Isn't it interesting that on the very day that Barack Obama wins the presidency, the U.S. Treasury department announces a change in its $700 billion Wall Street bailout program--a change that would benefit MSNBC, the most pro-Obama news network? And also benefit NBC, which is also no slouch when it comes to pro-Obama-tude? The common connection, of course, is GE, and its subsidiary, GE Capital.
Sounds like payback to me, or is it payoff? We can presume that it's all legal, according to the fungible "legality" that has prevailed in Washington for the past six weeks, since the bailout was proposed and enacted. But of course, the bailout program--which seems to change every few days--is not not in the least transparent, and it gets murkier and murkier, leaving the taxpayers and other interested parties to search for clues where they can be gleaned.
So how, exactly, is the bailout going to be benefit MSNBC? And NBC? How is money going to pass from the folks on Main Street to the sharpies on Wall Street, and then to the Obama-loving likes of Keith Olbermann, Chris Matthews, Rachel Maddow, David Gregory, and Andrea Mitchell?
(And let's not forget CNBC, which shamelessly shilled for the bailout when Congress was considering it. At the time I just thought that Maria Bartiromo & Co. were sticking up for the class interest of Wall Street--now it looks like they were sticking up, directly, for their own corporate interest in CNBC as a wholly owned subsidiary of GE.)
Here's the way the deal is going to work, as reported by Deborah Solomon, writing in The Wall Street Journal this morning, and confirmed everywhere since:
The Treasury Department is considering using more of its $700 billion rescue fund to buy stakes in a broad range of financial companies, not just banks and insurers, after tentative signs of the program's success, according to people familiar with the matter.
In focus are companies that provide financing to the broad economy, including bond insurers and specialty finance firms such as General Electric Co.'s GE Capital unit, CIT Group Inc. and others, these people said.
That's clear enough, isn't it? GE Capital now in line to get bailout money. Are there any rules and procedures determining who gets what? Or can the Treasury just look up at, say, the election returns and make a big policy change? Apparently so.
But in the meantime, GE investors are happy at the news that the federal gravy train is chugging their way: GE stock price jumped this morning: the Reuters headline was, "GE, CIT rise after report on bailout funds."
The Cable Gamer doesn't pretend to be a Wall Street expert, but I have always been fascinated by the relationship between the cable newsers, CNBC and MSNBC, and their corporate parent, NBC. And then, in turn, the relationship between NBC and its corporate parent, General Electric. But of course, GE--the sixth-largest company in America, according to Fortune mag--has many other "children," too, including, interestingly enough, GE Capital.
And now GE Capital is in line to get money from Uncle Sam. All of a sudden, the long strange trip of MSNBC, way to the political left, starts to take on a certain logic. Sure, MSNBC has taken some hits for its obvious pro-Obama bias, but at the same time, MSNBC has surely made some friends. Maybe, in effect, MSNBC placed a bet on Obama. That sure would explain why, during the Democratic primary campaign, MSNBC was the flagship of pro-Obama-ism in the media, mobilizing Dems to support the Obama even over Hillary Rodham Clinton. And then, during the general election, well, every night of MSNBC coverage was a five-hour Obama-infomercial. Does anybody doubt that the Obamans will remember who their friends were? That MSNBC will be the favorite cable news network for many VIPs in Obama world? All of a sudden, the "go left" plan starts to look like Machiavellian genius.
And now, we learn this morning, that the government stands poised to return the favor to MSNBC's parent--in a very real way, a boost to the corporate bottom line. Does the government do anything in increments of less than a billion dollar these days? Probably not. So a billion or more to GE Capital will surely trickle down, some of it, to all the other GE properties, including the news networks.
Now technically, of course, the Treasury is still in the hands of the Bush administration, but everybody knows that Treasury Secretary Hank Paulson is much closer to the Democrats than to the Republicans, and that his key aides and advisers are all Wall Streeters. Which means that when they all cycle through the revolving door, back to Wall Street, it would make sense for them to have plenty of friends among the Democrats who will now control both the executive and legislative branches. (Who needs Republicans anymore?)
So there you have it. Now it's not a done deal yet, and GE/GE Capital is being cautious: "This is not something we expect," said spokesman Russell Wilkerson. "If it were offered, we would evaluate it." But if you translate the coy corporate-speak, GE will eagerly take the money. And those long-suffering GE shareholders, having watched helplessly as their stock has declined by two-thirds over the last seven years, since Jeff Immelt took over from Jack Welch, will cheer. But of course: if the government hands out money, people will have their hand out.
The final proof, of course, will come if, in fact, GE Capital gets a big bailout check from the government. If it does, well, from a legal point of view, there's probably not much that could be done about it--now doubt the smartest lawyers on Wall Street and in Washington will all swear to the total legality of the transaction.
But from a political point of view, from a fairness point of view, Republicans and conservatives--and fair-minded folks of all partisan and ideological persuasions--should be outraged by what seems destined to happen. The mere idea that the the government would seek to give money to media outlets is an outrage.
It was bad enough that the government created a 12-digit slush fund to bail out Goldman Sachs and all the rest of 'em on Wall Street. But it's even worse if the money goes to the media--that's not just bad policy, that's a threat to the First Amendment.
Do we really want the government subsidizing the private media? Being able to reward favorable coverage with financial favors? Do we really want the federal government being able to dangle cash outlays, or the prospect of such outlays, over the heads of news outfits? After all, if the government can bestow money on MSNBC through GE, then what other corporate connections might be made in the future? That is, what other corporate media chief might decide that he or she needs a bailout--perhaps of some distant subsidiary, the connection to which the public doesn't see? The possibilities for deep corruption are endless.
"Sunlight is the best disinfectant," wrote Supreme Court Justice Louis Brandeis decades ago. He was right, of course, but sunlight doesn't do as much good if the light only falls on the corruption after it has happened.
But this time, we've been tipped off. Now is the time to raise a stink, lest Olbermann & Co. reap a huge bonus for their politicking, a bonus provided to them by American taxpayers.
At a rock bottom minimum, if GE, or any subsidiary of GE, gets government bailout money, it should announce in advance that it will spin off its media subsidiaries, so as to separate government financial benefits from media services to the government.
Surely all the serious journalists at NBC, CNBC, and MSNBC would want that insulation--so they can never be accused of tilting their coverage in return for financial gain. Because right now, it looks like GE shrewdly deployed its media assets to gain political leverage on Uncle Sugar--and it worked!
