Posts from — December 2008

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.

In 2007, General Motors and Toyota both sold the same number of automobiles, about 9.37 million each. But while Toyota’s net profit was about $14 billion, GM lost a jaw-dropping $39 billion. $39….b-b-b-billion! Many are asking the question – does GM need a government bailout, excuse me, a “bridge loan”, to keep it from failing? I disagree with the premise of this question – GM has already failed. Miserably.

One of the best journalists around today is John Stossel. When I was a kid, my mom would come home from work late on Friday nights, and I used to stay up and watch 20/20 at 10 pm. At that time, Stossel was a consumer reporter/investigative journalist on the show and I used to enjoy watching his segments. He had a witty style and a dry sense of humor, and he just seemed to make a lot of practical sense, even though at that time I probably wasn’t paying attention to much other than sports and school. Now, Stossel co-hosts 20/20 with Elizabeth Vargas and also writes a column for TownHall.com.

He is also the author of the book Myths, Lies, and Downright Stupidity, which debunks the conventional wisdom regarding a wide range of topics including the health effects of chocolate, the price of gasoline, the safety of public schools, world overpopulaton, landfill space, etc. Stossel’s work generally supports a libertarian philosophy and a belief in free markets and small government, which is probably why he made so much sense to me when I was growing up!