Randomly Noted

GUEST BLOG from Mike Reid, a deputy managing editor of Dow Jones Newswires:

We, the media, have been played.

This Fox-White House feud is too good to be true. We fell for it, swallowing it whole. We delivered the message to all, daily, that Presidents shouldn’t joust with the media, no matter how venomous and relentless the attacks.

What we didn’t realize, and mostly still haven’t yet, is that this isn’t about Fox, nor the White House, nor media independence or criticism. It’s not about the First Amendment, or quashing dissent, or any of that. And it’s not White House clumsiness: in fact, it’s cynical and calculating, and brilliantly so. This is solely about redefining the Republican Party… a strategy which, albeit risky, is James Carville-like in its audacity.

The White House doesn’t like Fox News, they love it. They like the ratings boost it’s getting, they like the shrill hostility of its commentators. For them, the hardcore supporters of Fox commentary are politically unreachable anyway. The more popular the likes of Beck, Hannity and O’Reilly become, the more emboldened they are and the more caustic their tone is. It makes it easy for the White House to portray this sort of commentary as the voice of the Republican Party! The subliminal message to the moderate conservative or the wavering independent is compelling: You may not like us, broader government, bailouts, and bigger deficits, but check out that lot, then make a decision. It’s no longer the party of Lincoln, it’s the party of Beck. (Note: Fox is owned by News Corp, which also owns Dow Jones Newswires).

If Fox gets better ratings, who loses exactly? Fox doesn’t, nor the White House. Michael Steele does, John McCain, Lindsay Graham, Olympia Snowe all do. Moderate Republicans lose hugely. The message of the party is redefined. Republicanism isn’t a mantra of small government, low taxes, defense and fiscal restraint… it’s that the Federal Government’s coming to kill grandma!

It’s a cunning, cynical strategy, but a brilliant one. And it’s crowning glory? Get the mainstream media to deliver the White House message, amplifying it daily. Pundit after pundit, commentators, editors, reporters, all united in an unwitting chorus of the White House’s own propaganda: The words “Fox” and “Republican,” “extreme” and “biased”, “the GOP” and “crazy” repeated constantly, tempting people to go look for themselves.

How did they achieve this? Everyone in authority knows a journalist’s worst fear is being cut off, alienated, denied access. Good reporters scoff that they can be equally effective without access to officialdom, but they know it makes life much tougher. Threaten one media outlet and the rest will circle the wagons. So the collective groan of disapproval from the mainstream media has played perfectly into the White House strategy.

The media’s universal reaction has been that the strategy is clumsy and ill-considered. Maybe it’s the media’s reaction which is. We were too gullible: In bemoaning attempts at media manipulation, we just got manipulated!

Jeremy J. Siegel, a highly regarded finance professor at University of Pennsylvania’s Wharton School, takes issue with those who blame the efficient market theory for creating the financial crisis that nearly felled Wall Street last year. The theory, which states that the prices of securities reflect known information that impacts value, has been under attack by some who say it led to lax regulation, asset bubbles etc.

Siegel, in an op-ed piece in today’s Wall Street Journal, argues that the theory doesn’t claim that market prices are always right. But there’s another line in his well crafted argument in defense of efficient market theory, that resonates with someone who has been following Wall Street for awhile – would the credit and financial crisis have occurred if Wall Street was still dominated by the partnership structure?

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If the hedge fund adviser registration bill that sailed Tuesday through the House Financial Services Committee becomes law, it had better come with a budget supplement for the Securities and Exchange Commission.

If it does not, there might be a lot less present than meets in the eye in the bill to force hedge fund advisers along with those working for private equity firms and other private pools of capital to register with the SEC.

The committee approved the measure by a vote of 67 to 1.

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With Ford the sole (relatively) healthy U.S. auto maker, this week’s newsflow is very instructive: The big events include the likely sale of its Volvo unit to China’s Geely, and Ford’s efforts to get UAW locals to approve measures that would reduce its labor costs. Both news events are key to Ford’s survival. Bidding a final adieu to Volvo, should the Geely deal stick, would conclude an odd period in Ford’s history. Ford bought Volvo in 1999 for $6.4 billion;  as WSJ colleague Norihiko Shirouzu writes, after racking up Volvo-related losses Ford finally decided last year to ditchi t. Ford never should have bought another brand – it needed to improve its own vehicles, which it has finally done. The UAW situation speaks to Ford’s disadvantage relative to rivals Chrysler and General Motors; the latter are in worse financial shape but enjoy lower labor costs thanks to deep UAW concessions made in the heat of the crisis that sent the firms into Chapter 11 bankruptcy protection. As I and others have written, Ford is at a competitive disadvantage by virtue of being the only one of the Detroit 3 to have skirted the need for a federal bailout and bankruptcy protection. It would behoove the UAW locals to get with the program and let Ford function at cost levels that are within hailing distance of Chrysler and GM’s.

The New York Yankees and Philadelphia Phillies square off tonight in Game 1 of the 2009 World Series. Past performance does not indicate future results, but on the basis of past performance, it’s no contest. The Yankees won more games (103 to 93), scored more runs (915 to 820) and had a higher run differential (162 to 111). The Yankees have far more league championships (40 to seven) and World Series titles (26 to two). The Yankees have the highest all-time winning percentage (.568), and the Phillies have the most losses of any team in North American professional sports (10,167). According to Forbes, at the start of the season the Yankees franchise was worth more than three times as much as the Phillies ($1.5 billion to $496 million).

In one area, though, the Phillies’ success has to make the Yankees envious: game attendance.

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