Government Bailouts: The Media Is In It For Themselves

In the past few weeks there has been a flurry of activity on Capitol Hill to dump truckloads of cash on ailing industries. Insurance companies, banks and financial services, mortgage lenders, and auto makers are all heading for Washington with their hands out.

But who is the real beneficiary? Keep this in mind when you see news reports in the media discussing the benefits of multi-billion dollar taxpayer funded disbursements to the nation’s biggest corporations:

2007 Advertising Expenditures By Bailout Targets
Company Amount (000’s)
General Motors 3,010
Ford 2,525
Toyota 1,758
Chrysler 1,739
Bank of America 1,491
Nissan Motor 1,407
Honda 1,326
Citigroup 1,135
JPMorgan Chase 1,074
American Express 1,050
Capital One 757
Hyundai 651
Visa 581
Allstate 537
Fidelity 499
MasterCard 489
Progressive 460
Washington Mutual 445
State Farm Mutual 431
Wells Fargo 356
Total: 21,751

That’s right. That’s almost $22 Billion in advertising that would be at risk if these companies were to fail. And this is only from the list of the top 100 advertisers. All told, the total would come to more than $36 billion. That does not include ancillary businesses like home furnishings, hardware, gas and oil, auto parts, accounting services, etc., all of whom are significant advertisers.

Do you think that the media might be somewhat concerned about losing these sources of revenue? Do you think that they might adjust their coverage to make the bailouts more palatable to the public to insure their passage? Do you think the businesses might pressure the media to put on a positive spin under the threat of cutting back on ad budgets?

When you consider how much of the money doled out to the banks, automakers, etc., would eventually end up in the pockets of Big Media, you would think that someone would question whether or not they can fairly present coverage of these issues. At the very least, they ought to disclose their interest so that news consumers can factor that into their conclusions.

The media also has its tentacles around the legislators in Congress who are debating and deciding these matters. So our representatives in Washington are susceptible to pressure from the media if they want to continue to receive favorable coverage. No congressman wants the press battering them every day about how they are responsible for this economic debacle.

Because of the ascendancy of multi-national media monopolies, whose only allegiance is to their bottom line, it is almost impossible to separate the interests of media companies from the corporate culture they promote and the public discourse they control. And they can hardly be depended on to represent the interests of their readers and viewers. Certainly not at the expense of their own interests. So when an issue of public concern is raised, the public has to very careful about who to trust.

Once again, the irrepressible anthem of conspiracy theorists everywhere is the key to assessing these mysteries. Cui Bono – Who Benefits. In this case, clearly the media will enjoy a windfall if American taxpayers bailout our failing industries. That doesn’t mean that the bailouts are bad policy. It just means that if we get our information about this from Big Media, we may not have all the facts with which to make the right call. And if we ever hope to have confidence in what we learn from the press, these media conglomerates will have to be broken up and regulated to insure independence and diversity.


6 thoughts on “Government Bailouts: The Media Is In It For Themselves

  1. Isn’t it a bit inaccurate and maybe misleading to suggest that the media will reap a “windfall” as a result of the bailouts. Rather, they would not suffer a decrease in profits realized from the advertising dollars of these failing companies.

    I have no objection to most of your argument here except where it briefly seems to manifest an agenda driven tone that is so often criticized on this site.

    • You’re sort of right, Tom. I am defining the revenue that the media would receive from the bailed out businesses as a windfall because it’s money they wouldn’t receive without the bailout. But it could be regarded as preventing the decline of revenue that is occurring due to the present state of economic affairs.

      I would just note, however, that the decline has already begun and the media has already lost billions. So it is not strictly preventing that loss. We are now in a place where we would be both restoring revenue (windfall) and preventing more declines. So we’re both right, but you’re point is valid.

      As for manifesting an agenda, I am totally in favor of that with regard to myself. I am opposed to it with regard to supposedly neutral journalistic enterprises. But I am hardly neutral. The important thing for opinionated observers like myself is not to suppress their opinion, but to be honest.

  2. An interesting way of looking at things I didn’t consider.

    There’s obviously a conflict of interest but that conflict is no different than any other time when the media covers business topics. Perhaps they should include a disclaimer.

    I rarely watch network news so I can’t attest to any bias they’ve shown in covering the bailouts. I can say I haven’t noticed a pro-bailout bias on cable. The only bias I detect is Fox News which often snipes at the bailouts because they’re touting a libertarian economic ideology.

    If media greed is overtaking journalistic ethics in covering this story, they need to do a better job of churning out pro-bailout propaganda. It doesn’t appear to be taking hold:,0,3246836.story

    Oddly, this is a rare case where right-wingers addicted to the notion of destructive capitalism and left-wingers who despise big business are aligned. A nice philosophy to hold if one feels immune to its economic impact.

    But forgetting the emotional upset at capitalist screw-ups creating a huge mess affecting millions of innocents or blind ideology, the bailouts are mostly a no-brainer. I didn’t come to this decision after getting spoon fed by the media but from basic Economics 101 I took back in the dark ages as a college student.

    In fact, I’ll stick my neck out here and say the biggest screw-up to date may have been letting Lehman Brothers fail. There’s an argument to be made that’s what triggered AIG’s failure forcing the larger $700 billion bailout.

    A right-winger I know got in my face over the bailouts, red-faced with anger and self-righteous indignation. Then I pointed out a simple analogy.

    He’s like the passenger in the train driven by an engineer who fell asleep. My friend? Oh, he’s in the back sanctimoniously screaming the incompetent jerk deserves to die for falling asleep. Me? I’m hurrying to the engine to wake him up realizing we’re all on this train together sharing a similar fate. 😉

    Note, my opinions on the bailout are not an attempt to counter anything you said since I realize you’re focusing only on the conflict of interest aspects. I just felt like spewing. 😉

    • Well said on several points, sknabt.

      On the main point: From what I see, if the media is trying to help themselves by promoting “bailouts”, they are incredibly incompetent. The incomplete and misleading reporting being done on the auto industry loan request has really surprised me. Including reporting by respected media like the New York times, ABC news and even NPR.

      So while I agree that bias in media is overshadowing good reporting, I don’t see any evidence that supports broad media bias in favor of “the bailouts”.

      My vent: Where do I go for reporting that is complete, accurate, and relatively un-filtered?

      • To avoid unintended confusion – I’m not the “Mark” who authored the original blog post. 🙂

        • Thanks, and I agree with your comment. The problem is not so much that there is certifiable bias, but that the appearance requires they make a disclosure.

Comments are closed.