Arizona's Own Espresso Pundit

The Collapse Quickens

Newspaper industry revenue continues to decline sharply.

The newspaper industry has experienced the worst drop in advertising revenue in more than 50 years.

According to new data released by the Newspaper Association of America, total print advertising revenue in 2007 plunged 9.4% to $42 billion compared to 2006 -- the most severe percent decline since the association started measuring advertising expenditures in 1950.

The drop-off points to an economic slowdown on top of the secular challenges faced by the industry. The second worst decline in advertising revenue occurred in 2001 when it fell 9.0%.

Total advertising revenue in 2007 -- including online revenue -- decreased 7.9% to $45.3 billion compared to the prior year.

There are signs that online revenue is beginning to slow as well. Internet ad revenue in 2007 grew 18.8% to $3.2 billion compared to 2006. In 2006, online ad revenue had soared 31.4% to $2.6 billion. In 2005, it jumped 31.4% to $2 billion.

As newspaper Web sites generate more advertising revenue, the growth rate naturally slows.

The NAA reported that online revenue now represents 7.5% of total newspaper ad revenue in 2007 compared to 5.7% in 2006.

That growth could not stave off the losses in the print however. National print advertising revenue dropped 6.7% to $7 billion last year. Retail slipped 5% to $21 billion. Classified plunged 16.5% to $14.1 billion.

Let the Speculation Begin

Vice President Napolitano?

This brings me to Janet Napolitano, or, Arizona Governor Napolitano to you, and why I’m putting all my chips on her as Senator Obama’s running mate. And never, ever, ever begin to suppose that American presidential politics is not the highest stakes poker game there is. Corporations, individuals and PACs don’t ante up those hundreds of millions on a Tuesday night, nickel-ante game among buds. As to the poker analogy, ain’t no other game on earth more decidedly poker-like than a presidential election contest.

Rough Justice

The fall of Elliot Spitzer has brought the tactics of prosecutors and their media enablers into sharp focus. 

Mr. Spitzer's main offense as a prosecutor is that he violated the basic rules of fairness and due process: Innocent until proven guilty; the right to your day in court. The Spitzer method was to target public companies and officials, leak allegations and out-of-context emails to a compliant press, watch the stock price fall, threaten a corporate indictment (a death sentence), and then move in for a quick settlement kill. There was rarely a trial, fair or unfair, involved.

The cost of prosecutors ignoring the "basic rules of fairness" is even higher when the target is an elected official and his opponents suddenly perceive him a vulnerable.  The classic example is JD Hayworth

For an example of how it works, lets start with this March 2006 Republic article.

The national Democratic Party is shopping for a big name to oppose Rep. J.D. Hayworth in Arizona's 5th Congressional District this fall, suggesting that the six-term Republican is vulnerable in the wake of a Capitol Hill lobbying scandal to which he has been linked.

"Linked" is such a great word.  The word allows the media to claim a connection without actually saying that the elected official is being "investigated" or being "charged."  As Kevin Bacon will tell you, there is no way to claim that you are not "linked" to something. 

The article makes it clear that the Democratic Party recruited Mitchell because of the "linkage" and the subsequent story. 

Hayworth's Chief of Staff was adamant from the beginning that there was no truth to the story.

Eule said Hayworth never has been contacted by investigators, and Eule dismissed the Times story as "totally wrong."

He also had a prediction.

"By the time the election comes around, it will be proved that what Mr. Hayworth said is correct, that he did nothing wrong, that the charges are bogus," Eule said.

Democrats were quick to pounce on Hayworth's vulnerability and their vitriol was unbounded.

This still shot is part of this Mitchell commercial.  I argued at the time that this was a sniper scope and that it was totally inappropriate for Mitchell literally to put Hayworth in the crosshairs.  The local media ignored my story, but it went national and the sniper scope image was on Fox News the following day.

But that was only part of the coverage.  The local TV Stations were all JD, all the time.  Here's a montage of all the local television coverage of the Hayworth/Abramoff "linkage."

Hayworth, of course, lost to Mitchell by about 8,000 votes.  The Republic's Dan Nowicki offered the post mortem.

During the recently completed campaign, Democrat Harry Mitchell relentlessly pummeled incumbent Republican Rep. J.D. Hayworth over his links to corrupt Capitol Hill lobbyist Jack Abramoff .

What about Joe Eule's prediction that "By the time the election comes around, it will be proved that what Mr. Hayworth said is correct, that he did nothing wrong, that the charges are bogus,"

Well, he was half right.  The Justice Department confirmed that Hayworth wasn't the target of an investigation, but it was well after the election.  Here's a copy of the letter that the DOJ sent to Hayworth's attorneys.  Here's the most interesting part. (funny, I can't find any mention of the exoneration in the Republic archives.)

So where does that leave Hayworth?  Out of office and paying off nearly $700,000 in legal bills. 

Hayworth recounts the ordeal here and is accepting contributions to help pay his legal bills. 

Checks can be issued to "The Freedom In Truth Trust," and mailed to:

The FIT Trust
P.O. Box 984
Willows, California 95988

Reporter Robbie Sherwood wrote this rather scathing epilogue of Hayworth's career.  (Sherwood is no longer with the Republic...he now works for Congressman Mitchell.)

In his years as a Valley sportscaster, J.D. Hayworth 's booming catchphrase for a home run was "Vapor!"
Now, that seems like the most apt description for the six-term congressman's once-invulnerable political career.

Hayworth , 48, was swept into office as part of the 1994 "Gingrich Revolution," and with Democratic President Clinton as a target, he quickly established himself as one of the most media-hungry barking dogs of the GOP Caucus.

So that's how the process of political destruction works: whispers of "linkage" and "scrutiny" followed by blaring headlines and endless B Roll,  recruiting of a high-profile opponent, commercials and mailers that refer to the headlines and news clips, an election defeat, exoneration that goes unprinted and unnoticed followed by unemployment and legal bills that the candidate can't possibly pay.

Ain't that America.

I'll leave you with a sentence from Sherwood's epilogue.

Love him or loathe him, Hayworth is a larger-than-life presence who is unlikely to stay out of the spotlight for long.

That F***ing Blows!

Republic Columnist Laurie Roberts has obtained a remarkable series of emails between the Governor's staff and Legislative Democrats during a vote to force Child Protective Services to be more transparent. This one is the most interesting.

From Haener to Campbell, when he remained a Yes vote and the bill passed with Democrat support (6:32 p.m.): “That (inappropriate term) blows. Glad to see the (inappropriate term) caucus is willing to help. Hope that there are no (inappropriate term) changes in senate.”

The blog rules allow me to print a few more letters of the "inappropriate term" than Roberts is allowed to print.  Not only is it a great title for a post, but it would be a good title for a blog.  I'm checking later to see if "thatfuckingblows.com" is available.  I want to snag it before Mike Haener uses it for his own private blog after his stint in state government is over. 

(I just checked and the domain name has already been purchased by the Bob Dylan cover band "that'sfuckingblowingintthewind").

Reporters will rightly focus on the fact that the governor's office claims to support the disclosure bill but appears to be working against it behind the scenes. 

Indeed, the traditional role reversal is remarkable.  I'm taking a media law class at ASU and one of the big topics is open government and transparency.  The class was puzzled that a Democratic Governor has been using the Democratic caucus to oppose legislation that would force government disclosure in a troubled agency whose purpose is to protect children.  I use the occasion to remind them that the Republicans are the party of open government.

However, I think the most outrageous thing about the email is that it demonstrates the disdain that the governor's office holds for legislators--especially those of her own party.

Let me be clear.  Governor, the Democratic Caucus is not your (inappropriate term) play toy.  They are duly elected; they are part of a separate branch of government; they represent a different constituency and they will be here long after you are gone.   Tell your staff to treat them with the deference and respect that they deserve, or send your staff packing.   

Unfortunately, these emails are simply one more example of abusive way in which the Napolitano Administration treats the rest of state government.  She seems to have no concept of the Separation of Powers.

She used an Executive Orders to establish her "Copper Card," and then used $650,000 out of the Health Care Crisis fund to promote it. 

She used extraordinary and extra-legal means to force the name change for Squaw Peak.

She used the line item veto to INCREASE spending.

She use her line item veto to make substantive changes in legislation and was slapped down 5-0 in the State Supreme Court.

She claims that the Constitutional provision that requires her to relinquish power when she is out of state is "antiquated" and doesn't apply to her.

She is bypassing the Legislature by using the rule-making process to provide benefits for domestic partners of state employees.  This latest move clearly flouts legislative intent and unconstitutionally uses a rule to change a statute. 

She has to get this maneuver approved by the GRRC.  Don't be surprised if you see a flurry of emails from her staff to the GRRC members during the vote saying "Vote Yes!"  And if she loses.  "This F***ing Blows!"

Here's the Answer.

Yesterday I showed a snippet of a campaign piece and asked you to identify the candidate.  So who is this fiscal conservative immigration hawk?  "Alex" guessed it:  Pete Hershberger.  Here's a copy of the piece.  (Notice that it's a 2008 campaign piece, but that it's paid for by Hershberger's 2006 account.  I'm sure that has all sorts of matching implications.)    

Dust Up

I drive through a cloud of dust each morning when I take the 101 to work.  This time of year, tractors on the Salt River Pima Indian Reservation spend the day plowing fields that are in the middle of the Metro Phoenix air shed.  I took this picture on the way in this morning.

Dust is a major cause of the Valley's air pollution problem and the County is very aggressive about going after businesses for minor violations.  These costs are ultimately passed on to consumers.   The County and DEQ don't have any jurisdiction on the reservation so they can't do anything about the cloud.

I like clean air as much as the next guy and I think companies should do their part to control dust.  But it's hard to watch the cloud drift from the reservation over east Phoenix and not feel sorry for the companies that are spending millions of dollars to prevent minor infractions. 

Here's an article about the largest fines for last month alone. 

Dust control was the most common air-quality violation in February in Maricopa County, with 45 settlements ranging from $1,464 to $20,326. The three largest settlements in February:

• Pulte Homes Corp. in Scottsdale agreed to pay $160,000 to resolve 44 reported air-quality violations that occurred from 2004 through mid-2007, including failure to obtain an earthmoving permit and failure to cover haul trucks.

• APS-Palo Verde Nuclear Generating Station agreed to pay $79,619.45 to resolve three reported air-quality violations at in Avondale and in Tonopah. The reputed violations included failure to limit particulate-matter emissions less than 10 microns in diameter to less than 54 tons on a 12-month rolling basis.

• J.L. Hardy Construction, based in Salt Lake City, agreed to pay $63,000 to resolve 21 reported air-quality violations at 1703 W. Bethany Home Road in Phoenix.

Who's the Candidate?

During this campaign season, I'm going to post snippets of candidate's literature and see if you can guess who the candidate is.  Here's the first one. 

The Future of Journalism

I had the opportunity to be a guest speaker at an Honors Journalism class at ASU this morning.  The students were great.  They asked great questions and obviously knew their stuff.  I was really impressed. 

Chicken Little Responds

The political community is still buzzing about the dueling press conferences that Governor Napolitano and State Treasurer Dean Martin held concerning the state budget last week.  All state agencies are required to bank with Martin, so he has the latest budget numbers and knows all the key expenditure dates.  Martin has calculated that the state will run out of cash in late April. 

The Governor's response was remarkably personal and proclaimed that Martin sounded like "Chicken Little."  She also claimed that he didn't have good numbers and was merely a "side player."  Martin has responded with humor and sent the Governor an Easter basket that includes Peeps candy and a copy of "Chicken Little."

(Governor, if you are not going to watch it, send it my way, my kids are tired of watching the Ken Burns videos I get from the library.)

Breaking The Code

Last week, the Governor vetoed the latest Legislative attempt to fix the state budget.  Communication between the 9th floor and the legislature has never been good and the Governor isn't exactly on the best terms Appropriations Chairmen Sen. Bob Burns or Rep. Russell Pearce, so negotiations are at an impasse.

I just received the Governor's Weekly Message and I believe that Governor Napolitano is using her weekly blast email in order to secretly communicate with the Chairmen.  Her original message is in black and my decoded translation is in blue. 

Dear Friends,

Bob and Russell.                                                    

Foreclosure rates are high in Arizona and across the country – many Arizonans have family or friends in fear of losing their homes.

State Revenues are in the dumper and you guys can’t balance the budget.

A feeling of powerlessness is common among these homeowners, who may feel there’s nothing they can do if they start to fall behind on their mortgages.

You guys understand that “feeling of powerlessness.”  After all, I’m the only one who can cut the current budget.  All you can do is whine about  bankruptcy.

Help us get the word out: This isn’t the case. If you or someone you know is in this situation, please take a minute to learn about steps that can be taken. 

Yeah, maybe you guys should have a caucus or something.

First and most importantly, people falling behind should call their mortgage lender to talk to them about possible options.

Call your “lender” not your “banker”.  Our banker is that Chicken Little State Treasurer Dean Martin.  He keeps whining that we are going to run out of money.  “The sky is falling; the sky is falling.”  He really pisses me off.

Many borrowers are afraid to call their mortgage lenders when they start falling behind. They shouldn’t be.

Dude, we aren’t even bonding for operating expenses yet.  I mean, a developer friend of mine told me we could get an interest only, adjustable rate, balloon payment loan with no money down and no payments for two years.  How could we go wrong with that?

Calling one’s mortgage lender is probably the most important step a borrower in trouble can take to help avoid losing a home to foreclosure.

Have I mentioned that you should call your lender?  That’s a subliminal message…. “must borrow more money…”  “you are feeling sleepy, buy popcorn, must borrow more money.”  But don’t call Dean Martin, that guy doesn’t know the “real” numbers.  That's because the real numbers are in my sock drawer next to my Jefferson Airplane tapes and the donor list for the Project for Arizona's Future.

I have spoken to all of the major lenders in Arizona, and most of the time, they would rather re-negotiate a mortgage to find a fixed rate that allows a borrower to pay what he or she owes, rather than force a borrower into foreclosure.

Lenders are very happy to hear from me—after all, I want to borrow 2.4 billion dollars and I’m getting really desperate.  But, I don’t call Dean Martin because he’s—you know—a side player.

This way, the mortgage lender continues to be paid, and the homeowner stays in his or her home.

Dang right they get paid… and paid and paid baby.  Pretty soon they own the whole dang state.  The Constitution says we can only borrow $300,000 but the Constitution is a "living" document and if Obama puts me on the Supreme Court, I'll show you how alive that document can be. 

We have seen a high success rate when borrowers take the initiative and call their lenders – so it’s important that those falling behind take this critical step.

Don't call Dean Martin, but if you see him, make sure to tell him that he’s not invited to my birthday party. 

There is some other help available to borrowers falling behind. There are credit counselors at the HOPE NOW program who are available through the hotline at 1-888-995-4673. These credit counselors can talk to homeowners about their situation and their options.

I called and asked for advice and they told me to cut up my credit cards and stop spending money.  Yeah right.

I said that my plan was to have the agencies spend this year’s appropriations as fast as they could and then we would borrow $2.4 billion and do it again next year.  They didn’t like that plan.  Those guys really piss me off.

Of course, people who take these routes will still have to pay their mortgages.

D’oh. 

Well, actually the NEXT Governor will have to pay the mortgages.  It better not be  Dean Martin.  He’s a poopy head.

But they may be able to find help in keeping their mortgage rates affordable, and therefore keeping their homes.

Speaking of homes, have you noticed that home prices in the D.C. area have been falling sharply.  Hmm.

You can always call my office 602-542-1318 for any of this information, or if you have questions or thoughts.

Well, actually, you guys can call with questions, I’m not interested in “thoughts.”  That’s because all you guys ever say is “cut spending.” And “we’re running out of money”.  You sound like that chicken little, sideline player, poopy head Dean Martin.  Have I mentioned that he really pisses me off?

Information on HOPE NOW is available at www.hopenow.com.

Information on MY PLAN is available “Bankruptstate.com”

Also, you can visit my Web site at www.azgovernor.gov for information and news in state government.

Isn’t that a great domain name?  I bought it with personal money so I can keep it forever. 

Yours very truly,

And the Horse you Rode in on. 

Janet Napolitano

Her Royal Highness, Duchess of Arizona Janet Napolitano.  Defender of the Children, Drainer of the Treasury, Giver to the Poor, Protector of the Establishment.