Big Brother vs. Big Business
(posted by Libby Spencer)
In reading through the comments on Radley Balko’s chat here yesterday, I was thinking the greatest gap between libertarians and liberals is the belief in the free market. Don’t get me wrong. I believe free markets would work; I just don’t believe they exist. So I’m wondering what the libertarian take is on this lawsuit to block Bud-InBev’s potential monopoly on the US beer market.
A group of ten private citizens filed a federal complaint “claiming Belgium-based InBev’s $52 billion purchase of Anheuser-Busch Cos. Inc. would violate U.S. antitrust law if completed as planned in the coming months.” They’re not seeking financial damages. They want only to stop the merger.
The suit filed Tuesday challenges the deal’s legality on different grounds. It says the merged brewery, to be called Anheuser-Busch InBev, would have a monopoly over beer production in the United States. The lawsuit argues that combining two of the world’s biggest breweries will reduce competition.
“If InBev is allowed to purchase Anheuser-Busch, there no longer would be any significant major potential competitor to influence pricing and marketing practices in the United States.” the suit says.
I think they have a valid point. We’ve seen what corporate consolidation has done to media. Once we had news programs. Now we have infotainment gossip shows. This week the major media players will spend more air time on pig lipstick than on the continuing meltdown of our major financial instutions, the deteriorating situation in Afghanistan, and as for Iraq — that’s just that little country we’re still occupying with 130,000+ troops at cost of billions per month. Old news. This, of course, is not even close to an exhaustive list of greater issues.
Defacto corporate monopolies also control our oil, our telecommunications, our medical care and to a large extent our agriculture. It’s not much of a stretch to envision a time when corporations will control our water supplies as well. So while a discretionary product like beer isn’t that high on the list of concerns, it’s symptomatic of the creeping corporate control of every aspect of our lives. Today many major multinational corporations have an annual revenue that exceeds the GDP of at least 30% of the third world nations. Free market principles can’t exist under these conditions.
I hear a lot of talk from libertarians about the coercion of big government when regulatory controls and monopoly busting comes up but I believe corporate coercion is of much greater concern and is the one area of the market that does require government intervention, assuming we can break the stranglehold the corporations already have on our government that has allowed these monopolies to form in the first place. In fact, I see it as an essential first step in breaking the excessive governmental interference in our private lives.
September 11th, 2008 at 11:12 am
I’m somewhere between a softcore libertarian and not-liberal-enough liberal, but I think this Busch lawsuit is bogus for two reasons: one, there will still be plenty of little microbreweries producing beer; and more importantly, the only way I could support anti-trust laws is if one company manages to get a complete stranglehold on something which is absolutely necessary for life, not merely a luxury. If one company in the US managed, for example, to control 95 percent of the grain supply, I definitely agree that could lead to problems. But one company controlling the majority of the production of watered-down beer, bubblegum or temporary tattoos? Meh.
Disclosure: I don’t drink beer at all, and my boyfriend only drinks precious little microbrews with names like “Pretentia-Brau.”
Instead of trying to fight corporate monopolies, maybe we’d be better off re-thinking the government invention of corporate status.
Defacto corporate monopolies also control our oil, our telecommunications, our medical care and to a large extent our agriculture.
All problems caused by excessive government regulation. The government says that a certain cable company gets a monopoly in my area. The government makes laws that punish small farmers to help big ones. The (local) governments pass zoning laws which make it impossible to live without a petroleum-powered car. And so forth.
September 11th, 2008 at 11:16 am
Once we had news programs? You mean when there was only CBS, NBC and ABC spouting middle of the road nothingness?
There has been a vast proliferation of alternative news outlets. Most people just don’t give a damn.
September 11th, 2008 at 11:23 am
Let’s not forget MillerCoors, which was formed just months ago in a merger, and is a rather potent competitor to AB-InBev.
September 11th, 2008 at 11:25 am
Got a deal for you. First we repeal all laws granting government enforced limited liability and corporate personhood plus all laws which serve as impediments to other brewers entering the marketplace. Then we can talk about “corporate coercion” absent government coercion, and see where we stand.
The notion that beer is not essential is not worthy of comment
September 11th, 2008 at 11:26 am
I think the real libertarian argument against monopoly busting isn’t that it shouldn’t happen. I think that’s a very real and necessary form of a government, and a power that a limited government still would need to maintain. But like any big power, that power can also be used to skew markets in favor of a special interest so it needs to be used with a lot of care.
In this particular case, it doesn’t seem to me like this is a serious monopoly. Anheuser-Busch is the biggest brewer in the states, but InBev didn’t really have much of a presence here before the merger. Not on the level of AB anyway.
Even after the merger, I can still think of Miller and Coors right off the top of my head that still seem to compete at that level. Also, beer production isn’t something like car production with a huge overhead cost to product. One of the best things about the beer industry in my opinion as compared to something like the soft drink industry is the amount of small companies that are able to fill a seemingly innumerable amount of niches that a gigantic company like InBev is far too sluggish and big to deal with.
In a lot of cases having tons more capital is a big advantage, but in a lot of others being a small nimble company is too. We’ve seen that recently with Starbucks closing 600 stores. Tightening the belt is a lot harder when it’s that big.
Even if InBev/AB was the only big beer maker left, which it isn’t, there would still be tons of small ones eroding it’s business. A bottle of craft beer doesn’t cost much if any more than a bottle of bud, so it’s not like a custom car company trying to compete with Ford.
You say at the end of your post that “assuming we can break the stranglehold the corporations already have on our government”. I agree completely, but that sounds like a free market argument to me. If large corporations have too much control on the government, then you can’t look to the government to end corporate coercion. “We” has to actually mean us, and since we can’t (nor should we) just go burn down companies we don’t like, the best weapon you have is to beat them at their own game. As hard as that sounds sometimes, I think history has shown that it’s far from impossible.
P.S. Nice post. It really made me think.
September 11th, 2008 at 11:50 am
What Mike said. The problem is not that market power in beer is crossing some threshold of over-consolidation, but that it was *already* too consolidated.
September 11th, 2008 at 12:21 pm
Jennifer your point is well taken but isn’t the reason government regulation right now favors corporate interests because the corporations and their lobbyists are the ones writing the regs in order to subvert the free market. It’s a catch-22 and I’m thinking if we break up the conglomerates, they won’t have the economic power to control government policy.
Dain - it’s true enough that most voters don’t bother to seek out alternative outlets. So we’re left with the major media dictating the narratives and the public perception and we get pig lipstick instead of policy discussions. What we had prior to the consolidation granted wasn’t great, but I’m old to remember when the major news outlets reported hard news instead of gossip and celebrity sightings. Paris Hilton would have received a couple of minutes of air time and current events would have received the majority then, as opposed to the opposite now. The question is, for me anyway, how do we fix this imbalance?
LOL Mike. I agreed that repealing corporate personhood would be a very good place to start.
Thanks for the encouragement Lucas and to be clear, I do favor free market in theory. I’m just trying to figure out how to make it a reality.
Jeremy - Again, I don’t think this beer merger is a huge threat, because as has been pointed out, the free market principle actually works in this industry. A lot of us love our micro-brews. I only like it on the basis that it challenges the slow encroachment of corporate monopolies in new markets.
September 11th, 2008 at 12:31 pm
Government *IS* a big business. The biggest, and not subject to *any* restraint by market forces, and therefore the results will be horrid. The results are SO horrid that “horrid” bleeds through to everything it touches (regulates).
The reason we have such homogenous “infotainment”, BTW, is not because government permitted a bunch of mergers, it’s because government permitted mergers *while maintaining large regulatory barriers to entry*, eliminating free market competition, and all the choices that competition would otherwise offer (in fact, if you were paying attention, that eliminates both large and small competitors simultaneously. Wow.) You end up with a few huge market players that are identical due ENTIRELY to the consolidating influence of the regulatory environment, which quickly overrides the diversifying influence of the market. The reason they’re all the same is that they are serving the demands of their REAL customers in the government, not you.
Which is why, if you want timely, complete, accurate information and thoughtful analysis, you don’t go to the regulated media, you go to the less regulated Internet. (The media megalopolies do the same, you might notice - they have ever since Drudge broke the Lewinsky scandal.) The diversity of opinion and accuracy of reporting on the Internet is no accident. Nobody’s website is at risk of losing their FCC license or having a surprise regulatory compliance audit if dissenting opinion is posted, or if the government’s press releases are dissected and fact-checked, rather than stenographically reiterated. (I’m sure more Internet regulation is on the way, so enjoy it while you can…)
Libertairans and anarchists are often misunderstood to favor businessmen over the government regulators, when in fact, we favor the market over EITHER (though govenment is, indeed, at the BOTTOM of our preferences, but that’s another post). Business people can be expected to take every unfair, anti-competitive, customer-damaging, market-busting advantage they can find, and the *best* place to find these is over in the Government Sector. The only thing that tends to stop them is if you permit their customers to ignore them in favor of their competition. Only government can require you to buy something or prevent competitive alternatives in the things you willingly buy. Regulation is the price they pay for being shielded from real market competition, and it’s way cheaper than competing, or they wouldn’t pay it.
The regulated LOVE the regulators, they literally hang out together all the time, and people move back and forth between jobs in the regulated industry and regulatory oversight jobs ALL the TIME. It’s the regulatory hoops that make it hard hard for Libby Spencer or Jeff Thomason or whoever to start up a competing TV station and point out what ignorant jerks the media or the government are, and force the MSM to shape up or die. When radio transmitters got cheap enough to offer numerous real competitors, “Pirate radio” was outlawed by Government regulators. Coincidence?
Sure, a TV station is completely different and there are a ton of of capital requirements to start one, but I bet the vast majority of those are in the “regulatory compliance” column, not in the “technology required to emit TV signals” column. Spectrum alone is probably the biggest expense, and that’s all regulatory. And if your business plan says “our TV station is going to publicize government stupidity at every turn — just as soon as the FCC approves our license”, do you think you might have a hard time raising capital? Investors are human too, if you offer them a choice between investing in a business that MIGHT be able to compete in an ever-changing free market, where you’re going to have new competitors before they can even sign the check, vs investing in a business with a government-granted monopoly (or even where government regulatory demands limit competition sharply), what do you think they’ll pick?
Even the tech is better and cheaper when it’s sold into an unregulated industry. Which do you imagine is higher-tech, high speed Internet routers or TV broadcast radios? Which is dropping in price fastest? Which is used in a more regulated environment? Not a coincidence. Why do you suppose YouTube started on the Internet and not on cable channel 8?
So I don’t know if the beer merger is a net positive or a net negative, but I know in either case we’re focusing on the symptom and ignoring the disease. In a free market, businesses that get too big are eaten by their smaller, faster moving competition, but the beer market is highly regulated, so the smaller competition have all been sprayed with DDT, years ago. Does anybody happen to know what kind of licenses and approvals you need to even sell homebrewing supplies to the general public? I’ll bet it’s way more than just a business license and a department of health tag. And certain beer heiresses (that, ie, bankrolled the political career of certain senators) got to be rich because the business that enriched them never, ever had to worry that is was getting too big and slow-moving and bureaucratic. You NEED that big business bureaucracy to comply with the big regulatory bureaucracy (which means we’re paying overhead on beer TWICE, by the way, which is probably the real moral tragedy here).
OK, I’ll stop now. No prizes for guessing where my hot buttons are…..
Jeff
September 11th, 2008 at 12:47 pm
Jennifer your point is well taken but isn’t the reason government regulation right now favors corporate interests because the corporations and their lobbyists are the ones writing the regs in order to subvert the free market.
That’s why I said we need to seriously re-think the entire government invention of corporate status. Under the current situation, if I individually brew and sell you some tainted Jennibeer, and you get sick and miss a week of work, you can sue me for medical costs, lost wages and punitive damages. But if I have corporate status and then sell that same tainted Jennibeer to thousands of people, what happens? At most, there’s a class-action suit wherein I have to pay a fine equivalent to maybe a week’s profit, the lawyers will make a nice sum and everybody who got sick drinking my tainted product will be reimbursed with a coupon good for three dollars off their next six-pack of Jennibeer.
September 11th, 2008 at 12:50 pm
the elitist and the populist in me doesn’t know what to drink sometimes. sundry hipsters and leftists take note that pabst is a virtual brewer usually made by coors or miller or whoever.
from wikipedia and of interest for the discussion:
Two major events in the beer market revolutionized the mass beer market from 1970 to 1990, none of which Pabst fully participated in. To understand the context of these changes, it’s important to note the top selling beers in 1970 in contrast to twenty years later in 1990. The top beers (sales - U.S.) in 1970 were 1) Budweiser, followed by Pabst Blue Ribbon, Schlitz, and Miller High Life. By the 80’s, the market had been totally re-invented due to the advent of “Lite” beer by Miller and subsequent light beer additions by other brewers. Furthermore, a federal judge had ordered Coors Brewing Company to expand its operations outside of the Rocky Mountain area, forcing Coors to ship their product east of the Mississippi for the first time. The resultant reordering of beer sales by 1990 stacked up with Budweiser still on top, followed by Miller Lite, Bud Light, and Coors Light. Only Budweiser had remained from the original hierarchy, and was the only “non-light” beer remaining on the listing.
September 11th, 2008 at 12:51 pm
my first sentence doesn’t make sense, but maybe you get my drift.
September 11th, 2008 at 12:53 pm
anyway, proud minnesotan that i am i drink lots of grain belt.
September 11th, 2008 at 2:39 pm
Like Jennifer said, a beer monopoly is nearly as much of a concern for a society as a media oligopoly, an oil oligopoly, etc.
September 11th, 2008 at 3:29 pm
To get my facetious response out of the way first, maybe being bought out by Europeans will result in A-B making some beer that doesn’t taste like shit for a change. Buying them out is a nice first step, but levelling all their breweries and sowing the ground with salt would be even nicer.
Seriously, though, the problem with regulation isn’t just that the process was “captured” by big business. It was *invented* by big business. Any time you see any form of regulation, it’s almost a dead certainty the “bootleggers” were the primary force behind creating it in the first place, and the “Baptists” are just useful idiots.
As it is, the capital and other startup costs for a microbrewery are pretty low, and I’d guess they’d be a lot lower were it not for the licensing requirements Jeff mentions. I don’t even have a real fermenting tank, let along a hygrometer and all that other stuff. And with my jury-rigged 5-gallon distilled water jug, I can’t produce IPA of anything near the quality of the brew pub in Fayetteville. But my worst infected batch tastes better than Budweiser’s wretched shit.
You’d better believe the loudest people to squeal about repealing the liquor licensing system would be existing bars and restaurants that already have them; it’s the reason a shot of bourbon in one of those establishments costs more than a half pint bottle at the liquor store.
Getting a real fermenter, using a room of your house as a public restaurant area, etc., would maybe require a small bank loan for a few thousand $$. And with that capital outlay, you’d only have to serve a few customers a day (whom you could probably find among your own present circle of acquaintances) to pay off your debt and support yourself. But that’s illegal. You have to buy an extremely expensive liquor license, as well as having an industrial size and strength stove, dishwasher, etc. And that level of capital outlay can only be paid off with a large dining room and a large kitchen-waiting staff, which means you have to keep the place filled or the overhead costs will eat you alive–IOW, Chapter Eleven. These high entry costs and the enormous overhead are the reason you can’t afford to start out really small and cheap, and the reason restaurants have such a high failure rate. With the entry costs lower (in this and many other areas of small business), the minimum level of custom required to stay in business would be quite modest, and even a low level of turnover would be sufficient to pay the overhead. In that case, a lot more people would be able to start small businesses for supplementary income and just scale back their wage labor a bit, maybe gradually shift to complete self employment, all with minimal risk or sunk costs. So maybe it’s employers, as well as big competitors, that have a vested interest in keeping these entry costs so high. It’s a way of erecting an enormous toll gate between you and the possibility of self-employment, without a boss cracking the whip over you.
I’m also guessing intellectual property law plays a big role in the cartelization of the market. If anyone with a fermenter could legally attempt to reverse engineer Budweiser or Michelob (assuming anyone would want to do such a thing) and sell a generic version, things would be a lot different. I believe in trademark enforcement only to the extent that prevents actual fraud or misappropriation–none of that “dilution of trademark” bullshit. If you can produce an identical product, and advertise it as “just like so-and-so,” while making it clear that it *isn’t* so-and-so, and sell it for half the price, more power to you.
Then there’s the role of subsidized long-distance transportation, as the fundamental prerequisite of the “warehouses on wheels” distribution model that the centralized beer cartels depend on. Do away with the power of eminent domain for building/expanding airports and highways, and fund highways entirely with weight-based tolls on the big trucks, and anything that *could* be produced on a small scale for local markets *would* be. There wouldn’t be much of a place for A-B in such a world.
More generally, transportation subsidies have had an enormous effect on the creation of continental and global market areas and large industrial corporations serving them. The American corporate economy couldn’t have come into existence on a national scale without the prior creation of the national railroad system through government land grants. The creation of a national railroad network was followed, first by nationwide wholesalers, and then by large-scale industry producing for the national wholesale market. Absent this, we’d probably have a decentralized economy of small-scale industry producing for local markets.
Intellectual property, in general, also has a major cartelizing effect. Probably the central tool for creating stable oligopoly markets is the pooling or exchange of patents (e.g. the way the home appliance industry was cartelized by a pooling of patents between Westinghouse and GE, or the way the Dept. of Justice siezed German chemical patents during WWI and gave them away to the American chemical companies). And the major profitable industries in the global economy–biotech, software, entertainment, electronics–all follow business models that rely heavily dependent on intellectual property.
Re media, through the 1920s about half of all radio stations were owned by local nonprofit groups of one kind or another. It was the creation of the FCC and its licensing that directly led to the corporate cartelization of the radio industry.
September 11th, 2008 at 4:08 pm
Big Business, Government, and Coercion…
I think the evidence shows that as long as you have government regulators, you will have interested parties seeking to influence those regulators. The problem is that the parties interested in a particular set of regulations will almost entirely come…..
September 11th, 2008 at 4:08 pm
Libby, I think a lot of this anti-trust stuff is hysteria. My son drinks Rolling Rock beer, a New-Jersey founded company whose beer is sold everywhere (at least here in the Midwest). The corp. is Latorbe Brewing Co.
And what? Folks are gonna stop buying Guinness if this merger succeeds? I think not.
As my son can tell you, beer prices vary wildly, and he pays more for what he likes.
September 11th, 2008 at 5:12 pm
good answers. I think these answers along with Publius Endures’s great post on the matter through his link pretty beat down the most thoughtful liberal argument for trust busting and regulation in most cases…this beer affair included.
Liberals need to get past the catch 22 in what they say about government power towards free-er markets and rent-seeking regulation. It’s really DOA.
September 11th, 2008 at 5:12 pm
Let me mention first that I love this community. I love when the readers are smarter than me. I learn things.
Surprisingly, it appears to me we’re more or less in agreement on the nature of the problem. Big government invented bad regs essentially to stifle the free market to favor big business and created almost insurmountable barriers for entry to minimize competition from small business. The incentive on the side of Big Business is clear. Profit and control of the market. So what are are the incentives on the government side? The way I see it, it’s mainly power.
The bureaucracy has an incentive to increase regs in order to perpetuate its existence and exert control. But they need politicians to enact the regs that they enforce and the politicians need the corporate cash to maintain their positions of power so they have an incentive to write the bad regs in order to keep the cash flowing. You have to break the circle somewhere.
I don’t think the answer to bad regs is no regs. Surely our experiment with allowing the financial industry to police itself has proved that. The answer is good regs that protect the common welfare while allowing for fair competition. My question is, how do we get there?
September 11th, 2008 at 6:01 pm
Dain - it’s true enough that most voters don’t bother to seek out alternative outlets. So we’re left with the major media dictating the narratives and the public perception and we get pig lipstick instead of policy discussions. What we had prior to the consolidation granted wasn’t great, but I’m old to remember when the major news outlets reported hard news instead of gossip and celebrity sightings. Paris Hilton would have received a couple of minutes of air time and current events would have received the majority then, as opposed to the opposite now. The question is, for me anyway, how do we fix this imbalance?
I’m far from an expert on all this, and we’re definitely kind of throwing impressions of our sense of what the media is all about at each other, but let me take a shot at this.
My hunch is that as the variety of channels increased - due to deregulation, perhaps - the pressure on any one channel to provide infotainment - and increasingly just entertainment (Daily Show included) increases, because something funner is a click away. Younger people tend to make up the viewership of cable television, and their tastes are not as, shall we say, refined as the baby boomers?
But of course, why did people switch to what’s “fun” (or at least not politics) instead? Rick Shenkman, in his new book Just How Stupid Are We?, says that young people back in the 50s were more likely to read newspapers and engage the world of politics than young people today, so the viewer demographic thing can hardly explain it all.
Diana Mutz’s book Impersonal Influence shows that objective conditions are - big surprise - not accurately reflected by the media. The media is fairly autonomous from expert - political, scientific - viewpoints on the state of reality. And it’s also deadset on keeping viewers, so the way it “spins” has to more or less abide by the tastes of viewers.
And viewers feel out of touch with politics. And to the extent they like it, they like it entertaining and easy to swallow.
I think above all, the proliferation of lifestyle choices has just made politics less important than ever, so people just tune out. After all, in totalitarian societies politics is everything.
September 11th, 2008 at 6:08 pm
I don’t think the answer to bad regs is no regs. Surely our experiment with allowing the financial industry to police itself has proved that.
Yea, I must admit this can be very complicated. And I’m not just going to say that since a lot of regulation can be (a) counterproductive or (b) actually beneficial to established business/government interests, that “well, real financial deregulation must bring market optimality too!”
Again, to recap where we can (pretty much) all agree - and even on a shared sense of “there’s nothing free market about this“: intellectual property, limited liability, corporate welfare generally…and war!
September 11th, 2008 at 7:28 pm
Balko on media consolidation. I agree with him. Love it or hate it, FoxNews diversified things. My take: The People are to blame.
September 11th, 2008 at 8:10 pm
order to keep the cash flowing. You have to break the circle somewhere.
I don’t think the answer to bad regs is no regs. Surely our experiment with allowing the financial industry to police itself has proved that. The answer is good regs that protect the common welfare while allowing for fair competition. My question is, how do we get there?
Libby, on issues like beer, there is no need for anti-trust regs. Your average hillbilly (I of course exempt my Rolling Rock-imbibing son from that category) is still gonna buy the beer s/he prefers. This is not the world if high finance.
Its brewski. My boy would not drink Bud (or whatever it is they sell) if Anheuser-Busch gave it to him for free.
Now if they bought out Corona — his competing choice — he might join the cartel….
September 11th, 2008 at 8:13 pm
And by the way, all beer tastes like dog piss. One must be mentally disturbed to drink, much less enjoy it.
September 11th, 2008 at 8:33 pm
Chris:
…huh?
Would be the first I heard of this. A court order expanded Coors?
Kevin: I’ve long had thoughts of brewing some of my own. Just have to get my head around it enough to where I wouldn’t get stuck halfway, wondering “what do I do now?”.
W/R/T A-B & Miller, their latest moves strike me as crazy. Seriously, in response to a beer market diversifying at will despite the barriers they balloon even further? The thought process behind Miller deciding they needed an alliance with Coors particularly hits my “WTF?” button.
September 11th, 2008 at 8:42 pm
Mona: Look for a bottle of this, trust me. Saying that THAT beer tastes like piss might as well be an endorsement of drinking urine far as I’m concerned.
September 11th, 2008 at 8:55 pm
This gives a good acount of how US beers got that way. And, of course, there’s always this…
September 11th, 2008 at 9:16 pm
b,
checked out that beer. DAMN THAT LOOKS GOOD.
September 11th, 2008 at 9:20 pm
I don’t think the answer to bad regs is no regs. Surely our experiment with allowing the financial industry to police itself has proved that.
Not to split hairs but I don’t see any proof. The financial industry is incredibly regulated. It’s regulated in terms of interest rates for starters. The the market has two privileged giants, Fannie and Freddie, looming over everything. Then, I’m sure people in finance can point regulations spanning several reference books.
Saying after the fact that the problem was simply one of “lack of regulation” is a bit simplistic IMO. We have severe institutional problems wrought by regulation that affect the behavior of all parties involved.
I generally find arguments for regulations to quite weak in most cases. It seems that most matters that people want regulated (that fall outside fraud and stealing) would be solved by deregulating something that causes the matter in question.
September 11th, 2008 at 9:29 pm
Consider Hayek here:
The fundamental attitude of true individualism is one of humility toward the processes by which mankind has achieved things which have not been designed or understood by any individual and are indeed greater than individual minds. The great question at this moment is whether man’s mind will be allowed to continue to grow as part of this process or whether human reason is to place itself in chains of its own making.
This is not written with regulation in mind but the genius of Hayek’s way of explaining the dangers of trying to control things through reason that are not really the product of pure reason is superb.
That last phrase about human reasoning putting us in chains of our making is insightful. In general, Hayek’s perspective on the true nature of the evolution of human institutions is humbling to the reader and gets the reader to always be wary of putting too much limited reasoning into attempts to control outcomes.
September 11th, 2008 at 9:45 pm
John,
I know you acknowledged that Hayek’s quote isn’t directed at regulation per se, but as it stands it’s a bit murky as to how it relates at all.
Arguably a super-cartel achieved via laissez faire can attempt to plan for all contingencies that may affect its monopoly status through an extremely well exectued cunning of reason. Likewise, a regulator could draft a regulation that is simple, and widely applicable, through the use of his or her mere “common sense”.
September 11th, 2008 at 9:51 pm
b-psycho: My poison of choice is generally red wine (mostly Merlot), but offer me a well-made vodka, chocolate martini, and all bets are off — same likely for chocolate beer. But the operative word is CHOCOLATE. Otherwise, beer is all piss.
September 11th, 2008 at 10:17 pm
Dain,
I just can’t see that scenario taking place under laissez-faire. Give me a scenario.
BTW, when regulations are simple and merely in defense of basic rights, I can’t argue with that. But that’s not necessarily a regulation. It’s simply an interpretation of defending individual rights against fraud, force and theft.
September 12th, 2008 at 12:46 am
I don’t think the answer to bad regs is no regs. Surely our experiment with allowing the financial industry to police itself has proved that.
For those interested, here is a superb account by a former insider about what went wrong with Fannie Mae. It’s a perfect example of Mises’s theory that the middle road leads to socialism. Once government starts partially intervening - say by giving an implicit guarantee of debt - all the incentives of the “market” get be screwed up. Massive moral hazard is created, and if not regulated, the companies involved will bilk the public for all they can. However, regulation does not work, since the companies will always be smarter than the Congress-critters. Eventually the government must either privatize completely or socialize completely.
As for the beer question - I agree with Kevin. Regulations are invented by corporations. I was talking to a microbrewer in Philly recently who kept complaining Anneuser-Busch’s lobbyists. One example of a regulation A-B got passed was a law banning the listing of ingredients on beer bottles. They promoted it as an anti-drinking measure. After all, A-B said, if beer companies could promote their ingredients as healthy, that could lead to more drinking. But the real motivation is that craft breweries have far better ingredients, and Anneuser-Busch would rather not have people know that. So they got the law passed preventing anyone from listing ingredients.
September 12th, 2008 at 1:00 am
Mona: I can completely understand someone who doesn’t like beer at all. It makes perfect sense to me that somebody would go into a brew pub for a meal and drink a Coke. I mean, the food’s great and some people just don’t like beer. But what I can’t, for the life of me understand is somebody going into a brew pub and asking for a Miller Lite or something. It’s like going into Paul Prudhomme’s restaurant and ordering a bowl of Campbell’s Condensed Chicken Gumbo.
September 12th, 2008 at 1:21 am
Wait, is this some sort of joke? Since when is the market for beer anything close to consolidated? It’s hard to think of a more diverse market. In fact, Andy Stedman used the market for beer as an illuminating contrast to the electoral process.
Laws against media consolidation strike me as sour grapes; the typical American doesn’t shop organic only at Whole Foods either, or drive a Volvo. That isn’t a reason to pass laws against Kroger or Ford. If you don’t like the fact that average Janes and Joes prefer Bill O’Reilly to PBS or NPR, there is a simple solution: make your preferred media source more appealing to consumers. The Daily Show is a pretty good example of this; more content than many of the cable news outlets, and popular too.
September 12th, 2008 at 7:14 am
Mona,
Sorry to hear your son is mentally disturbed.
September 12th, 2008 at 7:47 am
Most antitrust actions begin as suits filed by private companies against their competition. How does that protect competition? It’s rent-seeking, pure and simple.
September 12th, 2008 at 8:07 am
Good morning lovely people. I’m loving this thread.
Just to be clear on a couple of points. I think we can all agree that the Bud-InBev merger is not an existential threat to our economy or to beer drinkers. Again, what I liked about the suit is that it pushes back on the trend toward corporate consolidation in general which I think is a problem.
As for my remark on the failed experiment of dereg in the financial industry, I wasn’t really thinking of Freddie-Fannie. That seems to me to be a rather unique piece of the puzzle being that it doesn’t operate under normal market restraints due to the US guarantees.
I was thinking more of the subprime debacle that started the whole slide. IIRC, these loans weren’t under any regulation because it was such a new concept. I believe the industry term for it was “creative financial instruments.” It’s my understanding that whole scheme was based on the premise that real estate values would rise indefinitely. But nobody knew how it worked really, not even those inside the industry if I’m to believe my banker friend who has been underwriting mortgages for many years. His bank wouldn’t touch them. I’d note that his bank is no danger of failing.
September 12th, 2008 at 8:19 am
Just to speak briefly to the points on media consolidation, I’m too lazy to look up the link right now but I’m sure that the narrowing of the market to basically six major players is a relatively new phenomenon, and it’s only within the last couple of decades that the major corporations almost completely swallowed up independent stations. There’s not a whole lot of difference between Fox and MSNBC, or even NPR anymore.
There is simply not a diversity of views or sources. Newspapers use only wire services for national and international news. The on air media may differ in their slant on a story, but they’re all talking about the same damn story. They decide on a narrative and that becomes the water cooler discussion. This week it’s lipstick. I find that frightening.
The entire major media has become a cross between the USA Today and The Enquirer. And yes I know there is a wealth of alternative sources on the internets, and we all seek them out, but the average Jake is just tuning into CNN or Fox to get 30 minutes, if that, of soundbites.
What I’m trying to get at is who would break a story like Watergate in today’s environment? I don’t think it would happen today. I don’t think it could.
September 12th, 2008 at 9:05 am
Libby,
on several levels:
First,
Fannie and Freddie affect the subprime market. Their presence affects behavior. Their implicit guarantees affect choices.
Second,
Creative financing solutions are the products of the environment. Loose Fed policy encouraged decision making…both in trying to get people more house for lower rates and in making real estate values rise from over-consumption.
To make a point after the fact and call for regulation of this is like locking the barn after the horses escape. It’s too late.
Yes, the idea that real estate values would constantly rise was a faulty one and one that doesn’t need to be regulated. People must learn the hard way that such sophisms are just that. That’s the free market. But the free market would never have fostered circumstances to encourage the gluttony we saw to begin with. That’s a key thought here. Keep in mind that Congress takes measures to get more people in homes. Sounds good but then it can cause problems. It also helps that if Fed doesn’t encourage a bubble.
“Free markets” involve all forces acting truly independently and freely with full responsibility for action taken. When Government puts one of these forces “on steroids” (so to speak) or gives it a helping push, it’s upsetting this balance. To cry foul on regulations for this artificial encouraging has wrought misses the point.
It is more honest to simply say that the one wants intervention and then wants further intervention in the form of regulations when side-effects from the previous intervention occur….all while never hinting at the idea that “markets failed”. Markets didn’t really fail. The intervention caused a perversion that led to a failure because the perversion wasn’t accounted for.
September 12th, 2008 at 9:11 am
And yes, Sheldon Richman hit the nail on the head:
Most antitrust actions begin as suits filed by private companies against their competition. How does that protect competition? It’s rent-seeking, pure and simple.
Exactly. Protecting competitors and protecting competition are two different things. Competitors want protection and advantages. Nothing new there. Most times, it’s bogus, lazy and dishonest rent-seeking.
September 12th, 2008 at 10:09 am
I, too, am enjoying this thread, which has now inspired two posts of my own. I’ll just briefly summarize those posts here.
1. I disagree that the underlying problem is that monopolies/corporate interests control the regulators, but would instead argue that this is more a symptom of the real problem, which is that regulations inherently encourage monopoly and consolidation.
2. While I disagree with Libby’s diagnosis, her post exhibits an underlying principal that is essential for the formation of a left-libertarian coalition. That is the principal that competition is inherently good and desirable. To the extent Libby’s points are typical of contemporary liberals (and they are certainly not atypical), this demonstrates that contemporary liberals have moved from planning against competition to trying to plan for competition (this distinction being the entire basis for Road to Serfdom).
3. Libby’s arguments bring forward something that libertarians should internalize, even if somewhat unintentionally. That is that the far greater threat to liberty in the economic policy arena is not social welfare programs but rather corporate welfare programs and rent-seeking. This is particularly the case because a symbiotic relationship between government and corporations allows government to do an end run around fundamental personal liberties (think warrantless wiretapping programs, for example). A symbiotic relationship between social welfare recipients and government, however, has little such danger (indeed, it is the recipients themselves who are more likely to wind up forfeiting constitutional rights).
September 12th, 2008 at 10:23 am
libertarians should internalize…that the far greater threat to liberty in the economic policy arena is not social welfare programs but rather corporate welfare programs and rent-seeking.
I think you’ll be hard pressed to find any libertarians that don’t already believe that.
Problem is that far too many liberals ignore the counter-productive danger of fighting fire with fire to put out a fire.
You simply can’t rely on a highly active and interventionist government to fix the incentive and institutional problems wrought by a highly active and interventionist government.
As long as the refs are subject to influence, their role is too great and distorts the game.
September 12th, 2008 at 10:38 am
John:
Maybe it depends on which set of libertarians you’re referring to. Remember, for a very long time libertarianism has been primarily associated with the coalition of the Right. Even today, I see many, many nominally libertarian blogs that decry Obama as a massive threat to liberty because he is a “socialist” (the apparent lack of recognition of the meaning of the term notwithstanding). Perhaps the majority of these libertarians view Obama as equal or worse than McCain in terms of being a threat to liberty because of this.
As a practical matter, it has seemed to me for quite some time (though increasingly less so) that libertarian economic policy activism has been primarily directed at the welfare state. This may be a function of the de facto alliance with the Right such that attacks on corporate welfare have been particularly ineffective (since the political Right is ok with much corporate welfare), while attacks on social welfare have been particularly effective (since the political Right for a long time didn’t like social welfare, either). Regardless, the popular perception of libertarians is that we are only/primarily concerned about cutting social spending; whether this perception is accurate or not, we have to accept that there is probably a reason for this perception, and should act to change it.
September 12th, 2008 at 10:53 am
I hear you, Mark.
But I think the association with the Right is more responsible for that perception that things actual “Right” libertarians say or state in that there is “guilt by association” going on. When Free-Market Rhetoric conservatives and supply siders say such things, they get misconstrued as being “Right libertarian” rather what they really are: Just “Right” or crony capitalist.
Cato is often considered “Right Libertarian” but I don’t personally believe they are. I think they are just libertarian. They speak against all kinds of welfare and bemoan parasitic rent-seeking as soon as it rears its head.
But yes, perhaps Right-leaning small government conservatives who fancy themselves as libertarian parrot the image you convey. But at that point, yes, it depends on whom we classify as libertarian.
September 12th, 2008 at 11:59 am
People must learn the hard way that such sophisms are just that. That’s the free market. But the free market would never have fostered circumstances to encourage the gluttony we saw to begin with.
Except, wasn’t it the Bush administration’s failure to regulate the instrument in the first place, in order to foster a quasi-free market approach that allowed it occur? And the only ones I see suffering the consequences of bad decisions are the schlubs at the bottom that took the bait on what to me looks like a classic Ponzi scam. The people at the top of the pyramid who invented the instruments are still walking out with serious money.
Problem is that far too many liberals ignore the counter-productive danger of fighting fire with fire to put out a fire.
Sorry, I just have to note that this actually is an effective method to put out a forest fire. I suspect that’s where the expression originated.
By the way, none of my arguments should be construed as believing we aren’t already over-regulated as a society on all levels, not just in business matters. What I’m driving at is that I believe we need some reasonable regulation although I think it should be as miminal as possible. But no regulation at all encourages greed and fraud.
September 12th, 2008 at 12:30 pm
Except, wasn’t it the Bush administration’s failure to regulate the instrument in the first place, in order to foster a quasi-free market approach that allowed it occur?
I’m simply not sure. Was it?
My I see messes like this. I ask myself a few preliminary questions:
What was done to induce the market to produce this result?
What would have been the goals for this inducement?
What was happening that this goal needed to be artificially induced?
Would this all be happening without the inducements in question?
Was the inducement wise in retrospect?
Again, to get the gist of my point, you’d have to backtrack and see if distorting measures we’re already leading to this point. I say yes. Then, assuming you like the distorting measures, then you have be able to explain what exactly was supposed to regulated and what exactly the reason for it would have been and ask yourself again if some pre-existing factors, implemented by government, were more to blame than the failure to “regulate” what came after.
If you prefer free-markets, I say the default position is to see what intervention created the problem. If you admit that our markets are not truly “free” then you still look back to see why and start from there.
September 12th, 2008 at 12:35 pm
And the only ones I see suffering the consequences of bad decisions are the schlubs at the bottom that took the bait on what to me looks like a classic Ponzi scam.
Libby,
Paul Krugman’s estimate of $500 billion in writedowns and losses that have occured as a result of the meltdown in the subprime mortgage market is probably an accurate number. Those losses have been incurred by financial institutions (i.e. the Wall Street i-banks, commercial banks) as well as the investors that made much of the boom in financing that we saw possible due to unprecedented levels of demand for mortgage-backed securities.
This situation goes far beyond people losing their homes (a tragedy of course) and has thrown the financial markets into turmoil, a situation I witness every day as I work in the commercial real estate business and I follow the capital markets day in and day out.
Thanks to Fannie and Freddie, you can also add all US taxpayers to the list. Who knows what else the taxpayers will take on as a result of this. Frankly, it would not surprise me if an acquisition of Lehman Brothers by whatever buyers acquires the company will be made in part due to some sort of federal intervention.
September 12th, 2008 at 1:10 pm
What I’m trying to get at is who would break a story like Watergate in today’s environment? I don’t think it would happen today. I don’t think it could.
Drudge Report. Didn’t some supermarket tabloid break the John Edwards story?
September 12th, 2008 at 2:19 pm
a propos,
Liberal Democratic Economist Mark Thoma says something refreshingly encouraging on financial markets and failures.
Of course, he doesn’t do this because he’s a libertarian-leaner (far from it)…but rather simply because he’s an economist, who by rule generally favor markets and will defend them against outward appearances of failures…sometimes.
September 12th, 2008 at 2:36 pm
Drudge Report.
Yes, the go-to spot for all hard-hitting bulletins about major lawbreaking and / or Constitutional violations by authoritarian administrations. Remember the nonstop Drudge coverage of the FISA violations? Nice equivalence between Watergate and exposure of a failed politician’s affair, though.
…What’s the HTML tag for “eyeroll”?
September 12th, 2008 at 2:49 pm
I’m not well versed in economics and don’t really understand the specifics that well. Frankly, the numbers and charts glaze me over. I only follow the overall trends to get a sense of the sociological impact, which interests me greatly. But I end up reading quite a lot of the specific stuff and I seem to recall that the fed bailed out the early big institutions that melted down with some kind of guarantees, so aren’t the taxpayers on the hook for more than just Fred and Fannie? The term I’ve heard bandied about on the econ blogs from the first bailout is privatized profit and socialized losses. Again, I’m asking, not stating facts. But I’m reasonably certain that the subprime market was not regulated at all and that’s why they’re talking about regulating it now.
Micha - Drudge Report and the supermarket tabloids don’t break stories like Watergate, they go for sexy rumors. And John Edwards sleazy little affair is hardly equivalent in my mind. And what did the Enquirer do with all their resources in AK on Palin? Baby stories and affairs and the son’s alleged drug problem. Of purient interest perhaps, but I didn’t see them breaking anything of political significance. Closest they came on Bush was his allegedly drinking.
September 12th, 2008 at 3:08 pm
crimelord: Sorry to hear your son is mentally disturbed.
Yes, and I’ve told him it is a tragedy — as has my daughter-in-law who also despises beer.
September 12th, 2008 at 3:34 pm
I only follow the overall trends to get a sense of the sociological impact, which interests me greatly. But I end up reading quite a lot of the specific stuff and I seem to recall that the fed bailed out the early big institutions that melted down with some kind of guarantees, so aren’t the taxpayers on the hook for more than just Fred and Fannie? The term I’ve heard bandied about on the econ blogs from the first bailout is privatized profit and socialized losses.
I follow trends to. We all do. I find the sociological impact interesting as well. But one should not stop there. There’s a matter of forensics in getting to the bottom of what caused the problem and not simply dwelling on the after math.
Yes, privatized profits and socialized losses. That doesn’t happen in a free market….or a market trying to follow free market principles. How do you socialize costs in free markets? You don’t. Government does with market and behavior distorting interventions.
Some things are justly socialized through government: Military and other so-called “commons” since they are not done through markets.
But these matters of finance? No. The socialized part is a direct product of government intervention getting people to pass off risk.
September 12th, 2008 at 4:18 pm
But these matters of finance? No. The socialized part is a direct product of government intervention getting people to pass off risk.
Except that the government only intervened to bail them out when the risks didn’t pay off and the guys at the top still walked off with millions, if not billions. Only the small shareholders and employees got hurt. Had there been some kind of regulation to prevent the scheme from becoming such a huge chunk of the so called Bush boom in the first place, we wouldn’t be bailing them all out now.
I have a vague recollection that this had something to do with rolling back the post Enron regs that were designed to prevent just this sort of meltdown. But don’t hold me to it if I’m wrong.
In any event I think we’re all pretty much in agreement that corporate welfare is bad policy. And let me take a moment to thank everyone for this great thread.
September 12th, 2008 at 4:38 pm
“But I’m reasonably certain that the subprime market was not regulated at all and that’s why they’re talking about regulating it now.”
Yes well the lack of regulation was a necessary condition, but was it really a sufficient condition, for the housing bubble? It could be argued, and I’d tend to agree, that it would never have been sufficient without ridiculously low interest rates and tons of money creation (monetary policy).
But lets reverse it, what if there WAS subprime regulation AND yet we still had the policy of very low interest rates massive money creation that we did. Then the money may never have found it’s way into housing, hence no housing bubble. Wonderful, right?
Well yes, but the money would find it’s way somewhere, it’s like water. It would produce a stock bubble, or a commodities bubble, or an education bubble or a tulip bubble or baseball cards bubble. The point is it would bubble up somewhere and drive prices far beyond any reasonable past ratio. And then the inevitable crash. And if the bubble was in something central enough to the economy as it usually is (stocks, energy or houses say) there would be fallout all over the place.
So did the government want a housing bubble? I don’t know. They actively encouraged some kind of bubble. Tin foil hat says they needed some kind of bubble to revive the economy post dot bomb and post 9-11. And that they knew it (and knew what they were doing?).
September 12th, 2008 at 4:38 pm
Not to go too far afield here, but re: regulation and the mortgage crisis:
I will concede that it’s theoretically possible that regulation could have prevented the irrational behavior of both lenders and buyers. The problem is that regulators are inherently reactionary - rarely do you find an actually worthwhile regulation that is imposed without some crisis precipitating it. This is not too difficult to understand - the economy is too complex to anticipate never-before-encountered problems.
Because regulations are ordinarily reactionary, in many cases they probably don’t do much good even if they actually would have prevented the problem had the regulations existed in the first place. The reason for this is simple: once a business/industry suffers badly as a result of a certain kind of behavior, they’re not particularly likely to engage in that behavior again. In this case, there can be little doubt that much of the mortgage industry as a whole paid a goodly price for its behavior.
The problem, however, is that to a certain extent much of the industry probably believed that the government would bail them out if things went wrong. This knowledge encouraged them to take otherwise unjustifiable risks, which was to the detriment of all involved. That the feds have now come in and bailed the industry out so completely has, I think, a far more negative impact on future good behavior than a lack of regulation could ever have. Were the feds to allow these banks to fail or suffer the full extent of their irrational behavior, the surviving banks would have a tremendous incentive to act more cautiously and rationally in the future, regulations or not. And this wouldn’t just apply to the specific acts at issue now, but rather to just about any unduly risky behavior.
Instead, though, the solution has been to provide a bail-out while also (maybe) imposing reactionary regulations. The problem is that these regulations are only going to try to prevent the same situation from happening again. But the likelihood is that the next time a credit crisis emerges, it will emerge due to something entirely different. Maybe that future problem could be prevented if lenders were more risk-averse because they had no reason to think they would get bailed out.
In general, though, it’s worth remembering that, in the absence of a federal bailout, it is almost never in a lender’s interest to foreclose or repossess, except as a last resort.
September 12th, 2008 at 5:37 pm
Libby,
Except that the government only intervened to bail them out when the risks didn’t pay off and the guys at the top still walked off with millions, if not billions.
That’s simply not true. Read what we’ve been saying. The government is intervening every step of the way. when we libertarians say things like market distortions, perversions of behavior and the like, we are talking about interventions…ever present interventions that cause problems. The bail out is only the latest intervention.
September 12th, 2008 at 5:39 pm
Well put JS.
September 12th, 2008 at 5:44 pm
Good roundup, Mark.
The idea of talking about regulations after the fact is easy. I tend to see disconnects between liberals and libertarians at times on such matters on the matter of focus. Liberals pop onto the scene once it happens and deplore the problems wrought by something that in hindsight could have possibly been prevented. Libertarians, start to look back at what went wrong and deplore the distortions.
Perhaps I’m generalizing but I think it’s pretty accurate.
September 12th, 2008 at 6:09 pm
Mds,
Remember the nonstop Drudge coverage of the FISA violations? Nice equivalence between Watergate and exposure of a failed politician’s affair, though.
You don’t have to think the two are of equivalent importance to answer the question I was posed as I did. The point is that, regardless of what you think of him, Drudge broke a major story that powerful interests had an interest in keeping private.
So to say that breaking a story like Watergate just couldn’t happen today implies that the problem lies not with the media, but with media consumers. And to repeat what I said earlier, complaining that other people don’t share the same interests and sophistication that you do just comes across as sour grapes.
September 12th, 2008 at 6:38 pm
Kevin writes: But what I can’t, for the life of me understand is somebody going into a brew pub and asking for a Miller Lite or something. It’s like going into Paul Prudhomme’s restaurant and ordering a bowl of Campbell’s Condensed Chicken Gumbo.
Yes, or like going to a wine-tasting event and asking: “Hey, dude, where’s the Ripple?!”
September 12th, 2008 at 7:06 pm
That the feds have now come in and bailed the industry out so completely has, I think, a far more negative impact on future good behavior than a lack of regulation could ever have. Were the feds to allow these banks to fail or suffer the full extent of their irrational behavior, the surviving banks would have a tremendous incentive to act more cautiously and rationally in the future, regulations or not. And this wouldn’t just apply to the specific acts at issue now, but rather to just about any unduly risky behavior.
Well, we’re in complete agreement on this point.
So to say that breaking a story like Watergate just couldn’t happen today implies that the problem lies not with the media, but with media consumers.
That is not at all what I was implying and frankly it’s a stretch to say it does. I’m saying exactly the opposite.
September 12th, 2008 at 7:26 pm
Then what are you saying, Libby? I see Drudge and the National Enquirer as proof that some part of the media will bring scandals to light, no matter how powerful the interests are in keeping the story private.
To complain that sex scandals are more popular and interesting to the average viewer than less salacious scandals is to criticize media consumers, not the media. It’s like the people who complain about boy bands and prefer indie films and music. It’s great that you have those preferences, unfortunate perhaps that others don’t share your preferences, but so the fuck what? Blame your fellow media consumer for having less discerning tastes; don’t blame the ice cream truck for catering to those tastes.
September 13th, 2008 at 12:16 pm
I can’t believe I missed a thread about beer and antitrust.
We used to, in this country as in Europe, have local breweries. They were killed by Prohibition. Companies like A-B and Coors stayed afloat through those times by moving further into related vertical or horizontal sidelines, like making glass or malt. When we came out of Prohibition, they grabbed up lots of market share, in part with the aid of the new laws.
I recently visited the Jack Daniels distillery. I’m not a fan of their product, but I do recommend the tour (it’s free). One data point: they make it in a dry county, and they yield something on the order of $10M per month in taxes to both the federal and the state coffers. Why would you want to give up control of something like that?
If anything, some deregulation (mostly at the state level) has led to a revival of local brewing. The capital outlays required for brewing are relatively low. Microbreweries, small independents, and even homebrewing have come back into vogue, with quality ingredients available even to the smallest brewer.
And there are substantial costs to large scale production. A-B may taste like shit, but every can tastes like shit in the exact same way. Getting consistency at those volumes requires massive control on the raw materials, and if there is any danger here, it is their influence on the barley and hops manufacturers. So far, though, the premium prices that premium malt and hops can bring have not only kept them alive, but they have actually gotten much better in the last 15 years, IMHO.
Just as we have more choices in beer (at least I do, and I live in a small town a long ways from a major metropolitan area), we seem to have far more choices in news sources. I would suggest you decouple your observations about the quality of network news and the quantity of sources available. Sure, we don’t have the “serious” Walter Cronkite, but then again, because he had no competition for your attention, he could (and did) say pretty much whatever he wanted with complete conviction and the knowledge that you **had** to believe him.
Look at the difference in war coverage. The media still loves the ratings and attention they get, but the coverage in Iraq, while tightly controlled by the military, was far less rah-rah than the WWII coverage. Look at the way the press initially ate up the Army’s version of the Jessica Lynch story, but eventually began to tear it down. Yes, television has become infotainment and the newspaper is dead, but a few outlets like Nukes and Spooks and lots of independent blogs make it very difficult to keep the public thoroughly misinformed.
Unless they want to be. Tastes great! Less filling!
September 14th, 2008 at 5:25 am
[...] Big Brother vs. Big Business by Libby Spencer [...]
September 17th, 2008 at 1:05 pm
[...] my colleague Libby noted last week “I believe free markets would work; I just don’t believe they exist”. A market [...]