Sunday, September 30, 2012

4 Reasons Why You Need To Wake The Fuck Up

1. Too much is at stake not to be awake. Democrats (comprising progressives and liberals) have a way of going to sleep, especially when they have the lead in an election campaign. Well, like in the 2010 mid-term elections, which is why we're in such a mess today. In this 2012 election, we face fiercely committed radicals who are willing to take you down for ideological reasons, from the wing-nut Evangelicals to the Tea Party. If you want to keep what you have, you really must Wake the Fuck Up!

2. Don’t believe the polls. Polls are not votes. Focus and do the difficult thing. Knock on doors, help people register to vote. Get those people in your household out canvassing. Kick that son-in-law off his couch and out the door helping people register. Millions of registered Democrats did not do this in 2010 and, well, we got what we deserved, didn't we? If you want real change you got to Wake The Fuck Up!.

3.This election is not just about re-electing Obama. You need to know the issues so you can vote for the mayor and city council, the county supervisor, your state assembly person, your Congressional and Senate representatives. You can bet the Republicans will know the issues chapter and verse at every level of government. To give Obama a chance at real change, you need to elect a Democratic majority in both houses so he can pass legislation that is critically needed. Mostly, you need to Wake the Fuck Up!

4. The Republicans are counting on you to go back to sleep. In fact, they are   betting the bank Democrats will fold once again.  This is an election  to protect what others before you fought so hard for. Do you want the Republicans to dismantle the very democracy you enjoy today? There are many things to do as a Democrat in the next month.  The most important of all is that you must Wake the Fuck Up!

Sunday, September 23, 2012

Hasty Sale to Foreigners, Americans Holding the Bag

China New owner of scandal-ridden American Digital Domain
I imagine that John C.Textor, aka the Bernie Madoff of South Florida, is grateful that he had the foresight to build his home on an island just off the coast of Florida. Especially as more light is shed on his shady dealings of last week.

He will still need an electric fence and shark-infested waters to 
ward off the countless lawyers and processors tring to serve him an array of subpoena.

Textor will need the privacy

One week after Digital Domain suddenly filed for bankruptcy, the hardest working people on Florida’s Treasure Coast are newly arrived lawyers and accountants. They have been pouring through the remains of Digital Domain to see if there is anything worth saving. On Friday, they filed law suits to avoid an “accelerated asset sale” to give them time to sort out the multi-layered scandal spread before them.

But on Saturday, in another surprise twist, the bankruptcy judge in Delaware ruled that Digital Domain could complete a “snap auction” deal.

The foreign buyers comprise two large vfx firms who will pick up American intellectual property for about a dime to the dollar in what amounts to a fire sale.

Digital’s most experienced vfx firms in Venice, California and Vancouver, British Columbia, will be part of the sale.

The expensive proprietary software and human capital will in large part disappear from South Florida, as well as haunt the American visual effects industry for decades. 

In the wake of the Digital Domain scandal, Carrol wondered if the town would ever approve another investment proposal, even in another field, like biotech.
We've got to ask ourselves down the road, 'Are we inheriting this as our redheaded stepchild forever or do we call a halt to it and say (to the other council members) that at some point you have to become self sufficient and act like any other business," he said of his colleagues."They've all got the Boca dream. Unfortunately, they've got a Port St. Lucie wallet.' "

Monday, September 17, 2012

A New Way to Fail in America

John C. Textor, The Bernie Madoff of South Florida
For the better part of the last year I kept abreast of John Textor's latest ruse through someone very close to the visual effects field. We were surprised just how far this guy was going to go, from corrupt and sleazy all the way to unbelievably seedy. And today, it's getting worse by the hour.

The story of Digital Domain begins in 2009 when John C. Textor, as managing principal of Wyndcrest  Holdings LLC, a private equity firm, purchased Digital Domain from James Cameron and others. 

As CEO, Textor decided to move the headquarters of Digital Domain across the continent from Los Angeles to Florida where he planned to build an animation studio to rival Disney, Dreamworks and Pixar.

Upon arrival he sought a business friendly town to build his corporate headquarters, somewhere close to his $4 million home on Jupiter Island in Martin County, Florida.

But Textor couldn't get buy-in from Martin County community leaders on the proposed location, the tax breaks or the accelerated development approvals needed for the construction of the visual effects studio. After lambasting their decision, he went up the road to nearby Port St. Lucie, Florida.
Marina in Port St. Lucie, Florida
It didn’t take Textor long to win over the town fathers, especially when he talked about taking Digital Domain Media Group (DDMG) public and making everyone rich in town.

At the time, the town and county of Port St. Lucie were facing a 14% unemployment rate and saw Textor as a white knight investor who came to their rescue. The city council responded with an array of incentives to make Textor’s dream a reality.

In addition to assuming the $39.9 million bond for building the animation studio, the city council agreed to provide a $10 million economic development grant; the state of Florida added $20 million in cash while St. Lucie County agreed to waive county property taxes for five years.

On top of this the city council of Port St. Lucie would provide millions of dollars for office furniture and money for purchasing state-of-the-art digital effects equipment. They would even develop soccer facilities for employees, as well as a park.

Port St.Lucie offered generous loans and accelerated approvals
DDMG, in turn, initially promised 500 salaries ranging up to an average of $64,233; it would pay off building construction cost with annual payment for 20 years. font-family: Verdana, sans-serif;">As construction began Textor restructured the new company into an array of business units, promising that Port St. Lucie would be the world headquarters of a prestigious international company that was soon going public (NYSE: DDMG). margin: 0in 0in 0.25in; vertical-align: baseline;"> font-family: Verdana, sans-serif;">Private equity managers, like Textor, are notoriously secretive, but as a CEO of an entertainment company he became a promoter, hyping his company at every opportunity. 

Behind the scenes Textor knew that visual effects is a “low-bid, low margin” business, which would not make him wealthier. So he expanded into creating businesses that would train young people through a franchise of visual effects schools. And this may have been the beginning of Textor’s downfall.

It was at a pitch meeting with investors that he revealed his strategy for how he would make money from his schools. Somehow his presentation was taped then distributed on a YouTube video. The tape was widely circulated and was damaging enough to contribute to the stock’s poor performance.

Further, Textor’s business ethics were widely revealed in the video, in which he boasted that his "free (American) labor was better than foreign cheap labor".
Pirate flag flew above DDMG
A firestorm ensued among visual effects bloggers and Textor's admission eventually caught the eye of Variety, which brought Textor's questionable ethics into the mainstream entertainment media.
In the YouTube tape Textor was pitching investors on Digital Domain Institute’s “essential skills” program. Not only would DDI charge students $4,400 for a 10-week course that taught students how to create digital animation for movies. Certified students would then work for free on DDMG projects, in hopes that one day they would be hired by a real visual effects studio, say Dreamworks, Disney or Pixar back in Los Angeles.

The brand of Digital Domain had become a joke.

Then on September 7, 2012 DDMG in Port St. Luicie padlocked the doors with no warning.

The board of directors had hired a new CEO and sought protection from creditors under Chapter 11.

Today, the town of Port St. Lucie still owes $38.4 million for the studio and lost $7.75 million of a $10 million grant. It is considering legal action to recoup its losses and is looking for new tenants for the 115,000-square-foot building that housed DDMG.

 Gov. Rick Scott, the far right Republican governor of Florida, has ordered an investigation into the matter. Scott had contributed $20 million of the state's money in cash to sweeten the deal with Textor.
Textor, once thought to be the savior of Port St. Lucie, is now referred to as "our Bernie Madoff", the disgraced financier.

This coming week a judge will rule whether DDMG can conduct a snap auction which would allow DDMG to sell off the assets of the high-priced equipment and furniture the town had essentially purchased for Textor.
 Currently two visual effect studios are bidding for DDMG assets at the auction, including Jame’s Cameron one of the founders of Digital Domain, through his new company. Another bidder is a major conglomerate in Mumbai.

 To see American made proprietary software and loads of intellectual property  sold off to a foreign visual effects conglomerate may be too much to bear for the taxpayers and voters of Port St. Lucie.

 Meanwhile, the 346 newly unemployed Digital Domain people of Port St. Lucie will be depending on the generosity of the local food bank, using food stamps and turning to other sources of goodwill in the coming weeks and months as they sort out their lives. And the story gets worse.

In nearby West Palm Beach the Mayor is giving back the $20,000 she was given by Textor for her campaign. City officials there continue to have no comments concerning the city’s decision to hand over 2.4 acres of prime downtown land, valued at $10 million to Digital Domain before the company met any performance thresholds toward building a high-rise on the site.

West Palm Beach officials have refused to say whether they knew Digital Domain took two mortgages against the property.

The city is also quiet about $2 million they gave Digital Domain toward the FSU film school, the first installment of a $10 million payment.

The list of failed promises will continue to grow as investigators look at the books, including the one in which  Digital Domain would partner with Florida State University in create a first-in-the nation $28,000-a-year bachelor of fine arts program.

As of last week, classes for the 27 Florida State University students who transferred from schools around the country are in doubt. The school’s new West Palm Beach campus this fall is also in doubt and no one is commenting.

And so ends a cautionary tale taking place in a dystopian world located in Florida. But it could happen anywhere.

Watching John Textor attempt to fool, cheat and rob while boasting about it made me think of Mitt Romney's career at Bain Capital and his run for the presidency. The two men are adept at telling bigger and bigger lies and no one has yet caught on enough to stop them.

Then it came to me. The people who are getting cheated are actually admirers of Textor's and Romney's deviousness because both men have proven there is more potential reward for being greedy than doing honest labor in today's America. These men have found a way to fail upwards, taking few people with them when they cash out and move on.

For an inside look at how Romney got rich, please read Matt Taibbi's brilliant article in Rolling Stone

Tuesday, September 11, 2012

4 things the pundits missed at Bill Clinton’s DNC speech

Bill Clinton trains Democrats to sell their vision
Many pundits, including Jon Stewart, had a field day with Clinton's DNC speech, but they got it wrong.

 1.   Bill Clinton was not paving the way for Hillary in 2016 nor was he speaking off-topic. Rather, Clinton was conducting a highly focused 48-minute tutorial for Democrats in the rudimentary grass roots tactics of focusing their vision, positioning it, overcoming objections with facts and closing the deal, something Obama and fellow Democrats often have trouble doing.

2.   Clinton knows this election won’t be won by the base on lofty oratory and slogans of an Obama speech. Rather it will be won in the trenches, i.e. knocking on doors while delivering pamphlets and speaking to the independents who will eventually turn in the deciding votes. 

3. Clinton understands hand-to-hand combat against the GOP. He has learned that voters want to be talked to like smart people, not sinners being preached at. Pundit Chris Matthews got it right. “Clinton knows how to talk to people.”

Chris Matthews got it right 
4.   Clinton knows the intended audience for his speech was Obama, whose own DNC speech was a warmed over stump talk by comparison. Clinton was there to appeal to the President, as well as the Democrats, not to wander out of the DNC in a fog of rapture, but rather get back on the campaign trail with a sense of urgency. 

If you're a Democrat and missed Bill Clinton's full speech, watch it and pass it along. It is classic messaging.

Monday, September 3, 2012

“Moneyball” Paying Off for the Oakland A’s

Brad Pitt as Billy Beane

If you didn’t see “Moneyball” because you don’t like baseball then you really missed a very good movie. Brad Pitt plays the current general manager and minority owner of the Oakland A’s, Billy Beane. Beane defied baseball logic and used economics and statistics to build a team that wins on average and nearly always makes a profit.

Today, the A’s are once again doing something amazing on the field and probably in the profit column as well. 

Just like in the movie, this year's team is made up of misfits and leftovers; the players have been traded frequently, had injuries, were getting older or were too quirky to earn a $10 million salary.The players are essentially working class commodities who play baseball for a living.

They lead baseball in late-inning comebacks

None of the players are stars. The are paid to provide just enough to pitch in long relief, or get on base and steal a base, or hit left-handed pitchers, or get late-inning strike outs,or move guys on base with rbi's, and occasionally hit a home run. The stats prove this is how a baseball team wins in Moneyball, a term from the title of author Michael Lewis' book, from which the movie is based.

In Moneyball terms, the bottom line comes down to this:  A’ players earn $150,000 a season compared to the New York Yankees, who pay an annual average of $1.5 million per player. If the A's get to play the Yankees in the playoffs it doesn't matter if the Yankees win, the A's have already won in Moneyball.

The A's are just three games behind the Texas Rangers who lead the division. The Rangers are expected to make the World Series, largely because they pay their player some of the largest salaries in the business.

As of this writing, the A's are heading into September on a winning streak, similar to the one portrayed in the movie. 

Seemingly, the A’s are doing it with smoke and mirrors. The A’s have won more games on the final at bat than any other Major League Baseball team this season. 

Moneyball is working just the way the economists and statisticians said it would. You wouldn't want to bet against it.