Monday, March 30, 2009

Yelling at your kids.

If you haven't raised your voice to your children it can only be because you don't have any.  I can promise you though that when you get some you'll be hollerin'.   Sometimes, not often, but  sometimes Im given the gift of objectivity and I hear myself as I actually sound and not with my aggravated-end-0f-the-day ears and I think, "what the hell has happened to me that these words are coming out of my mouth at this volume?"   Cause you're never yelling at your kids  over a dispute about the allegory  of Socrates' Cave or whether marginal tax rates ought to be 3% higher.  No, its because they put the fork in the wrong place for the 59th time.

My son is a good natured and pure hearted pleaser.  He'd really rather not earn your  disdain on any level so when he is yelled at he gets upset and often cries which is shaming and awful for all the right reasons.

My daughter is also very sweet but she's willing to lock horns for what's right.  When I raise my voice to her she doesn't ignore me or anything like that.  Nope, she looks me right in the eye with a gaze that says "Im in the presence of a crazy person now" and  patronizes me accordingly. 

She's five.

And when you lose your shit like that its really hard to dial it back so you're just sort of  hung out there being mocked silently by a dear innocent little girl.   This is what makes us old and ultimately why we die.

Saturday, March 28, 2009

Would you like asphalt with that?

God I love this idea.  I would have to think that  the goodwill upside of branding fixed potholes or whatever else cities struggle to pay  for is much higher than paying tens of millions of dollars to re-name a stadium for your company which everyone will resent and no one will actually use.   Do you say Comisky or Cellular One Field??

That said Im not sure that a fast food chain that has struggled to shed a greasy and unhealthy image is best served by associating their trademark  with thick, gooey, stinky, tar-filled asphalt.
And the gesture may have some downside come next winter when the pothole reforms and slowly  rips  the "KFC" all to hell.  Still, probably better than a coupon in the Sunday paper.

Thursday, March 26, 2009

Sound and Fury at American Theatre Co.

Its sad to see what's happened there.   I have fond feelings for that place having worked there several times and being very good friends with a number of company members.  Its a shame, but its not terribly surprising from either perspective.

I like PJ fine in so far as I know him but clearly he has a strong  vision and is highly ambitious and it was never clear to me how that was going to reconcile with an ensemble of actors many of whom aren't cast-able in the shows he's interested in doing.   It was a bad mix from the beginning.

First it was Facebook. Now its the parking meters.

Im setting myself up for no end of ridicule on this but I guess Im one of the few in Chicago who thinks that the parking meter lease is a good idea and that the gnashing of teeth about the switch over is mostly a non story.

First of all I think the whole concept of selling off an underperforming asset for loads more cash than the city could generate in the short term is breathtakingly brilliant and Im going to try and entice you to at least entertain the same notion.   A particularly  cogent explanation of the details is found here and serves as a good basis for moving the discussion forward.

Here's why its such a good idea in my head:

a.)  As a user fee parking meter rates have been woefully underpriced.  Why the hell do I say that?  Most, though admittedly not all meter fees hadn't seen a significant increase is almost twenty years.  Can you name another transportation fee  that has had that kind of flat price rate for that long?  No you cannot.  Privately owned parking garages downtown have raised rates through the roof in that same time period without a drop off  in usage and even heavily subsidized CTA fares have increased more than %100 in roughly the  same time frame and the same is true of Illinois toll fares.   There is no way around the fact that the city has been losing money on meters relative to other transportation user fees for a good long while now.

Okay... well... why do it this way and privatize the system?  Why not just let the city retain control of the meters and raise the prices over time??

b.)  According the the linked article above the city earned a profit of roughly $16 mil per annum on meters at the previous rates.  Nice, but not nice enough when you're  several hundred million in the red annually.   But still, lets just say the city was able to double its income on the deal to a cool $32 mil per.  At that rate it would take the city over 40 years to earn roughly the same $1.16 billion it got in a lump sum from Morgan Stanley et al, and in 40 years a billion dollars wont be what it used to be.  Even in good economies  the purchasing power of money is severely eroded over time.  You'd much rather have that money with today's purchasing power than doled out over several decades.  Couple that with the fact that the city has banked more than $300 million of the pay day so the overall take at the end of the contract will  be well beyond the $1.16 billion.   That's just damned smart.

Now for some of the bitching:

Don't our taxes cover this kind of stuff?

Uh..... no.  And honestly its unfair to increase the burden on taxpayers simply to support an undervalued price structure that people can choose to use or not.  When possible user fees are ALWAYS more equitable than across the board taxes and should reflect actual value in pricing.

Rates are too high and businesses will suffer

This one makes at least some sense on its face but even so Im skeptical that there will be long term impact on neighborhood business.   I'll go back to the example of downtown parking garages.  They're packed even on weekends, so the likelihood of any long term chill due to meter rates isn't supported anecdotally.   But, hell lets say Im wrong and prices are too high and businesses get hurt because  nobody will park at meters.   This is the beauty of the free market boys and girls.  These investors are obviously HIGHLY leveraged on the deal and if we start denying them our quarters in numbers large enough to have any impact they will have to adjust their pricing downward or default.  

Daley  could have gotten more money  than he did

Maybe, but to be fair this is relatively new territory and pricing precedent is hard to come by.  Even so had Daley sold the meters for $4 billion as some have suggested they're worth the rates would have to be much much higher as would the relative level of bitching about them.

Well the whole thing is a giant fucked up mess and nobody  knows what the hell is going on.

This is true.  For now.  As I've said the contractor here, LMZ, and Morgan Stanley have over a billion reasons to get this thing up and running quickly which obviously means mistakes will be made.  But they've got the same number of reasons to see to it that those mistakes are fixed in time.  Money is one hell of a motivator.

But that said I guess I never had any contact with this benevolent and efficient Dept. of Revenue everyone seems so nostalgic for lately.    No, this seems just like it has always been to me, too many cars chasing too few spaces and the desk jockeys running the system don't give two squirts of piss about it one way or the other.  At least with this system there is a top down motivation to improve it.

But.  All that verbiage notwithstanding lets say you still disagree.   Fair enough.  Lets hear your better idea.

Wednesday, March 25, 2009

Probably not a coincidence

This looks like a boring chart from the Economist and, well fuck,  it is.  But the first column bascially tells the story of an international financial crisis.   Look at the trade inbalance in the first four countries listed, China, Japan, U.S. and Britain.   When we run a deficit of hundreds of billions of dollars with places like China and Japan while they're running a surplus of hundreds of billions then it means all that currency needs  to be  laundered or "invested" by the surplus countries.   Hello American real estate market.

That's where the cash comes from to fund a market run up that magically makes your piece of shit condo worth $70,000 more than you paid for it in 18 months. It wasn't the paint or curtains.  So the next time some asshole on TV tries to demagogue some poor shmuck who got caught trying to flip an insanely overpriced property keep in mind that the Finance Minister of China was doing essentially the same thing except he made money.

This is why I don't like to see women in a burkha.

 At first blush this may sound a lot like xenophobia  but in fairness  I don't think its that simple.  It perhaps doesn't shine the most flattering light on me but when I see a woman in a burkha its mystifying and more than a little frustrating.   

I wouldn't suggest that Muslim women shouldn't be allowed to wear a burkha  but I think its worth wondering why they would choose to de-individualize themselves in a  country that affords them the freedom not to because I don't think its just another of a series of innocuous choices but obviously an unbelievably overt symbol of paternalistic oppression that is largely tolerated among those of my political ilk in the name diversity. 

Put this guy on the list for a scrotum punch.

This what a privileged rich person sounds like when they whine.   A person whose sense of entitlement is so out of proportion with reality that its really kind of difficult to process.  To be clear we're talking about a man who likely makes a 7 figure salary that got his feelings hurt because some people were mean about  his $700,000 + after tax bonus paid for with our money.  

This Desantis fucker makes a critical error of cognition in his pout.   In reading his letter its clear he is quite familiar with AIG's bonus contract but he also claims not to have known what was going on in the rest of the AIG FP division.  That's a lie.   The contract very clearly uses language that insulates the bonuses from anticipated loss in the very products AIG Financial Product's  division deals in.   They all knew massive losses were coming in their product division and its not at all credible that an Executive Vice President wouldn't know why.  Fuck this guy.

We can make all kinds of macro observations as to what really caused all this shit to hit the fan but in truth it is due to nothing more than this kind of pettiness in spirit.  

Monday, March 23, 2009

But I thought they'd quit.....

Of the ten top AIG bonus recipients all but one asshole returned their ill gotten gain accounting for $80 million of the $160 mil or so we're short on the deal.  And presumably of all the employees that got this money these 10 would be among the most necessary to the unwinding of this mess.

 Liddy argued that absent these bonuses  lots of important people would say "fuck it" and head for the exits making it impossible to ever fix this thing.  Well... evidently some of the most indispensable folks can both live without that money AND continue to work cleaning up their own shitpile.   Liddy needs a nut punch

The moral hazards of income inequality.

Market fundamentalists are the secular doppleganger of the Christian right and like their Lordly counterparts they've done a good job selling the notion that their values aren't just their own but a manifestation of eternal truth.   As such they don't seem to give much consideration to the possible downside costs, namely that people aren't going to accept income disparity on a massive order of magnitude forever and will start to think seriously about taking your shit from you since there are a lot more of us.   

Capping executive pay or targeting specific bonus recipients with taxes isn't a good idea. In fact its a very bad idea but it feels really damn good and the well is so poisoned by irresponsible behavior by the financial elite that its going to be hard to counter that.

Toxic assets and topless chicks.

Im not sure if I actually know any women that would consider dancing in a strip club or shooting a porno to make ends meet if they lost their jobs.   And I guess you can color me suspicious of the whole story here because the free spirited grad student paying off her student loans by stripping or the saucy white collar exec shooting a porno on the side just seems to jibe a little too neatly with the hetero fantasy life of too many men to just accept it at face value.   I mean I suppose its possible that lots and lots college  women are really just bi-curious and maybe most of those letters to Penthouse were real but I don't really think that's the deal.Porn is predicated on the titillating possibility though.

One women that has gotten bit by the topless bug is quoted in the story saying "its like giving a speech, but instead of imagining everyone naked, you're  the one whose naked".   Okay.  She's probably not the grad student.

Oww my cranium.

 This book > My Brain.  I know a phrase like this has a meaning...

"... an increase in the marginal physical productivity of labour in the wage-goods industries (to use Professor Pigou's convenient term for goods upon the price of which the  utility of the money-wage depends)

...Im just not sure what it is.  I know what each individual word means... when they get all strung together like that though its a real bitch.

Saturday, March 21, 2009

Baaa Means Baaaa

I don't pretend to know what the answer is here.  But it seems to me that if you're at all predisposed to fornicate with an animal I tend to doubt potential illegality is going to dissuade you much.

Friday, March 20, 2009

Ships in distress, Confederate troop movements. That kind of thing

Why hasn't Morse Code faded into the oblivion of lost technology like flint napping and making fire out of two sticks??    Im not sure why there is a need for a two way Morse Code translator but here it is.

Thursday, March 19, 2009

Cue fan... and cue shit...

Here's the AIG contract.   It goes without saying that I don't live in a world where the word bonus gets tossed around much whether its performance or retention or whatever.  But then again almost no one lives in a world where your employer enters into a contract with you that includes language like this:

"The objectives of the plan are....

To recognize the uncertainty that the unrealized market valuation losses in AIG super-senior 
credit derivative and originally rated AAA cash CDO portfolios have created for AIG-FP employees and consultants"

Again. Not pretending to have been around that block but how can that mean anything other than AIG management knew that the bottom was falling out of CDS's in 2007 and included that language to insulate those bonuses from coming losses?

Gets worse...

Page 5 Section 3 specifically establishes bonus levels at either 100% or 75% of bonuses paid in 2007 completely irrespective of performance.

Page 10 though will really make you wish you'd chosen a different career path:

"(a ) Effect of Mark to Market Losses on the Bonus  Pool:

The Bonus Pool for any Compensation Year beginning with the 2008 Compensation Year will not be affected by the incurrence  of any Mark to Market losses ( or gains)"

The "or gains" was for appearances I presume.  It goes on to limit the level of bonus pool loss in a given year to $67 million or so.  And just to be clear this was above base salary and my guess that anybody qualifying for a million plus in bonus  scratch is probably not working for $7 an hour the rest of the year.    

Fuck me.

Tell me this isn't the coolest thing you've ever seen

So not everyone is a news junkie, but still

Monday, March 16, 2009

"Sincerely, Mr. Brass Balls"

Here's the letter from AIG honcho Edward Liddy explaining to Geithner why it would be a bad thing not to reward employees with bonuses using money they don't really have.  I don't understand it either.  Here's the clincher:

"On the other hand we cannot attract and retain the best and brightest talent to lead and staff the AIG businesses-which are now operated principally on behalf of the American taxpayer-if employees believe their compensation is subject to continued and arbitrary adjustment by the 
U. S. Treasury."

I didn't make that up.   Is there really a word in english that adequtely captures the fucking gall of it?   To be clear much of this bonus money goes to the geniuses in the AIG Financial Products division. These'd be the very same invaluable talents that dealt in the very same credit defaults that put the company in the hands of the government to begin with.  

Saturday, March 14, 2009

A lovely poem

This was written by my long time friend.

"It does not conduce to Aristotelian happiness..."

Jesus, that sounds important.  Im linking to this speech made by Charles Murray at AEI because I disagree with it but respect the level of intellect behind it.  Im not sure why the "European model" has become such a  bogey man of late.  I suspect its because  the pejorative use of the term liberal has lost much of its magic and the right  has had to resort to the specter of European Democratic Socialism to draw scary comparisons.  I wasn't aware that a change of a few percentage points in the upper marginal tax rates had so much import but apparently what the fuck do I know.

The primary problem with this speech to my mind is the absolute faith it has in the necessity of an either/or outcome.   Murray allows that he enjoys visiting Paris or Rome and doesn't take particular note of populations straining under the "yoke of an evil system",  quite the contrary  he observes.   But as lovely as it might seem it isn't quite..... Aristotelian.  Quite. Fuckin' please.

I couldn't say with any objectivity  why  Im a liberal and I suspect Murray  couldn't really explain why he isn't.  I perceive human affairs one way and he another and I doubt either of us would be comfortable with the lack of empirical data to support those perceptions.   However I do not believe in ultimate ideological victories and I think people who do contribute to a good deal of ill in the world.

When we start getting serious about understanding where our money went..

We'll start paying more attention to articles like this one  and accept that these kind of catastrophes are due fundamentally to our cognitive inability to accurately asses risk.   Because we as a species do such a poor job of processing what we  don't know and continually overvalue what we think we know we lead ourselves in to these blind alleys  time and time again.  It isn't simply that we don't know what we don't know, we become absolutely certain that we DO know and chaos predictably follows.

And because we can't/wont/don't accept  that we're looking directly down the barrel of our limited brainpower we look for "blame" where it doesn't exist.   The list of correlative factors is long but none of them are causal.  Yes people overbought, yes Fannie and Freddie were mismanaged, yes the Bush administration was lax in oversight, yes Clinton undid too much financial regulation, yes Carter chose a tax policy that favored mortgage debt over consumer debt.   But not a single one of those things on their own or combined caused the bottom to fall out  of the economy.  

The fact is we still believe in alchemy.  Maybe not so much the lead into gold thing but if we judge our actions we clearly respond to the idea that risk can be entirely negated and something can be created out of nothing at all.

Friday, March 13, 2009

What a suicide bombing looks like.

Not morbid at all but scary as fuck and darkly fascinating.   The slideshow is here

This is how we end up eating tree bark and grass salads

The irony runs two ways here.   The worlds richest capitalist country becoming ever more beholden to the world's largest communist country.  Our system predicated on private ownership being financed by cash from their publicly held industrial base.  A tad oversimplified yes but basically correct.

In any event we'll have to get used to idea that China will have an unseen hand in governing America for some time to come and would have even absent an increase in D.C. spending.   And thank God for it too because it they stop fancying our T-bills then its time to hunker down in the nearest compound and start frying squirrel.

Have you met my new boyfriend? His name is Jon Stewart...

*Sigh*.   Isn't he just the dreamyyyyyyyyy-ist?!?!?    A Jonus Brother for menopausal men.  Im dispensing with any pretense of objectivity here and just swimming in the giddy hot goo of nerdy fan boy adulation. Aside from the obvious de-pantsing of financial reporting I think last night's Daily Show was a seminal event for reporting in general, politics, and  pop culture.  Lets look at the fallout.

The greatest guilty pleasure I took in watching Cramer grovel was how emasculated he, and CNBC by inference, looked when confronted with their own bullshit.   If you're not a regular CNBC viewer then you might be surprised at the level of testosterone that oozes up from the trading pits and finds its way on air.   These guys act as if they made money by swinging around their big penises and then carry home the profits in their pendulous  ballsacks.  Its a self congratulatory culture pumped up on its own fast pace and unrealistic reward structure.   This is the wanna-be NFL for paunchy non-athletes and CNBC is its ESPN.  

It spoke volumes then to watch this culture's loudest and most in your face personality sit with shoulders hunched offering little more than "sorry" and "you're right" in the way of explanation.   The curtain is down now and it all seems too silly, if it weren't for the money lost. Its been a circle jerk passing itself off as expertise.

But my new boyfriend didn't stop there.   The political fallout will be interesting to watch and harder to connect conclusively to the interview but there is no avoiding the implications of what's  been exposed.    CNBC and the economic class they represent have obviously been very critical of Obama.  They've whined about a war on capital, class warfare, socialism, and on and on.  But last night made it more difficult to make the case that the top earners in this economy are getting victimized here.  Stewart has helped to make it clearer for those of us with less financial acumen just  how skewed the system is in favor of those at the top.   The rewards are disproportionately dispersed and generated by a insider system that most Americans will never have access to so its going to be difficult to create a viable political narrative arguing that the responsibilities for fixing this fuck up should not be primarily borne by those who created and benefited from it.  The country club wing of the GOP has been punked by a comedy show. Get out your checkbooks boys, you deserve  your higher tax rates.

And I have to confess that Im fascinated by the eye candy implications.    This isn't the first time obviously the Daily Show or TV in general has generated viral pub but it is one of the first times that the nexus between YouTube and broadcast has fed on itself to generate a highly anticipated broadcast event.   Daily Show ratings are up 20% since this all hit and I think its clear that the web has driven that increase which reverses the conventional wisdom and creates a template for an interesting model going forward.   These don't have to be competing technologies, they should compliment one another and generate ad revenues that neither would have access to on their own.  We've seen a glimpse of our entertainment future here I think.

This will be why Jon breaks up with me finally but the degree to which he shames news networks is endlessly fascinating to me.   What seemed like uncomfortable awkwardness last night actually has a name.  I believe we used to call it journalism.

Thursday, March 12, 2009

John Stewart totally fucking dismantles Jim Cramer and the entire concept of financial reporting

Im far giddier than I thought I'd be over that.  Im old now and this is exactly when I get sleepy but couple of thoughts.

1.  For the 100,000,000,000 time why oh why  oh why does it take a comedian to get to the truth of something as important as global financial meltdown??

2.  How does CNBC rebound??  This is twice now that they've been completely exposed as facilitators and fucking liars.  You'll recall that post bubble we learned that CNBC regularly booked guests for interviews who would talk up stocks they had major interests in which would surprise surprise then move the market.  This was the genesis of the "full disclosure" comments they make now after interviewing people.

3.  Im interested to see what this does for the cultural nexus between TV and internet.   This is going to be the viral clip of all viral clips  for the next couple of days AND it was highly anticipated as well, in some circles anyway.  The line between the two mediums just  got one helluva lot fuzzier.

Sometimes a man gets too hungry to clean his hands properly.

Gawd I loved these commercials.   In fact their aspirational ad magic even made me drink their beer for a time before Pa-pa Budweiser set me straight.  

Wednesday, March 11, 2009

Emails Im not getting anymore...

The first couple of weeks or so after Obama took office I got all kinds of emails from conservative friends or friends of friends linking to some whack job blog or barely skimmed article that claimed Obama was either appropriating an already existing Bush policy or only reaping the rewards of Bush's fearless leadership.  

Im not getting those emails anymore.

Friday, March 6, 2009

Chris Jones doesn't know what he's talking about.

Tribune theatre critic Chris Jones makes the point in the Trib today that companies facing hard times in this economy should NOT cut back on production but rather ignore bleeding ledgers and continue to produce.  Plucky idea but about as feasible as alchemy.

Jones suggests that local theatres in trouble follow the example of Hollywood, which is currently booming, and continue to mount shows but charge less for them.   Okay.... any number of simple errors of logic here.  First of all the movie bidness is predicated on volume of ticket sales which creates economies of scale in distribution that no theatre on earth can match.  The number of asses a theatre can put in seats  is severely limited as is the number of times a show can be performed in a given run whereas movie googleplexes spread all across the country have huge  capacity  for asses and can have multiple showings in a day without increasing their overhead exponentially .    It goes without saying obviously  this isn't a model theatre can compete with no matter how  cheap a ticket gets.

Which gets to Jones' next error of cognition.  At current rates ticket sales do not cover theatre operating expenses.  Surely the man knows  this.  Somehow though Jones thinks lowering those prices would cover that margin or help retire current debt?   Think of it like this:

Lets say you  own a small business that is in the red because your per unit pricing loses you money.  Your sales don't cover your production costs.  Would it then make sense to lower your prices and hope volume covers your margin??   Only if you could substantially lower your costs which theatres are not well positioned to do.  They can't rip up Equity contracts or skip out on royalty fees or substantially lower their rent in most cases.  Fixed overhead is pretty much exactly that.  One begins to see why the man writes for a living instead of producing theatre.

I know this aint so cheery but  the fact is that non-profit theatre is aptly named and is not meant to be, nor in fact able to be as fiscally nimble as businesses are.   You can cut ticket prices to the bone and beyond but if  grants and other outside funding sources dry up as they have in an environment that has seen the Dow lose almost 50% of its value in 3 months then things aint good. You live by  the grant and you die by the grant.  Debting your way out of debt really only works if you have the keys  to  the Treasury Dept.   

Fact is not everyone is going to make it and there  isn't a lot that can prevent that from happening.  

Wednesday, March 4, 2009

The prophet damns your Prius to hell

More silly god people.....

What lack of common sense gun laws cost Chicago.

This study from the U of Chicago puts a pretty steep tag on gun violence in Chicago.  Their calculations suggest that in the aggregate the bill comes to $2.5 billion or $2,500 per households annually.

But don't jump to conclusions.  This isn't necessarily an anti gun screed.  In context  I like guns and just in case you're an officer of ATF or the Chicago Police Dept.  Im going to exercise my 5th Amendment rights as to whether or not I own any guns without proper documentation. 

Reality is this.  If Im out in the sticks of southwestern Missouri or central Oklahoma it is not at all uncommon to hear gunfire during the course of the day and it doesn't have to be deer season necessarily either.  Its not a cause for concern.  Conversely there is no good reason for me to hear a gunshot in Chicago. None.  Even if its a homeowner shooting an intruder, which doesn't happen that often but even so, a gunshot in the city is never a cause for comfort.

So why can't gun laws reflect that obvious reality??  Because of top down 2nd Amendment fanaticism.  The kind of fanaticism that says more guns lead to less gun violence.  Really?  Then why isn't gang membership one of the least violent occupations?   Really??  Why aren't places like Mogadishu paradises free of gun violence??  I think we know why.

When you live in an area where the costs of gun violence is potentially higher then clearly we have a collective interest in controlling gun access accordingly.  Not limiting it outright, but setting a higher standard for ownership for me than someone living in a county with less population than my neighborhood.  Otherwise known as common sense.

Monday, March 2, 2009

Do actors need unions and can they survive? Missive #2

First of all, in response to the several comments sent my way pointing out actors are free NOT to accept union  scale I should say that of course you are correct but I think there is an important distinction to note.  Not accepting scale for a particular job does not necessarily have the effect of increasing your earning potential across the board.  In fact it very rarely correlates in my experience.   Effectively you price yourself out of one contract without enhancing your bargaining power in another.

So, if one can make the argument that collectively bargaining a wage can have the unintended consequence of undercutting negotiating power why do actors join?  In the short term clearly there aren't many options as the unions own a monopoly on labor.  Yes an actor can choose Fi-Core but I have to think that tends to increase the amount of available work only and not the earning power of an actor being offered that work. In fact that work usually pays less precisely because it exists outside the negotiated union structure and enjoys a cost advantage for the producer that would obviously vanish if the unions didn't have established pay  scales.  And just as obviously the appeal to the actor is that the level of competition is much much lower and so the work is relatively easier to book, also an advantage that would disappear absent scale.

Since this isn't meant to be a polemic this would be a good time to acknowledge how successful the unions have been in the last 50 years in changing the producer-actor dynamic.    Much of what is thought of as "business as usual" is due directly to benefits won by the unions at one point or another.   Paradoxically its that same success which they might fall victim to.  

I doubt too many  will join me on this but  I'm strongly  of the opinion that there is no benefit to producers in breaking the union or drastically altering the business model as it exists currently.   Why the hell would I say that?   The lesson I take from the 2000 commercial strike as well as the brinkmanship with the writers and directors since then is that producers want and need collective contracts for cost certainty and efficiency.   Yes they will try to skew contract details to their advantage just as actors will but they are only fiddling in the margins.  If producers actually wanted to break the unions they could do it with very little trouble but it isn't in their interest to do so.  They are well served by the certainty of this structure and have an obvious interest in sustaining it.

If that's the case, and I realize Im out on that limb by my lonesome, but if that is the case then what exactly  is the union bringing to the table?   They've won the war.  Why not disarm?
Health.  Pension.  

In terms of real value this is the entire game and frankly I think it really all boils down to healthcare.  In the last 20 years the entry costs for individual investors has plummeted to the point that its hard to argue that managed pension funds are a necessity or even a particular benefit.   There is no structural reason that actors could not fund their own retirement savings just as any other small business owner can.  So its all about health insurance and as such the unions face two unavoidable doomsday scenarios as I see it.  One or the other will almost certainly come to pass at some point.

The hard truth of rising health costs means  fewer and fewer members will qualify  for coverage in the future and those that do will pay more and get less.  Couple shrinking benefits with rising costs in union dues and its only a matter of time before the rank and file member starts to feel the pinch and legitimately ask whether membership is even worth the dues.   There is no avoiding the reality that the answer to that question will be no.

Perhaps even more troubling is the possible likelihood of government sponsored healthcare.  If at some point the government is able to break the nexus between employment and healthcare either by providing it directly or controlling price points the union will be irrelevant in that respect and lose most of its reason for being.   Ironic because my guess would be that the vast majority of union actors vote for  politicians who claim to favor a greater role for government in health care. Essentially we  are slowly voting the union out of existence.

Sunday, March 1, 2009

Do actors need unions and can they survive? Missive #1

Interesting to think about.  I want to be clear that Im not advocating  either of the broadcast unions should go under but current economics combined with advancing technology and clouds of labor unrest on the horizon make the possibility more real than I think its otherwise been in at least a generation and as such worth considering how exactly one might weather the subsequent storm.  

Generally my politics incline me to be pro-union but Im not  sure it is a model that works in  every instance and actors may not be well served by it ultimately.   To my mind unions work best when the nature of the labor in question makes it difficult for any one individual to create substantially more relative value for himself.   A laborer on an assembly line for instance can only work as fast as the assembly process allows so his earning potential becomes disengaged from his ability, giving the suits a disproportionate advantage in setting wages.   In that case the value of labor is greater than the sum of its parts and collective bargaining enhances the individual's negotiating leverage.

But that aint show biz, or shouldn't be anyway.   From the actor perspective the business is predicated entirely on our unique-ey-ness.  We jump through hoop,  after hoop,  after hoop (usually without being paid for it) to demonstrate to director, producer, ad agency, client, that we are a rare commodity, one in a million,  a precious precious flower.  

Now here comes the contradiction...

After being run through an audition grinder designed to identify our particular loveliness we turn around and forfeit any wage leverage that uniqueness might confer to a collectively bargained wage, which in reality also functions as an earning ceiling.  So my experience, unique abilities, and winning smile have no market value in reality and some other punk actor in the world with less experience, pedestrian abilities, and a phony ass smile commands the same money I  do on a job per job basis.   AND we pay a 10% premium, plus dues, for the privilege of undercutting our real market earning potential.  That doesn't strike me as sustainable, or even particularly necessary.

More to come....