How Limbaugh and Beck's propaganda works

I am just completing some interior renovations and about to start some exterior work and so was talking to a couple of contractors. The first told me a conspiracy theory a friend of a friend had told him from the Rush Limbaugh show, whereby the government was alleged to be requiring spy cameras in every HD TV set. I have not been able to track down what Limbaugh might have said to have triggered this claim, but the 'Chinese whispers' effect is instrumental in the workings of this type of propaganda. The speaker makes a claim that is hedged with qualifications and caveats knowing that their words will be repeated without them.

The second conspiracy theory involved a story on Glenn Beck's site about a government 'plan' to ban PVC pipe. The headline has a question mark but it is clear that the reader is intended to believe this is a real proposal.

Banning PVC pipe in home building probably isn't much of a concern to most people but it would certainly worry the people in the building trade most of whom are the blue collar males who are the target audience for Beck and Limbaugh.

The propaganda follows a pattern that will be familiar to anyone who has watched Beck's show. First there is an incredibly detailed introduction that is designed to prove to the reader that the writer is an authority on the subject by stating a long list of essentially irrelevant facts that could be found on wikipedia. Next there comes a sequence of paragraphs that juxtapose facts in a way that is essentially irrelevant to the point but intended to create an association in the reader's mind. The big lie must be preceded by an advance guard of spurious but hard to check claims designed to distract attention from the blatant misrepresentation to follow:

First off, LEED certification is not cheap. Design and construction review of a new building can cost up to $27,500. In fact, in 2009, the USGBC made over $74 million from accreditation, membership dues, and certification fees. The non-profit organization reported $53 million in net assets at the end of that year.

It $27K for LEED certification expensive or cheap? It all depends on the cost of the building and the planning considerations. $27K would be rather expensive for a single residential building and a rounding error for a developer building an office block or a 100 unit residential community.

Next comes a completely irrelevant statistic:

The extent to which the federal government subsidizes the USGBC is made clear when you realize the amount of LEED-certified building space in Washington, DC, which has more LEED-certified space on a per-capita basis than in any of the 50 states. Over 18.9 million square feet, or 31.5 square feet per resident, is LEED certified in the Washington, DC; the closest state is Colorado, with 2.7 square feet per person.

Does it really make sense to compare a city to a state? Isn't it rather likely that Manhattan, Chicago and Boston have more LEED certified office space per capita than any of the 50 states as well?

Finally, after the preamble has prepared the reader and exhausted their fact checking efforts we get to the money shot, a statement that is clearly designed to get the reader whose livelihood depends on building houses worried:

And this brings us all the way back to PVC. As first mentioned, the GSA is considering new USGBC regulations that include the “avoidance” of the popular material.

As the proposal states: The intent is to “decrease the concentrations of chemical contaminants that can damage air quality, human health, productivity, and the environment.” And to this end, LEED will certify whoever uses products or materials “that do not contain intentionally added substances present in the end product.” This includes Polyvinyl chloride.

OK so assuming that the government is not intending to shut down the construction industry by banning PVC pipe, what is really going on?

What is really happening is that the LEED program has a 'pilot program' that developers can use to secure 'extra credit'. Participating a pilot is optional and many pilots list many different ways to score the credit. The pilot at issue here is Pilot Credit 54 "Avoidance of Chemicals of Concern". The criteria are hardly very exacting:

Use a minimum of 20%, by cost, of at least 3 building product and material types
meeting one of the options below

The option then lists a series of highly toxic materials; lead, mercury cadmium and so on. PVC isn't even in the list. So these are requirements that only apply to 20% of the building materials costs. A PVC building floating on a lake of mercury could qualify for the pilot credit provided at least 20% of the cost was other materials. I don't know how much my plumber spent on PVC pipe but I doubt it added up to more than a few hundred bucks. It certainly didn't amount to 80%.

PVC only appears in 'Option 2' which is an alternative option within the pilot and the wording is rather obscure:

Meet the requirements of Option 1.AND Use third party certified building products and materials that do not contain intentionally added substances present in the end product over the reporting thresholds
below. Calculate compliant building products and materials at twice the cost.

What this appears to say is that if your materials don't contain PVC or the other substances in concentrations higher than those allowed they count double. So you only need to source 10% of your components from these sources.

I can't see how a developer would have a problem meeting the requirements. My biggest building material expenses were concrete, framing lumber and plywood. The real challenge would be documenting that the requirements were met.

Remember that LEED is an optional program designed to illustrate best of breed, it is not regulation. This proposal isn't even a proposal for a LEED requirement. If the pilot requirements are unmeetable, nobody is going to meet them. If nobody meets them, the pilot proposals are unlikely to even become a LEED requirement.

This position is reinforced by a series of statements by what are cited as 'experts' but are really spokespersons for the PVC industry:

Allen Blakey, vice president of Industry and Government Affairs for the Vinyl Institute, says his organization is “astonished to see PVC added to the USGBC’s list of chemicals to avoid,” the report adds. According to Blakey, PVC is a material that’s been studied for some time by the USGBC itself.

And finally the writer heads off into crazy loopsville:

So why is LEED trying to blacklist the material?

Well, maybe it’s important to understand a little bit more about LEED’s “founding founder” Robert Watson, a man who infamously said “Buildings are far and away the worst thing humans do to the environment.”

This are not the ravings of a lunatic, they are the work of a deliberate, cynical propagandist. Deconstructing the propaganda is really not hard but it does require some critical thinking skills. The type of skills that Republicans would rather not see taught in schools.

First the reader needs to be able to identify the small set of factual statements that are actually relevant. Next the reader has to fact check the key claims by examining the original sources. In this case the key source is a document that appears to be written by lawyers for lawyers but even a quick glance demonstrates that it is being misrepresented. Finally the reader has to do a bit of work with Google to find the original source for the out of context quote. This is what I found:

Lest we forget. "Buildings are far and away the worst thing humans do to the environment," Rob Watson of the Natural Resources Defense Council tells Grist magazine (November 25). "All of the buildings in the U.S. consume more than twice as much energy as all of the cars in the country." Chicago has a building that does much better--the Chicago Center for Green Technology, at 445 N. Sacramento, is the third building in the country to receive a "platinum" rating from the U.S. Green Building Council.

Will Limbaugh, with the help of Romney's Bain Capital, bring down Clear Channel?

Three weeks ago Rush Limbaugh was the undisputed king of talk radio. Not only did he have the most stations and the best broadcast slots, the audiences he attracted meant that he could actually charge stations for his show. Most talk radio shows are provided to the stations for free, bartering space on the dial for a half share of the advertising slots.

Limbaugh's show is distributed by Premiere, which is in turn owned by Clear Channel, a company with a balance sheet that has been running red ink for some time as the outdoor advertising market went sour during the recession. The Motley Fool has an interesting analysis of Clear Channel's attractiveness as a stock pick, scoring the company a mere 2 out of 10 on its investment screen. Forbes reports that the company has $19.2 billion in debt.

But wait, it gets worse (or better).

Clear Channel's stock has just jumped after the company announced that it would borrow $2.2 billion to pay a special dividend of $6 to shareholders. Regular readers of this blog will remember the special dividend as one of the tricks used by Mitt Romney to make his fortune at Bain Capital. The crew would buy a company with money borrowed against the value of the company then borrow even more money to fund a special dividend that would mean a huge profit for them and likely bankruptcy for the company. And, hey, lookee here [Matt Koppenheffer, my emphasis]:

In a press release today, Clear Channel, which is largely controlled by Bain Capital, announced that it will be raising $2.2 billion via two debt offerings. The company will then turn around and use $2.17 billion of the proceeds to pay a $6.08-per-share special cash dividend to shareholders on record as of March 12. As the big jump in the stock suggests, the move was well received by investors.

Forbes states that Bain Capital paid $17.2 billion to acquire the company. The huge debt load suggests that what Bain really did was to put in as little of their own money as possible and the rest makes up the lions share of that $19.2 billion in debt. Matt is not too impressed by this:

You'll have to excuse me if I throw up in my mouth just a little bit. Maybe I'm just a sissy when it comes to debt, but the idea of a company practically doubling its indebtedness in order to pay out a massive dividend just doesn't sit well with me.

The only reason I can see that the stock would jump $1.50 on the news of the special dividend is a short squeeze. When a company pays a dividend, a short seller has to cover it. So an investor short 1,000 shares in Clear Channel would be facing a $6,000 charge to their account.

The Limbaugh crisis leaves Clear Channel paying $38 million a year for a broadcaster who has recently lost a good deal of his paid advertisers and has driven many advertisers away from talk radio completely. And this comes when their competitor, Cumulus Media Networks, is preparing to launch Mike Huckabee's new show. Cumulus owns many of Limbaugh's highest profile stations, and even before the Fluke crisis, the launch of the Huckabee show was seen as a move intended to recapture the younger and female listeners that Limbaugh has been hemorrhaging in recent years.

As anyone who has seen the Golf Channel knows, a channel does not need to attract a large audience if it attracts the right audience. Limbaugh attracts large numbers of the elderly white low income demographic that few advertisers are interested in. Huckabee attracts younger listeners and female listeners that advertisers are most interested in.

So lets recap, Clear Channel is losing a large slice of advertising revenue for a broadcaster they are paying $38 million a year. The company has a market cap of $5.5 billion, and $19 billion in debt. Despite a junk bond rating, the company is planning to borrow another $2.2 billion to pay a $2 billion dividend to Bain Capital. That will leave the company with a market cap of $3.3 billion, and $21.2 billion in debt with $4 billion due in 2014 and another $12 billion up to 2016.

And don't forget that in the increasingly likely case that these Vampire Capital tactics put Clear Channel into bankruptcy, Chapter 11 will allow the same management team who engineered it to stay in control and later find a new clutch of investors to bilk.

So the answer to my question in the subject line turns out to be "no": Mitt Romney's Bain capital looks like it was doing a fine job of destroying Clear Channel all on its own. But Limbaugh's bigotry and the advertiser boycott he brought on himself might well turn out to be the final straw.

Update: A lawsuit brought on behalf of the minority shareholders in Clear Channel Outdoor alleges that Clear Channel Corporation (holder of the 89% controlling interest in CCC) forced CCO to make a $1 billion loan to CCC on unfavorable terms.

Update 2: And there is an investigation into whether an unexplained 11% price movement in the CCO stock ahead of the news was caused by insiders front-running the trade.

Majority say fire Limbaugh, another station drops his show

Wow.  I'm actually a bit surprised. And remember, any time we have a majority that means Democrats AND Independents are siding with us. And that's interesting.

More than half of those interviewed also say radio host Rush Limbaugh, who called a female law student testifying publicly in favor of birth-control coverage a “slut” and “prostitute,” should be fired based solely on those comments.

And this just in, a third station (this time in CA) has now dropped his show.

Official statement from Charlie and Trish Busch-G.M./Business Mgr.

“I regret to inform the fans of the Rush Limbaugh program that 1140 KVLI will no longer be airing his daily show.

Please believe this had nothing to do with recent events involving Mr. Limbaugh. The decision to cancel the program was made in December of last year for financial reasons only. A 90-day notice, as required by our contract, was given then.


The Rush Limbaugh program was the only daily show we carry that charged us a significant amount of money each month to air. Due to the current economic status in our market, certain operating cuts had to be made. Unfortunately, Rush was among those cuts. Attempts were made with his organization to “clear” the program at no cost, or at a reduced cost, but they were not willing to do so. I hope this sheds light on the situation.