his family and campaigns told the world that JFK has chosen to do that - also out of his sense patriotic duty. JFK had originally been given a desk job in Washington, from which he is said to have been extracted, sent to Charleston and eventually placed on PT-109 as a result of his sexual indiscretion - especially with the notorious and controversial Inga Arvad Fejos.

That JFK may have been sent to command PT-109 for reasons other than his naked choice does not detract from his valor in the line of fire. But, as a political matter, such a story would definitely have properly had a material effect on his electability and the degree to which one would admire him. A man who chooses to expose himself to danger out of patriotic duty and then comports himself well in the line of fire and is injured is simply more admirable than a man who is sent into danger and then comports himself well in the line of fire and is injured.

That's true for both JFK's.

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Tuesday, February 24, 2004

Pathetic ... And Bound To Lose IV: Another Damn Bush Henchman!

The Washington Post reports:

As a candidate for the Senate in 1984, Kerry proposed eliminating a series of weapons systems, including the B-1 and B-2 bombers, the F-14A, F-14D and F-15 fighter jets, the Aegis air-defense cruiser, the Patriot missile system and the M1 Abrams tank, among others. Kerry told the Boston Globe last year that some of those proposals [of Kerry's] were "ill-advised, and I think some of them are stupid in the context of the world we find ourselves in right now and the things that I've learned since then."

How dare Senator Kerry impugn his own patriotism and challenge his own military record this way! Henchmen, henchmen. Everywhere henchmen. This is really outrageous, and these Bush henchmen such as Senator Kerry just go too far! And it's clearly a deliberate ploy. As Senator Kerry points out, "That's the underlying message of [the Republican] attack. [The Republicans] haven't come to you and said this [weapons] system is a great system and we need this system and John Kerry voted against this system. They're saying he voted against defense." That's exactly what's happening here. John Kerry says only that "some" of his own proposals to eliminate important defense systems are "stupid." But he doesn't say exactly which of his proposals to eliminate these defense systems are "stupid." Yes, indeed, Senator Kerry was so right when he asserted that the Bush henchmen were just trying to suggest that Senator Kerry is weak on defense:"That's the game that they play." Is someone who boldly states that "some" of Senator Kerry's proposals to eliminate important defense systems are "stupid" suggesting that Kerry is weak on defense? Of course he is!

The Post also reports that when Senator Kerry was asked Monday when he changed his mind and which proposals were ill-advised, Kerry replied, "I never voted for one of those, I don't think, so I very quickly came to that conclusion when I was in the United States Senate in 1985 and 1986." Kerry immediately amended that statement, saying he had opposed former president Ronald Reagan's missile defense system, anti-satellite weaponry and the MX missile.

Clearly this Bush henchman, Kerry, is trying to obscure matters with incomprehensible and inconsistent answers that make him look weak on national security by suggesting that he can't hold two thoughts together. In addition to his answer's overall incomprehensibility, note how Senator Kerry slyly restricts himself to listing some of the defense systems he considers "ill-advised" - but he doesn't even try to list which of his own proposals to eliminate defense systems are "stupid." As Senator Kerry points out, such willful vagueness is the clear mark of the trained Bush henchman! By Senator Kerry's own standards there is just no question that he is trying to impugn his own Vietnam military record here - and he shouldn't stand for that!

The Bush campaign has clearly planted a mole at the very top of the Kerry organization! That's the game that they play - and it isn't pretty.
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Old Age And Treachery Again Beat Youth And Enthusiasm

The Supreme Court has just seriously narrowed the applicability of a major federal civil rights act over the objections of the applicable federal agency charged by Congress with enforcing and construing that act.

A collective-bargaining agreement eliminated a company's obligation to provide health benefits to certain retired employees, except as to then-current workers at least 50 years old. Other employees who were then at least 40 but less than 50 sued under the Age Discrimination in Employment Act of 1967 (ADEA), claiming before the Equal Employment Opportunity Commission (EEOC) that the agreement violated the ADEA because it "discriminate[d against them] ... because of [their] age," 29 U. S. C. §623(a)(1). That claim seemed pretty clearly correct from the statutory language, since the ADEA makes it unlawful for an employer to "discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's age." §623(a)(1).

And the EEOC agreed with the obvious meaning of the statute. In fact, the EEOC actually promulgated a regulation that confirmed that meaning:

"It is unlawful in situations where this Act applies, for an employer to discriminate in hiring or in any other way by giving preference because of age between individuals 40 and over. Thus, if two people apply for the same position, and one is 42 and the other 52, the employer may not lawfully turn down either one on the basis of age, but must make such decision on the basis of some other factor." 29 C.F.R. §1625.2(a) (2003).

The federal appeals court also agreed with the EEOC. But the Supreme Court majority said the EEOC was "clearly wrong" and overtuned the regulation.

Conservative Justices Scalia, Thomas and Kennedy dissented. The Court majority was dominated by liberals. Justice Souter wrote the tortured majority opinion.

Why would a liberal dominated majority restrict a major civil rights act? Because it is more important to some judges not to establish a principle really holding Congress to the meaning of its statutory language, even though Congress only votes on language. Such a principle would narrow the Court's ability to import its own perception of legislative "policy" into federal statutes - and some judges dearly value their ability to overturn Congressional language by an appeal to incorporeal "policy." If the civil rights of some protected workers stand in the way of that Court prerogative, then the workers' rights must go.

Such "policy" judges are disproportionately, but not solely, liberal judges. It is no coincidence that the Chief Justice and his Stanford classmate are in this majority.

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Monday, February 23, 2004

Candidate Nader

Ralph Nader is again running for president. Some astute observers believe it will probably not matter because the chances that the 2004 election will be as close as the one in 2000 are minuscule.

But I disagree that there is only a minuscule chance that Mr. Nader will matter. And I don't think it is right to dismiss Mr. Nader's effort as "monomania" or the like.

Yes, the election will probably not be as close this time out. And, yes, Mr. Nader will likely attract less support this time around. But in some large states - such as California - it is possible that the election could be close - and Mr. Nader's support in some of those states may be enough to make the difference in the state and therefore the entire national election.

That means that there is a reasonable chance that Mr. Nader may find himself in a position to prevent Senator Kerry from tacking towards the center (that is, towards the right). If Senator Kerry wants to co-opt Mr. Nader's natural constituency, the Democrat will have to tack fairly far left right up to election day. Depending on what polls are showing in late October/early November, Mr. Nader may be able to significantly affect the course and outcome of the election.

OK, ... he can't win the election. But he can hope for a reasonable chance of winning other things that matter to him and his constituency. There's nothing so wrong with that.
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Pathetic ... And Bound To Lose III: Henchmen Under Every Bed!

What is the Democratic front-runner going to call Joshua Muravchik? Mr. Muravchik notes, on the pages of the Bush-henchmen-operated Washington Post

As leader of Vietnam Veterans Against the War, Kerry accused American soldiers of "war crimes . . . committed on a day-to-day basis with the full awareness of officers at all levels of command." ... As a first major foreign policy cause, he championed the "nuclear freeze." ... The litany of weapons systems that Kerry opposed included conventional as well as nuclear equipment: the B-1 bomber, the B-2, the F-15, the F-14A, the F-14D, the AH-64 Apache helicopter, the AV-8B Harrier jet, the Patriot missile, the Aegis air-defense cruiser and the Trident missile. And he sought to reduce procurement of the M1 Abrams tank, the Bradley Fighting Vehicle, the Tomahawk cruise missile and the F-16 jet. ... When U.S. troops intervened in Grenada, Kerry denounced the action as "a bully's show of force." ...[H]e made himself one of the Senate's most vigorous opponents of aiding the anti-Communist contras as a means of pressuring Nicaragua's Sandinista regime. ... When Saddam Hussein swallowed up Kuwait in 1990, Kerry voted against authorizing the use of force. ... By 1995, with the death toll there estimated to have reached a quarter-million, Congress voted to end the arms embargo hamstringing the beleaguered Bosnians. Kerry was one of 29 senators who opposed this resolution. ... He now says that some of his stands against weapons systems were "stupid." And those medals he tossed away in protest, he explains, actually belonged to someone else ... Kerry cast one of only 12 Senate votes against the administration's request for $87 billion for the occupation and reconstruction of Iraq and Afghanistan.

How dare Mr. Muravchik impugn Senator Kerry's patriotism and challenge his military record this way! Henchmen, henchmen. Everywhere henchmen.

Mr. Muravchik's list of examples demonstrating Senator Kerry's weakness on national security is far from complete. It doesn't even touch on his opposition to an adequate American intelligence system, for example. The extent of a complete list should give a good deal of pause to anyone who hopes (as I do) that Vietnam is not likely to be a major campaign theme after all. The fact is that John Kerry has a big problem with his national security record - and his constant citation to his military record is the only hope he has of countering that problem. Senator Kerry sings his ceaseless, one-note song because he must. When will the Vietnam War be over in this campaign? It will end when both candidates figure out that neither has anything to gain from it - and not a moment sooner than that. Senator Kerry has already made feeble (one might say fraudulent) efforts to suppress the Democratic ploy of exploiting the President's Vietnam-era service record. I believe that particular ploy will likely stop for real very soon, simply because it's beginning to backfire as more and more evidence is produced. (Just one example from Brad DeLong's web site.) But Senator Kerry will not cease his constant citations to his own Vietnam service in attempts to distract attention from his weak voting and political record in the area of national security. He just can't do that.

To see this, one only has to look as far as ex-senator Cleland, who was also weak on national security, and was defeated in his re-election bid by Senator Chambliss largely on those grounds. Senator Cleland used his far more dramatic and sacrificial Vietnam service as a distraction from his weak national security voting record. It didn't work, and he was voted from office - but he's still citing to that same record and to Senator Kerry's today and for exactly the same purposes: "For Saxby Chambliss, who got out of going to Vietnam because of a trick knee, to attack John Kerry as weak on the defense of our nation is like a mackerel in the moonlight that both shines and stinks," Cleland recently said.

Cleland is saying that kind of thing for the same reason he has always said that kind of thing: He has to. He has no other response with any hope of success.

The same is true of Senator Kerry. Indeed, he's at it again today: Kerry ... said he will not allow questions to be raised about his commitment to defense by Republicans "who never fought in a war." ... Asked for examples of Bush attacking his service in Vietnam, Kerry cited published reports that the campaign plans to question his outspoken opposition to the war after he returned.

Senator Kerry thinks and says that questioning his opposition to the war after he returned is the same as attacking his service in Vietnam. And people think that Dean sounded like he was nuts?

Settle in for a long, long summer.

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Sunday, February 22, 2004

Pathetic ... And Bound To Lose II: The Silence of The Republicans

An astute reader e-mails:

Today's news makes it sound like Kerry's gonna push it: he's sending a letter to Bush saying, essentially, if you want to complain about my votes then let's just *have* a debate about Viet Nam. So it sounds like the plan is to avoid all discussion of his real record by trying to turn it into a discussion of Viet Nam. It's going to be a long summer.

I agree. I agree that's exactly Kerry's plan and I agree that if he sticks to it we will have a very long summer - at the end of which Senator Kerry's election prospects will resemble all the other deserted, post-summer boardwalks throughout the country.

The plan described by my reader is , in my opinion, desperate - especially since it seems that Senator Kerry intends to direct it at every one of his critics (not just the President). Criticize John Kerry's voting record and hysterical anti-war activism, and you're a "henchman." Well, I'm doing that right now - and I never met the President. Am I a "henchman?"

Senator Kerry is outright lying when he suggests - as he often does - that the President or anyone connected to the President has been criticizing Kerry's military record. But Kerry's actual military record is a lot less indicative of the kind of president he would make than his voting record and his long record of political activities. He can't hide from his voting record or his post-Vietnam hysterical denunciations of the behavior of American soldiers in Vietnam or his record in the Dukakis administration that produced the illusory "Massachusetts miracle." And he can't stop people from considering those things with his customary arrogance.

So far, the media have been very weak in discussing Kerry's post-Vietnam-return antiwar activities - or the rest of his past, for that matter. After all, many of the people now involved in the mainstream media of Kerry's age participated in many of the same activities. The nation has learned to forgive them. Even Jane Fonda has apologized for some of what she did in the depths of her Vietnam era insanity - and on this point Ms. Fonda is more responsible than Senator Kerry, who does not apologize but instead just misrepresents his past. But if Kerry keeps pushing Vietnam, the Bush campaign won't be so gentle - and, ultimately, the media won't remain gentle, either. At some point Senator Kerry is going to have to stop misrepresenting his antiwar statements and outright apologize for some of them - especially his assertions to Congress that American soldiers were routinely war criminals. Veterans on the campaign trail are going to demand that of him - to his face.

The more the Senator pushes the "I was tough in Vietnam so you can't talk about my political record" argument, the more transparent his ploy appears to more people. He is at the moment pushing it pretty hard:

In a letter to Bush, Kerry wrote: "As you well know, Vietnam was a very difficult and painful period in our nation's history, and the struggle for our veterans continues. So, it has been hard to believe that you would choose to reopen these wounds for your personal political gain. But, that is what you have chosen to do."

Even so, I don't think it's at all clear that we will get an early read on whether the Kerry ploy will work - or if he will give up trying. For example, my guess is that lots of very high profile Republican veterans are ready to come forward and strongly challenge Kerry on this point. Senator Kerry's position leads almost inevitably to his accusing any veteran who says Kerry has a weak voting and political activities record of impugning his patriotism and military record. Is this Democratic candidate going to stand up on a podium and hoot down a veteran who's saying with sincere conviction exactly what Senator Chambliss is saying? Is the Democratic candidate going to lash out from his podium and accuse the veteran of being a Bush "henchman?" That would make Howard Dean's lashing out at the old heckler ("You sit down! You had your say! Now, I'm going to have my say!") look positively like an act of political genius. Is Senator Kerry going to savage as "henchmen" a troop of veterans who follow his campaign stops and say these things outside on the sidewalk? I don't think so. Yet, the Kerry posturing leads to exactly those preposterous situations for him.

One interesting question is: Why hasn't that kind of thing happened, yet? I suspect that the White House may actually be holding such responses back at this point to the extent that can be done (the White House by no means controls all such responses, although it does have influence). I have no special information, but it's clear that Kerry's political and anti-war activism record have to be treated carefully and precisely. It's Kerry who's desperately trying to confuse matters - and that's a disgrace on his part. That means that the Republicans are right now running extensive private polls and focus groups on how to direct the criticism. It will come - and it will be very effective.

And when it comes the criticism will not be limited to Senator Kerry's voting and activism record. Kerry is by all accounts personally a complete jerk and completely out of touch with ordinary people. He is so remote that it is actually, terrifyingly possible that Senator Kerry really does think that he has opposed all those nasty "special interests." Unlike Bill Clinton, there aren't many "Friends of John" out there. He appears to be amazingly insubstantial and vulnerable. His wife, because of her efforts at influence and past activism, is also fairly subject to criticism - and her past use of her enormous, inherited fortune and her bizarre personality will likely be significant liabilities. Those criticisms, too, must be directed with precision. [UPDATE: It's so generous of Maureen Dowd and the New York Times to the Bush re-election effort to clear the way for examination and criticism of Teresa Heinz Kerry with an empty but nasty cat-swipe at Laura Bush.]

I don't think the Republicans have completed their planning. Even if they had completed it, I'm not sure they want to extensively damage Kerry right now. For example, the anti-Kerry internet ad now appearing on the Bush web site is only seen by visitors to that site - not the part of the public that will be influenced by the campaign. If the White House blew Kerry up now, Bush might end up running against some stronger candidate. My guess is that Kerry will be a bigger disaster for the Dems than Dukakis was.

UPDATE: Viking Pundit suspects a Rovian strategy in this relative Silence of the Republicans.


Easterblog opines:

Pundits of the left and right are now engaged in tormented disputes about the nuances of Kerry's Vietnam statements and actions more than 30 years ago, but this misses the big picture. The big picture is that Kerry thought the war was wrong but went anyway because he felt it was his duty.

This is wrong.

It is probably not incorrect to say that Senator Kerry felt that the war was wrong - although Senator Kerry himself says that his feeling against the war intensified enormously during his four month turn in Vietnam.

But it is just false to say that he "went anyway because he felt it was his duty" and it borders on prevaricating to suggest that this is the "big picture." It is no secret and no disgrace to John Kerry that he joined the Navy after he was told that his application for an extended student deferment that would have allowed him to study in Paris was turned down by his draft board. That is: John Kerry had no choice, he was required by law to enter the military - and then he was sent to Vietnam. As the Harvard Crimson put it in 1970:

When he approached his draft board for permission to study for a year in Paris, the draft board refused and Kerry decided to enlist in the Navy. The Navy assigned him to the USS Gridley which between December 1966 and July 1968 saw four months of action off the Vietnam coast. In August through November, 1968, Kerry was trained to be the skipper of a patrol boat for Vietnamese rivers. For the next five months, until April of 1969, Kerry was the commanding Lieutenant of a patrol boat in the Mekong Delta. He was wounded slightly on three different occasions and received a Silver Star for bravery.

The above recounting of some of the facts in the case of John Kerry's military service is not intended to disparage his actual, dangerous service once he reached Vietnam.

But, whatever the "big picture" of John Kerry's involvement with the military includes, it definitely includes his post-Vietnam activism, including his denunciations of American servicemen then fighting in Vietnam. As recounted by OpinionJournal, Kerry said in his April 22, 1971, testimony before the Senate Foreign Relations Committee (link in PDF format; the excerpt begins on page 180, the second page of the file):

Several months ago in Detroit, we had an investigation at which over 150 honorably discharged and many very highly decorated veterans testified to war crimes committed in Southeast Asia, not isolated incidents but crimes committed on a day-to-day basis with the full awareness of officers at all levels of command. . . . They relived the absolute horror of what this country, in a sense, made them do.

They told the stories [that] at times they had personally raped, cut off ears, cut off heads, taped wires from portable telephones to human genitals and turned on the power, cut off limbs, blown up bodies, randomly shot at civilians, razed villages in fashion reminiscent of Genghis Khan, shot cattle and dogs for fun, poisoned food stocks, and generally ravaged the countryside of South Vietnam in addition to the normal ravage of war, and the normal and very particular ravaging which is done by the applied bombing power of this country.

Any putative "big picture" of Senator Kerry's involvement with the military that omits such testimony and activities, and suggests that John Kerry could have legally avoided military service but chose to go anyway, is nothing short of Orwellian.


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Saturday, February 21, 2004

Pathetic ... And Bound To Lose

John Kerry seems to be the first person in history trying to win the Presidency through verbal confusion bordering on punning. In particular, he is deliberately confusing his military record (that is, his record of service in the military) with his record of Senate votes on defense programs and defense systems. Some measure of how desperate and confused John Kerry has become:

Democratic presidential candidate John Kerry said Saturday he wouldn't stand for Republicans attacking his patriotism, accusing the president of using henchmen to challenge his military record. The Vietnam veteran, campaigning in Georgia, said President Bush used the same strategy to beat John McCain in the 2000 race for the Republican presidential nomination. [Note: The AP has now substituted the word "surrogates" for "henchmen" in this quoted passage. The original AP version was more correct. Scroll down in the AP article for the Kerry quote employing this term against Senator Chambliss.]

Well, that doesn't sound very nice on Mr. Bush's part ... or Mr. Chambliss' part. Just what was this "attack" on Senator Kerry's "patriotism" and this "challenge" to his "military record?"

Well, it seems that the "attack" had nothing whatsoever to do with Senator Kerry's patriotism or his military record. What Senator Kerry is bristling about was this:

Earlier in the day, Sen. Saxby Chambliss, R-Ga., said Kerry has a "32-year history of voting to cut defense programs and cut defense systems." Chambliss said in a conference call arranged by the Bush campaign that Georgia voters would be looking at that record. .... "He has a long history, particularly in the last decade, of not only voting to cut intelligence spending, but introducing bills to cut intelligence spending," Chambliss said.

It seems that Senator Kerry - who, previously, appeared to equate fleeing to Canada with service in the national guard - is going to learn the very hard way that everyone is perfectly free to point out that his "32-year history of voting to cut defense programs and cut defense systems" is indeed very weak and very troubling. And pointing that out does not constitute an "attack" on Senator Kerry's "patriotism" or a "challenge" to his "military record." Here's a point to keep in mind: Senator Kerry's time in the United States Senate does not constitute part of his "military record."

And Senator Kerry owes his Senate colleague an immediate apologetic telephone call for referring to the Georgia Senator as a "henchman." Is that the way Senators speak of each other these days?

Perhaps a petition signed by a few million veterans pointing out how confused Senator Kerry has become in giving this expansive meaning to his "military record" and instructing Senator Kerry to stop dishonoring other veterans who believe his voting record (as opposed to his military record) is weak, would help concentrate his mind. But one shouldn't stop there.

Simply put: What the Senator is trying to do isn't going to work. It's embarrassing for him. It's only going to get more embarrassing for him and his supporters. Frankly, Senator Kerry is becoming something of a disgrace. A lot of veterans, especially, are going to get hopping mad at him if he keeps this up.


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Friday, February 20, 2004

Daschle Descending IV

The South Dakota Rapid City Journal reports:

Sen. Tom Daschle, D-S.D., on Thursday praised the Bush administration's war and nation-building work in Iraq and said he has no serious concerns about the lack of weapons of mass destruction. Daschle told state chamber of commerce representatives meeting in the South Dakota capital that he is satisfied with the way things are going in Iraq. "I give the effort overall real credit," Daschle said. "It is a good thing Saddam Hussein is no longer in power. It is a good thing we are democratizing the country." He said he is not upset about the debate over pre-war intelligence on weapons of mass destruction.

With the leader of Senate Democrats taking this position in public, what are the likely answers to the following questions:

1. How well do smarter Democrats around the country think savaging the President over Iraq and WMD is going to play in the fall campaign?

2. How much trouble does Senator Daschle think his past Washington shenanigans have caused for his re-election chances?

3. Are South Dakota voters so dim that they won't see through Senator Daschle's silly ploy? Does Senator Daschle think they are?

4. Is John Kerry happy that Senator Daschle has said these things?

5. Will Senator Daschle's statements be quoted in the forthcoming Presidential candidate debates and Bush campaign ads?

Just asking!!!

HINT for all questions: No points will be awarded for any correct answer.

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Making Nonsense Of Military Numbers

From the CNN/USA Today/Gallup poll:

Do George W. Bush's actions while in the National Guard make you more likely or less likely to vote for him--or will they not have much effect on your vote?
More Likely 4%; Less Likely 15%; Not Much Effect 80%

Does John Kerry's combat experience in the Vietnam War make you more likely or less likely to vote for him--or will it not have much effect on your vote?
More Likely 19%, Less Likely 2%, Not Much Effect 78%

This CNN/USA Today/Gallup poll, which also shows Kerry leading Bush by double digits, exhibits many symptoms of being unscientifically slanted in favor of Democrats - but suppose it is accepted for the sake of argument at face value. That means the Bush AWOL palaver the Democrats and their media followers have been slinging has slightly depressed the President's current poll numbers and John Kerry's service record in Vietnam slightly enhances his poll numbers.

If that is exactly what the Democrats wanted, then Democrats today are a lot dumber than the old ones. Begin with an obvious but important point: the election is not for nine months. This effort by the Democrats has therefore resulted in a tiny shift in the polls nine months too early. And note that the poll question doesn't even ask people whether they would change their vote on this "issue" - only whether it makes their vote for the President "more or less likely." What the Democrats have succeeded in doing here is bashing this "issue" so much that it is now probably spent, having produced only a tiny effect even in today's polls - and nine months from now this "issue" will have much less poll effect than it is having today, which means it will essentially have no remaining effect. The overall result is a disaster for the Democratic effort.

On the other hand, it's positively bizarre that only 19% of those polled say that Kerry's military service will make a vote for him "more likely." (Heck, it makes me "more likely" to vote for him - not that I will vote for him). This is his resume item that is supposed to "inoculate" him from the effects of his weak post-Vietnam military and national security policies, positions and record - and any candidate's military and national security policies, positions and record are going to mean a lot to a lot more than 19% of the electorate. But this poll shows that the military-service "inoculation" means little and will affect few votes. Some "inoculation!" The overall result is a yet another disaster for Kerry's chances.
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Hamdi Cert III

When the Supreme Court granted review of an appeal by Yaser Esam Hamdi, the New York Times immediately ran an article by David Stout construing the Court's decision as a slap at the Administration generally - and a personal slap at some of its key officers. Specifically, the Times reported:

The Supreme Court stepped squarely into a momentous debate over national security and personal liberty today by agreeing to consider the case of a man who has been held without charges by the United States military since he was captured in the fighting in Afghanistan. The justices agreed to hear the appeal of the captive, Yaser Esam Hamdi, who is believed to hold both American and Saudi citizenship and who is in a Navy brig in Charleston, S.C. The Bush administration had urged the Supreme Court not to hear the Hamdi case, so the announcement today represented a sharp rebuff to the president, Attorney General John Ashcroft and other architects of administration policy.

Mr. Hamdi's case does not float in a vacuum. In fact, the Associated Press reports that Mr. Hamdi's case has a legal companion:

The [Jose] Padilla case is a companion to another terrorism case the court was already set to hear this spring. Together, the Yaser Esam Hamdi and Padilla cases will allow the high court to take its most comprehensive look so far at the constitutional and legal rights of Americans caught up in the global war on terror.

As noted above, the Times "reported" that a Supreme Court decision to review the Hamdi case that the Administration had won in the Fourth Circuit was a great big stick in the eyes of the president, Attorney General John Ashcroft and other architects of administration policy. But Padilla's case has had a rather different course than Hamdi's case. In the words of the same AP article:

A federal appeals court ruled in December that President Bush does not have the authority to declare Padilla an enemy combatant and hold him in open-ended military custody. The ruling by the 2nd U.S. Circuit Court of Appeals "undermines the president's vital authority as commander in chief to protect the United States against attacks launched within the nation's borders," Olson argued in asking the high court to take the case. Unlike the Padilla case, the government has won its argument in lower courts that Hamdi may be held indefinitely without access to a lawyer or the U.S. court system.

The Times said that the Supreme Court's decision to hear the Hamdi appeal represented a sharp rebuff to the president, Attorney General John Ashcroft and other architects of administration policy. So surely the Supreme Court's decision to hear the Padilla appeal represented a big endorsement to the president, Attorney General John Ashcroft and other architects of administration policy.

Right, Mr. Stout? You're going to write it up that way lickity-split, aren't you? Sure you are.

But what will Linda Greenhouse write? She already wrote an article completely at odds with Mr. Stout's piece - but never mentioned that absurd article at all. Unlike Mr. Stout, Ms. Greenhouse doesn't think that the Court's decision to review the Hamdi appeal meant anything except the prosaic fact that four justices think the case warrants review.

So the Times is on both sides - but doesn't tell it's readers that. How post-modern, post-truth of the Times! Repeated efforts by the Man Without Qualities to contact Mr. Okrent have not yet yielded action on his part - although there have been many e-mails back and forth with his assistant.

Let's be clear about this: Mr. Stout's article was WRONG. It constituted a big PARTISAN, BIASED ERROR. The Times is supposed to correct such BIG ERRORS expressly. Ms. Greenhouse has already contradicted the ERROR - but she won't be explicit. It's Mr. Okrent's job to correct such ERRORS explicitly.

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The Strange Case Of Reasonable Doubt v. Marthahate II

Well, yesterday it was all up for Martha Stewart. Done. All-but-convicted. Mariana Pasternak, Martha's close "friend" of twenty years - a "friend" who at the critical time had been busy consuming a considerable number of Martha's good things whilst vacationing with her in Mexico on her private jet - testified that Martha had confessed to the crime. And not just to crime with which Martha is charged (obstruction of justice) - but actual insider trading, with which she is not criminally charged. And just for good measure, Ms. Pasternak says that her "friend" incriminated Mr. Baconivic, too. Perhaps Ms. Stewart had been tippling too much in those hotel margaritas and just decided in a stray, inebriated, uncompensated moment to hand her entire life and that of her broker over to Ms. Pasternak in this fashion. Specifically:

Mariana Pasternak, who was on vacation with Stewart in Mexico in December 2001, told a hushed court that the conversation occurred when the two were seated on the terrace of a hotel discussing friends' plans for the end of the year.

She said they began to talk about Sam Waksal, one of their friends and the founder of ImClone.

Pasternak, who has been a close friend of Stewart's for more than 20 years, said she recalled Stewart saying of Waksal "that he was selling or trying to sell his stock and his daughter was selling or trying to sell her stock."

She said Stewart continued by saying, "His stock is going down, or went down, and I sold mine."

Pasternak, who testified that she had socialized with both Stewart and her stockbroker Peter Bacanovic, then quoted the trendsetter as saying, "Isn't it nice to have a broker who tells you those things?"

Pasternak said she remembered the evening because she and Stewart had been out hiking and were too tired to go down to dinner. She said the conversation occurred before the end of December 2001. Prosecutors then showed a hotel bill for a guided hike that occurred on Dec. 30.

The testimony has been described by various televised talking heads and self proclaimed trial "experts" as the most damaging evidence yet adduced against Ms. Stewart at her trial - and that might be true, depending on how it is construed.

But especially without the little gratuitous tag line "Isn't it nice to have a broker who tells you those things?" this testimony appears to be completely consistent with the Stewart version: Yes, Waksal's stock was then going down, or had gone down. Obviously, Ms. Stewart and the public knew about the stock price plunge by the time she made her statement to Ms. Pasternak (assuming any such statement was made). And, yes, Ms. Stewart had sold her stock. But Stewart says she sold pursuant to her "stop loss" order - and nothing in the Pasternak testimony says otherwise.

So what about that little gratuitous tag line? Well, Ms. Stewart's "friend" now says that she may have confabulated it:

At issue is testimony the friend offered in which she said Stewart boasted "Isn't it nice to have brokers who tell you those things" during a vacation in Mexico just after the trendsetter dumped her shares of ImClone Systems Inc. Stewart's attorney pressed the witness about that statement on Friday, asking whether that conversation had actually taken place or if it was all in her head. "I do not know if the statement was made by Martha or if it was thought in my mind," Pasternak said. She also said she previously told prosecutors that she was not sure about that recollection.

It's hard to know how a jury will take this testimony. But a sound jury would completely discount any testimony shrouded, as Ms. Pasternak's is, by protestations that it may have been invented - and go on to seriously and reasonably doubt the accuracy of all of Ms. Pasternak's testimony. And, for the record, "Isn't it nice to have brokers who tell you those things" seems more like the kind of thing someone who really isn't Ms. Stewart's "friend" would think? Doesn't it seem like a rather nasty thought about Ms. Stewart?

Yes, indeed, friends like this one are enough to make one swear off "friends" entirely in favor of paid sycophants.

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Thursday, February 19, 2004

The Fall Of The House Of Eisner VII: Love from A Python

A curious perspective is developing among some analysts concerning the Comcast/Disney matter. This view holds that the Comcast bid for Disney is a way of signaling to the nation's regional telephone companies (RBOCs) that Comcast will not aggressively pursue telephony.

Comcast controls 40% of the homes passed in the U.S. and a Comcast decision not to go into the local telephone business would be a huge relief to the RBOC's. Comcast is concerned about retaliation from the RBOCs if it decides to aggressively pursue telephony and compete with them. The RBOCs have already signaled their willingness to accept a zero return on the Echostar deal for their video offer, for example. But a naked promise from Comcast to the RBOC's not to compete with them would raise anti-trust problems to the extent it had any content.

The analyst theory further holds that Comcast therefore instead is focusing away from distribution and towards the part of the business that is creating value i.e. content. That is, the Disney offer is a defensive grab for more value given that distribution is being squeezed. The theory goes on to propose that Comcast can create value through "time shifting" e.g. changing the windows for movies to be available for video on demand. This is the source of the Comcast synergy savings, which investors are skeptical about, since it's never been done.

Such analysts believe that Comcast won't raise its bid, nor will another bidder emerge. Instead, Comcast will just wait for Disney's stock to drift back down and keep selling investors on their offer, which may take 9-12 months.

The willingness of Cingular and other RBOC's to pay so much for AT&T Wireless might have been influenced by the Comcast bid for Disney. If Comcast isn't going to come after the local telephone business, SBC/Cingular and Bell South have more room to overpay for a wireless asset--since wireless substitution is another big threat to their local telephone business. Maybe they have more confidence that Comcast will ultimately be successful in acquiring Disney than the average investor does.
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Peggy Said Zogby Said

Peggy Noonan's typically engaging article that appears in OpinionJournal today includes this paragraph:

It is fascinating to me that after two months of the Democratic Party demonstrating what appears to be dynamism, and the Republicans struggling with such questions as the weapons of mass destruction, and the president fighting back charges regarding his military service, the smartest read on where we are came this week from a a Zogby poll that said the Democrats are leading in the Democratic areas and the Republicans are leading in the Republican areas. Mr. Bush's poll numbers are down, but the blue states are blue and the red states are red. And no one knows what will change that.

Current presidential preference polls are inconsistent, to say the least - and Zogby is a particularly suspect pollster. Still, Zogby provides a bit more interesting information:

Democrat John Kerry would edge George W. Bush 46% to 45% in the "blue states" or states won by Al Gore in the 2000 election. In the "red states," or states won by George W. Bush in 2000, however, Bush wins handily by a 51% to 39% margin.

In other words, Zogby says that Bush and Kerry are in a statistical tie in the Blue states, but Bush is leading by a whopping margin of 12% in the Red states. That doesn't suggest a 2000 re-run at all.

UPDATE: More detail.

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Wednesday, February 18, 2004

Daschle Descending III

Even with the help of the non-stop Republican-bashing and pro-Democratic media coverage during the presidential primaries, Senator Tom Daschle is now in a statistical dead heat (48% -45%) with his Republican opponent, Thune.

Senator Daschle has already spent millions of dollars running months of campaign ads. John Thune has not begun a substantial campaign.

Look for Daschle dirty tricks ahead!
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It's still a bit early to understand yesterday's Wisconsin primary results. But that primary may have been much more damaging to the prospects of Senator Kerry and the Democratic Party than the mainstream media is admitting at the moment. The most interesting aspects of the vote seem to be (1) with respect to Senator Kerry, his heavy dependency in holding his thin lead over John Edwards on voters focusing mostly on Senator Kerry's supposed "electability" (or people focused on finding someone who can beat President Bush in November, as the AP puts it, struggling to avoid the "e" word) and (2) with respect to the Democratic Party, increased prominence of outright anti-free-trade voters in the Democratic Party.

Such Kerry dependency on "e" voters (for "e" for "electability") is unstable, to say the least. How long can Senator Kerry obscure the fact that a Northern Democrat is all but inherently unelectable to the Presidency? How long will primary voters fail to remember this fact? There is a great deal of speculation as to whether there is a need for Senator Edwards to now take off the gloves in criticizing Senator Kerry. But that speculation focuses on substance, policy and personality, which e-voters have de-prioritized. Senator Edwards can degrade his opponent's lead by focusing on electability without attacking Senator Kerry on substance, policy and personality at all. The argument that Senator Kerry is an unelectable Northern Democrat should play nicely in the South - and that's where the big delegate trove remains. Of course, Senator Edwards should also make selective assaults based on his opponent's substance, policy and personality(!) - but disembodied electability is really his strong suit. And a brokered convention is really a strong possibility if he handles this right.

The Wisconsin primary also demonstrates another increasingly obvious weakness in the Kerry position: he has plateaued, he is not getting a majority even as the media has pre-anointed him as the nominee, and Democratic voters do not seem to like him more the more they look at him. In fact, AP notes: Three-quarters of [Wisconsin] Edwards voters said they had decided to back him in the last week, as Edwards picked up two newspaper endorsements and got good reviews for a Sunday debate. More than half the Kerry supporters said they decided to vote for him before the past week. After Wisconsin, the Edwards campaign can legitimately claim that "momentum" is on their side.

There are rumors of an ill-founded decision on Senator Edwards' part not to compete in California. That would be a major mistake in the view of the Man Without Qualities, since strong anecdotal evidence suggests that John Kerry's high handed personality and Brahmin ways play very poorly in this state when their details are brought to the voters' attention - Democratic voters seem especially offended by the man's personality and arrogant bearing (again, on unscientific anecdotal evidence alone). Yes, here in California narcissistic entitlement must be presented to the voting public in a very specific fashion - and Senator Kerry's version is not to local tastes at all. I suspect much of Senator Kerry's support here is among e-voters, and hammering on Senator Edwards' momentum should mean a lot to them.

Moreover, disembodied electability and momentum are arguments that play well with the mainstream media, especially because they are arguments peculiarly within the ability of the media - as distinguished from the campaigns and candidates - to present and advance. And the mainstream media is just dying to resume their irrational infatuation with Senator Edwards. Presenting Senator Edwards' disembodied electability and momentum to the public is a way the media can express their love!

Of course, the rise of Senator Edwards - or someone like him - riding on the back of his anti-free-trade message is an almost inevitable consequence of recent Democratic demagoguing about the "loss" of American jobs to overseas competition. Senator Edwards is proud - PROUD, I tell you - that he is, and always has been, opposed all those free trade treaties that Clinton supported so strongly! If that message claims dominance of this election, it will become a disaster for the Democrats of truly historical proportions. Perhaps someone needs to remind them: a lot more people in this country rely on free trade to buy foreign made goods than have lost their jobs because of it. And while the unemployed are a classic, concentrated special interest group - if it actually looks to the great majority of voters that that minority is about to get their way in some significant manner, the consequences will be that every single senior Democrat will get to learn to spell tsunami in November.

O, and by the way, perhaps the Democrats might also want to remember that the United States is particularly good at providing services - financial services and especially technical, software services (programming services disguised as software products). Such services favor both our comparative advantage and also our supposed home market effect. So an anti-free-trade approach that focuses on the supposed nastiness of foreigners providing "back office" services to American companies probably rates among the most counterproductive approaches one could take in the area of long-term trade. It is much more important to get other countries to open their markets to American service providers more fully. (And as an aside, what is it with the Democrats and India bashing? As if India didn't have enough to contend with. The New York Times reports that only 200,000 people in India out of about 1 Billion Indians work in telephone "help centers" for Americans - and that the number of Indians who can do that work is now tapped out.)

In yet another way, Senator Edwards' momentum is more evidence that the Democratic slogan this time around should be "Forward, Into The Past!!!"

UPDATE: Lots of good thoughts are being thought and shared at Ellisblog.

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Monday, February 16, 2004

The Fall Of The House Of Eisner VI: The Problem With Michael

Media coverage of the Comcast/Disney takeover story has been curious, to say the least. For example, Reuters has "reported" that Wall Street has been cold toward Comcast Corp.'s bid to acquire Walt Disney Co. Reuter's even goes so far as to quote fund managers holding Disney stock as 'supporting" Mr. Eisner when they observe that they would prefer a higher price:

Many fund managers gathered at Walt Disney World in Orlando, Florida, last week backed Eisner. They said Disney could survive on its own, and balked at Comcast's offer as Disney's quarterly results blew past Wall Street estimates. "I think that is a little low," said Mario Gabelli, chief executive of Gabelli Asset Management.

Of course a fund manager wants a higher price - such a fund is a potential seller of Disney stock. Does Reuters expect the owner of Disney stock to complain to a reporter that the Comcast offer is too high? Is the choice for such people binary: support Michael Eisner or speak against one's own interest?

Even the Wall Street Journal doesn't get market reaction quite right, although the Journal is skeptical:

The Mouse may not fetch as much as its fans are expecting. Shares of Walt Disney Co. have surged 16% since Comcast Corp. unveiled its unsolicited takeover offer Wednesday. The view of most investors: Comcast has made an initial offer, with more-lucrative bids from a bevy of possible suitors surely on the way. But a look at Disney's stock price -- $28 at Thursday's close, up 1.45% -- and at how much value is untapped at the company, suggests investors may be disappointed. Many analysts say it will be hard to get to a price much more than $31 a share for Disney, even after taking into consideration substantial cost savings and additional growth that new management can squeeze out of the entertainment giant. Philadelphia-based Comcast's current stock bid is valued at $23.45 a share at Thursday's closing price.

In fact, that "surge" in Disney's stock price now reflects quite a bit of nearly unfounded "hopes" that more-lucrative bids from a bevy of possible suitors surely on the way - and, if those "hopes" are dashed, Disney stock will decline, making Comcast's bid (or a modestly enhanced version of it) harder to resist. It is unlikely that other suitors will emerge, for the same reason that Disney has not had an offer before Comcast's, notwithstanding Disney's dreadful recent performance: Disney is just too big and has too many evident problems and probably a lot more hidden problems. For example, Disney has long been padding its net revenues by deferring theme park maintenance and investment - to the point where the grime and deterioration is positively embarrassing at Disneyland in Anaheim. That a suitor bearing a much larger check than Comcast's is unlikely can be seen by looking at the list of supposed "likelies:" Viacom, Liberty Media, Pixar, InterActive.

Consider Viacom, just as an example. That Viacom is mentioned at the top of possible "suitor" lists (including the Journal's) itself shows attenuated the hopes that a "suitor" will emerge really are. Viacom already owns CBS, so it would have to shed loss-making ABC. Viacom is a major studio owner, so anti-trust considerations mean it would likely have to shed Disney's studios assets (or its own). The Disney theme parks and merchandising leverage off Disney's studio intellectual property - so that all gets very complicated and messy. Sumner Redstone didn't get as rich as he is by acquiring huge, troubled companies he has to dismember on someone else's schedule (the Justice Department's, in this case). His near-death Blockbuster experience surely provided enough of that flavor.

The other possible "suitors" all have similar problems - with only Pixar perhaps being positioned to do something really creative with Disney's assets. Pixar would need a more financially muscular partner to compete with the Comcast offer. But Pixar also has substantial - although limited - experience working with Disney.

At bottom, Disney has two huge problems: it is a company whose value is ultimately based on intellectual property, where Disney is no longer (1) generating intellectual property in sufficient quantity other than through its now-defunct Pixar venture and (2) refreshing or extending its existing intellectual properties adequately. To these two huge problems may be appended a big third problem: a decreasing ability to exploit existing intellectual property financially. At a minimum. Comcast's management includes people who have demonstrated an ability to fix this third problem. The real advantage Comcast enjoys is that its management comes from Disney and is familiar with Disney's problems and potentials - and knows where the bodies are buried.

Regarding point (2), it is worth noting that most children now do not even have a clear idea of who Mickey Mouse is supposed to be, other than a corporate logo. That is mostly because Michael Eisner has personally blocked all meaningful efforts to refresh or extend Mickey's identity. In a little while, Mickey will be unsalvagable. The same is true of most of the other "classic" (that is, pre-Eisner) Disney characters. For a long time, Disney's best merchandising character has not been Mickey or any of those classic characters, but Winnie-the-Pooh. Even that Winnie-the-Pooh revenue stream is almost certain to be disrupted soon once the eternal litigation (it is the longest-running case in Los Angeles county) in which it has been tied up ends - an end probably distinctly against Disney's interest.

It is Michael Eisner's inability to generate new intellectual property or refresh and extend Disney's existing stock that has created the real crisis at Disney - and the real opportunity for a buyer. Numbers like those cited above from the Journal article don't capture the real problem and opportunity Disney represents at all, or the extent of Michael Eisner's recent failings. Those numbers treat Disney as if it trafficked in natural gas or some other commodity, which is only one part of what Disney really is or needs. Roy Disney understands that. Others may, too. Possibly even Comcast - although the evidence for that is as yet a bit thin.

UPDATE: It's not as if a rejection by Disney of the Comcast offer were ever in doubt. And here it is.

UPDATE: At least some media are beginning to understand that there really isn't any likely suitor out there. The Los Angeles Times seems to have actually counted the chickens:

The odds are long of another company coming to the rescue or storming the Magic Kingdom, analysts and investors say. Some face regulatory hurdles, don't have the money or have little appetite for the kind of mega-mergers that backfired on AOL Time Warner and Vivendi Universal.

Still, with the famous Disney name in play, it's enough to give pause to any media conglomerate or mogul.

"I don't think there are any obvious white knights here," said Lowell Singer, a media analyst with SG Cowen Securities. "But there are certainly some other companies out there who've probably spent more than a couple of minutes contemplating this."

Yes. It takes a little more than two minutes to determine why each of these "suitors' would not be well served by out bidding Comcast ... but not much more than two minutes.

There's a lot more of an opportunity in Disney than media coverage of this offer suggests. If only more market and industry players can figure out that Disney's problems ultimately stem from its recent inability to create and refresh its intellectual property - and only secondarily from problems with financially exploiting that intellectual property, including through distributing it. Mickey Mouse, for example, could be revived - but it would take a real artist with soul and commercial savvy to do it. An artist like Walt. Wall Street operatives and media industry reporters aren't in the business of seeing that kind of potential.

FURTHER UPDATE: Roy Disney and Stanley Gold have really sharpened their focus.

Viacom says: "No, thanks." That didn't take long.

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Friday, February 13, 2004

The Fall Of The House Of Eisner V: The Man Without Qualities Get Results!

It was so, so long ago. Eons. A geological era. Over a day ago in the Disney/Comcast kerfluffle, the Man Without Qualities urged:

You there on Wall Street, think of the fees!

And the painful truth of it is that the Man Without Qualities did not have in mind just the fees to be earned from value-enhancing divestitures and restructurings of the post-Eisner mess at Disney, although the plea was couched in that context. No, the truth is that the Man Without Qualities does not think for a moment that those on Wall Street give a rat's ass about whether their fees come from value-enhancing transactions at all. Wall Street just wants fees. And, although I would like to think I acted in the service of a higher good, it was that basic inclination of Wall Street that the Man Without Qualities was seeking to stimulate with the clarion call: Think of the fees!

And I am deeply satisfied with the increasingly plentiful signs that Wall Street is rising(?) to the challenge laid down by the Man Without Qualities, as with this sample:

The New York Times:

As soon as the bid was announced, eager investment bankers trolling for new deals began pelting executives of Time Warner ... with phone calls warning of dire implications. The advice went like this ... Time Warner would miss its chance to own Disney's ABC television stations, another valuable bargaining chip. The pitch: bid for Disney.

Los Angeles Times:

In making its bid for network parent Walt Disney Co. this week, cable giant Comcast Corp. blamed the long-suffering ABC for dragging down Disney's fortunes. The network, the industry's most profitable when Disney agreed to buy it in 1995, lost by some estimates as much as a half-billion dollars last year.

Ah, the tender mercies of the market for corporate control!

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Thursday, February 12, 2004

Another Fourteen Points

Baseball Crank has Fourteen Points for Democrats all over the country to spend all their time trying to answer until November!

Will Democrats continue to obsess on this National Guard silliness? If they do, the rest of the country will get on with discussing the issues that will actually matter in November - and voting Democrats from office. As the last Democrat is dragged from the Senate cloakroom, (s)he can gibber:

"But ... but ... there must be some mistake! I must have been re-elected! You see, Bush's Guard service was irregular!"

But it won't happen. The Democrats - or at least the more rational ones - seem to be grudgingly admitting that the election will be about the present and the future - not obscure, marginal issues from the deep past.
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The Fall Of The House Of Eisner IV: ISS Moons Michael Eisner

Institutional Shareholder Services, Inc. (ISS) has now recommended that shareholders NOT support the re-election of Michael Eisner to the board of the Walt Disney Company. As noted below, such a recommendation is normally very influential with institutional investors.

This is very, very bad for the Disney chairman. Perhaps he should have been a little nicer to the gentleman calling from Comcast who was offering many billions of dollars and a reasonable-sounding business plan. Instead, Mr. Eisner just rebuffed him out of hand. Who told Mr. Eisner that institutional investors like to see the Chairman of a company in their portfolio hang up on suitors bearing very big checks? Fire that person, Mr. Eisner!

The radiance was that of the full, setting, and blood-red moon, which now shone vividly through that once barely discernible fissure, of which I have before spoken as extending from the roof of the building, in a zigzag direction, to the base. While I gazed, this fissure rapidly widened—there came a fierce breath of the whirlwind—the entire orb of the satellite burst at once upon my sight—my brain reeled as I saw the mighty walls rushing asunder—there was a long tumultuous shouting sound like the voice of a thousand waters—and the deep and dank tarn at my feet closed sullenly and silently over the fragments of the “House of Eisner.”

Yes, yes,, yes ... and the internet is going absolutely wild! It makes so much poetic sense that Mr. Eisner's last days should be suffused with the scent of decay and outlandish speculation of complex and devious conspiracies!


Things for Eisner turned worse Wednesday when Institution Shareholder Services, a research firm that advises shareholders on a variety of issues, recommended that Disney shareholders withhold their vote on the re-election of Eisner to the company's board of directors.

Now the news media is faced with a tough issue: Do you lead the news with yet another Democratic presidential candidate getting out of the race or Eisner stepping down?

Oh, he's going to step down alright. Maybe not today. Or tomorrow. But the pressure is too intense not to. Either that, or there's the whole ouster route -- it takes longer, it's uglier and it historically rips a big hole in one's golden parachute, so Eisner would be dumb to fight for too much longer.


It is unlikely that Mr. Eisner's mind will be set at ease by a observable tendency in Wall Street denizens to talk about the Comcast takeover of Disney as if it were a done deal:

"This opens the whole field up," Paul Kim, an analyst at Tradition Asiel, said. "Although the Comcast-Disney thing is big, the more interesting question is what comes after and how will this have a ripple effect on the industry," Kim said. "Every institutional investor here is thinking about what's the next M&A deal down the pike."

Yes, yes. This one's pretty much in the bag. Now let's talk about ripples. It also means Disney is in play, analysts say.

The media don't seen to be paying much attention to the fact that Comcast's share price has fallen substantially since the offer was made. Comcast management may - or may not - have some answering to do when its own shareholders start asking the big questions. But, so far, many people think that there is a "strategic necessity" for Comcast to own Disney. How does one criticize management for doing what's "necessary?"


Disney, of course, owns ABC - and therefore controls ABC News. Interestingly, an astute reader e-mails to point out that ABC News seems to be the only media outlet suggesting that Comcast is not offering to pay nearly enough, and will have to up its offer substantially to prevail. (Some modest increase is of course likely on ordinary deal dynamics grounds - but ABC is suggesting a lot more than that is needed.) In addition, the Disney subsidiary article (1) quotes Michael Eisner as saying that Disney is on the "road to recovery" (And ABC breathlessly opines: Disney's quarterly report indicated that the surge Wednesday might not be a one-day fluke created by excitement over the merger proposal.) (2) quotes an analyst saying "Disney did a nice job over the quarter!" and (3) reports that no one thinks that Comcast is paying too much!

Life in the trenches!

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Wednesday, February 11, 2004

The Fall Of The House Of Eisner III: Disney In Play?

From the Wall Street Journal:

Comcast's real concern is less Disney itself than other rivals swooping in for its trophy. Among the potential entrants who could make a play for Disney are Barry Diller's InterActiveCorp., John Malone's Liberty Media Corp., Sumner Redstone's Viacom Inc., Rupert Murdoch's News Corp., and perhaps even Bill Gates's Microsoft Corp. They all have done far more media deals than Comcast CEO Brian Roberts and have strong incentives not to let Disney fall into the hands of a cable company. .... Disney does have a few cards to play in an effort to control its own fate, say investors. It can own up to its weak performance and dump Chairman and Chief Executive Michael Eisner, who has incurred the wrath of investors and two former board members, including Roy E. Disney.

And so it goes. Yesterday, a media titan. Today, just one of the corporation's few cards to play in an effort to control its own fate. Tomorrow, bring out the long knives!

The Comcast interest in Disney cames at a delicate moment. A shareholder meeting is coming up and Disney management has been making the rounds of the company's investors to shore up support for its slate of directors. Perhaps the most important entity in such an effort is the obscure but central Institutional Shareholder Services that describes itself this way:

Institutional Shareholder Services, Inc. (ISS) is the world's leading provider of proxy voting and corporate governance services. ISS serves more than 950 institutional and corporate clients worldwide with its core business — analyzing proxies and issuing informed research and objective vote recommendations for more than 10,000 U.S. and 12,000 non-U.S. shareholder meetings each year.

ISS's core businesses include global proxy services and database and research tools for institutional investors. With more than 15 years of experience and a respected team of domestic and international research analysts, ISS is considered to be the world’s authority on proxy issues and corporate governance. Our research and proxy voting policies are designed on the premise that good corporate governance ultimately results in increased shareholder value.

ISS doesn't own Disney stock, but a lot of institutional investors will follow its advice when it comes to backing the Disney management slate - or not backing them.

According to the New York Times, Patrick McGurn, special counsel for ISS, was visited in advance of next month's Disney shareholders meeting by both Roy Disney and his partner, Mr. Gold, and separately by George Mitchell and Mr. Eisner. Mr. McGurn told the Times that ISS had not yet decided how to advise shareholders. That's very bad news for Disney - despite Mr. McGurn's observation that there has been a "change of attitude" at Disney. That such an attitude change was viewed as needed is very telling.

What are Messrs. Disney and Gold after? The Times reports:

Their short-term goal is to get 35 percent of Disney's shareholders to withhold votes for Mr. Eisner and three other directors next month. Under an S.E.C. proposal released last October, reaching that threshold could force Disney to include alternate board candidates suggested by major shareholders the next year.

While investors and analysts say it is unlikely that the 35 percent level will be reached, a smaller number could still show palpable investor discontent with Mr. Eisner.

"If 10 percent of shareholders withhold their votes that would be significant," said Sarah Teslik, executive director of the Council of Institutional Investors, an advisory group for shareholders. "It would be an indication that Roy Disney has some place to go with this campaign."

In the middle of all this comes the Comcast offer - summarilly rebuffed by the pump headed Mr. Eisner.

I wonder if he could remember that the ISS is watching closely.

In the mean time, it appears that the Disney board, at least, has had one of those long disturbing chats about the fiduciary obligations of directors with the lawyers:

Comcast's $66 billion takeover offer -- a stock swap initially valued at $54 billion, plus the assumption of about $11.9 billion in debt -- was made despite the objections of embattled Disney CEO Michael Eisner, who personally rejected an overture from Comcast earlier this week.

By going over Eisner's head and delivering an offer directly to Disney's board of directors Wednesday, Comcast initiated a takeover bid that could turn hostile. ....

Disney officials issued a statement Wednesday promising to "carefully evaluate" the Comcast proposal, but they offered no time frame or any hint of the board's reaction.

Mr. Eisner is looking more and more like Steve Wynn, another once-cutting-edge executive who had gone seriously stale, on the eve of the loss of "his" company to Kirk Kerkorian.
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At the time the movies The Terminator and Terminator 2 were made, "hi tech" meant chips - hardware. The Terminator threat was a chip.

By the time Terminator 3 was ginned up, hardware was so yesterday - "hi tech" meant internet software. The Terminator threat to civilization correspondingly evolved into an uber-Java-like program, "Sky Net."

And now it looks like hardware may be back as the next big thing.

Does this mean Terminator 4 will feature some wireless, amorphous nimbus of light nodes that somehow zaps squishy humans?
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The Fall Of The House Of Eisner II: Now For The Tender Mercies Of The Market For Corporate Control?

Someone, finally, is trying to buy the almost inconceivably mismanaged Walt Disney Company.

The would-be purchaser happens to be Comcast. Of course, Comcast notes that Michael ("Valeur d'actionnaire? Planification strategique? Cest moi!") Eisner already "had rebuffed its request for talks". At least the phrasing and volume of Mr. Eisner's retort will likely change once he has had time to speak at greater length to his attorneys about the fiduciary obligations of the directors of a Delaware public company finding itself "in play."

The Man Without Qualities has not exactly been a fan of Disney management - especially the likely pump-head Michael Eisner. "Disney in play." How long has the world justifiably waited for those words! We're really not quite there, yet. But close. So close.

What does it say for Disney that the first action taken by it's kennel of Eisner lap dogs masquerading as a board is early release of supposedly positive financial results? The results depend heavily on revenues from (1) Finding Nemo, a product of the now-defunct Pixar/Disney joint venture that foundered on Mr. Eisner's pointless accusation that Steve Jobs' Apple was aiding and abetting the theft of Disney's intellectual property, and (2) the unrepeatable Pirates of the Carribean, surely Disney's own best effort to prove the truth of the cannard "Even a blind hog sometimes finds an acorn." (Acorns are it. It's unlikely many analysts will award a truffle to this hog.)

Now if only "Disney bust-up deal" could gain currency! The value that might be realized by undoing so much of the Eisner legacy! Tossing out moribund ABC assets (except the accidentally-acquired ESPN)! The real estate occupied by that silly Florida wild animal park! Restoring annimation. The acquisition/bust-up/restructuring would be comfortably self-financing and then some!

You there on Wall Street, think of the fees!

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Monday, February 09, 2004

Ineffective Vaccine

Senator John Kerry is now openly questioning - disparaging is actually the more accurate word for what Senator Kerry is doing - President Bush's National Guard service record. The Wall Street Journal and others believe that the Senator is trying to use his Vietnam biography as a political shield against his national security voting record. The Journal gives many reasons why Senator Kerry's post-Vietnam record is a big problem for him - and why he is therefore trying to distract attention from it this way.

What's especially curious about this Kerry ploy is that it has been tried recently by other Democrats and it has not worked. Most recently, Wesley Clark disparaged Senator Kerry's military record in a manner having substantial points of similarity with Senator Kerry's attempt to now disparage the President's military record. Senator Kerry seems not to have learned when Mr. Clark was forced to recant. And, of course, Wesley Clark himself failed to establish his credibility on national security matters even with a thirty years military career as "inoculation."

But the most spectacular example of the ineffectiveness of this particular inoculation is the defeat of former Senator Max Cleland of Georgia, who has recently been very active in supporting John Kerry's bid for the Presidency. Saxby Chambliss defeated the then-incumbent Democratic Senator Max Cleland with a campaign including a controversial ad which Capitol Hill newspaper Roll Call described as follows:

The spot begins with a screen showing video footage of al Qaeda terrorist leader Osama bin Laden and Iraqi President Saddam Hussein. "As America faces terrorists and extremist dictators, Max Cleland runs television ads claiming he has the courage to lead," an announcer states. The ad continues: "Max Cleland says he has the courage to lead. But the record proves Max Cleland is just misleading."

The ad brought howls of protest from the left, and accusations that the Chambliss ad inappropriately "associated" Cleland with bin Laden and Saddam Hussein and somehow "questioned Senator Cleland's patriotism." Both charges were absurd, and were seen as absurd by most of the public. To be weak on defense and national security (as Senator Cleland was) of necessity means being weak on defending and securing the country from somebody. Naming that somebody in a campaign ad is perfectly appropriate and in no way "associated" Cleland with bin Laden and Saddam Hussein or "questioned Senator Cleland's patriotism" any more than John F. Kennedy's "missile gap" ploy "associated" Richard Nixon with the Soviet Union or "questioned Vice President Nixon's patriotism." Nobody in his right mind would argue that Kennedy was suggesting that Nixon worked for the Soviets. The fault in Kennedy's ploy lay in it's serious inaccuracy, not in any "association" or "question of patriotism" it attempted to create for his opponent. In contrast, accusations that Senator Kerry has been weak on national security are perfectly accurate. In fact, to be Senator from Masachusetts requires one to be weak on security, so Senator Kerry has been himself counting on the ineffectiveness of his "inoculation" for decades in Massachusetts. The furor on the left and the Cleland "inoculation" didn't work in Georgia, either. So the "inoculation" works in neither liberal nor conservative states. Yet Senator Kerry is shooting up.

Senator Kerry's ploy will probably make his campaign problems with national security worse than they are. The world has changed since Vietnam. We have other problems, other enemies now. Kerry's ploy carries a severe risk of presenting him as someone overly focused on the past, which he is. It's just one more way in which he is out of touch.

More and yet more. But I will be amazed if anyone cares strongly about this non-issue now or will even tolerate hearing about it in a week.

And now: A National Guard comrade comes forward with a letter to the Washington Times. But the problem is that the people who care about this non-issue (and, to be fair, there are several of them) would have to remove their tinfoil hats to read the letter. And they're just not going to do that.

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