[Re: Loose Cannon: Belaboring A (Percentage) Point, Direct Newsline, Sept. 8]:
So here it is in a nutshell. Get stock prices to start upward again, so investors can provide companies with more capital so they can hire more people. In order to do that, firms need to show a profit and increase the bottom line to look more attractive to investors and stockholders. The easiest way is to cut costs is by cutting their work force. And around and around we go.
George H.W. Bush was absolutely correct in calling “trickle down” economics “Voodoo Economics”, because it is. It does not work. Furthermore, if I’m a wealthy businessman looking to start a company, which can become profitable, I’m opening a business offshore or overseas, not in the U.S. where regulations, taxes and laws have made it virtually impossible to win. Could it be that although a few executives were fat cats, the bean counters and financial people at Tyco, Worldcom, and Enron were not cheating to accumulate wealth, they were trying to make their bottom line look better than it was in a fight for survival?
It remains to be seen what the effect the new telemarketing laws will have, but one thing for certain, not only will people lose jobs, but the cost of the $600 billion worth of products the so-called fed-up public buys by telephone is certain to increase, according to the Direct Marketing Association.
As an aside to this entire question, I have my own theory. The FCC recently sought to relax media ownership rules to allow media companies to buy TV stations in markets where they already have an alternate presence. The overwhelming response to Vongress regarding these changes is that the general public thought it dangerous, as one entity could control everything you hear and see in a community, which is a correct assumption, so Congress deep-sixed the idea. The FCC, under pressure from network television, pushed hard for these changes because CBS, NBC, and ABC are supposedly bleeding ad revenue to cable outlets.
My first reaction was, “Yay for open competition. Cable programming is superior. Put out a decent product, and maybe the tide would turn.” I thought to myself, “This is another form of protectionism. Let the free market work.”
Then I made a startling connection. Direct marketing, specifically telemarketing, is the cheapest form of advertising available to a company. Cut off one of those avenues of advertising, and where do you think a company looks to go as an alternative? Bingo. Ad agencies who buy infomercial time are the number one source of ad revenue to the television industry, according to the DMA. Just look how many “Paid Programs” are on your TV from 11:00PM until 6:00AM?
The FTC has been trying to crack down on false claims made on infomercials, says the DMA, so that revenue stream is beginning to dry up, so the television industry has been in panic mode for about a year now, and needs to replace that revenue source with something. Could it be that the television industry has lobbied for a change in the Telemarketing Sales Rule, in effect, forcing companies who sell via direct marketing to convert their telemarketing budgets toward television (the next logical place to go)?
Look at the facts. Over $600 billion dollars worth of goods and services were purchased via the telephone last year (almost 6% of GDP). The FTC/FCC projected 60 million residential phone numbers on the National DNC list by Sept. 1. There are slightly over 48 million numbers. And all this with an aggressive advertising and media blitz to constantly remind us how annoying and intrusive telemarkerters are. The ads themselves were annoying. I’d like to see just how much the television industry contributed to Bush’s campaign….Probably not as much as WorldCom, or Tyco….
Tony Kudalis
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The Wellness Institute
Nashua, NH