There is no such thing as a free lunch.

Tom Ashbrook – Biased?

I listen to NPR almost every day, and I like the show On Point with Tom Ashbrook. There is usually a good discussion about current events, and there’s a minimum of commercials which is a trademark of NPR. However, Ashbrook’s coverage of the recent financial crisis has been biased in my opinion. He approaches the topic with the presumption that deregulation and capitalism running wild were the root causes of the whole mess, and that the economic experts of the world have reached a unanimous consensus that we need to have more, smarter regulations. It is as if the debate is over, if there ever was one.

As a further example, today Ashbrook had a guest on (I’m not sure who), and they were discussing Bernard Madoff, the investment firm manager who was recently charged with securities fraud which led to the collapse of his $50 billion dollar alleged Ponzi scheme. A caller told Ashbrook that he was an investment manager, and said that his biggest problems were the regulations. He was basically drowning in paperwork and legal overhead, and his business could be much more efficient if there were fewer regulations. Ashbrook replied (I’m paraphrasing from memory),

“Ha, what?! Less regulation?! That doesn’t really jive at all with what we’re seeing here caller!”

The caller continued to explain his point very well. He said that all firms have to be diligent in filing their paperwork, or else the SEC and other overseers will be on them. So they have a big incentive to do those things on time. But the problem is that while the government is checking that you filed your forms, nobody is checking to see whether you are telling the truth on those forms. There is really no way for anyone to know. Hence, everyone is burdened by the regulation overhead, but the liars still lie. I thought it was a really interesting point, but Ashbrook basically laughed him off the phone.

I think part of what happened in the Madoff case is that people believed that as a stock broker/dealer, he was operating under strict regulations, and that made them feel their investments were safe. After all, how can one commit fraud when there’s all that government oversight? Maybe the regulations created a moral hazard.

I guess you would say that Tom Ashbrook was defending a liberal position while I may be defending a conservative, or libertarian, or free-market position. And some may say that I shouldn’t be surprised that NPR is showing favoritism toward the liberal idea. Well, at least they don’t get any government funding.


1 msg { 12.18.08 at 9:03 am }

Once again, the Wall Street Journal Op-Ed pages riding on my coattails:

2 Swash { 12.19.08 at 12:43 am }

NPR kicks ass when it comes to non-political discussions like music, art etc. Today they were interviewing some couple that goes to far corners of the earth to eat at street hawkers, and then they come back, try to reproduce the recipes, and they have now published a book with obscure recipes. Thats the kind of stuff I love listening to on NPR.

3 msg { 12.19.08 at 12:52 am }

Yeah, but it bother me that they receive government funding and are politically biased.

4 Joe { 04.14.09 at 4:52 pm }

Voice from a dead post… I agree that he's been off the hook on his anti free market stance recently. Though, after listening to the recent show on Aid to Africa, where he kept goading the 'pro' stance to flatly deny the original guest's view point, I'm beginning to think that he doesn't have a lot of people telling him to reign it in and just host anymore.

5 msgnet { 04.15.09 at 3:47 am }

Write your comment here…

6 msgnet { 04.15.09 at 3:57 am }

Despite all of those things, I still think it's a great show. It's just frustrating that he's not as neutral as he should be.

UPDATE: I just listed to the show with Dambisa Moyo on aid to Africa. Excellent discussion, thanks for the heads up.

7 SRB { 05.04.10 at 2:16 pm }

Obviously a late comment, but I heard about some complaining about Ashbrook's conservativeness, so I googled him to see what his bias is. I've now found complaints about him being a libertarian, a conservative, and on your page, a liberal. This sounds like he's being a pretty good host that harasses everyone. I've been pretty impressed by him as a host.

As for regulations, everyone complains about them when we've got 'em, so we deregulate, then people take advantage of the system (Enron, WorldCom, Madoff, Blackwater, Halliburton, Exxon, BP, Massey, etc.) and we ask why there aren't more regulations. Of course businesses don't like regulations, because they can't act quite at ruthless as they would like to. Without regulation, there is absolutely nothing in place to stop businesses from taking advantage of everyone (think industrial revolution).

8 msgnet { 05.04.10 at 2:43 pm }

In all honesty, I just really started listening to Ashbrook around the time of the financial crisis, but I was astounded at how fast he jumped to certain conclusions. Within a couple days of Bear Sterns going down, he was echoing the "free market failed, deregulation is bad, regulation is good" mantra. If a caller or guest came on the show and said the free market failed, we need more regulation – that point of view would at the very least go uncontested. If someone tried to defend free markets, and blamed that government for the crisis, that person would just get blasted.

On the regulation matter, I think it's nonsense to say that because we deregulate, people take advantage of the system – as if people don't take advantage of regulated systems! For any proposed regulation there is absolutely a special interest, usually backed by corporate dollars, who stands to benefit from that regulation. Elected officials are not angels who are looking out for our well being – they are looking to secure enough money and votes to win the next election. So do regulations really stop businesses from "taking advantage of everyone"? Or do they enable them?! I think you're taking a whole lot for granted when you leave it in the hands of some politicians to set the rules of the game.

9 SRB { 05.05.10 at 5:28 am }

Well, I never claimed politicians were angels. However, they generally move in the direction Americans want them to move in, whether Americans know what they're pushing for or not. Politicians can often sway voters to push for one thing or another, but, inevitably, the voters stand behind the movement.

I do think there is less abuse with regulations. Two perfect examples are the Clean Air Act and the Clean Water Act. Both have cleaned up the environment since they were enacted. They didn't harm GDP much either, since our economy continues to grow (overall) since they were enacted, and the U.S. continues to consume more energy than ever. Without these regulations, businesses would continue the status quo. The industrial revolution is a perfect example of what a lack of regulation will get you (i.e. child labor, cheap labor from women, long work days/weeks, filthy/dangerous/unhealthy working conditions, etc.). I'd rather have fallible regulations than businesses only worrying about the bottom line.

10 msgnet { 05.31.10 at 6:29 pm }

Did voters want politicians to move in the direction of massive fiscal deficits? In terms of fiscal policy, government generally moves in the direction of more handouts to special interests that have the political clout.

The acts you cited were successful at imposing a cost on business to counteract the externalities they were imposing on the public through pollution. I wouldn't use these as examples that we can regulate anything successfully. It is more of an example of enforcing property rights. In order to protect the property of individuals, the government should impose rules that make people accountable for their externalities, and this is entirely consistent with a free market.

\”The industrial revolution is a perfect example of what a lack of regulation will get you (i.e. child labor, cheap labor from women, long work days/weeks, filthy/dangerous/unhealthy working conditions, etc.)\”

Let me just say that there is no developed economy in the the world that has not gone through this stage of economic development. The industrial revolution is a perfect example of how economic growth results in millions of ordinary people escaping generations of poverty and misery.

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