Recapturing the economic lead China has dislodged the United States from its long reign as the main engine of global economic growth for the first time because China is relaxing more economic laws as it moves closer to a free market (“China becomes the growth engine,” Page 1, Thursday).
As economic laws are relaxed, the economy grows. If the United States wants to regain its title and remain the world’s economic powerhouse, the president and Congress will have to work together to deregulate various industries within the country.
America is in the midst of a presidential campaign, making this the perfect time for such a conversation. Who ever thought we would be asking if we should be more like China?
GARY UZONYI
Fairfax
What’s wrong with the Bush Doctrine?
Victor Davis Hanson concisely summarizes the dilemma we face with respect to Middle East policy in granting credibility to the words of wisdom so freely offered by foreign-policy sages from bygone times: appeasement from Democrats and cynicism from Republicans (“Mideast back to the future?” Commentary, Saturday). Neither approach constitutes more than a fleeting plan for obvious reasons — appeasement and cynicism are both too fragile and too delicate. A stable foreign policy, one that will provide more than finger-in-the-dike utility, requires permanence.
The author of the Bush Doctrine understands this, and thus the Bush Doctrine represents a bold (perhaps too bold at this time) departure from the shopworn policies of the past.
However laudatory the idea of spreading democracy, one must have a fertile field in which this most demanding of governmental systems can flower. It appears that people riven by tribalism and religious stricture combining obedience to Allah with the edifice of government are not ready for democracy. It also appears that the American people are no longer willing, as they were in the aftermath of World War II, to put in the time and effort required for this arduous task.
The problem is more with the timing and specific target of the Bush Doctrine than with its ideals.
PAUL BLOUSTEIN
Cincinnati
Beneficiaries, not insurance companies
The Washington Times has the Children’s Health and Medicare Protection (CHAMP) Act backward (“Dingell, Stark and Medi-scare,” Editorial, Friday).
The Medicare provisions actually extend coverage by, for example, removing cost-sharing for preventive benefits and giving Medicare more authority to cover preventive services, making it easier for low-income beneficiaries to get the help they need with their Medicare premiums and drug benefits, and reducing the cost-sharing for mental-health services.
The bill accomplishes this by reducing taxpayer money to private insurance companies — which neutral government bodies say are overpaid by, on average, 12 percent — and which recently announced record profits because of their Medicare business. Medicare dollars should go to Medicare beneficiaries, not to overpaid insurance companies.
JUDITH A. STEIN
Executive Director
Center for Medicare Advocacy Inc.
Washington
The Sirius/XM merger in perspective
The editorial in favor of the proposed merger between the nation’s two satellite-radio companies, Sirius and XM, fails to consider the context of the purportedly perilous position in which the satellite-radio firms find themselves (“Approve the Sirius/XM merger,” Editorial, Thursday).
First, both companies have been plagued by bad business, technology and management decisions. For example, Sirius began operation with only two satellites, which provided insufficient coverage, thereby requiring the deployment of terrestrial “repeater” towers allowing its signal to fill gaps. XM, which had the superior technology plan, committed various marketing errors out of the gate.
In addition, both firms allowed their automaker-partner/owners (General Motors Corp. owns 10 percent of XM) to insist on service-exclusive radios so that a Sirius radio could not receive XM’s signal. So, if you buy a BMW and you want XM (and its Major League Baseball offering) you’re in “Sirius” trouble (and stuck with Howard Stern), as only Sirius is available with that auto brand. I recall that the old NBC-owned RCA radios could receive CBS. Last but not least, who forced Sirius to pay Howard Stern $500 million over five years for his illustrious services?
Second, satellite-radio is an infant industry, only five years old. The two major satellite-TV firms — DirectTV and EchoStar — weren’t exactly scaring cable operators after five years, but they did exhibit better business practices than their satellite-radio brethren. It remains too early to throw in the towel on a competitive satellite-radio industry.
In fact, the potential market for satellite radio is huge — 200 million vehicles and 110 million households — and this excludes the mobile market, another exploding segment. At present, Sirius/XM have a combined customer-count of 14.85 million, the vast majority of which is autos. Even if their market were limited to vehicles, Sirius/XM’s current share equals a mere 7.5 percent of the potential market.
Moreover, according to the companies’ most recent quarterly reports, they’re no falling stars. For Sirius, net subscribers (gross additions minus losses) increased by 556,490 year-over-year, or 9 percent, to 6.6 million, representing two-thirds of the industry’s total net additions. Revenue increased 61 percent to a “record $204 million.”
For XM, net subscribers were up 5 percent and revenue increased 22 percent. The firm boasted, “XM had its largest quarter ever in automotive gross additions with 618,000.” One problem was in the area of customer retention. While gross subscriber additions were 942,000, XM’s net additions were only 338,000. This means that for every three subscribers added, it lost two. This is bad management, but hardly justifies a merger.
Notwithstanding these boastful numbers, had the companies spent less time lobbying and more time building their business their financial situation might be less precarious than they claim. For instance, why not offer a la carte pricing and program options now, not as a bargaining chip for the merger? Because it’s easier to merge than do the hard work of business. And it’s not inconsequential that executives’ compensation is tied in large part to share-price appreciation. When management fails to grow the business, what better way to boost the stock price — and its compensation — than through a merger?
A better idea than a Sirius/XM merger into a satellite-radio monopoly would be for DirecTV and EchoStar to acquire Sirius and XM. The former have had their growth rates flatten recently as the subscription-TV market (cable and satellite) has reached 85 percent penetration, whereas, as noted, satellite-radio’s penetration is in single digits. This would allow satellite-TV firms to expand and diversify their revenue streams while retaining competition in the fledgling satellite-radio industry.
Alternatively, any merger should be conditioned on the grant to another licensee of the rights to provide satellite-radio. Though some would view this as defeating the purpose of the merger, the facts show that better business practices combined with the potential market justifies two players in this industry segment. It would also prevent the lament a few years hence of a satellite-radio monopoly.
ROBERT BRANTLEY
Alexandria
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