I read with interest your article in the Dec 10 issue, “Coping With the Meltdown.” Your last paragraph, concerning the Fairness Doctrine, got me to thinking about how talk radio was something of a contributor to the current financial meltdown.
I think as engineers it is always useful to pinpoint the events that cause us problems. Talk radio is predominantly “conservative,” many would even say extreme, right wing. Those of us who have spent some time in broadcasting know that the political slant of a program makes no difference to broadcasters. They would be just as happy to offer talk programming that is “liberal” or extreme left wing if it would get good ratings. But such is not the case.
For years, talk radio has been a bastion of deregulation, free market principles and no government interference in anything, particularly business. I would suggest to you that these basic ideas are things that, if they are not entirely responsible for the meltdown, certainly played a large part in causing it. And deregulation, the free market and minimal or no government are the main ideas that you hear over and over again on talk radio.
Even Alan Greenspan, a prime force for the deregulation that helped cause the meltdown, was forced to admit before a congressional committee that deregulation had not worked the way he thought it would.
So while talk radio certainly has been a money-maker for broadcasters, it also has been responsible for advancing some of the very same ideas that caused the meltdown.
Guy Wire replies:
It’s easy and popular nowadays to blame conservative talk radio and the Bush administration for all the failures of the past eight years and then conclude the financial meltdown happened as a result of that. The assertion that conservative talk radio, in promoting less government regulation was largely responsible for the meltdown is simply naive and ignorant of the real reasons why it happened.
There is no doubt that improper oversight of Fannie Mae and Freddie Mac was the kindling that got the meltdown fire started. But that was largely promoted by the liberal Democrats in congress who changed the guidelines and pressured those agencies along with banks and financial institutions everywhere to make bad real estate loans to legions of folks who could never pay them back. It was all done in the name of giving virtually everyone a shot at the American Dream, even if they were not gainfully employed or financially responsible. From there, Wall Street hedge funds packaged the bad loans with all the others and sold them to a worldwide market.
This practice went on for almost 15 years and injected hundreds of billions of dollars of toxic debt into the financial system. Soon after, the big insurance companies and brokerage firms holding the liabilities quickly went upside down financially. And then the big auto companies jumped in with their own intractable problems of unfunded obligations to labor contracts that swamped their balance sheets. In a matter of months, everything unraveled. And you still want to blame conservative talk radio?
Now, the new Obama government appears to be willing to give away almost one trillion dollars of taxpayer money to bail out companies that made bad decisions and failed. This will burden several generations to come with massive debt. A long deep recession and eventually heavy inflation is likely in our future.
I do agree that Wall Street played a big role in spawning our current mess. We’ve learned the hard way that the regulations and guidelines that were in place were manipulated or simply ignored. We probably do need smarter and better regulations, and certainly more accountability. But if the capital and equity markets are going to work at all, the dynamics of risk and reward cannot be fundamentally tampered with. Did greedy people take advantage of the system to gain profit? Certainly they did. But realize that greed and taking risk to gain reward are what motivates and drives a market. Without that, most buyers would not be compelled to buy much of anything. If that becomes too heavily constrained, you essentially give up a free market.
Too many Americans appear to be ready to turn the markets and free enterprise over to much greater government control. They are willing to let politicians neuter the miracle of capitalism that made this country great and somehow legislate the prevention of failure. That worries me a lot. Without the opportunity to fail, the opportunity to truly succeed is not possible. European-style socialism may not be far behind.
The other issue that worries me about the Obama agenda is the apparent quest by many in his power circle and in the Congress to find a way to muzzle conservative talk radio. It’s been driving liberals and Democrats crazy ever since the Clinton years. They blame it on the Fairmess Doctrine being repealed in 1987. Reuters reported on a little-covered meeting of Obama operatives including Leon Panetta and various liberal talk radio interests last fall right after the election. What they came up with is a bit chilling and gives us a glimpse of what’s coming.
Realizing that trying to reinstate the Fairness Doctrine would probably be judged unconstitutional and violate the freedom of speech guarantees in the First Amendment, they are planning an end run. We will likely be seeing a proposal to institute “localism performance laws” that will require stations to program a balance of local content with nationally syndicated content. Stations that mainly feature a lineup of national talk shows that garner good ratings will be forced to replace many of them with something local. Locally appointed adjudication boards would decide if their market stations are properly “balancing their programming.” If they don’t, these boards would have the power to fine such stations and the proceeds of the fines would go to … are your ready for this … public radio! Talk radio would never be the same. I’m not so sure liberal talk stations would enjoy being judged and fined accordingly. This is only the beginning of the battle to save free speech and talk radio in this country. — GW