NY Times: Obama’s Man on the Budget: Just 40 and Going Like 60

friend (10:33:38 PM): we’re in disney and this little girl goes

friend (10:34:14 PM): “today is going to be the best day of my lifee!”

friend (10:34:59 PM): i was like “dont say that… you havent had sex yet”

friend (10:35:15 PM): she was 4

friend (10:35:19 PM): maybe 3

“I often wonder whether we do not rest our hopes too much upon constitutions, upon laws and upon courts. These are false hopes; believe me, these are false hopes. Liberty lies in the hearts of men and women; when it dies there, no constitution, no law, no court can even do much to help it. While it lies there it needs no constitution, no law, no court to save it.” – Judge Learned Hand, May 21, 1944

I saw this quote in my Government Professor’s PowerPoint during class and I think it is somewhat relevant to today. The same thing can be said about the economy; whatever the government does is insignificant if people are not confident that the American economy will survive. If global consumers have confidence, then this recession will quickly disappear.

Obviously gluttonous American spending will get us out of the recession, but it is not sustainable and that is one thing the government needs to rectify once they pump enough money into the economy to get it going.

We all know that the root cause of the current recession was overextending loans. But why did this happen? It happened because Americans are not educated enough to determine the difference between their needs and wants. Some things are just unnecessary! For this, our marginal propensity is greater than 1, meaning that we spend more than we earn. If we do not save, we are not putting our money in banks. Then banks have no money to loan out. No loans=no expansion=constant productivity rates. Because we constantly want higher wages, wages will outstrip productivity, causing horrible inflation. Since inflation is enemy #1, it has to be stopped and it would most likely throw us into another recession. Basically if we can increase savings, we would be able to avoid more major, significant recessions.

The issue at hand is how we do this. I really don’t know but it has to start somewhere, maybe in households or in schools? American children need to learn the value of money at an early age. There is a generation that lacks a work ethic but continues to demand a higher quality of living; the children cannot learn from this horrible example. Sometimes one can hope that this recession gets much worse so people begin to appreciate the value of their hard work for their high quality of living. If we look at workers abroad, they are good examples of appreciating their hard earned cash. America should try to be much more like that.

The big question people are asking about the quickly changing media industry is where are all the newspapers going to go? It has been a huge topic in the news lately. I am not going to cite specific articles on the specific financing issues newspapers are happening because I am writing this article in an airplane and do not have access to the internet. I just got a cup of water and the damn “professional flight attendant” poured too much in the cup. When she handed it to me, it spilled all over the girl sitting next to me. Oops! I do want to specifically look at two of the bigger newspapers and a couple of smaller newspapers.

Let’s start with the Los Angeles Times. The LA Time is currently owned by Tribune Media. Tribune is a company that used to be a publically traded company and then a few years ago, (don’t remember off hand how many, but it’s between about 5 and 7 years) went private. Tribune’s assets include other print publications and the Chicago Cubs. Early this year/last last year (don’t remember) Tribune filed for Title 11 Bankruptcy. This was primarily because there was a decrease in subscriptions to their print publications as people can read most of the newspaper online for free or just don’t have the extra cash today for newspaper subscriptions. Along with the decrease in subscriptions, comes a decrease in advertising, which is the primary source of revenue for Tribune. The New York Times has seen the same decrease in subscriptions and has therefore took out a second mortgage (something to that extent) on their headquarters located in Manhattan. These two “larger” newspapers will probably be able to fare through the recession because they are large and have more resources than smaller, more locally distributed newspapers.

Smaller newspapers have primarily resorted to one of two things: stop publication completely or go completely online. The first is something that has happened to the New York Sun and other newspapers across the country. The second is something that we have not seen much, but will be a major trend in the future.

Obviously the issue at hand is revenue; how can the newspaper industry remain solvent. Mark Cuban suggested that the cable companies charge a little extra to receive a daily news subscription. Obviously, this will not work in the long run, as there is a clear trend in people receiving their media via the web. The industry wants to keep their current subscribers, while finding new means of revenue. As for keeping their current subscribers, I will let the newspapers figure that one out. I strongly believe that if there is no physical newspaper, the advertising dollars have to go somewhere and that somewhere is the internet. In order to keep the revenue, newspapers will need to perfect the internet advertising model, beating Google in doing so.

Newspapers will have to figure out how to use direct advertising, very similar to Facebook. The New York Times, is currently available free online as long as you make an account with them. If I remember correctly, all I had to do was fill in my name and email address. What they really have to do is ask a few personal and interests questions. This information will not be shared, but will only be used for advertising purposes. (Maybe in the future, web browsers will be able to fill out these types of forms, so you only have to fill them out once. I know there are currently autofill functions, but they are not sufficient). The media companies will be able to charge more for online advertising if the desired target market is the consumer bombard with ads. With the extra information, this would be completely feasible and the newspaper industry’s revenue will be saved. Of course eventually the next generation will not want physical newspapers at all so those will cease completely. Not only is it environmentally friendly, but it will make the newspapers more navigationally friendly for a busy, fast paced, high tech generation.