By MSNBC Standards, GE's $16 Billion in Bailout Loans Compromises NBC News Coverage
Do a media company's political activities affect the way its subsidiaries report the news? The folks at MSNBC sure think so. That channel's hosts have insisted ad nauseum that Fox News parent company News Corporation's political actives compromise the ability of Fox to report the news fairly and accurately.
But MSNBC has, as I have noted before, shilled for policies that would enrich its parent company, General Electric, under the guise of "environmental awareness." Today the Washington Post exposed yet another such conflict, reporting that GE took $16 billion in loans from the Federal Reserve during 2008 and 2009.
The Fed's efforts to prop up the financial sector reached across a broad spectrum of the economy, benefiting stalwarts of American industry including General Electric and Caterpillar and household-name companies such as Verizon, Harley-Davidson and Toyota. The central bank's aid programs also supported U.S. subsidiaries of banks based in East Asia, Europe and Canada while rescuing money-market mutual funds held by millions of Americans…
Companies that few people would associate with Wall Street benefited through the Fed's program to ease the market for commercial paper, a form of short-term debt used by major corporations to fund their daily activities.
By the fall of 2008, credit had frozen across the financial system, including the commercial paper market. The Fed then purchased commercial paper issued by GE 12 times for a total of $16 billion. It bought paper from Harley-Davidson 33 times, for a total of $2.3 billion. It picked up debt issued by Verizon twice, totaling $1.5 billion.
"It is hard to say what would have happened without the facility, and how its absence might have affected GE, but overall the program was extremely effective in helping stabilize the market," GE spokesman Russell Wilkerson said by e-mail.
It seems fair to say that without the $16 billion in liquidity the Fed provided, GE would be in far worse financial shape than it is - or at the very least would have struggled to emerge from the financial crisis in as sound economic shape as it finds itself today.
Federal Reserve lending rules - which are now coming under fire by prominent lawmakers, the Post noted - had yielded tremendous benefits for GE, and therefore for its subsidiaries, including NBC Universal and all its components, which include NBC, MSNBC, and CNBC. Yet none of those news outlets has disclosed that fact while reporting on political or economic news touching on the subject.
Now it's entirely possible that the folks at NBC and its cable affiliates didn't even know that GE had received these Federal Reserve loans. After all, NBC-Universal and General Electric are two separate entities, governed by two separate groups of people (though some former reporeters have claimed that GE brass occasionally exerted pressure on NBC News staff). This notion that a media company is quite isolated from its parent, however, was wholly lost on MSNBC's on-air staff when the company in question was News Corp, not GE.
When News Corp's actives could be used as a cudgel against Fox, MSNBC hosts painted the parent as indistinguishable from its subsidiaries, and News Corp's political activities as having a direct effect on Fox's news reporting.
Cenk Uygur, filling in for MSNBC host Ed Schultz, begged viewers (according to a Nexis search) "not [to] take [Fox's] stories at face value" due to News Corp's $1 million contribution to the Republican Governor's Association. "Fox News has a purpose to help the Republican Party. They do it with their programming, they do it with their anchors, they do it with the stories that they push into the mainstream media, and now they are doing it with their money."
Schultz used the RGA contribution to claim that "not only does Fox carry water for the Republicans, hell, they buy it." He also claimed on another occasion that "Fox News is still duping folks into thinking that they are a real news organization and they have a front row seat in the White House briefing room to show for it. But News Corp. recently removed any illusion of fair and balanced by giving a $1 million to the Republicans."
"We now have another million reasons Fox News is the Republican news channel," said Keith Olbermann of the RGA donation.
All of those statements, and many more made on MSNBC, conflate Fox News and News Corp, and take for granted that the parent company's activities indisputably affect Fox's news reporting. So shouldn't MSNBC be held to the same standard?
By the logic put forth by Schultz, Uygur, and Olbermann, the $16 billion NBC's parent company received from the federal government surely had an effect on news coverage of financial and political matters. And for the past two and half years, financial and economic policy has been more relevant to current affairs than usual (for obvious reasons). Shouldn't MSNBC have at least disclosed this massive conflict of interest?
By Olbermann's and Schultz's and Uygur's standard, we can fairly depict any support for policies that would result in federal intervention in the economy as ethically compromised by MSNBC's indirect stake in such policies, and the possibility that they would enrich the channel's corporate bosses.
Again, this is not a standard that should be applied to MSNBC - or Fox News, or any other news outlet. If further evidence can be shown that the parent exerted overt pressures on a media subsidiary, than that is a different story (no one, mind you, has been able to show that News Corp intruded on Fox's news operation in any way). But the political actives of media companies do not ipso facto affect the news operations of those companies' subsidiaries.
Now if someone would only tell MSNBC.