Tuesday, February 5, 2013

Financial Interests and the Media

 I just posted this as part of my online Business and Government class's discussion of financial interests and the media.
Discussion Board on Financial Interests and the American Media

Everyone in the class gave good answers as to how concentrated financial dominance of the media industry influences coverage of issues, especially key issues like the bailout.  Here are three examples from the class:

G:  These individuals' ownership of new sources influence coverage of events such as the 2008-2009 bailout of Wall Street by creating this image to the public that whoever was against the bailout was wrong, basically influencing the public to choose sides while misinforming them.

V: A lot of the media coverage was created to stir fear among the people. Certain media outlets were promoting the bailout by creating an end-of-the world image of what would happen if the banks go out of business. Others portrayed bankers as overpaid people who deserve to get fired and the companies should get shut down for bad business practice.

C: These individuals' ownership of these news sources influence coverage of all new stories.  These influences especially affected the coverage of the 2008-2009 bailout of Wall Street.  Depending on the investors' personal interests in the banks' being bailed out, they were portrayed as enemies or important vital pieces of the American economy.  The investors who needed these banks to continue to operate used their influence in newspapers to portray the situation as much worse than it was. They used their influence to sway public opinion in whichever direction they pleased.

Since Wall Street-linked interests (detail below) control the media, few alternative views were discussed from Bloomberg (Bloomberg) to Fox (Murdoch).  You might say: "Murdoch is a media executive, not a Wall Street executive."  But in his career he has engaged in dozens of acquisitions globally, from London to Australia, and in order to make the acquisitions he used Wall Street financing. He is as integrated with Wall Street as any Wall Street executive. GE, which until recently owned NBC and MSNBC (now partnering with Comcast), owns GE Capital, which is a Wall Street firm.  GE is Wall Street.  

The class's answers to the questions are, in general, excellent.  Wikipedia is not a good source for formal papers, but for assignments like this it is fine.  The point is that a handful of super-rich people and corporations control most of the media.  The corporations include Disney, Time Warner, and GE.  Behind the corporations are Rupert Murdoch (Fox), Bill Gates (until recently MSNBC), Sumner Redstone (National Amusements, which his father founded, Viacom, and others), and Warren Buffett (at various times owner of significant shares in Cap Cities/ABC, Disney, the Washington Post, and the Buffalo News). 

All sales are financed by Wall Street.  Sam Zell, the 68th richest American and the 216th richest person in the world, according to Forbes, bought the Tribune Corp., drove it into bankruptcy, then sold it to a distressed asset fund owned by Wall Streeter Howard Marks, who is also on the Forbes 400 list, through his firm Oaktree. 

The history of Time is interesting.  It was founded by Henry Luce, who dominated Time until his death in 1967. Control passed to his top lieutenant, Roy Larsen, who had first been named a director in 1929. Larsen's stake in the firm was almost as big as Luce's, and he ran it until 1979.  Warner Brothers bought it in 1989.  Writing of an earlier era, Wikipedia says:

J.P. Morgan retained a certain control through two directorates and a share of stocks, both over Time and Fortune. Other shareholders were Brown Brothers, W. A. Harriman & Co., and The New York Trust Company (Standard Oil).  

When Murray Rothbard talks about the Fed having been created by three factions--Morgan, Rockefeller, and Kuhn Loeb--it is interesting to note that both Rockefeller and Morgan had influence with Time.

The Bush family--through Samuel P. Bush, George W. Bush's great-grandfather--was connected to Brown Brothers, Harriman. Samuel P. was on an early board of the Cleveland Federal Reserve Bank and Bernard Baruch appointed him to  the War Industries Board I under President Wilson during World War I.  World War I was the first time socialism was put into effect in the industrial-era US. (Wilson in effect socialized the American economy; the head of the planning board was financier Bernard Baruch. A good book on that topic is Ronald Radosh and Murray Rothbard's New History of Leviathan.)

Prescott Bush, George Bush's grandfather, was vice-president of A. Harriman and Co., and partner of Brown Brothers Harriman.  Wikipedia says this about Samuel P. Bush, George W.'s great-grandfather:

In 1901, Bush returned to Columbus to be General Manager of Buckeye Steel Castings Company, which manufactured railway parts. The company was run by Frank Rockefeller, the brother of oil magnate John D. Rockefeller, and among its clients were the railroads controlled by E. H. Harriman. The Bush and Harriman families would be closely associated at least until the end of World War II. In 1908, Rockefeller retired and Bush became President of Buckeye, a position he would hold until 1927, becoming one of the top industrialists of his generation.

The story is equally interesting with respect to The Washington Post. This paragraph is clipped from Wikipedia:

The newspaper was purchased in a bankruptcy auction in 1933 by a member of the Federal Reserve's board of governors, Eugene Meyer, who restored the newspaper's health and reputation. In 1946, Meyer was succeeded as publisher by his son-in-law Philip Graham.

When Philip Graham committed suicide, Meyer's daughter and Graham's wife Katharine Meyer Graham took it over.  Warren Buffett has long been associated with The Washington Post as well and was the mentor of Katharine Graham, its long-time CEO.

The Ochs Sulzbergers have owned a controlling interest in The New York Times since 1896. Although they advocate inheritance taxes for others (especially those who own moderate-sized businesses and lack the sophistication to establish a family trust), the Sulzbergers themselves have passed The New York Times through inheritance via a family trust through five generations.  The current owners, led by Arthur Sulzberger, partnered with Bruce Ratner to build their new office building near Port Authority.  Naturally, The Times favored Ratner's use of eminent domain to take possession of others' land in building the new basketball stadium in Brooklyn.  The Times, with Ratner, also used eminent domain in building its own office building.

The more recent history of Time Warner is also interesting.  This is what Wikipedia says:
As of mid-2010, it was the world's second largest media and entertainment conglomerate in terms of revenue (behind The Walt Disney Company), as well as the world's largest media conglomerate. Time Warner subsequently acquired Ted Turner's Turner Broadcasting System in October 1996. In 2005, Time Warner was among 53 entities that contributed the maximum of $250,000 to the second inauguration of President George W. Bush.

Note that the Bushes were connected to Time via Brown Brothers Harriman; Time Warner contributed heavily to Bush's presidential reelection.

In sum, I have stopped watching television or reading newspapers.  Better no information than slanted information. Television, radio, and newspapers make you think you know something; it's better to know that you don't know.

No comments: