Will bankruptcy result in banks owning major media?

September 21, 2009 · Filed Under Uncategorized 

radio tower 02The United States is facing a difficult situation. It is no secret that all too many of our major organizations function not by the value they produce, but by the debt they take on. Last year’s financial armageddon was the result of too many banks leveraging themselves against assets made of completely fictional, and declining value. Debt was laid on top of more debt, until the whole thing melted down, and the only “fix” was to have the U.S. Federal Government take on even more debt. At no point has productivity or value entered into this debate, just debt, invented from thin air, helping nobody and shackling future generations to our poor management.

Coinciding with our failing banks is the failure of American media. Information is going online, content is free, attention is scarce. As advertising revenue shrinks, media companies are going into default. But in the event of failure, who gets the assets?

Banks.

And major media companies are financed by major banks. This brings us to the incredible situation of Goldman Sachs and JP Morgan inheriting so many media companies, that they are running afoul of already-weak media ownership laws.

So, to recap, banks that failed last year are only around due to the American taxpayer. Those taxpayers can only keep tabs on such organizations through government agencies and news outlets. The banks are now so big that they essentially in direct partnership with the United States government, which cannot let them fail. (Or at least protest that it would be too dangerous.) And now, those banks will begin owning an increasing percentage of the major media which most Americans use, rightly or wrongly, to derive information about the economy.

Our institutions are becoming intertwined at a level where a dialogue is nearly impossible. For every conversation, you need at least two people. What are the differences between the banks who control money, the media telling their story, and the government offering to prop both of them up?

The answer may have to do with large organizations in general. Major media need huge advertisers to pay for their conglomerates. Small, niche, local media? They can survive on engaged, passionate niches. Major banks need huge customers for their debt. Small regional banks can survive helping local businesses actually provide value.

Maybe the problem isn’t banking or media or government, but the BIG versions of all three.

Tags:

Comments

blog comments powered by Disqus