As Goes the Nation, So Goes the Station

The following piece was published on 1/2/13 on the Talkers Magazine website.  Talkers is “The Bible of Talk Radio and the New Talk Media”:

Here’s some context: I’m a small businessman. In addition to being a talk show host, I run a small, modestly successful music and entertainment production company. Because of the Cliff, the Ceiling, and Obamacare’s paralyzing lack of clarity, I’m not spending one dollar more than I have to on salaried staff, independent contractors, and infrastructure/equipment.

This stingy posture isn’t because I’m a greedy bastard. It’s because neither I (the producer of goods and services), nor the consumers I sell them to, know where our next batch of greenbacks is coming from, or going to. And clients, those a rung above me on the ladder, are behaving in kind. We’re like kidnap victims who’ve had black hoods pulled over our heads, while the van we’re in careens through a sketchy neighborhood of miserably thought out economic policies.

 Which brings me to the afternoon of December 20, 2012, the day the major overhaul at WOR in New York City began in earnest. I walked into the station at 4:30 pm. I was there to prep for my M-F 6:00 pm to 8:00 pm internet stream show. The show’s existence was an anomaly, as the rule of thumb is to carry the entirety of one’s terrestrial programming on one’s primary stream. I was grateful for the anomaly.

I was greeted by a cacophony of sights, sounds, and most importantly, feelings that were close to overwhelming. The day has been described in the trades as everything from a house-cleaning to a bloodbath. Those are surface descriptions that make the point, but don’t paint the deeper human picture. And a bloodbath it wasn’t. We all saw one of those recently, and for the time being, at least, that particular figurative and hyperbolic word play doesn’t ring right, at least to me.

The sight of 10-plus radio engineers, some union, some not (we’ll get to that later), dressed in what they thought was appropriate attire to meet with management, was, um, unique. Brilliant, eccentric fellows, including my guy, who, having been there for 30 years, was like a radio big brother to me. (Full disclosure: having engineered albums for Grammy winning recording artists, I’m not unfamiliar with the offbeat mental terrain, or the less than up-to-date sartorial choices of folks on that side of the glass. I’ve been one.)

Clear Channel, which acquired WOR, was until relatively recently a publicly traded company with a fiduciary duty to shareholders to keep their share price stable at worst, and rising at best. The company’s present position of being burdened by debt and even greater debt looming still puts its top management in an excruciating pressure cooker. Their employees keep their jobs and their executives are compensated when they adapt and excel not just within their industry, but within the larger opaque economic climate described above.

So most of the union engineers, who drew larger paychecks than their non-union brethren, were out. Sounds a lot like the state by state “right to work” issue we’ve been talking about on a regular basis. There’s a fine line between cutthroat capitalism and survival during changing times.

The station mimics the nation. And it continues:

Some of the award-winning, high-profile talent was let go, as the station began to sculpt its new sound. Consolidation breeds efficiency, but by definition, it also breeds a lack of variety, a lack of choice. This may be an unintended consequence, but it’s not a surprising one. Our personal options, whether they’re in areas as disparate as radio programming or job opportunities, are becoming fewer in number as productivity rules the roost. One host broadcasts on 300 stations rather than many more hosts on fewer stations each, just as one employee at an insurance company does the work that two or three used to do.

The frayed nerves of all employed parties concerned had been in evidence since the eventual transfer of ownership was made known, and created the working equivalent of a “sleeping with one eye open” mentality, as there was an amorphous foreboding in the air. It’s not unlike the workplaces of today, where those with a job fear losing it, while those without one, on the outside looking in, fear not being able to get another one that involves their skill set and a pay level that had, up until now, been assumed.

There wasn’t anger, there was sadness. Certainly not because of change itself, but because of the human toll it currently extracts. In the early 1900’s the workers in a buggy whip shop went on to work in automobile plants; such innovation and expansion is not currently in evidence. So unemployment will rise a bit more (if you swear by the Labor Department numbers, perhaps you’d like to join my Friday night poker game), and the government coffers will be further depleted as new claims are filed, checks are written, and deficits grow.

Most importantly, there’s now yet another group of good, talented, skilled folks who have, for the time being at least, nowhere to employ those skills, and may well be feeling an emptiness and facing an unknown future that serves none of us well. The national skittishness increases. Even the corporations that abide by their corporate charters and mission statements end up losing, as the pool of consumers continues leaking, which then takes its toll on advertising dollars. Which then, in a Catch-22 fashion, leads to further consolidation in order to contain costs.

And understanding and being prepared for where and how and when it stops is the challenge at hand.

 

Debt Ceiling With Feeling-LK’s WOR BroadKast 7/27/11

LK has been made ill by the DC dopes and their debt ceiling double dealing. What our elected scum deserve is unprintable, unless LK wants guys in black suits showing up at his front door tonight at midnight. Charles Kannon delivers the sports as only he can.

Here’s the link.

Don’t Fear the Rooster-LK’s WOR BroadKast-7/14/11

You can stick your head in the sand, you can whistle past the graveyard, but there’s no way you should avoid facing the slow deterioration of our way of life. “Cock-a-doodle-doo” says LK.

Here’s the link.


Econ 101, or Just Con 101?

In the wake of this whole debt ceiling circus, I was kind of shocked – in a humorous way of course, to learn that there is a credit rating company that actually can ruin the United States of America’s credit score.  How weird is that?  Didn’t you guys think the USA would be immune to a bunch of slug lawyers and accountants who have the power to deny the US a MasterCard?  Does this mean that Bernanke logs on to Free Credit Report.com every day?

Feeling like a real dope, I had to look into this, and it seems that there are actually three of these companies that research and analyze international finances on government agencies.  Now it seems that the big one, called Moody’s Corporation, is  considering downgrading the USA’s triple A rating because of the possibility that the debt limit will not be raised in time.  Plus, any financial institutions connected with the government -  that would be Fannie Mae, Freddie Mac, Federal Home Loan Banks, and Federal Farm Credit Banks, are also being reviewed for downgrade. And if that ain’t enough, Moody’s has also placed on review for possible downgrade pre-refunded municipal bonds, certain housing bonds that are supported or guaranteed by the US government, and other municipal ratings that are directly linked to the rating of the US government. Bonds issued by the governments of Israel and Egypt that are guaranteed by the US government were also placed on review for possible downgrade.   Man, that’s an awful lot of power!

Given that I don’t have the slightest clue of a clue about economics, cause basically it’s pretty boring stuff compared to say, the NFL, MLB, and the Deadliest Catch crabbing show, I had to look up the ramifications of international bad credit.   A credit rating reflects the risk of default.  There could be a massive outflow of foreign investment since some global funds are mandated to invest only in AAA debt and if the U.S. loses its AAA rating‚ it loses those investors.  A credit rating downgrade provides a perfect excuse for an alternative reserve currency to replace the dollar. China‚ Russia and other countries are already suggesting creating a “basket of currencies” that would replace the U.S. dollar.  Interest rates will increase as will risk of inflation. Philadelphia Federal Reserve President Charles Plosser cautions, “History shows us that you can get very bad economic outcomes with rapidly rising inflation.”  Okay, I kind of understand all that.  But, I also understand that every coin has two sides, and I really understand blackmail.

It seems in the early 1970s, S&P, Moody’s, and Fitch began receiving payment for their ratings by the securities issuers for whom they issue those ratings. Also, according to The Institute for Individual Investors, Moody’s had offered German insurer Hannover Re a “free rating”. When the insurer refused the gift, Moody’s continued with the “free ratings” anyway, but gradually lowered its rating of the company.  The German insurer continued refusing Moody’s services, so Moody’s lowered Hannover’s debt to Junk, causing the company to lose $175 million in market value in a couple of hours.  And, finally, Wall Street veteran, Chris Rowe writes, “I started underwriting big bond deals for one company that we eventually took public.  The CEO of the security issuer suggested we remind prospective investors that the bonds would eventually be given a “nice rating” by credit agencies like Moody’s, which would push the bond’s prices higher and put the firm in a better capital position.  I asked how I could possibly say that (as it seemed illegal), only to find out that the only thing the firm had to do was PAY THE RATING AGENCIES and BOOM!  Instant credit worthiness, instant price movement, and instant exposure for the company itself.”

I was right.  This economics stuff is so corrupt, crab fishing in the Bering Sea is literally a breath of honest, fresh air.  I prefer it and the people involved in it to the thousand dollar suited mobsters that make even our politicians look like innocents.  I don’t like it.  I don’t get it.  I don’t want to get it.  I won’t participate in it.  Call me a dreamer, but I will invest myself in my family, the blue sky and the yellow sun.

The Spoils of War-LK’s WOR BroadKast 7/12/11

We’ve got the debt ceiling, we’ve got public servants with pink handguns, we’ve got horrors in the middle east, we’ve got China’s eye in the sky, and we’ve got Iraqi resources going to Royal Dutch Shell instead of American troops. LK’s got his hands full.

Here’s the link.