Recently by Gary North: Confiscating Retirement Accounts
I had never heard of Juan Williams before he became a celebrity for having been fired without a hearing by NPR. Mr. Williams made an injudicious remark about feeling nervous when on a plane with Muslims.
Within hours, he had a multimillion dollar contract with Fox News. That was a slow response compared with the speed of conservatives in Congress demanding that the Federal government de-fund NPR.
Let me say, loud and clear, I am all for de-funding NPR. I am also in favor of de-funding just about everything else. I am like one of Pavlov’s dogs. I start to salivate whenever I hear the word “de-fund.” But conservatives miss the mark when they call on Congress to de-fund NPR. This is the wrong way to handle the NPR problem. It would only marginally affect NPR, which gets almost no direct funding from the Federal government.
I have a much more comprehensive goal. I want NPR off the air, not merely hampered slightly. I know how to do it . . . without liberals being able to scream “censorship!”
I want to cut off all of the subsidies. Take away these subsidies, and NPR becomes extinct.
THE SUBSIDIES
The direct subsidy from the Federal government is low. This summary appears in the Washington Post.
The firing brought swift condemnation Thursday from many quarters, but especially from conservatives, who have long accused NPR of liberal bias and have called for an end to federal subsidies of public broadcasting. The federal government provides roughly 15 percent of the revenue of public radio and TV stations, although less than 2 percent of NPR’s annual budget is directly subsidized by tax monies. The rest comes from corporate underwriting, foundation grants and programming fees from hundreds of NPR member stations. These stations, in turn, receive direct financial support from the Corporation for Public Broadcasting, the entity set up by Congress in 1967 to pass federal funds to stations.
This is not the subsidy that matters. Another one does. The Federal government under the Roosevelt Administration allocated 88.1 megahertz to 91.9 megahertz to non-profit broadcasting. This spectrum was deliberately removed from visibly commercial use. Radio stations broadcasting in this spectrum may not sell advertising time.
These stations were not worth much money until the 1960s, when Japanese transistor radios got cheap enough to create a large audience for FM radio. FM signals are cleaner than AM radio. They are high fidelity. They soon became stereo.
Any station operating in this spectrum receives a subsidy. The value of this subsidy is whatever money the station would bring at an open auction. If these frequencies were sold off, once and for all, to investors, not one of these stations would be able to buy back its frequency. Commercial stations that most people want to listen to would buy them.
October 25, 2010
Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 20-volume series, An Economic Commentary on the Bible.
Copyright © 2010 Gary North
