Daily Archives: December 2, 2004

Peggy Noonan on Dan Rather

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In this Opinion Journal piece, Peggy Noonan writes the best and most balanced epilogue on Dan Rather‘s career that I have read to date. Ms. Noonan, who used to write Mr. Rather’s daily radio commentary, has some particularly insightful personal observations about Mr. Rather, including the following:

Dan was a great boss. He was appreciative of good work and sympathetic when it wasn’t good. He was one of the men–Douglas Edwards and Dallas Townsend were two others–to whom I am indebted, for they taught me how to write for the ear, how to write for people who are listening as opposed to reading. He was generous with praise. Someone who did a good job on a story got flowers and a note. Someone in the newsroom once knocked Dan in a magazine profile, saying he was insecure, always sending too many flowers. Dan thought, Really? Life’s tough, you can’t send too many flowers! He was open to ideas, he was democratic and not hierarchical in his management style, and he tried to be fair in his dealings with people in spite of a personal emotionalism that was deep, ever present and not entirely predictable.

For three years, from 1981 through 1984, I wrote his daily radio commentary, a four-minute essay with a one-minute spot that went out to all the CBS affiliates and network-owned stations. It was a great job. We did some good work. Here’s how it got done: When I had been doing the show for a few weeks I could see that my work was not good–uneven, without voice, without a clear point of view. I thought I knew the reason. I had become increasingly a political conservative. Dan, it was obvious to me, was a sort of establishment liberal–not a wild leftist and not an ideologue, but whatever smart liberals thought was more or less what he wound up thinking, and saying. I couldn’t write his views well, because I didn’t buy them and didn’t fully understand them. I couldn’t write my views, because the show had to reflect his thinking. So I went to him and told him my problem. He was great. He said: On any given issue that we discuss, give the liberal point of view fairly and give the conservative point of view fairly, and then we’ll end it with my opinion, because it’s my show. I thought that sounded good.
And it worked. “Dan Rather Reporting” actually got something of a conservative following, not because it was a conservative show–it wasn’t–but because it actually put forward the conservative point of view in what might be called a fair and balanced way.

Read the entire piece.

More on the Wrong Amendment

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Following up on this earlier post, Virginia Postrel disassembles the Wright Amendment in this NY Times piece.
As noted in my earlier post, the Wright Amendment is so clearly obsolescent and contrary to the interests of the public that the controversy over its proposed repeal provides a useful barometer to measure a politician’s true motivations. Be wary of any politician who contends that the Wright Amendment serves a useful public interest. That’s another way of saying that “the supporters of the Wright Amendment contribute more to my campaign war chest than the folks who overpay for airline tickets.”

The Myth of Vioxx

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Dr. Rangel analyzes in posts here and here the dilemma raised by Merck’s decision to pull Vioxx from the market. Definite clear thinking. Check his thougts out.

More on the addictive nature of governmental subsidies

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This post from awhile back explored the phenomena that governmental subsidies – even ones that are the product of good intentions – eventually generate obsolescence.
Following up on that thought, the Washington Post’s Steve Pearlstein makes the point in this op-ed that governmental subsidies in college funding, housing, and health care have caused serious distortions in the market place, starting with college funding:

And one of the big reasons [that college administrators] can [continually raise tuition] is the ever-increasing amount of public money pumped into the system in a losing effort to keep college “affordable.” In effect, these well-intentioned subsidies have the perverse effect of shielding colleges from the kind of market discipline that would have forced them to hold down prices by constantly improving their productivity and efficiency, as happens in just about every other industry.

And how about health care?:

In health care, the big culprit is the tax deduction for employer-paid health insurance, which has hard-wired into the American psyche the expectation that companies should pay for their employees’ health insurance. . . Unfortunately, the unintended effect of this $112 billion-a-year tax deduction is to make insured consumers largely indifferent to how much health care they consume or what it costs. And in the face of such indifference, doctors and hospitals and drug companies have done what any profit-maximizing industry would do: push prices and utilization up 7 to 10 percent each year until so many people are priced out of the market that government is forced to pump in even more money, spurring a whole new round of spending increases.

Finally, the home ownership subsidy:

And then there is homeownership, which has somehow become synonymous with “the American dream.” The mortgage interest deduction already costs the Treasury $62.6 billion a year, supplemented by billions more in implicit subsidy provided via Fannie Mae, Freddie Mac and the regional Home Loan Banks. To a large degree, however, this money has rewarded those already with homes while making it harder for everyone else to afford one.
The home mortgage deduction is no different than a monthly rebate. Over time, its effect is to boost the price of the house until it incorporates most of the subsidy. And the more the house appreciates, the bigger the tax deduction, creating a dynamic of ever-increasing house prices.

Read the entire piece. All of which re-emphasizes that government subsidies are strong medicine with serious side effects. As such, they should be deployed infrequently and with great care.

Beating Icahn at his own game

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This NY Times article reports on an interesting twist to the current takeover battle involving Mylan Laboratories‘ bid for the generic drug maker, King Pharmaceuticals and legendary takeover expert Carl C. Icahn‘s typical strategy to extract some ransom from Mylan’s takeover bid. Mr. Icahn owns about 10% of Mylan and, of course, opposes the bid for King.
Turns out that a New York-based hedge fund called the Perry Corporation owns seven million shares of King and is attempting to profit from the spread between the price Mylan offered for King shares ($16.49) and King’s actual share price (closed yesterday at $12.42). If Mylan’s bid is successful, then Perry would make a cool $28 million on the deal.
However, in making its play, Perry appears to have set up an elaborate swap trade with Bear Stearns and Goldman Sachs so that Perry now controls about 10 percent of Mylan‘s votes with limited or no exposure to fluctuations in Mylan’s share price. Perry appears to have accomplished this by buying 26.6 million shares of Mylan while having Bear Stearns and Goldman Sachs “short“ the same number of shares. The result of the transaction is that it removes any risk of price fluctuations for either side.
The move leaves Perry as the largest, albeit indirect, shareholder of Mylan and most likely means that Mylan will receive enough shareholder votes to approve the deal for King. As a high school football coach once told me while describing the reaction of his booster club to a failed trick play, “that went over like a turn in a punchbowl” with Mr. Icahn, who the Times quotes with self-righteous fury:

“If this is true, in our opinion, this maneuver is rigging an election, plain and simple, and robbing shareholders of the right to have a meaningful vote – one of the few rights they have left. If hedge funds or any other investors are permitted to dictate the outcome of corporate elections without having economic interest in the companies, then any semblance of corporate democracy we still have in our country would become a travesty.”

Translation of the above quote from Mr. Icahn:

“I sure wish I had thought of that!”