Archive for category Louisiana Business

Employer Mandate? Never Mind

Wall Street Journal editorial on Obamacare implementation…

Obama decides not to enforce the heart of his health-care law.

These columns fought the Affordable Care Act from start to passage, and we’d now like to apologize to our readers. It turns out we weren’t nearly critical enough. The law’s implementation is turning into a fiasco for the ages, and this week’s version is the lawless White House decision to delay the law’s insurance mandate for businesses, though not for individuals.

The employer mandate is central to ObamaCare’s claim of providing universal coverage. Companies with 50 or more “employee equivalents” must pay a $2,000 penalty per full-time employee if they don’t provide government-approved health insurance. The provision was supposed to start in January, and delaying it is like Ford saying its electric car is ready to go, except the electric battery doesn’t work.

But all of a sudden on Tuesday evening Mark Mazur—you know him as the deputy assistant Treasury secretary for tax policy—published a blog post canceling the insurance reporting rules and tax enforcement until 2015 as Washington began to evacuate for the long Independence Day weekend. Enjoy the holiday, mate.

White House fixer Valerie Jarrett tried to contain the fallout with a separate blog post promising that ObamaCare is otherwise “staying the course.” That’s true only if she’s referring to the carelessness and improvisation that have defined the law so far.

Mr. Mazur cited the “complexity of the requirements” as the reason for the delay. He isn’t talking about business confusion and uncertainty, as damaging as those are. This is probably an admission that Treasury’s information technology isn’t ready to process and cross-check paperwork across the 5.7 million businesses in America, especially the pass-through S-corps and partnerships that file under the individual tax code.

This is more than a typical government snafu. It relates directly to the design of the law, which was thoughtlessly written and rammed through Congress with instructions for the bureaucracy to figure it all out.

And, lo, over eight interim final rules, three final rules, 20 requests for comment, 21 proposed rules, one information collection request, two amendments to the interim final rules, six requests for information and one frequently-asked-questions document, the Administration has created an employer-mandate system that, for example, requires business to track and report every full-time employee’s hours of service on a monthly basis.

Meanwhile, the law stipulates that a full-time workweek for the purposes of the mandate is 30 hours, when general business practice is at least 35. The result is that businesses have been scrambling to insulate themselves from higher labor costs by hiring part-time workers, or splitting shifts, or in some industries like fast food even sharing workers. Small firms trying to expand while avoiding the 50-worker trigger have come to be known as 49ers.

The delay will help these and other employers avoid immediately higher costs, which is why the main business lobbies endorsed it. But the decision will continue to dampen overall job creation because businesses know they’ll still be whacked in a year. Businesses don’t hire workers with the intention of sacking them later.

The Administration’s media cheerleaders are nonetheless portraying this as a stroke of political genius to push all the pain past the 2014 elections. But if that’s the goal, it is too clever by half. If Republicans have any sense, they will move immediately to delay the rest of the bill for at least a year too. They should start with the individual mandate to buy insurance or pay a tax.

Individuals are only supposed to be eligible for ObamaCare’s subsidies if their employer doesn’t offer the right benefits. But how will the Treasury know who qualifies in 2014 if they lack the information that businesses are supposed to provide? Citizens must also pay the individual mandate-tax if they decline coverage from their employer. How will the Treasury verify these offers?

Maginnis: Newspaper Rivalry Good for Readers

By Louisiana-based political columnist John Maginnis

When I was growing up in Baton Rouge , after my family moved there from New Orleans just before I was born, the Times-Picayune was thrown in our yard each morning. After school, I would get on my bike to deliver the State-Times, the afternoon counterpart of the then-called Morning Advocate.

Besides the paper route, I’ve never worked for either paper (this is a syndicated column), but like most of their dual readers, their newly engaged business rivalry holds my attention as much as any stories they publish these days.

On May 1, both papers ran front-page banner headlines announcing their big changes: GEORGES BUYS ADVOCATE and T-P ADDING NEWSSTAND TAB 3 DAYS A WEEK.

The great south Louisiana newspaper war is on. This one is unlike those from the early 20th century in big cities, when the struggle was between two established papers rooted in the same market. New publisher John Georges plans to expand on the Baton Rouge Advocate’s recent incursion into New Orleans , while the Picayune prepares to defend its turf with its new tabloid, TP Street , to be published on three of the four days of the week on which it has stopped printing. The Picayune also is making a foray into the capital with its new tabloid BR, while both companies will compete digitally through their websites.

It is an audacious move by Georges to buy a newspaper that one member of the owning Manship family said was not worth what he was offering to pay. Such an assessment by a seller would give the ordinary buyer pause. But Georges is nothing if not confident, optimistic and driven.

He built a family fortune into a much bigger one that supplies grocery and convenience stores and services cigarette and video poker machines. He will say that gambling makes up only a small part of his holdings, but Georges Enterprises, which he founded, is a major player in the state’s video gaming industry.

With those businesses producing enormous cash flow, Georges has estimated his net worth at about $100 million. But men richer than he have lost more than that by trying their hands at newspaper publishing. (Ask Chicago real estate tycoon Sam Zell what owning the Tribune did to his bottom line.)

Georges becomes a publisher after running unsuccessfully for governor in 2007 and for mayor of New Orleans in 2010, making him a Louisiana-style William Randolph Hearst in reverse.

In his brief career as a politician (who’s to say it’s over?), he distinguished himself as one of the more colorful characters of the post-Edwards era. The man would say anything, and on the record. My favorite quip of his came after Bobby Jindal, then running for governor in 2007 as was Georges, delivered his wife’s baby in their Kenner bedroom when there was no time to get her to Woman’s Hospital in Baton Rouge . While others heralded Jindal’s heroics, Georges faulted him for “poor planning.”

In those days, Georges loved talking to political reporters, helpfully telling them how they should write their leads. To succeed as publisher he will need to resist that temptation, mighty as it is.

The daunting challenge facing him is to publish separate editions for two vastly different communities. The two cities have grown somewhat closer since Hurricane Katrina, but the remaining gap can still be as wide and impenetrable as the great swamp that lies between them.

To increase its New Orleans circulation to the point where it can compete for advertising, the new Advocate needs to offer a product that is embraced and not just accepted, while not losing the connection to its hometown readers.

TP Street needs to be more than a day filler if the Picayune is to woo back former subscribers who feel jilted by not having their daily paper on their front steps every morning.

The solution for both, of course, is to beat each other to the best stories and to better capture the cultural vitality of both cities. Doing so will require big long-term investments for both companies, with the dividends to be reaped by better informed and entertained readers. How this all plays out could foreshadow the future of daily journalism across the land. The whole newspaper world is watching. Gentleman, start your presses.

The Mayor of New Orleans Has the Wind at His Back

Mitch Landrieu is presiding over a major economic turnaround.
by Adam Kuschner for National Journal

NEW ORLEANS—Among the many other changes unfurling in this town, its chief executive is another kind of break from the past. Mitch Landrieu is the first white mayor since his father left that office in 1978; to get the job, which he began in 2009, he had to assemble a broad-based, multiracial political coalition. The Landrieus may be a political dynasty in Louisiana (the mayor’s sister, Mary, is a three-term U.S. senator), but these are tough times for political machines in New Orleans, and Mitch has been able to slough off patronage awardees from city posts and contracts, inching closer to a meritocratic administration. He talked with National Journal’s Adam B. Kushner, a New Orleans native, about how the city’s economy is transforming, and how to make it last. Edited excerpts follow.

NJ There’s a sense of optimism I’ve felt in my reporting that I don’t remember from growing up here.

LANDRIEU Anybody who comes to New Orleans right now feels a palpable spirit of energy and hopefulness. They see physical manifestations of that transformation taking place in front of their eyes. You can see the medical complex going up, designed not just to take care of people’s health care needs or train doctors or do research, but also as a fairly aggressive step toward information and economic development. You take the smart thing coming out of the research and turn it into a product; we’re going to take the technology and transform it into a industry sector. The second thing is that we now have a working system of schools. We’ve redesigned the governing mechanism, and consequently you’ve seen the scores—which are what counts—begin to grow exponentially from the inner city. The achievement gap between kids here and in the [rest of the] state is closing rapidly. Graduation rates are now better than the national average, and that’s a structural change.

The people in New Orleans are not just deciding to build the city back the way it was. They’re accepting responsibility to build it the way they always wanted it to be. It’s amazing how many young people we have from around the country who are starting to create stuff.

NJ How do you build a knowledge economy? And how does it serve upwardly mobile New Orleanians who don’t have elite educations?

LANDRIEU Generally, we’ve been a place with a lot of raw material and talent and intellectual capital, and we’ve extracted it and exported it. Think of Wynton Marsalis at Lincoln Center. So if you want to have a knowledge-based economy, you’ve got to create the kind of jobs. GE Capital basically said, “I like what you’re doing down there.” They put 300 jobs downtown. Gameloft [which develops smartphone games] did the same. Pre- and postproduction film work is happening here now. All of a sudden, you’re attracting these industries, and then you’ve got to supply them with workers. Kids are coming to New Orleans and don’t want to live in the suburbs; they want to live downtown, so we have a construction boom, restaurants opening up.

NJ Are the young people who move here staying?

LANDRIEU Yes, they’re becoming citizens and leaders of New Orleans. I have a bunch working in my office right now. They’re moving into government, running for office, starting businesses. And because those jobs are here now, there’s a pathway to prosperity, a pipeline to success, through primary and secondary education, from college and tech schools to [knowledge-economy] jobs. You want to train people so that an older, African-American woman living in [a new, mixed-income development downtown] can walk down the street and have the job as phlebotomist at the new health center. You’ve got to train workers on the low scale, the medium scale, and the high scale. The same thing can be true about high schools and colleges.

NJ Violent crime here is 80 percent worse than the national average. Does that put a ceiling on economic growth?

LANDRIEU You have to know the difference between the crime rate and the murder rate. For the crime rate, we’re number 73 in the nation, meaning that major American cities are much less safe than New Orleans is. But the murder rate is 10 times the national average. Both those things are depressors, which is why we’re spending so much time working on that. Who’s killing, who’s being killed, where they are, and how to change that—it’s a complicated problem that has provided no easy answers for a long time. We hope, as the police department and the school system get better, and culturally we identify where the problems are, we can change it. But there’s no question that it has a negative impact. It should not be a ceiling. It is absolutely possible to change that trajectory. New York City did it; Chicago did it to a certain extent, though they’re having trouble now.

NJ How can you tell whether the gains in the tech and entrepreneur sector are lasting and will take deep root? These haven’t really begun to represent a major share of growth yet.

LANDRIEU When Forbes says we’re the most improved and best for jobs, when The Wall Street Journal says we’re best for business, something’s happening. [New Orleans was the most improved metro on The Journal’s “Best for Business” list last year, up 44 places from 2010. Forbes ranked Louisiana most improved on its “Best States for Business” and gave New Orleans the top spot for “America’s Brain Magnets,” attracting college graduates under 25.] They’re looking at objective data on a sea change of how a place operates. U.S. News & World Report says Tulane is the most popular school. All this stuff has nothing to do with culture and tourism and food. Now, seven years on, they’re beginning to see how change works.

NJ How can the improvements outlast your tenure?

LANDRIEU There’s probably no more important structural change for the future of the city than how the schools work. At some point, the governance of the school system has got to come back to local control [it is now administered by the state]—but not until we have absolute stability. We don’t have that back yet. When it comes back, the new school board must be designed as an oversight board of schools that are run at the site, where the principal has autonomy, where he can fire and hire based on merit, students are accountable, and parents have choices. Those are the kinds of inputs that will close the achievement gap.

This article appeared in the May 4, 2013, edition of National Journal.

Dreher: The case for coming home (to Louisiana)

by Rod Dreher for the Baton Rouge Business Report

In the autumn of 1987, I sat at my computer terminal in The Daily Reveille office in the basement of Hodges Hall on the LSU campus and punched out a bitter op-ed commentary about Louisiana state politics. I can’t be sure, but I think it had to do with then-Gov. Edwin Edwards’ campaign statement that if Louisiana’s best and brightest wanted to leave the state, well, good riddance.

That might be what set the hotheaded undergraduate editorialist I was on fire. But truth to tell, as folks who lived through that dismal era of Louisiana politics can attest, it could have been any number of things. Whatever the catalyst, the point of the incendiary piece was to say goodbye to all that. The cynicism of our politics, the populist scorn for excellence, the economic storm and stress that Louisiana institutions seemed incapable of dealing with, and so on—all these things signaled to my generation of college students that we didn’t have much of a future here at home.

Five years later, after the failed Roemer Revolution, and having had to vote for the Lizard to keep the Wizard from becoming governor, I fulfilled my own Daily Reveille prophecy. I quit my job at The Advocate, loaded up a U-Haul Gentle-Ride van, and lit out for the East Coast, never to return.

Or so I thought. A year and a half ago, I moved with my wife and children from Philadelphia back to St. Francisville, where I was born and raised. Today I don’t have much more faith in Louisiana’s functionality, political or otherwise, than I had nearly 30 years ago. But I have a lot more faith in Louisiana—so much so that I came back home to raise our own children. I did this with open eyes and a changed heart.

Here’s what I see now that I didn’t see back then.

HARD TRUTHS

I left Baton Rouge for a journalism job in Washington, D.C. My roommates were friends from LSU, and my social circle included a number of Southerners. Whenever we would get together at bars or parties, we would usually end up telling stories about back home. As much as we missed the Bayou State, returning home was out of the question. We all had good jobs and good lives in Washington. Besides, Louisiana was a mess, and always would be. “It’s a great place to be from,” I used to say then, “but it’s not such a great place to be.”

As the years went on, I moved up and down the Eastern seaboard, onward and upward with my career. All the while I was corresponding frequently with an email circle of friends. One, a Californian, once said to me, “Did you ever notice that your best writing is about Louisiana? That’s when you really write with flair and passion.”

No, I had not noticed, but I conceded that she was right. Still, I told her, I can never forget the (perhaps apocryphal) words a New Orleans journalist told his newsroom at his farewell party before taking off for a job up North: It was more important to live in a city that valued libraries more than parades. That’s the reality of Louisiana life, I told my friend. Romanticism and sentimentality obscure, but do not nullify, hard truths about the barriers life in Louisiana raises to professional advancement.

Which is what mattered to me more than anything. And why not? There’s nothing wrong at all with wanting to advance in one’s field and better provide for the needs, comforts and prospects of one’s own children. As my family grew, my wife and I moved from New York City to Dallas, and then back east to Philadelphia; my career arc—and my salary—kept rising.

And then it happened.

In early 2010, my younger sister Ruthie Leming, a West Feliciana schoolteacher, went into Our Lady of the Lake Regional Medical Center for exploratory surgery. Surgeons found stage IV lung cancer. Ruthie was 40 years old and had three children. She had never smoked. By the time her cancer was found, it was, barring a miracle, too late.

The news was devastating to all of us who loved her. Ruthie, typically, was a rock of faith, hope and serenity from the beginning. For my part, I was 1,300 miles away, powerless to do anything for my sister, her husband, their children, or my folks.

As it turned out, I wasn’t needed. Ruthie and her husband Mike, a Baton Rouge firefighter, had everything they could have asked for, and more. The West Feliciana community, as well as Mike’s BRFD buddies, rallied to their side from the first day and held firm until Ruthie died at home, 19 months later.

There was nothing Ruthie and her family needed done that wasn’t done—and even some things they didn’t need friends provided anyway. Ruthie had good medical insurance, but the town still threw a fundraising concert and barn dance for her, to show her how much they loved her.

This didn’t just happen. Ruthie had roots, and she tended them carefully. She accepted the limits of her small-town Louisiana life. To be sure, Ruthie did not do a cost-benefit analysis to decide her path. She did what she loved, and what she loved was being at home in Louisiana.

OPPORTUNITY COSTS

Back home for Ruthie’s funeral in the fall of 2011, my wife Julie and I saw an astonishing outpouring of love and affection for my sister and our family. Yes, it was terribly sad, but there was so much hope and light amid the darkness of those days. Ruthie’s friends gathered over beer in her Starhill kitchen, where she had cooked so many late-night meals for them, to talk about the good times. Mike said back then, “We’re leanin’, but we’re leanin’ on each other.”

Losing Ruthie compelled me to think in a new way about my responsibilities to my parents, to Mike and my nieces, and to my own kids. I asked my wife back then what would happen to our family if one of us woke up one morning with terminal cancer?

“We have friends who could help us,” she said. And it was true. But we had not been in Philly long enough to build the kind of deep and extensive relationships that Ruthie had from having spent all her life in one place.

There was more. In my emotional geography, Ruthie was a landmark, a mountain, a river, a fixed point around which I could orient myself. There was no horizon so far that I could not see Ruthie in the distance and know where I was and how to find my way home to Louisiana, no matter where in the world I lived.

Now she was gone, and before long, my mother and father will be gone, too. What would my children know of Louisiana then? Does that matter? Should it matter?

It mattered. Julie and I decided that we wanted to be part of Louisiana life—tailgating at Tiger Stadium, Christmas Eve gumbo at our cousins’ place in Starhill, po-boys at George’s under the Perkins Road overpass, Mardi Gras parades, yes ma’am and yes sir, and all the little things that give life its texture and meaning more than career prestige and a paycheck.

True, by moving to Louisiana our children would have fewer “opportunities,” in the conventional sense. But what were the opportunity costs of staying away? I had believed the American gospel of individual self-fulfillment and accepted uncritically the idea that I should be prepared to move anywhere in the world, chasing my own happiness.

But here’s the thing. When you’re young, nobody tells you about limits. If you live long enough, you see suffering. It comes close to you. It shatters the illusion, so dear to us modern Americans, of self-sufficiency, of autonomy, of control. Look, a wife and mother and schoolteacher, in good health and in the prime of her life, dying from cancer. It doesn’t just happen to other people. It happens to your family. What do you do then?

The insurance company, if you’re lucky enough to have insurance, pays your doctors and pharmacists, but it will not cook for you when you are too sick to cook for yourself and your kids. Nor will it clean your house, pick your kids up from school, or take them shopping when you are too weak to get out of bed. A bureaucrat from the state or the insurance company won’t come sit with you and pray with you and tell you she loves you. It won’t be the government or your insurer who allows you to die in peace—if it comes to that—by assuring you that your spouse and children will not be left behind to face the world alone.

Only your family and your community can do that.

What our culture also doesn’t tell young people is that a way of life that depends on moving from place to place, extracting whatever value you can before moving on again, leaves you spiritually impoverished. True, it is not given to every man and woman to remain in the place where they were born, and an absolute devotion to family and place can be destructive. I do not regret having left Louisiana as a young man. I needed to do that; I had important work to do elsewhere.

But the world looks different from the perspective of middle age. In her last 19 months of life, Ruthie showed me that I now had important work to do back home. Hers was a work of stewardship—of taking care of the land, the family, and the people in the community. By loving them all faithfully and tending them with steadfast care, Ruthie accomplished something countercultural, even revolutionary in our restless age.

You can’t convince somebody by logical arguments why they should love someone or something. You can only show them, and hope the seed of affection falls in the heart’s fertile soil. Through Ruthie’s actions, and through the actions of everyone else in the town who held our family close, and held us up when we couldn’t stand on our own two feet, I was able to see the power of Ruthie’s love, given and returned. And I was able to see my own life in light of this love, and, finally, to feel for the first time in nearly 30 years, a profound affection for this place I had abandoned so long ago.

THE CULTURAL CASE

We moved back to Louisiana and have regretted it not one bit.

It’s not that Louisiana has changed, or changed all that much. It hasn’t. Parades still matter more than libraries here, and college football coaches’ salaries are more important than college professors’ paychecks. The political and economic problems are still with us. So, bless his heart, is Edwin.

Louisiana may not have changed, but I have. Parades—I speak metaphorically—are a lot more important than I used to think. That is, the small things about the life we were all given as south Louisiana natives can’t easily be given a dollar value, or co-opted into an instrumentalist case for rising in the meritocracy. Having the chance to drive over to Breaux Bridge to the zydeco breakfast at Café des Amis, or to have Sunday dinner with the family every weekend, will not get your kids into Harvard, but it just might give them a better chance at having a life filled with grace and joy. Same goes for their parents.

When we told our Philly friends that we were leaving the big city for a tiny south Louisiana river town, we expected that they would be both shocked and amused. That’s not what happened. A startling number of them responded by saying, one way or another, how much they envied us. They wished they had a place like St. Francisville to go back to. Their parents made the decision to leave, and they themselves had been raised in rootless suburbia. This, it turns out, is one reason why they loved listening to my Louisiana stories: because I come from a real place, with particular traditions and a distinct culture.

Truth to tell, I was lucky that I had a good family back home, a beautiful town, and a job that I could do online. Not every Louisiana expat has these things, and that lack may keep them in exile, against their wishes. Nevertheless, many of us may come to realize that the limits we must accept by moving back to Louisiana make possible a richness of experience that we cannot have anywhere else. And it opens opportunities for us to take the good things we learned in exile and put them to work making our state a place that will be easier for our kids, whatever their calling, to choose as their home.

The cultural case for moving home to Louisiana, then, is fundamentally a countercultural one. The small life expats leave behind in search of grandeur in the world beyond Louisiana—a life whose limits are set only by our own desires and capabilities—may contain a profundity, even a greatness, that is hard to see when you judge it by contemporary American standards.

But how much sense do those standards make when judging a life? A Louisiana native who works in Washington politics said to me that folks back home know something about the good life that other people don’t.

“It’s OK to be average there,” he said. “To go to work each day, come home, have a beer, and love your family and friends. One thing that really sucks about D.C. is that everyone here very seriously carries the burden of having to Change the World.”

To be freed from the felt burden of having to Change the World, of having to get ahead, of having to think of your life in terms of achieve, achieve, achieve—it’s an unusual thing. You can be only OK in Louisiana, or maybe even a basket case, and they’ll love you anyway, as long as you can laugh at yourself and at life, and know how to sit on the front porch, so to speak, and pass a good time.

I didn’t know how important all of this was until my sister Ruthie died. I didn’t know that the things about Louisiana that used to hold me back turned out to be the things that held my Starhill family together in their time of great trial. There was a lot I didn’t know as an ambitious LSU journalism undergraduate, and one truth is this: Life is too hard and too short to spend in the office trying to get ahead, while outside in the bright sunshine, the parade passes by.

Kennedy: A Plan B For Income Tax Reform

By Louisiana Treasurer John Kennedy

I appreciate Gov. Jindal’s plan to end Louisiana’s personal and corporate income tax. Our state needs a tax code that looks like somebody designed it on purpose, and the Governor is correct, in my estimation, that the income tax, which taxes work, makes us less competitive.

Though well-intentioned, the Governor’s plan was not going to pass. Nor should it, if for no other reason than it would have raised taxes on businesses by $500 million.

Now that the Governor has withdrawn his plan we need a Plan B. Several plausible ones have been hinted at. Here’s another.

1. Draft the Legislative Fiscal Office, the Legislative Auditor, PAR and CABL to count the beans. They have credibility.

2. Forget about raising the state sales tax rate or taxing services.

3. Concentrate instead on reducing the state income tax by making it and the state sales and excise taxes flatter. Our goal for income, sales and excise taxes should be the lowest possible rate (everyone pays as little as possible) and the broadest possible base (everyone pays something), consistent with the promotion of shared social and economic policies (for example, no one should have to pay sales tax to eat at home).

4. Achieve our goal by objectively analyzing the efficacy of each statutory (not constitutional) exemption, exclusion, credit and rebate our current state tax code gives to people and companies that would be paying income, sales or excise taxes, like everyone else, but aren’t because a law exempts them. Why were they exempted in the first place? Job creation? Fairness? To promote a shared value? If the exemption is achieving its purpose, keep it. Perhaps even double down on it if it is working exceptionally well. But get rid of it if the preference falls short of its purpose. All it takes is a majority vote of the legislature.

5. The state has 19,000 consulting contracts, according to the Legislative Auditor. We don’t need all of them. Eliminate at least 10% by value, and demand a reasonable discount, perhaps 5%, on the rest when the state has superior bargaining strength, which is most of the time.

6. Implement a centralized collection process and automated collections management system to collect the state’s accounts receivable (debts owed the state, such as fines, medical bills and taxes) by passing HB 629 by Rep. Chris Broadwater (R) and Rep. Ted James (D). CGI Technologies and Solutions, Inc. estimates HB 629 will bring in an extra $158 million over 5 years, and likely more.

7. Eliminating exemptions, winnowing down and renegotiating consulting contracts and doing a better job of collecting state debt will save enough money to reduce the state income tax without raising the state sales tax rate or taxing services. The more money we choose to save this way, the more we can reduce the income tax. Enough could be saved to eliminate the income tax, if we want to. This sounds simple, and mathematically it is, but this exercise will require extraordinary political will. The buffet may be large-19,000 contracts; 468 exemptions worth $4.8 billion-but each has a constituency. We’ll find out quickly how serious we are about tax reform.

8. Finally, if Plan B passes, make it effective only if the voters agree. Gov. Roemer and Gov. Foster let people vote on their tax code revisions. So should the proponents of this plan.

Gov. Jindal has called for a fairer, flatter and simpler tax system that creates jobs and encourages growth. This Plan B achieves each one of his goals.

Identity Theft – What the Newhouse Family’s Decision to Cut the Times Picayune Means to Louisianans

I believe that most people publicly identify themselves with their hometown sports team(s) and their hometown newspaper.  It’s personal.

We have often seen this notion with the former – witness the post-Katrina revival of New Orleans right along with the New Orleans Saints’ ascension to a Superbowl Championship.

Newspapers are equally important as identity markers to the residents of the metro areas those papers serve.  In essence, newspapers provide the public identity for their readership.  Therefore, the Newhouse family is not only guilty of wreaking havoc on their employees’ lives with mass layoffs and shutdowns, but also guilty of public identity theft, slowly stealing away the chronicling soul of the city.

So important is that public identity to the New Orleans community that a letter was sent from an organization called the New Orleans Times Picayune Citizens’ Group urging Advance Publications (the Newhouse’s publishing company) to sell the newspaper rather than cut its production.  The group is comprised of more than 70 community organizations and business leaders including such luminaries as Archbishop Gregory Aymond, former New Orleans Saints quarterback Archie Manning, jazz artist Wynton Marsalis, Tulane University President Scott Cowen, Xavier University President Norman Francis, Loyola University President Kevin Wildes, restaurateur Ralph Brennan, and Saints and Hornets owner Tom Benson.  These are serious people; these are busy people; and I doubt they would lend their names to such a fight unless the fight was exceedingly important to them personally, just as though this were their own identity under attack.

As a result, the Newhouse family is witnessing firsthand how businesses often come under attack.  A company can only flourish with a strong business plan, clear goals, an attractive product or service and the endearment of its customers.  I would argue that the Newhouse family’s stealing of their customers’ public identity, or maiming it by cutting it to the bone, are not terms of endearment.

Now before you come at me with an “It’s their business; leave them alone” argument, let me be clear about something – I am a huge supporter of entrepreneurs and the business community.  I generally believe business leaders should be free to run their organizations as they see fit, so long as it’s legal and their customers are satisfied.  Therein lies the rub.  The natives are restless; the customers are anything but satisfied.

In my view the Newhouse family’s version of identity theft, the virtual shuttering of the Picayune, is a critical exception to this generality for three reasons:

1) The New Orleans revival post-Katrina continues to progress and excite, so we need an invested, local voice to articulate those gains on a daily basis.

Tulane President Cowan may have said it best: “In the next several years, the city will host an unprecedented amount of national and international visitors and media, including the NFL Super Bowl, NCAA Women’s Final Four, NBA All-Star game, commemoration of the 10th anniversary of Hurricane Katrina and celebration of the city’s 300th birthday. These events, along with the downtown opening of two new $1 billion-plus hospitals, deserve a more robust approach to news delivery.”

2) The newspaper business is tough these days, but no one forced the Newhouses into New Orleans, and if they cannot make it work, someone else can.

The reasons for shutting down the paper have often been discussed as solely based on business principles, that revenues are down and that print media in the current economic environment is unsustainable.  But if that were really true, then how could the Baton Rouge Advocate agree to move into the market and begin actively interviewing current and former TP reporters and staff?  For starters it’s because the Manship family knows what they’re doing.  At a more macro level, the truth is that print media, at least for those organizations with savvy business leaders, has begun steadying itself even as advertising revenues fall further.

Take a look at this year’s annual news media report – The State of the News Media 2012.  The report is the work of the Pew Research Center’s Project for Excellence in Journalism, a nonpolitical, nonpartisan research institute funded by the Pew Charitable Trusts.  Yes, many of the numbers in the study paint a less than stellar picture of the industry and to be sure, much progress must still be made, but the “lead” for the newspaper portion of the report states the following: “The newspaper industry enters 2012 neither dying nor assured of a stable future. The industry has rallied around a story about itself – that year-by-year it is developing new digital products and new revenue streams to transition from dependence on print advertising.”  In other words the jury is still out on the newspaper industry, and any good business leader knows where there are challenges, there are also opportunities.

The Newhouse family has a long and storied history in the newspaper business, and they must know that basic business theory.  Indeed Britannica states the family “built the second largest publishing empire during the second half of the 20th Century,” and Forbes Magazine in years past has had them ranked as high as 46th among privately-held American companies.  That track record indicates someone over there must know what they are doing, but in the case of the Picayune, it seems to me the Newhouses have chosen to cut and run rather than to focus on their customers by developing new products and revenue streams.

3) People want their newspaper, they want their identity, and they’ll shout from the rooftops until they get it.

Referring back to the Pew Research Center report, one will find a most glaring fact that I believe supports the notion of shared, public identity through a community’s newspaper: from 1980 – 2004, ad revenue rose steadily, but since then, that revenue has fallen precipitously.  Throughout that time, circulation remained relatively stable.  In other words people kept reading.  And people will keep on reading.  They want their hometown newspaper, and they want it every day.  It is too bad the Newhouse family couldn’t find a way to give New Orleans theirs.

——————

Also published on Louisiana Daily and the Hayride.

Tags:

Guaranty Broadcasting Launches Louisiana News Website

My great friend Flynn Foster and his company Guaranty Broadcasting have launched a Louisiana news website called Louisiana Daily.  Check it out here.  The site covers news, business, politics and sports in and around our great state.  Hope yours truly gets to contribute every now and again.

Tags: ,

I’m back (back in the NY groove)

No, not really in the NY groove (homage to KISS), but I am back in the writing groove.  After a long hiatus, I’ll be writing again about DC and Louisiana.  Come back soon to read about the campaign to save the New Orleans Times Picayune.