In 1985 Lansana Conte declared himself President of Guinea after leading a military coup.  The constitution of the country was immediately suspended and Conte vowed to end corruption.  While Conte technically restored democratic elections in Guinea, most international observers believed that all of Conte’s Presidential victories were rigged.  In November, 2006, according to Transparency International, Guinea was listed as the second most corrupt country in the world, barely edged out by the most corrupt country in the world, Haiti.  This week, on December 23, 2008, after 23 years of rule in Guinea, Lansana Conte died.

Hours after Conte’s death, another military coup occurred.  This time army Captain Moussa Camara suspended the constitution and declared himself President, vowing to rid Guinea of corruption and to hold “transparent presidential elections by the end of December, 2010”.  Conte is a member of the “National Council for Democracy and Development.”

Gosh, I guess if I was a citizen of Guinea it would give me a real sense of comfort to know that my latest dictator was a member of the “National Council of Democracy.”  Of course, the first thing Camara did was to stop all mining production in Guinea.  The mines are owned by foreign companies and Camara wants to “renegotiate all mining contracts.”  In other words, he wants to make it more difficult and costly for foreign mining firms to operate in Guinea.  If the “renegotiation” is not acceptable to the foreign-owned mining companies, they may pull out their investments.  Or, Camara might “expropriate” the private property of the mining companies and kick the owners and skilled workers out of the country.  In either case, the result will be a lower standard of living in Guinea.

My prediction is that Camara won’t chase out the mining companies; he’ll just “renegotiate” their revenues with a nice bribe for himself.  Don’t look for elections in 2010 either, unless they’re fixed.

The Guinea story reminds me of a question people often ask me; “Why do foreigners continue to buy US government securities in spite of our negative balance of payments, weakening dollar, financial scandals, and huge national debt?”  The answer is simple:  We have regular elections that are clean and transparent.  For over two hundred years, once the votes are counted, the winner goes into office and the loser goes home, without a coup and without violence.  If there are contract disputes, the courts are generally fair and judicial decisions are rendered in a relatively short period of time.  Foreigners investing or banking their money in the United States suffer no more risk than US citizens.  In other words, the government of the United States of America is exactly the opposite of the government of Guinea.  That’s why, despite our problems and at least for now, the foreign “smart money” continues to stay in the United States of America.

As an adult I’ve always appreciated Thanksgiving more than Christmas because of the commercialization that accompanies Christmas.  For Christians, Christmas represents the birth of our savior, Jesus Christ, but even for those of other religious persuasions, the reason for the season is peace, goodwill toward men.

There’s nothing wrong with buying gifts for Christmas.  After all, who doesn’t enjoy both the giving and receiving of gifts?  Unfortunately, it is tempting to overspend during the holiday season, often leading to serious consequences when the January credit card bill comes due.  Believe it or not, I’ve experienced more than one Christmas morning when, after opening gift after gift, the eventual result is some spoiled kid crying!  What a lousy way to spend a day.

This year, with the country in a recession, more people are out of work than usual.  Many who are working are rightfully worried about the possibility of losing their jobs.  The predictable result of this economic uncertainty is a reduction of spending this Christmas season.  This means fewer material “gifts” and perhaps, more time to think about the real meaning of Christmas.

As I approach my sixtieth year, I’m trying to recall my most meaningful Christmases. I remember my brother and I waiting in the hallway as my father took what seemed like hours to set up four large floodlights that were necessary for the proper lighting of what was then a ”state of the art” movie camera.  We still have those movies of the goofy looking 12 year old and his younger brother.  I fondly remember a Christmas Eve when I read a biblical account of  Christ’s birth to my son and his two cousins, when they were about seven years old.  I also recall a midnight Christmas Mass in Mangalore, India.  I remember the handsome men, accompanied by their women dressed in elegant, bright saris.  The massive footprint of Catholicism never ceases to amaze me.  In a country where only 3% of the population is Christian, there are thirty-million Catholics in India.

On a personal note, I know a young man and a young woman who will go together to Mass in that same Mangalore church this Christmas.  Only God could have known that the little boy from North Dakota would someday fall in love with a beautiful little girl from India.   The rickshaw driver, who parked under the banyan tree, couldn’t have guessed that the little girl he took home daily from Catholic primary school would someday leave India and travel to Minneapolis, where she would meet the handsome lad from a distant place called Fargo.  It is upon these two incredible people and their families that my thoughts are especially focused this Christmas.  I also remember my brother-in-law and sister-in-law, who leave a place and “family” that have been very special to them and return to their native country after 13 years abroad.

With the economic slump, this Christmas may be different for many of us.  Please accept my sincere hope that you’ll be blessed by the spirit of God more than ever this year.  Pray for your families, pray for your spouse, pray for your friends, pray for our leaders, pray for our country and pray for the millions of people in this world who, despite your circumstances, would give anything to be in your shoes.

Gosh, I know a company that you can buy cheap!  The company is Lee Enterprises (headquartered in Davenport, Iowa), publishers of the Winona Daily News and 52 other newspapers throughout the country.  On February 21, 2007 Lee stock closed at $33.97 a share.   By October of 2007 Lee stock was selling for $14.75 per share.  Now Lee is a “penny” stock, closing on December 12, 2008 at 49 cents a share.  What a deal!  Or maybe not…..

According to a November 11, 2008 article by Carl Jackson, who writes for Sedonia.biz, Lee Enterprises has suspended its annual stock dividend as part of an agreement with a group of financial institutions that hold well over $1 billion of company debt.  Interest rates on the debt have been increased by the lenders, undoubtedly to compensate them for the increased risk of holding Lee’s debt.  Lee has also stopped contributing to the 401k’s of its employees.

As a long-time subscriber of the Winona Daily News, I know firsthand that Lee is trying to slash costs at its La Crosse, WI printing facility.  The width of the paper has narrowed.  The newsprint is so thin that when you flip a page (if you’re nimble enough to pry them apart), the corners curl up.  Presently, the only item delivered to my door that feels like a real newspaper is the free, twice-weekly, locally published, Winona Post.

Lee’s problems are common in the newspaper publishing industry.  Internet site revenue has increased at the expense of falling newspaper ad revenue.  Falling revenue, coupled with higher publishing costs have put a profit squeeze on most publishers.  Furthermore, many of the publishers are carrying too much debt.  The Minneapolis Star Tribune skipped a $9 million quarterly debt payment in September to conserve cash.  Even the New York Times is in financial trouble, planning to raise cash by borrowing $225 million against its Manhattan headquarters building.

The king of newspaper debt is the Chicago Tribune, which declared bankruptcy on December 8th.  The Chicago Tribune has $13 billion in debt, largely due to the leveraged buyout of Sam Zell who took the firm private.  The Chicago Cubs and Wrigley Field are owned by the Chicago Tribune.  Now that the Trib is such big financial trouble, maybe Zell will make quick work of selling the Chicago Cubs.  Last year Sam floated the idea of selling naming rights to Wrigley Field; an abomination in the mind of Cubs fans.

It would be fortunate if publishers could simply mortgage real estate and solve their cash flow problems, but the real problem is that these publishers have operating losses.  Like Chrysler and General Motors in the auto industry, the existing newspaper business model simply doesn’t work in the world of cyberspace.  Why would people buy newspaper ads when they can list and sell their items free on the internet?  Likewise, more and more employers are listing their job openings on industry-specific websites rather than paying for expensive newspaper ads.  Economists have a word for the constant ebb and flow of changing consumer demand and business adaptation; it’s called creative destruction.

Unfortunately for newspaper executives, their stockholders and thir employees, bankruptcy and consolidation will continue in the publishing industry.  There won’t be any government TARP money for the newspapers.  As their stock prices fall and values of newspaper publishing firms decline, new investors will eventually be able to buy these firms for pennies on the dollar.  Who knows, the new owners, with little debt and a revised business model, may be able to make the newspaper business profitable again.

Three weeks ago the CEO’s of GM, Ford and Chrysler flew in their corporate jets to the Senate hearings in Washington DC.  The outrage of politicians and the media was predictable.  It costs about $8,000 to fly a corporate jet from Detroit to DC.  It costs only $600 for a commercial flight.  How dare these pompous executives fly in private jets when they are asking the taxpayers to give them billions of dollars!

Image is everything I guess, so last week all three CEO’s drove hybrid and flex fuel cars to Washington.  The one-way drive takes about 10 hours.  During the Senate hearings these CEO’s were asked whether or not they drove to Washington, what kind of car they drove, and if they had any passengers.  They were also asked if they were going to drive back to Detroit or fly.  Each CEO indicated that he had driven to Washington and was going to drive back to Detroit.  That’s just what the media and the Senate were looking for; frugal CEO’s who don’t waste money and run a tight ship!  At least that’s how it was portrayed.

Of course, the real purpose of these hearings was to determine if Ford, GM and Chrysler had submitted suitable plans to indicate that they were on their way to running “viable” businesses (Pelosi just loves the word “viable”).  The irony is that by driving to Washington instead of taking their corporate jets, all three companies wasted money!

Last year Ford’s CEO got a total compensation of $21.7 million dollars.  Chrysler’s CEO salary was not disclosed because it is a privately held company.  The CEO of General Motors got $14.4 million.  Averaging the salaries of the Ford and GM CEO’s, we get $18 million per CEO each year.  If a person works a 40 hour week, he will work approximately 2000 hours a year.  Let’s say that these highly paid CEO’s work 60 hour weeks, so they work 3000 hours a year.  At an average salary of $18 million a year, working 3,000 hours a year, these guys make $6,000 per hour.   That’s a lot of money, but like it or not, it is the true “market value” of their time.

Whenever one of these highly paid CEO’s is not at his desk working (say he’s waiting for an airplane, stuck in traffic, washing his hands in the men’s room, etc.) it costs the company $6,000 per hour in lost productivity.  Given the extremely high value of their time, let’s compare the CEO’s cost of driving from Detroit to Washington, flying commercially (Northwest Airlines), and taking the corporate jet.  Once we know the costs of all three alternatives, the cheapest option is obviously the choice that a “viable” company should make.  After all, the Senate Finance Committee and Nancy Pelosi like “viability”.

Driving: Travel time 10 hours @ $6,000 per hour.  Gas $100.  Wear and tear on car:  $150.  Total cost of driving one way to Washington, DC = $60,250.

Flying Northwest Airlines: Two hour wait and security check at airport @ $6,000 per hour.  Two hour flight @ $6,000 per hour.  Plane ticket $600.  Total cost of Flying commercially one way Detroit to Washington DC = $24,600.

Flying in Corporate Private Jet: Security and wait time at airport 15 minutes @ $6,000. Flying time 2 hours @$6000 per hour.   Chartering a private Jet one way from Detroit to DC costs (including fuel, crew, and prorated aircraft costs) about $8,000 one way.   At that rate, the total cost of taking the company jet one way to Washington DC = $21,500.

Add to this analysis the fact that on his corporate jet the CEO has a complete office with satellite telephone, faxes, email, etc.   On the other hand, flying commercially he’s got to turn off his cell phone and is stuck in his seat with a laptop, unable to be very productive.  If the CEO can be fully productive using the office inside the company jet, the cost of the trip is reduced by $12,000, so the real cost of taking the private jet is only $9,500.

If we use the emotional decision-making process of the Senate Finance Committee, the news media and Nancy Pelosi, next time these guys come to Washington they should ride donkeys with pots hanging on the sides to save money.  Let’s see…that’s 23 days @ 12 hours a day @ $6,000 per hour, plus $50 donkey feed (which must be shared by the donkey and the greedy CEO)…that’s $1,656,050.  Yeah!  Now we’re getting there!  That’s politically viable!