Hostile Takeover: Resisting Centralized Government's Stranglehold on America

by Matt Kibbe

  According to America’s most trusted man, you and I need to stop clinging to our outdated notions like individual sovereignty and find more “faith in the new order.” The experts have it all figured out. And that’s the way it is.

  Frank Zappa, the contrarian musician and guitarist, had zero faith in the journalistic profession, or in any journalistic pronouncements from the top down. Circa 1979, the halcyon days of Walter Cronkite’s power over what average Americans could see and hear, Zappa was particularly peeved with the complete centralization of journalism in highly controlled, exclusive enclaves. Someone else’s conventional wisdom, based on someone else’s information, determined the rules of the game and the perceived truth of things. Reporters “walk in the door seeking a method by which they can reinforce conclusions they’ve already arrived at,” Zappa said.2

  This was true in Los Angeles for entertainment news, what the late Andrew Breitbart dubbed “Big Hollywood.” It was equally true in New York and Washington for political news. As the only markets in the country with a national reach, these three cities enjoyed significant control over the flow of information, framed by someone else’s values, filtered by preconceived notions of what the story was, and organized for us, creating an unchecked echo chamber—a one-size-fits-all message of the day.

  Even as ideas based on economic freedom and individualism gained a foothold in politics, it seemed the flow of information would always be handicapped in favor of predetermined big government agendas. The Cronkite-Chancellor-Reasoner Cartel in the 1970s gave way to the Rather-Brokaw-Jennings Cartel of the 1980s. New names, same bent. It had become, for all intents and purposes, a single manufacturing facility for the political establishment to craft and distribute its messages, keeping the voters in the dark about many things, by omission, with the help of their friends at the networks and big newspapers.

  This centralization of control and power in journalism was bad news for the American people, who rightly view the free and unfettered dissemination of information as foundational to the working of a free society. Because of the centralized media, they didn’t have access to relevant information about what the government was up to with their money and their personal liberties.

  One-size-fits-all press was not just a concern from right-of-center. As the iconic leftist press critic A. J. Liebling wrote in The New Yorker in 1960, “Freedom of the press is guaranteed only to those who own one.” Liebling had a detailed critique of the problems with centralized journalism even in the 1960s. “What you have in a one-paper town is a privately owned public utility that is Constitutionally exempt from public regulation, which would be a violation of freedom of the press,” he wrote. “As to the freedom of the individual journalist in such a town, it corresponds exactly with what the publisher will allow him. He can’t go over to the opposition, because there isn’t any.”3

  The problem Liebling saw wasn’t just for journalists who lacked diverse job opportunities. “In any American city that I know of,” he wrote, “to pick up a paper published elsewhere means that you have to go to an out-of-town newsstand, unless you are in a small city that is directly within the circulation zone of a larger one. . . . Even in New York, the out-of-town newsstands are few and hard to find. The papers are, naturally, late; they cost more; and most people would use up a sizeable part of every day just traveling to get one.”

  Who controlled the distribution of information, knowledge, wisdom, and truth was a question that got to the very functioning of our democratic republic. It was the very life blood of the bottom-up system established by the Founders. In January 1789, while in Paris, Thomas Jefferson wrote to British minister Richard Price about the adoption of the Constitution and his hope for a government of and by the people in spite of consolidation:

  I did not at first believe that 11 states of 13 would have consented to a plan consolidating them as much into one. A change in their dispositions, which had taken place since I left them, had rendered this consolidation necessary, that is to say, had called for a federal government which could walk upon it’s [sic] own legs, without leaning for support on the state legislatures. A sense of this necessity, & a submission to it, is to me a new and consolatory proof that wherever the people are well informed they can be trusted with their own government; that whenever things get so far wrong as to attract their notice, they may be relied on to set them to rights.4

  Jefferson, the most radically democratic of the Founding Fathers, was deeply distrustful of consolidated government power. He had great faith in the ability of the people to self-govern, to constantly question the prerogatives of centralized authority, and to limit, through grassroots vigilance, the power of government. But he understood the clout of information. He knew that a “well informed” public was required as a check on the necessary evil of the accumulation and centralization of control in the new federal government. And, he noted, it was within an informed public’s rights to change the government if things “get so far wrong as to attract their notice.”

  THE FCC WON’T LET ME BE

  ONE OF THE MAIN CONTENTIONS OF THIS BOOK IS THAT THE CONSOLIDATION of power in so-called “private” enterprise is often the result of an unholy alliance between big business and big government. The two often collude to fix prices, limit supplies, and prevent choice and competition. It is a symbiotic arrangement in a politically defined marketplace—you scratch my back and I’ll scratch yours—which is mutually beneficial to the colluders but harmful to the rest of us. Monopoly market power typically has to be enforced by the power monopolists, that is the politicians and bureaucrats, the “dictators” and “czars” of the government. Thus, the special relationship between the Truth Cartel in top-down media and the string-pullers inside the political establishment. Committee chairmen and information czars are protected by their effective control of the media’s message, and those granted a special position in media markets grow fat on a privileged market stake. Host or parasite, puppet or master, both feed off you and me.

  The first customer served by the crony capitalists in Big Media is “their man in Washington, D.C.”

  Not surprisingly, the heavy hand of government played a key role in propping up the cartel that created Walter Cronkite. From the earliest years of radio, federal regulators seized control over the airwaves and established rules to allocate the airwaves according to the “public interest,” a nebulous term akin to “social justice,” open-ended and conveniently defined by the bureaucrats. Not only did the Federal Communications Commission control the allocation of the airwaves, it also controlled the radio and television markets. The FCC viewed anyone granted a license to broadcast as a “public trustee,” which meant there were strings attached. Pulled just right, the strings will make the puppet dance.

  In fact, this is where the Fairness Doctrine emerged, the necessary result of puzzling bureaucratic logic. Because broadcasters were federally created monopolists, regulators required stations to ensure that both sides of the debate were heard, all in the name of fairness. Equal time for the opposition, as it were. Additional restrictions on media ownership and reach were also imposed. For example, no broadcaster could own stations that reached more than 35 percent of the population. In other words, media was the perfect example of a top-down, centrally controlled market with a rule for everything. Did it ever occur to the bureaucrats that removing barriers to entry might be an easier way to ensure all sides of the story are heard? Probably not, because the lucky station owners benefited, along with their political allies, who had an interest in how the news was told.

  As economist Thomas Hazlett notes, “The licensing bargain struck between broadcasters and regulators was a political accommodation that drove the 1927 Radio Act and has determined essential aspects of spectrum allocation ever since. The bargain relied on spectrum regulation to create gains for both parties. Allocation and ‘technical’ rules protected broadcasters from competition as well as from fees or competitive bidding (for licenses), and gave political incumben
ts (both in Congress and the executive branch) the opportunity to leverage ‘public interest’ discretion for some measure of control over content. Given the ban on regulation of free speech in the U.S. Constitution, this was a formidable regulatory achievement.”5

  The establishment’s stranglehold on information flow was so bad that, in 1987, a group of conservative news junkies started the Media Research Center to act as a watchdog against the liberal press. They couldn’t break into the carefully guarded ivory towers of New York newsrooms, so they decided to at least document what the media were up to. As it happened, 1987 was also the year that the Reagan administration repealed the Fairness Doctrine and laid the groundwork for conservative talk radio. A year later, Rush Limbaugh would begin his wildly successful radio show.

  It was only the push of technology that offered any relief to the stifling regulations. For decades most Americans had, at best, access to only a handful of stations: the Big Three—ABC, CBS, and NBC—along with a PBS channel and perhaps a few fuzzy UHF channels on a clear day. But technological innovation has pushed us into the information economy, fueled by rapidly decreasing computing costs and increasing bandwidth through both wireline innovations such as fiber optics as well as the booming new market for wireless communications and products.

  Technology has transformed the way we live, touching almost every aspect of our lives, from how we talk to others, to how and what we listen to, to what we watch and where we watch it. Smartphones, tablets, and other computing advances are at the forefront of a technological revolution that is providing dramatic consumer benefits. Indeed, the entire technology sector is in the midst of a paradigm shift. And these changes occurred because market forces chipped away at the government’s information cartel. The Fairness Doctrine fell in 1987, ownership rules began to ease after the Telecommunications Reform Act of 1996, and soon auctions were created as an alternative approach for allocating spectrum. As the market was allowed to evolve, consumers went from set-top rabbit ears to high-definition television. We don’t have to worry about getting two sides to a story; with a few simple keystrokes we can find hundreds of perspectives competing with one another.

  As long as technology keeps one step ahead of the regulators, the benefits to consumers are astounding. Today, instead of four channels, we can access hundreds of channels provided by cable and satellite, 255 million websites, and 152 million blogs that provide information virtually in real time.6 While most of us are awestruck by the new world of technology, bureaucrats at the FCC see an open-ended world of communications that makes no sense to a planner. Who’s in charge? Today’s dynamic marketplace is striking evidence that the FCC has outlived any purported purpose. Indeed, its continued meddling in markets only undermines the public interest. As media titans of the past lose their grip on political power, a new group of tech giants are fast rising to the top, none faster than Google. As if to justify its existence, the FCC is shifting gears to control the Internet, pushing new regulations that will benefit the new industry leaders. This is nowhere clearer than in the debate over “net neutrality,” a debate couched in terms of Internet freedom, but very much a power play that provides immense benefits to corporations with a large Internet presence like Google. Despite the fact that prices for Internet services are falling and consumer choice is booming, the FCC asserts the need to intervene in this actively functioning marketplace.

  Like the other czars pushing to expand the regulatory state throughout the Obama administration, FCC Chairman Julius Genachowski—Harvard Law classmate and longtime political ally of President Obama—has ignored both the courts and the Congress in order to impose net neutrality regulations. Using a very loose interpretation of the FCC’s authority, the agency proposed new rules to put the FCC in charge of the Internet, the emerging center of power in the world of information. This led to a sharp rebuke by the courts, which slapped down the regulations, stating the FCC clearly did not have the authority to regulate the Internet; only Congress, not unelected bureaucrats, can write the laws to provide such authority and they have not done so. Undaunted, the FCC took a second run at the regulations, issuing final regulations in December 2010 that provide the agency with control of the Internet. Those rules took effect November 20, 2011.7 This is yet another example of the growing muscle flexed by the executive branch, expanding government power against the intentions of Congress. For the sake of innovation, the courts should remind these information czars just who, under the Constitution, writes the laws of the land.

  FEWER EYEBALLS

  IN THE LAST TWO DECADES, THE INFORMATION CARTEL HAS CRUMBLED. In 1980, more than 52 million people tuned into the networks’ evening news shows. In 2006, 26 million did.8 Recently, CBS Evening News, which once commanded the attention of upwards of 20 million viewers, couldn’t muster even 5 million.9 Most of the people who still watch probably do so only out of routine. By late 2011, roughly 75 percent of nighttime network news broadcasts were outside—that is, older than—the important 25- to 54-year-old target demographic.10

  Newspaper circulation has been on the decline too, dropping by 8 million subscriptions between 1990 and 2004. Over the same period, the number of U.S. households grew from 93.3 million to 112 million.11 The number of daily newspapers in the U.S. has been steadily declining since 1940, dropping by more than 400 through 2005.12 While the trend had been occurring for years, recent data is no more reassuring for the establishment journalism’s cheerleaders. Twenty-four of the twenty-five biggest newspapers saw a decline in weekday readership between 2009 and 2010. The New York Times dropped 8.5 percent. Only the Wall Street Journal saw a small increase of 0.5 percent.13

  Why this erosion in audience and readership? Simple. The people finally had a choice. The web offered a new way to share information that was increasingly accessible to average people. A modem was all one needed to connect to vast, if still highly unorganized, quantities of information. Indeed, the first industries to recognize the potential of the Internet were media outlets without a national distribution. The Internet negated the need for expensive printing presses, distribution overhead, and the nineteenth-century model of delivering paper copy.

  Even more revolutionary was that citizen pamphleteers and homegrown investigative reporters suddenly had a ready avenue to the connected world. True, the promise was still much grander than the reality at that time, but the opportunity was before everyone: plug in, connect, inform.

  Slowly but surely, the American people started to realize they no longer had to rely on the Big Three networks, the New York Times, or the Washington Post for their news. The old model that Liebling wrote of began to crumble: American news consumers didn’t have to spend a day tracking down an out-of-town newsstand to get the rest of the story or hear a dissenting voice. All they had to do was surf to a different website.

  Of course, reading different outlets, critiquing old media, and disseminating your own views constituted just the first wave of the “New Media,” which saw the explosion of self-funded blogs around the time of the 2000 election. Indeed, many of the most popular blogs today—like Instapundit, Hugh Hewitt, and Michelle Malkin, to name just a few—all began during this first phase. In time, everyone had his own blog. But this was only the beginning.

  DEFENDING THE CARTEL

  THE ABILITY TO CONTROL THE FLOW OF INFORMATION IS VITAL FOR centralized politics. Just look at the communist states of the twentieth century, each of which repressed free speech and operated their own media outlets. The new attempts to control the media in the United States are defended through a progressive lens: information must be sorted through by experts, and knowledge vetted by the most knowledgeable among us. Leave it to experts so that nothing is left to chance. This is the “public interest” rationale used by FCC bureaucrats to justify their various Internet power grabs. This, ostensibly, is also the rationale of Democrats who pushed for the reestablishment of the Fairness Doctrine. But in both instances, one suspects another, less noble motive. One of those Democrats
demanding radio “fairness,” as it happens, was none other than Senator Charles Schumer of New York. In 2008, the day after the election with Democrats approaching monopoly control of the executive and legislative branches of government, Schumer told Fox News that he supported government controlling the content on talk radio, saying, “The very same people who don’t want the Fairness Doctrine want the FCC to limit pornography on the air. I am for that. . . . But you can’t say government hands off in one area to a commercial enterprise but you are allowed to intervene in another. That’s not consistent.”14

  That’s right, the same Senator Schumer who would later anoint himself the sole arbiter of speech content inside the walls of the Russell Senate Office Building wanted to control speech on the radio in 2008. The same Schumer, now chairman of the Senate Rules Committee, who told Senator Mike Lee, through Rules Committee staff, “that the event has to be moved.” He seems eager to try any means at his disposal to control what you can say, hear, or, presumably, think. Schumer saw then, through reimplementation of the Fairness Doctrine, a window to reassert his control over your speech.

  I’m not certain of the legal definition of tyranny, but I know it when I see it.

  For good reasons, this attempt to control talk radio never gained traction. But in March 2009, with a number of major news corporations on the brink of default, Democratic senator Benjamin Cardin proposed what the Hill described as a “newspaper bailout bill,”the coyly named “Newspaper Revitalization Act.”15 The proposed legislation “would allow newspapers to operate as non-profits, if they choose, under 501(c)(3) status for educational purposes, similar to public broadcasting. Under this arrangement, newspapers would not be allowed to make political endorsements, but would be allowed to freely report on all issues, including political campaigns.”16 Free to report, that is, what is deemed to be “in the public interest,” as determined by the government officials fortified with the monopoly power to make your business go away.