Posted 12:05 AM by Robert

One Must Move With The Times

With the Shays-Meehan-McCain-Feingold ersatz campaign finance reform bill lodged high in the Congressional agenda, it’s worth considering the often-asked question whether Big Media favor campaign finance reform because it would make them more powerful.

The argument is well summarized by Jonah Goldberg: “If you make it difficult or illegal for interest groups (a.k.a. American citizens) to express themselves through paid ads during campaigns, you necessarily make the media more powerful. …The coastal media do a pretty good job of getting their message out already.”

Jonah argues that this is just not how the issue is framed in “the minds of the top 1,000 media bigwigs.” He says that “conspiracy theories about the media fall apart, because journalists are neither that smart nor that devious. For the most part, the elite media support campaign-finance reform because it sounds like a good idea to them. Period. … But — and this is the important but — the reason they don't see that bans on issue ads are bad, for example, is that their ox isn't getting gored.”

True, Jonah, as far as it goes. But it doesn’t go very far.

Yes, journalists are neither that smart nor that devious, and in a few Big Media companies editorial policy probably lies close to the journalist level. There is, for example, no evidence that General Electric sets NBC news policy in any significant way, Henry Waxman’s preposterous post-election flame out about Jack Welch’s “interference” with NBC News election coverage to the contrary notwithstanding. Before his departure, Jack Welch was questioned about NBC News editorial policies at shareholder meetings, and dismissed the question with the observation that the entire NBC news division was “too immaterial” to GE as a whole to be worthy of his time. Welch may have been concealing his reasons for remaining removed from NBC editorial policy, but it seems that GE management did and do, in fact, not involve themselves.

But the relevant decision-makers at most Big Media companies are often not journalists. The Washington Post and The New York Times, both nominally public companies, are also both family run by highly involved owners. Could anyone seriously maintain that in the long run any chief editor at either of those companies could long veer from the owner’s point of view on a matter like campaign finance reform, surely one of the defining media topics of the day? Newsweek, a Post subsidiary, will also follow its master’s voice. There is nothing sinister about media owners expressing themselves through their properties, especially on the macro issues – that’s part of the fun of ownership and in the case of these companies it’s clearly a fact. While Disney is a true public company in the sense that there is no involved, dominant owner, its board of directors has for years been a notorious kennel of Michael Eisner lapdogs. Further, Mr. Eisner is a micro-manager to an embarrassing extent, even extensively sitting in on movie productions and the like. It obviously behooves an ABC talking head or other journalist as much to determine and emulate Mr. Eisner’s views on a topic of this significance as it does for the “head” or journalist to deny that Mr. Eisner (or Messrs. Redstone or Levin, as appropriate) is determining editorial policy from above. But one would have to be naïve to believe that the Mr. Eisner doesn’t make sure that at least the big issues line up his way at ABC. He’s just like that. Viacom and AOL-Time Warner (at least prior to Levin’s still mysterious implosion) show serious signs that editorial policy is considerably influenced by the views of the highest reaches of the corporate group. The case of CBS is complex, since Dan Rather is an inherited prince who by reports is unlikely to feel any need to cultivate higher management. But this is irrelevant to higher Viacom management in the case of campaign finance reform, since Rather’s views seem to align themselves with what appears to be the positions of Viacom’s management.

So in much of Big Media, the ultimate arbiters of editorial policy (and, for the purposes of this post, I'm including newsreportage emphasis, "spin" and "slant" as part of "editorial policy" - although I am well aware that they are quite separate in operation) regarding macro topic like campaign finance reform are probably the corporate majordomos – not journalists. Of course, this is not to say that the majordomos are editing copy in the news divisions or calling individual reporters to account for particular stories. And remember, the above discussion pertains to editorial policy – in the area of current lobbying and legislative policy the journalists have no role. Corporate operatives, not journalists, already handle those.

Unlike journalists, corporate majordomos are that smart and that devious. That’s how they got to be majordomos. For example, say what one will about their failings, people like Sumner Redstone, Michael Eisner and Gerald Levin have never been accused of lacking smarts or deviousness - which is not equivalent to saying that they are bad men.

On the other hand, there is no particular reason for corporate majordomos to be gifted or not gifted in understanding major national Constitutional power shifts – it’s just not something that comes up that often or that critically in one’s growth from minordomo to majordomo. And passage of a campaign finance reform bill which effectively suppressed the ability of non-media private parties to use their accumulated wealth to lobby and influence voters would certainly constitute a major national Constitutional power shift.

Where would such legislation lead Big Media? It is hard to say, since prior laws supposedly passed as such “reform” have not had much of their putative intended effect. But I don’t think it would lead to the Big Media as we know it acquiring the kind of power its majordomos may hope for – and which the critics of campaign finance reform fear.

But it’s fairly obvious that a new Big Media would acquire exactly that kind of power, and that is something the current crop of majordomos may or may not understand. If campaign finance reform effectively suppressed the ability of non-media private parties to use their accumulated wealth to lobby and influence voters, then ownership and control of the Big Media companies would immediately become essential to every major economic interest group in the nation. For example, MicroSoft – which long disdained purchasing political influence in Washington but is now a major employer on Gucci Gulch – would really only have one option: it would HAVE TO acquire a Big Media company, or several of them. It would be completely immaterial whether such an acquisition was economicly rational in the sense that the acquisition price square with the potential profits of the acquired company. MicroSoft would be protecting itself. And it would not be alone. Big Oil. The automotive industry. The Unions. All of them - by hypothesis - would suddenly have only one way to reach the voters: control of Constitutionally protected media. It would not be pretty.

It is highly unlikely that the current management of any of the Big Media companies would survive the wave of corporate merger and acquisition activity passage of such legislation would trigger. Disney is already an undermanaged mess. So is AOL-Time Warner. Even GE’s stock has swooned. There would be no question of whether these companies were “in play” – they would be acquired for the very purpose of replacing their management.

Nor would the family run companies likely survive, they couldn’t be allowed to. Somehow or other, a way would have to be found to eliminate the Sulzbergers of the nation and their like. There would simply be too much at stake. If it were even necessary to trump up criminal charge against The New York Times or its management, for example, that would happen. But these companies can probably be knocked off by some strategic decisions in by the Federal agencies - a few nasty findings by the labor department, for example, should be enough to take care of the Times. It would have to happen. It is simply not the case that every commercial interest in the country is going to let a little company like The New York Times control an information spigot while everyone else is prohibited from using their wealth to influence a political system that has absorbed so much of the nation's economic decision making through the Federal regulatory process. For the record, I am not urging these repercussions on the system. I just report the news (and the prediction of repercussions); I don’t advocate it.

Most of Big Media is not protected by the First Amendment. For example, GE is a major defense contractor as well as the owner of NBC. There would be huge incentives for political operatives to influence the editorial policies of the Constitutionally protected components of Big Media companies by applying government pressure to the unprotected components. There would also be pressure to appoint Federal judges sympathetic to restricting First Amendment protections.

Ultimately, if such “reform” legislation stuck, the economic incentives to restrict the reach of the federal government would likely enormously increase. After all, what makes regulatory agencies tolerable to the regulated interest is their ability to capture those agencies when the fuss settles. That would all be eliminated by “true reform”.

But the regulatory state can only shrink so much. What happens then? The economic incentives to affect government will never go away. Wealth is like a river – dam it up in one place, it finds another. And the obvious place for wealth to go is corruption.

Further, if you have wealth and you want to use it to affect the government and the law won’t let you do it, then you do it outside the law. Simply put: If monetary influence on government is criminalized, only criminals will have monetary influence on government. Almost a bumper sticker!

So, it comes to this: “True reform” would probably result in a great scramble to acquire and hold influential media in defiance of “rational economics,” with the resulting ejection of all current Big Media management as well as the destruction of any significant family-owned media. The Regulatory State might shrink somewhat, and corruption greatly increase – if corruption increased enough it might not be necessary to shrink the Regulatory State.

All of this would be ironic. But irony is cheap in politics, so I wouldn’t make too much of it.