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Crank of the Week - August 1, 2010 - Fox New Business Block

Every Saturday morning, the Fox News network presents two hours of purported business news, four half-hour shows staffed by talking heads that are billed as experts in the realm of business and finance. Most of the time their blather sounds knowledgeable, at least to a layman, but on occasion they stray beyond the bounds of business and into territory they are ill-equipped to handle. One such ignorance revealing foray occurred on the Saturday shows this past weekend. The topic was related to energy and automotive design—specifically, the value of Chevy's new Volt plug-in hybrid automobile.

The most powerful name in news brings you “The Cost of Freedom,” the most powerful business block on cable news! Or so Fox News channel would have you believe. The Fox business block's four shows—Bulls & Bears, Cavuto on Business, Forbes on Fox, and Cashin' In—are touted as providing investment advice to make you money. Cavuto on Business, hosted by the genial Neil Cavuto, claims to provide “information on how you can make and hold onto your money.” Forbes on Fox, often a soap box for magazine publisher and former presidential candidate Steve Forbes, proclaims “to make money in any market you need information from experts who aren't afraid to tell it like it is.” Presumably the experts are the various Forbes' editors that populate the show. For shows that advertise themselves as providers of investment and financial advice they seem to spend a lot of time arguing about socio-political issues.

In fact, the “Cost of Freedom” is pretty much a two hour, tag team arguing contest, often featuring a guest radio host or Democrat strategist to throw some liberal fuel onto the mostly conservative panel firebrands. While the regulars on these shows do generally have some claim to financial knowledge, their ability to jawbone and verbally abuse the guests and each other seem to be their primary qualifications. The rhetorical fireworks are often entertaining and even humorous, but seldom enlightening. And on occasion, the “experts” show themselves to be nothing of the sort. Case in point was when the subject of the GM bailout was mentioned on the shows (they always seem to discuss the same topics).

Part of the Business Block in action.

Granted, the Volt was not really the central issue. The discussion began by mentioning President Obama's visit to the factory that builds the Volt. Video was shown of the President actually driving one of the new hybrids about seven feet before hopping out to give what amounted to a campaign speech. Naturally, this set off a wave of commentary on the foolishness of the GM bailout, TARP and the government's policies in general. One thing led to another and soon the $7,500 tax credit offered for zero emissions vehicles was mentioned—so far still financially oriented—but then the mob turned on the poor Volt itself.

The venerable Ben Stein, a real economist as well as a media personality, questioned the need for such a vehicle on the Cavuto show. He expressed his preference for the more upscale Cadillac brand, which is certainly his prerogative. Maybe he should check out the top-end Lexus hybrid or the new models from Mercedes Benz. They may be a better lifestyle fit for Ferris Bueller's former instructor.

These Fox “experts” are not really experts at all when it comes to the automobile industry, but that is not our main complaint. It is the baldfaced hypocrisy that their comments represent which has garnered them a Crank of the Week. At one time or another these same commentators have complained about unemployment—the GM bailout did prevent the lose of many jobs, including jobs at associated parts suppliers in the surrounding communities; they complained about government “nationalization” of industry—intentions to sell off the government's stake in GM have already been announced; they complained that the government is doing nothing about US dependence on imported oil—the Volt, in an admittedly small way, is a positive step toward cutting that dependence. Now they claim it costs too much and nobody wants one—how about we let the market decide?

John Layfield, a former professional wrestler turned businessman, was perhaps the most vociferously short sighted. On Cashin' In, He blasted the Volt's $41,000 price tag, claiming he would rather buy a new Camaro with a 550 horsepower engine for the same amount (by they way John, that particular model has been canceled). Perhaps he hasn't notice that oil prices have been creeping up and that, sooner or later, gasoline prices will rise. Perhaps he doesn't mind contributing to the coffers of Hugo Chavez, middle Eastern oil sheiks and other unsavory petro-thugs around the world. Like all of the other Fox pundits who bashed the Volt that morning, he has no foresight.

The truth about the Volt is that it is a first, experimental step toward building better hybrid and electric vehicles in the future. No new product has ever burst on the scene fully formed and perfect, like Athena springing from Zeus' head. There is always a period of development, of trial and error, where production problems are solved, efficiencies perused and consumer complaints resolved. And most new products do have limited appeal and are initially overpriced. Consider the first cell phones.

Twenty five years ago, most cell phones were permanently installed in automobiles and cost more than $1,000. There were some portable models, Dr. Hoffman recalls owning a “bag phone.” It came, quite literally, in a bag and consisted of a handset about the size of a normal home phone with a battery the size and weight of a brick. It cost about $700 back in 1985. It was clunky, overpriced and had little mass appeal, a much worse product than the Chevy Volt. A quarter of a century later everyone has a cellphone that is smaller, lighter, longer lasting and far less expensive than the old bag phone. Yet, it is from those old clunky bag phones that the sleek new cellphones descended.

The 2011 model Chevy Volt plug-in hybrid.

The point is this: building the future requires present day experiments and a lot of work along the way. Electric cars are inherently more efficient than internal combustion automobiles, their only real drawback is limited range due to battery capacity. There are a number of companies, large and small, that are feverishly working on solving that limitation, driven by those market forces that the trash talking Fox pundits worship so fervently. If you want to see where electric and hybrid vehicles are headed see Dr. Hoffman's “I Sing the Auto Electric.” We should be praising the Volt's developers, not listening to criticisms from the vapid intellects on Fox or any other network.

These same commentators will be the first ones to scream about the government not doing anything when the next oil embargo hits, or China and South Korea are producing sexy, appealing and highly functional electric cars that are kicking Detroit's ass in the market place ten years from now. Ben Stein, buy yourself a new Cadillac, John Layfield, buy that new Camaro with the Corvette engine, but stay silent on matters that you don't understand. There are automotive engineers around the world who are building the future; your job is to shut up and consume. So, for a breathtaking demonstration of ignorance and network orchestrated group-think, this Crank of the Week is for all those who appear on the Fox Business Block (we just couldn't bring ourselves to call it “The Cost of Freedom”).

The real cost of freedom.


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