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October 21, 2009

Media Litmus Test
by John Browne

In a small bit of Washington irony, a government panel convened this week under the guise of ensuring 'expressive freedom' on the Internet, while at the same time the Obama Administration put Fox News on notice that ideological rectitude would be a prerequisite for White House engagement.

This heightened wrangling with the media comes at a time when ordinary Americans are rapidly becoming disillusioned with the major parties. Their disgust is evident in innumerable web discussion sites that, for many, have replaced the major media outlets as the primary source of information. In its focus to keep control of the conversation, the Administration is seeking to disguise the fact that the 'change' Mr. Obama promised in the election is unlikely to materialize.

Wishful thinking of the Nobel committee aside, what we have seen thus far from Obama is simply more of what had been delivered by the prior administration.

Obama renewed our military commitment to the quagmire that is Afghanistan. But he is hesitating now that the United Nations has uncovered fraud in the recent presidential elections there. Whether or not one believes the war is winnable, this type of hollow chest-pounding did not help anyone under G. W. Bush, and will not under Obama.

Domestically, Obama has re-enforced the doctrine of 'too big to fail,' which essentially involves 'socializing' the costs of reckless Wall Street failures while 'privatizing' the gains made through their use of taxpayer funds. As a result of this policy, elite investment bankers are now seeing bonuses that rival those at the bubble's peak. As an answer to Bush's publicly funded rescue of GM and Chrysler, Obama gave some $10 billion to the very trade union that had brought Detroit to its knees. In the first nine months of his Administration, Obama has increased the Treasury debt by some 20 percent to almost 100 percent of GDP, or a staggering $12 trillion dollars.

Even facing the vast $104 trillion of additional, 'off-balance sheet' government obligations, Obama is pushing ahead with a new Health Bill. This is not even a populist measure, as most Americans are sensibly standing in opposition to this attempt to bankrupt their country. The legislative momentum is wholly provided by a small ideological core of Democrats at the expense of the greater good, a pattern set by Bush and his zealous Republican base.

It is becoming clear, even to Democrats, that Obama doesn't aim to implement better policies, but to make the public feel better about the same old policies.

Unfortunately for the President, America is a free enterprise, capitalist and right-of-center country that does not take naturally to socialist policies. What is so concerning is that rather than learning this lesson, the White House is trying to silence the voices of opposition.

It is widely accepted that a free press will foster a healthy and vibrant cross section of views. While it is clearly susceptible to hyperbole, Fox News has nevertheless been instrumental in exposing the radical, socialist and even communist backgrounds of a surprising number of advisers and unelected officials close to the President. Their efforts in this regard have served the public.

These revelations about left-of-center tendencies would not have been damaging if the public were indeed in a mood to be led by leftists. If that were the case, the Administration would have dismissed Fox News as a network for conservatives to gripe to themselves. Perhaps the official uproar indicates Obama has noticed that some 50 percent of the Fox News audience is composed of Democrats and Independents.

Certainly, no credence can be given to the official position that the Administration is opposed to deliberate bias. On the other side of the aisle, MSNBC is just as partisan as Fox News, and in many ways functions as the media arm of the Democratic National Committee. Yet the President does not spar with that network. Perhaps he is attacking Fox News in response to MSNBC's dismally low ratings, proof that the latter network really is just a forum for socialists to gripe to themselves.

At its core, this issue transcends left-right bickering. Politicians across the spectrum are feeling increasingly threatened by an unregulated media. The media is more accountable to the public than politicians, as ratings are measured in real-time, not election cycles. Fox News is benefiting from the reality that Americans believe in limited government, lower taxes, unhampered enterprise and personal responsibility. Although both parties pay lip service to these ideals, their actions reflect a clear belief in more control, less freedom and bigger government. This has led to a deep voter frustration and disenchantment with the two major parties.

It's common sense that if the President wants to regain voters' trust, the answer is to listen to their concerns. If investors are moving their wealth overseas, the answer is to become more competitive at home. This feud with Fox News shows that the President has not yet heeded this advice, and, really, would rather not hear it.

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John Browne, Senior Market Strategist
Euro Pacific Capital, Inc.

John Browne is the Senior Market Strategist for Euro Pacific Capital, Inc. Mr. Brown is a distinguished former member of Britain's Parliament who served on the Treasury Select Committee, as Chairman of the Conservative Small Business Committee, and as a close associate of then-Prime Minister Margaret Thatcher. Among his many notable assignments, John served as a principal advisor to Mrs. Thatcher's government on issues related to the Soviet Union, and was the first to convince Thatcher of the growing stature of then Agriculture Minister Mikhail Gorbachev. As a partial result of Brown's advocacy, Thatcher famously pronounced that Gorbachev was a man the West "could do business with." A graduate of the Royal Military Academy Sandhurst, Britain's version of West Point and retired British army major, John served as a pilot, parachutist, and communications specialist in the elite Grenadiers of the Royal Guard.

In addition to careers in British politics and the military, John has a significant background, spanning some 37 years, in finance and business. After graduating from the Harvard Business School, John joined the New York firm of Morgan Stanley & Co as an investment banker. He has also worked with such firms as Barclays Bank and Citigroup. During his career he has served on the boards of numerous banks and international corporations, with a special interest in venture capital. He is a frequent guest on CNBC's Kudlow & Co. and the former editor of NewsMax Media's Financial Intelligence Report and Moneynews.com. He holds FINRA series 7 & 63 licenses.

Copyright © 2008-2010 Euro Pacific Capital, Inc.

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