Facebook Isn’t Breaking Any Laws Or Infringing On Its Readers’ Rights

By Sal Bommarito

I’m finding the brouhaha relating to Facebook’s “What’s Trending” a bit perplexing. The job of every news outlet is to present current events, stories and opinions that capture reader interest.

The most vocal crybabies in the growing controversy relating to Facebook are the largest news organizations. Clearly, they resent that anonymous editors at Facebook’s What’s Trending may be impacting the number of views of stories published, or shunned by Facebook’s service.

Facebook has an esoteric algorithm, a formula of sorts, that it uses to determine whether a specific story deserves to be posted on What’s Trending, and the prominence on the site it warrants.

Some journalists and news outlets contend that Facebook’s liberal employees eschew “conservative” perspectives. I’m not aware of any political preference polls of Facebook’s employees, but it’s likely they are biased towards the left because most of them are young and based on the West Coast. And, the company’s CEO occasionally speaks out on liberal issues.

Given that Facebook has 1.6 billion viewers and an enormous daily logon count, its readers are probably influenced to an extent by what stories the company decides to publish on What’s Trending (and their position on the site).

Since the birth of our nation, the press has fought aggressively against any intrusion into its constitutional right to report the news. Journalists, news organizations and their sources are protected. And, editors believe they have a divine right to all the facts relating to every newsworthy story.

There are no restrictions in the Constitution about how large any news outlet can be or how much influence it may foist upon its readers. Yet, Facebook’s prominence is under attack because it has access to so many readers.

The latest arguments are related to the fact that Facebook can make news because its reach is so expansive- something that every news outlet would kill to have. Facebook has garnered nearly 2 billion viewers, many of whom pour their hearts out and provide important data to Facebook in their posts.

The company takes this information and attempts to determine what its viewers want to read and their purchasing preferences, the latter of which they transmit to paying advertisers.

The world knows what Facebook is doing; it’s not a secret. The company uses data that 1.6 billion people freely offer to it. There’s nothing illegal or wrong with this process. It’s not a violation of anyone’s rights. It’s just damn good business.

If the nearly 2 billion viewers become uncomfortable, they could stop providing data to the company. There would be no penalties and all the big brother scare tactics would be moot.

The major problem with Facebook is that it is hesitant to admit to the world that it is such a powerful company. It’s trying not to ruffle the feathers of the other news and social media outlets that are envious of Facebook’s amazing relationship with its community.

The best response for the company would be to own up to its tremendous influence and be totally transparent. Facebook is giving its readers the news they want and the availability of products their postings say they have an interest in. Facebook is not big brother; it just a well-conceived and well-run company with a one of a kind franchise.

And finally, Facebook should admit that its reporting style may biased to a certain extent. All newspaper reporting is slanted to a certain extent by the perspectives of the news staff. Transparency is Facebook’s best defense against those that oppose its power and influence.

Polls Show Neither Presidental Candidate Is Fit To Serve

By Sal Bommarito

Every day, the presidential campaign gets a bit crazier. The choices available to the voters during this cycle include a boisterous, rude self-promoter, a pathological liar and a self-proclaimed socialist. What is a voter to do on Election Day?

It’s mind-boggling that these three people are the best that our political system has to offer. The Republican and Democrat establishments need to be revamped and staffed with recruiters that have some sense about what kind of person is qualified to hold office, especially the Oval Office.

A New York Times article on May 20th clearly delineates the predicament voters find themselves in. It can’t be any more obvious that the two main candidates are not qualified if favorability, values, leadership, trustworthiness and temperament are important person traits for the next leader of the free world.

Here is a summary of the Times poll for Trump and Clinton (Sanders no longer can win the Democrat primary):

 

Character Traits      Trump                Clinton

 

Favorability               26%                   31%

Values                          31%                   37%

Leadership                  55%                   54%

Trustworthiness       31%                   21%

Temperament           27%                   48%

 

Why are we settling for a future president who doesn’t have the right stuff to be our next leader? I’ve heard about all the anger brewing among the electorate. Some people are so pissed off that they are threatening violence. Can you imagine that? The greatest country in the world isn’t capable of a transition of power without disorder.

As I read about the most radical elements in each party expressing disenfranchisement, I scratch my head. Every person, rich or poor, in this country gets one vote. It makes no difference how much money a voter contributes to a candidate. The one person, one vote rule doesn’t change.

The contentious primaries are reminiscent of darker days. Revolutions in America, France, Russia and China along with the rise of fascism in Germany come to mind and are noteworthy. In those political struggles millions of people died because citizens wanted a different type of government. The ones that ultimately settled on a democracy at the time have had the most success by any measure.

What disturbs me the most is that the leaders of each party are the ones inciting violence. Ignorant and inexperienced rebel rousers believe that hand-to-hand combat and a hostile attitude will somehow create a better government. To them, marching, disrupting and attacking opponents is “cool.” The last time this type of protest was cool, and justified, was when the U.S. was fighting an immoral war in Vietnam and African Americans demanded liberty. Now, we have Occupy This and Occupy That, anarchists that disparage our legal and political system and our way of life.

Before one complains about how tough life is in America, he or she should consider what it’s like to be in Africa, or at refugee camp in the Middle East. We have a great thing happening here in America. Why tear it down?

Back to the election. I guarantee that violence would not be prevalent today if we had credible candidates. Our political system needs to do a better job vetting candidates at all levels of government.

I’m afraid that the general election is going to be an embarrassment fraught with name-calling and lies, and the ultimate victor may seriously damage our country’s reputation for decades.

Good luck picking a candidate on Election Day.

Trump: A Few Lingering Questions

By Sal Bommarito

Dear Mr. Trump,

Congratulations are in order. You’ve defied the odds, the talking heads and the blathering political gurus by winning the Republican nomination for president, barring an earth shattering event between now and the Republican Convention. Frankly, I was a naysayer about your candidacy and thought you’re aspirations were a hoax.

There are a plethora of questions that are floating around that maybe you can clear up. Here are a few of them.

Did you really want to become president at the outset of the campaign, or was it really a publicity stunt? If it was a stunt, when did you decide to go all in?

Is the nomination worth all the hassles you’ve had to contend with regarding your finances, business ethics, relations with the opposite sex, etc.?

Why would you, at the ripe old age of 69, be willing to give up all the freedom associated with being a kingpin in the real estate industry, prince of reality TV and a super stud? Keep in mind you will have to give up much if you win in November.

And finally, do you trust those who would take control of your business empire (supposedly worth $10 billion) while you are busy managing the free world?

Being president is a totally new adventure for anyone, much less a person like you, that has no experience dealing with Congress, global megalomaniacs and a media that will surely drive you nuts during the next four to eight years. By the way, you will be in your upper seventies when your time in office ends, and probably much worse for the wear.

I’ve been wondering what your first speech to the United Nations General Assembly will concern. Will it be about global warming, or terrorism, or income inequality? Will you laud the power and success of America? Or, will you take it down a notch and try to endear yourself to the people of Mongolia, Paraguay, Yemen and Montenegro?

It’ll be different discussing important issues with Arabs regarding ISIS, oil prices and human rights than with your fellow real estate magnates. For one thing, the latter don’t possess nuclear weapons.

And what about Russia and its pugnacious leader, Vladimir Putin? Your predecessors attempted to befriend Vlad, but he wouldn’t have any part of it. He still dreams of the Soviet glory days when his country actually competed with the U.S. But, he certainly has been a nudge in recent years, annexing Crimea and jumping into the Syria/Iran/Iraq/U.S./refugee brouhaha. Are you going to tell Vlad to back off?

There’s another international issue that is looming large. If you’re elected president, are you going to immediately dispatch trucks to the Mexican border to pour concrete for the wall? By the way, will you initiate construction without congressional approval a la Obama? How long does it take to build a 2,000-mile barrier capable of stopping illegal immigration? If it’s anything like the 2nd Avenue subway, it could take a while.

One of the most interesting considerations is your potential cabinet appointments and other advisors. In case you haven’t thought of it, running the greatest country in the world is a tad more difficult that managing Trump Inc. You’re gonna need some pretty smart people to help you even with your degree from the University of Pennsylvania.

There’s one real perquisite to being president that should be mentioned aside from flying around in Air Force One. You don’t have to borrow money from banks. Nor will you need to threaten them if you are unhappy with their terms. You can borrow as much as you want at the lowest rate in the world without any covenants. It’ll be a gas. You can just dial up the Secretary of the Treasury and tell him to draw down $10 or $20 billion on a moment’s notice.

But, the more important thing is whom will you hire to help you be an effective leader of the free world. You’ll need one guy who’s a foreign affairs expert. I think Mr. Kissenger would be a great choice. He would give you an edge when you try and fail to make peace between Israel and Palestine like every president since WWII. But maybe, Kissenger is a little too long of the tooth.

You’ll need someone to handle cash. You’re an expert in this area, I realize. But remember, you can no longer resort to bankruptcy if times get tough; the U.S. will not go Chapter XI under any circumstances. I would recommend a Wall Street person. These guys know what they’re doing. The only problem is that Congress would never confirm any of them.

You’ll find the job of hiring people a great challenge. You won’t believe it, but some people  may not want to work for you. You’ve pissed off a lot of them during the campaign and your career.

You’ll find being president will also necessitate a few attitude adjustments. The president represents all Americans including some that you have disparaged regularly, such as Democrats, women, the Republican establishment, the Bush family, the Cruz family, Mexicans, Muslims and anyone who disagrees with you. A night in the Lincoln bedroom at the White House could work wonders. It did for Bill and Hillary Clinton.

In any case, if you become president, I’ll be rooting for you. But, I’m going to wait and see what Paul Ryan does before I decide whether I’m going to vote for you.

Sincerely,

SB

Facebook’s News Operations Controversy

By Sal Bommarito

Sen. John Thune, Chairman of the Senate Commerce Committee wants Facebook to tell his committee “how it handles news articles in its ‘trending list’ . . .” according to a New York Times piece on Wednesday.

Specifically, Thune wants to know what steps FB is taking to “investigate” claims that its curators excluded articles, or that they “in fact manipulated the content of the trending list.” Some reporters have indicated that FB has “suppress[ed] conservative stories or kept them from trending.”

Let’s first unequivocally stipulate that FB’s news business is protected by the First Amendment of the Constitution, which states that “Congress shall make no law respecting. . . or prohibiting the free exercise thereof, or abridging the freedom of speech, or of the press . . .”

No one is attempting to tell FB how to run its news operations. However, longstanding traditions in the media frown upon press organizations that manipulate readers in their reporting. Over the years, op-ed sections have been the repository for opinion pieces, as opposed to reported stories. Even reporting on TV is divided into pure reporting and commentary. Viewers are informed when opinions are being expressed.

There is also a “big brother” issue that overhangs this debate. Considering that FB has 1.6 billion viewers “who regularly use [it],” the company has extraordinary influence. If it taps this reservoir of followers to project a liberal bias, FB could potentially change public opinion on any subject, such as an election, towards its perspective.

Intrinsically, there is nothing wrong with this so long as the company discloses it to its readers that it is expressing its opinion and not reporting an event.

For years, the New York Times and other large newspapers have struggled with this issue. It’s unreasonable to expect that reporters, much less commentators and columnists, will not inject their personal bias in their work. Yet, those, who respect the tradition that governs good reporting, monitor these situations carefully.

The counter point to all this is that FB is not accountable to any governmental agency. Rather it is protected from them. Of course, this would not shield FB from outright lies or slander.

For its own sake, FB should be fair and transparent about its news operations and specifically indicate when stories or tactics are based upon the opinions of FB employees.

Sumner Redstone’s Dementia

By Sal Bommarito

A contentious battle for control of Sumner Redstone’s $42 billion media empire has been percolating for some time. The travails of his family should be a warning to all wealthy and prominent individuals regarding the transfer of power, money and businesses at the end of their lives.

Mr. Redstone is the 92 year-old founder of National Amusements whose mental competency is being challenged, from two perspectives. The immediate issue is that he recently signed papers that dismissed his long-time lover, companion and caregiver. For years, Manuela Herzer exercised significant influence over Redstone’s personal and medical decisions.

Redstone’s “ostracized” daughter, Shari Redstone, challenged the authority of Ms. Herzer. The latter claimed that Mr. Redstone was not competent to change his existing relationship with her.

Additionally, Redstone’s estate papers were amended. They formerly bequeathed one of Redstone’s mansions and millions of dollars to Herzer. No longer will Herzer receive anything from Redstone as a judge ruled in favor of Shari Redstone. Already, Herzer has received millions of dollars of benefits from her former benefactor. In response to the judge’s decision, Herzer has filed a $100 million suit against all those who opposed her.

From a corporate perspective, new legal jockeying is surely down the road. Viacom and CBS are two of National Amusement’s largest assets; both are publicly traded. Recently, Mr. Redstone was forced out of current management even while he continues to be the controlling shareholder in both companies. Last year, Redstone received $2 million of compensation, down from $13 million in 2014.

Redstone’s mental capacity has been in question for some time. As part of the aforementioned legal actions involving his caregiver, Redstone was interviewed and deemed to be suffering from dementia. The tape of his interview for the trial was critical to the judge’s decision to rule in favor of Shari Redstone, and it could be critical in a growing effort to take away all managerial control of Viacom and CBS from Mr. Redstone.

What’s interesting about this situation is that it depicts the problems for many people when a loved one or family member’s mental capacity declines. Decisions made by the people in their twilight years are subject to challenge by relatives and business colleagues. Unscrupulous opportunists often try to take advantage of a person’s ability to make sound decisions.

When money, even minuscule amounts compared to Redstone’s fortunes, is involved, comity in families can be disrupted and pit one child against another, and one business colleague against another.

The morale of the Redstone’s imbroglio is that the potential disruptions that can occur when a prominent person experiences dementia, and subsequently dies, should be considered long before these events occur.

Obama’s Failed Middle East Strategy

By Sal Bommarito

The New York Times interviewed President Obama last Sunday in the Magazine Section. In it, President Obama attempted to salvage his disastrous Middle East legacy.

From his first days in office, the president planned to change America to reflect with his own worldview. He said the America was responsible for the sad state of foreign affairs around the world attributing no responsibility to those who hate America.

Obama believes that U.S. policies in the Middle East, and in particular the historic support of the State of Israel, is causing great consternation among Arab nations. Peace in the region, in Obama’s opinion, will never be a reality unless the U.S. ceases to dote over Israel and speak out against its policies relating to the Palestinian state.

Obama explicitly indicated he wanted America to be more evenhanded and to afford Palestinians more say in future peace negotiations. The problem with this new policy was that every president since the end of World War II unconditionally supported the interests of Israel.

The proof is in the pudding. Obama’s attempts to bring parity to Israel/Palestinian negotiations only served to alienate Israel, our most important ally in the region. And, the region is even more destabilized after eight years of fruitless bargaining by Hillary Clinton and John Kerry with interested Arab parties.

As everyone knows, Obama decided to bring  American troops home to make good on a campaign promise regardless of the consequences of doing so. In retrospect, this was a terrible decision. Understandably, Americans wanted to end U.S. troop casualties. But, announcing publicly our plans to withdraw at a critical moment created havoc and a void that was ultimately filled by a new radical child of Al Qaeda known as ISIS.

Now, slowly but surely, Obama has sent our soldiers back into the firestorm , supposedly these troops are not in direct combat situations. Obama has increased the number of soldiers to about 4,000 without giving our military a green light to aggressively attack ISIS. Just recently, the third U.S. serviceman was killed in combat by ISIS since last Fall. It almost seems like the Obama administration is stalling and trying to pass the baton to a new president without making any tough decisions. In the meantime, our greatest firepower is not being deployed while ISIS continues its murderous reign of terror.

Obama and many Americans believe that collateral damage trumps all other considerations when it comes to the use of deadly force in military conflicts. The U.S. does not bomb if there is a credible risk that civilians will be killed in the crossfire, despite the fact that it is difficult to distinguish innocents from the enemy.

Knowing this, the enemy embeds itself among civilians and are protected against our weaponry. The result has been that ISIS is still a strong and effective occupier of Iraq and Syria, and its influence is spreading around the world.

There is a realistic, yet problematic, solution to this dilemma. It is to send ground troops to root out the enemy. This strategy has been a non-starter for Obama and Congress because it puts our soldiers in harm’s way. And, Obama is insistent on Arab nations fighting their own wars. However, many military experts believe that ground force will be necessary to eliminate ISIS.

The truth be known, the U.S. is the most adamant of all countries relating to collateral damage. The enemy, and every country in the Middle East, is prepared to use deadly force even if it impacts civilians. Additionally, newcomers to the region, including Russia, have the same attitude about avoiding civilian casualties.

The hypocrisy of this policy is too great to ignore. The U.S. fought two world wars in the 20th Century during which bombing was employed extensively. It enabled us to to win both conflicts, but we killed thousands of innocent in the process.

The most glaring examples are the nuclear bombs used against Japan in WWII. Many Japanese civilians were incinerated in the interest of decreasing American casualties and ending the war quickly.

The war with ISIS is not progressing towards any reasonable conclusion because the U.S. is not leading the charge. Moreover, every country in the western world is on perpetual high alert frightened that ISIS may soon attack them.

Obama has been dead wrong in every major decision he made in the Middle East. Most importantly, he is too protective of radical Islam. The American people are similarly on edge relating to potential terrorist attacks. Some call this xenophobia and racism. Others think it makes sense to be more thoughtful about who we allow into our country.

We need a stronger and more decisive president to end the threat of ISIS.

 

Trump or Hillary, Ugh

By Sal Bommarito

I admit it. I never thought Donald Trump would win the Republican nomination for president. I was wrong and now must pay up on lost wagers.

Actually, this is the third worst political thing that could happen. The second worst is Trump wins the general election. And, of course the worst is Hillary defeats Trump. I guess this leaves me in lurch.

What the hell am I going to do when I enter the voting booth in November? I really don’t know. Trump is without a doubt the most ill suited individual ever to win a presidential nomination. How could Americans vote for him in the primaries? He brings nothing to the table but a lot of bluster. I’ve written on numerous occasions that the man is not well read about the economy or foreign affairs. Really, have you heard him say anything substantive about these important areas other than he’s going to make America great and the Chinese and Mexicans are cheating us in business?

In foreign affairs, I haven’t heard Trump discuss how he is going to defeat ISIS. The only thing he repeats over and over is that he’s going to bomb the hell out of the terrorists. What about Israel? What about the Sunni/Shiite eternal conflict? What about the refugees? What about the spread of radical Islam? Nothing. No information.

Hillary Clinton represents an even greater threat to America. Bernie Sanders has accomplished many things during his amazing campaign as a socialist. The most important one is that he has forced Hillary to move even further left. At this time in the election cycle, the candidates are usually starting to move towards middle ground on the controversial issues. Bill Clinton was the grand master of acting like a flaming liberal during the primaries and then pivoting to accommodate moderate voters during the general election.

Hillary is not going to be able to do this, if she wants any peace during her first term and to be elected a second time. Her hawkish attitude towards terrorists will be tempered along with her moderate stance on economic issues. Before long, she’s going to offer every college student free tuition to public universities just like Sanders. And what kind of person is she going to nominate to fill the open Supreme Court seat? Not Obama’s guy. No, she’s going to pick a real lefty who’ll make the Republican senators go insane.

The current betting is that Hillary will win in November. To reiterate, the victory of either candidate makes me cringe. Most polls have Trump behind. What do you think Trump is going to do to change public opinion? I think we need to prepare for the dirtiest mudslinging election in history. Trump is going to do exactly what he successfully did during the Republican primaries. He’s going to viciously attack Clinton. He’s going to subject all of us to a review of her husband’s dalliances and underhanded politics. He’s going to ram down our throats all of the missteps Hillary has made over the years, from her killing in cattle futures to Benghazi to illegal emails to her predilection to lie and distort the facts about her life and her opponents’ lives.

How will Hillary respond? My guess, if Trump talks about Bill’s exploits in the office next to the Oval Office and related adventures, she’s going to discuss Trump’s marital affairs and abuse of the opposite sex. And, even more interesting, we’re going to hear a lot about Trump’s business ethics, or lack thereof. You gotta believe there are people standing in line ready to tell sordid stories about the Donald’s exploits during his business career.

Generally, this stuff makes for good entertainment. The problem is that we’re trying to elect a president. You may think this is a joke, but what are other world leaders going to do in response to what they hear. I can’t even imagine.

We’re all in the same boat. It’s our country, and we want to be happy and prosperous. I’m very concerned that the opportunity to achieve these things will be greatly and negatively impacted by the two candidates for president.

 

 

 

Puerto Rico And Other Municipalities Are “Too Important To Fail”

By Sal Bommarito

Too big to fail is now being applied to more than struggling financial institutions, but the new moniker should be “too important to fail.” Consider the bailout of Detroit and the impending financial disaster in Puerto Rico, both municipalities.

The key aspect of any bailout involving a municipality is the renegotiation of debt that is always the most important element of the process. Without getting too technical, this means that existing debt holders agree to forgive a significant percent of their loans. Since municipalities have no equity, the debt holders receive nothing in kind from the debtor.

This is in contrast to corporations like AIG and General Motors where creditors could exchange some portion of their debt for equity ownership in the companies. The federal government received warrants to buy GM stock at a low price for the loans it made to bailout these entities.

Municipalities are much more complicated to reorganize than corporations. One reason is that they cannot cease to exist or liquidate to repay their debt. Puerto Rico borrowed $70 billion and is on the verge of defaulting on several outstanding obligations. The U.S. government is intimately involved in the current negotiations, although there is little agreement within Congress and with the Obama administration about a solution for the Commonwealth.

Creditors may ultimately forgive part of their loans, but only if Puerto Rico agrees to take certain actions that will make it financially more secure and able to service the residual debt. Complicating the process is the fact that there are many different categories of creditors, some of which are guaranteed by the Puerto Rican government, some of which are secured by specific sources of income (such as taxes) and some that are unsupported by anything other than the general credit of the island.

Creditors will be looking for concessions that will increase the free cash flow of the government. The greatest areas of relief will be derived from decreasing services provided to the citizens of Puerto Rico including basic things like energy, water, police, fire departments, etc. Decreasing payments to municipal pension funds would be another major source of cash.

The people on the island are protesting vehemently. They say decreasing basic services is unfair, and they are dependent upon their pensions for their retirement. At some point, the federal government will likely step in to defray some of these cuts in services and pensions, thereby transferring some percent of Puerto Rico’s financial responsibilities to the American taxpayers.

Puerto Rico’s dilemma is more problematic because the government sponsored Government Development Bank is the repository of billions of dollars of Puerto Rican investments by island residents. The likely default by the Bank will have serious repercussions for one million families. The government does not guarantee the Bank’s obligations, so when it defaults, many investors will lose money.

Much of the Bank’s debt is held by Puerto Ricans through credit unions. Local investors have invested billions in these credit unions, which in turn have financed municipal securities.

The point that needs to be made from all this is that there are hundreds of municipalities across the country that will probably encounter serious financial problems in the near future. They will be deemed too important to fail. Millions of people living in these places are dependent upon services provided and the jobs offered by the local government.

This scenario will occur for a number of reasons. Some of the most important ones include:

  • Costly municipal pension agreements negotiated years ago that will never be funded.
  • The migration of undocumented immigrants and the stress they have put on state and local governments for health care, education and jobs.
  • Unwarranted and costly projects for which municipalities have borrowed billions.
  • Out of control health care benefits to municipal workers.

The chickens have come home to roost. Tax receipts have not kept pace with inflationary costs and all the expenses mentioned above. City dwellers have resisted higher taxes and so the deficits in cities and states continue to skyrocket.

More bailouts of municipalities will continue to put financial stress on the economic stability of the U.S. The problem is that the federal government will not allow municipalities to go bankrupt and abandon citizens dependent on their services.