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1. Spink Nogales | 17-May-09 at 9:42 pm | Permalink

   I am not sure that I understand the quoted passage. There are several leaps of judgement that a reader must make to accept the speaker’s logic.

   1. Has American Capitalism been ‘raw and unencumbered’?

   2. A ‘wonderful engine’ of what? Of something sinister that is not elaborated?

   3. How did we mistake it for a ‘social framework’, and when exactly did that occur?

   I am assuming that the argument that is being refuted is in the vein of ‘a socialist United States would be a betrayal of American Tradition’, but I’m not sure from what I read on this post alone.

   Those who are thinking that they would happily surrender control of ‘free enterprise’ to the federal government of the highly popular Obama Administration are not considering the big picture of twenty years from now when the federal government is controlled by someone whose agenda they may not appreciate. What happens when George Bush III, twenty years hence, begins firing the CEOs of media outlets that do not praise him? What happens when an administration you are not a fan of forces a company that makes contraceptives, or some other controversial product to go into bankruptcy?

   I’m trying to see the big picture.

2. Michael Burton | 20-May-09 at 3:48 pm | Permalink

   Has American capitalism been “raw and unencumbered”? Well, it’s been unencumbered enough to wreck the financial markets. It’s been unencumbered enough that we have bloated companies “too big to fail.” A little antitrust enforcement could have been a big help.

   American capitalism is a “wonderful engine” for producing things, like a diesel locomotive is a wonderful engine for hauling trains. There’s no moral component stated or implied in that characterization. But just as you don’t turn a diesel locomotive loose without someone at the controls, you don’t let capitalism run ungoverned, either.

   I think the acceptance of capitalism as a “social framework” really took off during the Reagan Administration. “Government’s the problem, not the solution.” It’s been virtually unchallenged since then, by Republicans or Democrats. It became almost a religion to our political leaders. Stephen Colbert pokes fun at that absolute faith in capitalism when he says “the marketplace has decided.”

   Capitalism is not God. It’s a tool. It can help us or it can hurt us, but it will help us only if we pay attention, and make decisions about the outcomes we want.

   Context for the quote — at this point, there’s no transcript, audio or video of that portion of the show at HBO’s site, so this is from memory:

   David Simon used to be a police reporter at the Baltimore Sun. To cut costs, the company was getting rid of employees by buying out their contracts. Simon accepted the third buyout, and was about the 85th reporter to leave the paper. This was in 1995, long before the internet was a threat to newspapers. The Baltimore Sun was making huge profits. But Wall Street was telling investors that the newspaper business was a very profitable sector, and investors wanted to take even more by cutting costly reporting out of the budget.

   I believe an audio podcast of the entire show will be released in the next few days.

   Here is Simon making essentially the same point, and some others, as well, on Bill Moyers’ Journal:

   BILL MOYERS: I read something you recently told “The Guardian,” in London: “Oh, to be a state or local official in America…” without newspapers. “It’s got to be one of the great dreams in the history of American corruption.”

   DAVID SIMON: Well, I was being a little hyperbolic. But —

   BILL MOYERS: But it’s happening. I mean, it’s becoming true.

   DAVID SIMON: Yes. It absolutely is, it absolutely is. To find out what’s going on in my own city I often find myself at a bar somewhere taking, writing stuff down on a cocktail napkin that a police lieutenant or some school teacher tells me. Because these institutions are no longer being covered by beat reporters who are looking for the systemic. It doesn’t exist anymore.

   And this is not all the Internet. This was a — you know, there’s a lot of the general tone in journalism right now is that of martyrology. Of—

   BILL MOYERS: Being martyrs, right.

   DAVID SIMON: Yes, we were doing our job. Making the world safe for democracy. And all of a sudden, terra firma shifted, new technology. Who knew that the Internet was going to overwhelm us? I would buy that if I wasn’t in journalism for the years that immediately preceded the Internet because I took the third buyout from the “Baltimore Sun.” I was about reporter number 80 or 90 who left, in 1995. Long before the Internet had had its impact. I left at a time — those buyouts happened when the “Baltimore Sun” was earning 37 percent profits.

   You know, we now know this because it’s in bankruptcy and the books are open. 37 percent profits. All that R&D money that was supposed to go in to make newspapers more essential, more viable, more able to explain the complexities of the world. It went to shareholders in the Tribune Company. Or the L.A. Times Mirror Company before that. And ultimately, when the Internet did hit, they had an inferior product — that was not essential enough that they could charge online for it.

   I mean, the guys who are running newspapers, over the last 20 or 30 years, have to be singular in the manner in which they destroyed their own industry. It — it’s even more profound than Detroit making Chevy Vegas and Pacers and Gremlins and believing that no self-respecting American would buy a Japanese car in 1973. That — it’s analogous up to a point, except it’s not analogous in that a Nissan is a pretty good car, and a Toyota is a pretty good car. The Internet, while it’s great for commentary and froth doesn’t do very much first generation reporting at all. And it can’t sustain that. The economic model can’t sustain that kind of reporting. And to lose to that, because you didn’t — they had contempt for their own product, these people. I mean, how do-

   BILL MOYERS: The publishers. The owners.

   DAVID SIMON: Yes, how do you give it away for free? You know, but for 20 years, they looked upon the copy as being the stuff that went around the ads. The ads were the God. And then all of a sudden the ads were not there, and the copy, they had had contempt for. And they had — they had actually marginalized themselves

   By the time the Internet had its way, I mean, they’re down to 180 now. You don’t cover the City of Baltimore and a region like Central Maryland with 180 people. You don’t cover it well.

   And the institutional knowledge of the place disappears. And so that was — I was being a little flippant with “The Guardian” but what I was saying was, you know, there’s going to be a wave of corruption until they figure out the new model and reestablish — the institutional memory of these places, there’s going to be a wave of misbehavior.

   If, in 20 years, George Bush III wants to fire “the CEOs of media outlets that do not praise him,” we had better hope those media outlets hadn’t accepted tens or hundreds of billions of dollars of bailout money from the federal government, because that would give the federal government a legitimate interest in the management of those companies, and would leave the companies vulnerable to such an abuse of power.

   The best way to prevent that is to enforce antitrust laws to make sure no future company is “too big to fail,” and to regulate the economy to reduce company-destroying abuses of capitalism.

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