Website Video: Because Freedom of Speech is Not Cheap!

Last week's ruling by the Supreme Court will have as much impact on our capitalism as it will on our democratic republic. And you better be prepared to pay for it. Cause it's gonna cost you.

Written Jan 27, 2010, read 1376 times since then.

When I heard last week of the Supreme Court Ruling allowing unlimited corporate spending on federal political campaigns my first thought was that it was a victory for the 1st Amendment. Free speech is vital to the survival of our democracy. And restricting individuals or corporations just because they have more money than you and I don’t change the fact that to do so is still an infringement on liberty and a violation of the free speech provision of the U.S. Constitution’s 1st Amendment. The Court’s 5-4 ruling in Citizens United vs. Federal Election Commission surprised me only in the fact that as many as 4 Supreme Court jurists felt comfortable with such a bald and bold prohibition of our founding fathers most glorious gift of free speech.

After my initial rejoicing of free speech again being venerated my next thought was true concern over my wallet. Out of control federal spending and a weak dollar aren’t the only inflationary pressures that exist. The Supreme Court’s ruling will have the unintended consequence of driving up prices for most consumer goods. And the reason for this inflationary concern just comes down to the most basic rule in economics. High demand increases prices. Followed by the second rule of economics and inflation which is “Higher expenses drive up selling price”. Followed by the third rule of economics and inflation…shortage of supply also drives up prices. Well, as surely as President Obama will seek re-election in two years, this Supreme Court ruling will impact the three above stated rules of economics.

Efforts to limit corporate political campaign contributions or influence date to 1907 when Theodore Roosevelt convinced Congress to prohibit such corporate involvement in federal elections. The dangers of allowing such political spending freedoms to powerful interests are many and mostly self evident. In writing the dissenting opinion Justice John Paul Stevens called the decision a “radical change in the law.”, and predicted the ruling would “cripple the ability of ordinary citizens, Congress and the states to adopt even limited measures to protect corporate domination of the electoral process.” Stevens also wrote about the danger of foreign governments unduly influencing American elections through unfiltered and uncontrolled advertising. The esteemed Justice may need a reminder of the 1st amendments exact wording which reads, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” At no point does the text say “these rights are not to be enforced if you have too damn much money.”

Cases challenging the McCain-Feingold Act limiting political campaign contributions to federal candidates are already in the pipeline. And to expect the nine jurists to uphold that law while granting unlimited speech (i.e. spending rights) to corporations is akin to expecting Louisianans to support Barrack Obama in the same election they would elect David Duke Governor.

So unlimited campaign spending on advertising is upon us…now. Just in time for the Congressional midterms. Do you think some of those banks President Obama is trying to control, and who’s Executives are facing government mandated pay cuts MIGHT just want to see someone else in office? And do you think those banks and similar thinking corporations won’t devote record expenditures to removing their antagonists from office? It’s a fete acompli. TV and radio advertising executives can go home in August this year. They won’t be needed in the office to sell air time until after the General Election. Just in time for Christmas.

Having studied Economics in college isn’t necessary for me to have the ability to deduce what happens to the price of a product when it’s sold out for at least four consecutive months in a row. If my fear is realized radio and TV stations will have no choice but to substantially raise their advertising rates. And remember once Christmas 2010 has passed we’re a mere 11 months from the Presidential ad campaigns swinging into full throated roar for the January 2012 Presidential Caucuses and primaries. Like any other industry TV and Radio stations are not eager to lower their prices once they’ve been raised. When the spigot of corporate dollars starts pouring into the advertising industry beginning this July I see no turning back.

And when the Supreme Court inevitably rules McCain-Feingold unconstitutional those same radio and TV stations will be facing a losing proposition if their ad rates aren’t drastically increased. Federal law requires broadcast entities to sell as much advertising as a candidate wants to buy to that candidate; and to sell it at the lowest prices possible. Facing the prospect of selling ALL of their air time at the LOWEST prices possible is not appetizing to the average advertising Sales Manager. So, once again, rates will go up.

All this spiking in ad rates will make it harder for the average grocery store, department store, casino or restaurant to advertise over the king of the medium, television; and its “old war horse” radio. Lower cost and less effective means of advertising will have to win the day. One of the biggest “Buzz” phrases in Marketing right now is “Search Engine Optimization”. For the uninitiated it means to make your website enticing to Google. And if you can also make it enticing to other search engines like Yahoo, Bing, Alta Vista, not to mention Joe Blow Websurfer.

Adding audio and video to your website is one way to make that website more attractive to the king of search, Google. Google represents anywhere from 65-75% of all internet searches. So if you are not playing to their tune, you’re simply not playing. Google’s algorithms have their metric set to devote half their time looking for VIDEO, versus text, graphics, website name, or any other worm dangling from the fishing line that is your web site. So failing to have video on your site will be an expensive non-expense for your business. The fact is you are already paying for your website. It’s virtually mandatory for legitimacy in today’s business world. So since you’re already paying for it, it makes sense to make it (your website) work for you. That’s where audio and video come in. And if you aren’t selling your website visitors, your competition is.

With increased expenses in advertising facing retailers in the immediate future price hikes on products or services is another anticipate result of last weeks Supreme court ruling. Sadly increased advertising expenses are not the only inflationary pressures our economy faces. A weak dollar brought on by high Government deficit spending doesn’t help either.

Resourceful Americans (read business owners) will be looking for new and effective but inexpensive ways to advertise their products and services. Maximizing their websites is job one.

As a Patriot and concerned citizen I hope some of the predictions contained in this writing are mistaken. Or I hope our citizenry re-devotes itself to staying informed on issues so we can collectively avoid being hoodwinked in our election cycles by free spending corporate big-wigs who may or may not have our best interest at heart. Thomas Jefferson was one of our nations first and strongest advocates for the freedom of the press and the benefit’s therein. Before ratification of the Constitution he wrote in 1786,"Our liberty cannot be guarded but by the freedom of the press, nor that be limited without danger of losing it." Thirty years later he wrote, "Where the press is free, and every man able to read, all is safe." One can only hope the reading, viewing or listening is actually taking place.

Thanks for visiting. Comments are welcome (and encouraged).

Learn more about the author, Michael Schuett.

Posted by Brian Willoughby, Bellevue, Washington | Jan 28, 2010

This is a good article - and certainly timely. The issue is complicated because our society seems to accept a few artificial mechanisms on top of the necessities of commerce. The simplest definition of economics is the allocation of finite resources, and money is just one of the most efficient means of exchange. Beyond that, though, we have to look at what sorts of artificial constraints there are which specifically affect campaigns and advertising in general.

One of the biggest issues here is that the broadcast media are run by artificial monopolies granted by the FCC. Before the FCC, anyone could put up a radio antenna, and since there's always a limited range this would not result in as much chaos as you might think. Instead, the FCC makes it illegal for anyone to broadcast radio or television without specific permission from the government. The result of this artificial restriction is that a few corporations are the only ones who can manage to obtain the permission, thus creating an artificial monopoly over the airwaves. My point is that the biggest reason that airtime is expensive is that it is artificially limited by the existence of the FCC and its restrictions on legal access.

In contrast, one is still able to run a campaign by walking door to door, signing up volunteers to get the word out, using the limited public access on cable networks, putting up a web site or even just a video on YouTube. As a side note, I suggest that the only reason that the internet is still a viable media for the general public is that it is largely unregulated. I predict that Network Neutrality legislation would start the process of turning the internet over to purely corporate interests - which is ironic, since the whole topic is based purely on the fear that it might happen. These side-issues are important because, as you note, the internet offers some of the best opportunities for inexpensive advertising that has not yet been so thoroughly monopolized as a result of government restrictions.

Another huge issue besides the government manipulation of the broadcast market is our fiat currency. The dollar is weak purely because it is not based on anything solid, and because legal tender laws do not allow U.S. citizens any other choice. The Fed is printing dollars like toilet paper, and they've doubled the money supply in a very short time. Even without the issues of limited airtime, limited broadcast frequencies, and all of the other natural limitations inherent in a resource like radio media, you raise a good point by mentioning that the falling dollar makes these problems even worse.

The strange thing about the topic is that campaign finances are not really the limiting factor keeping independent and third-party candidates off the ballots. The unfortunate truth is that most states have laws which make it impossible for anyone to run for office without joining the two-party system - a system which is clearly corrupt and lacking in any examples of staying true to their founding principles. Instead of allowing these real barriers to come to light, the establishment makes a big noise about the amount of money spent, without admitting that each party got $16 million from the government to run their national campaigns, or that outsiders are completely excluded. Campaign finance is almost completely a red herring.

To get back to your point, advertising costs are indeed likely to go up. There are many reasons for this. Unfortunately, these and other factors contribute to a system which is not the best for business. Hopefully, we can reign in the bad practices of our representative government instead of making the problem even worse.
Posted by Steven Washer, Windsor, Connecticut | Jan 28, 2010

This is a most welcome post from someone who I can only assume is my "brother from another mother". Indeed, nothing our beloved representatives do in their ever-accelerating zeal to make our world safe from all risk seems to have its intended effect.

And nothing they do is more dangerous than when they meddle in areas that should be determined by the aggregate effect of actions taken by millions of people in their own enlightened self-interest.

Certainly the issue of web video is close to my own interest, and I must confess mixed feelings about the inflation that may be coming to ad rates. At the same time, I'm not so sure it will even happen.

TV stations are sinking under their own weight already. Layoffs are happening in droves. Content is being slashed to the bone. I'm not at all sure that this ruling is going to stop the inexorable slide of an industry that has lost its base and continues to do so, the latest Superbowl ad situation notwithstanding.

It will be interesting to watch this newest development. It's too bad so few of us know our own history. The genesis of this problem goes back to John Rockefeller, who petitioned the government to give him the first permanent grant of a corporation. Before him, corporations in this country were shunned because of the mischief they did in Europe. The founders wisely eschewed them for all but the most benign of public purposes, like building roads or bridges. The point is, they were temporary grants, dissolved when the project was completed.

But now they are "people". Yes, that was the whole point, boys and girls. Give an entity the right to do anything it wants, in the most amoral way possible, and there is nothing you can do to stop it, until it eventually wrecks your republic. That is the slow-motion train wreck we are gaping at right now.

It's tragic and true that those who ignore history do so at their own peril. Perhaps we'll be able to turn this around. But we need to start at home. Educate yourself. Educate your children. Don't leave it to the professionals. They don't have your best interest at heart. Presumably you do!

Again, great post, Michael!
Posted by Michael Schuett, Renton, Washington | Jan 28, 2010

Thank you for your comments gentleman. A couple of clarifications are neccessary. Brian unless I am reading it wrong your's has a tone of conspiracy theory. The FCC was created in 1934 largely because any TOM-DICK-AND-HARRY were putting up transmitters of endetermined wattage and transmitting their radio signal. Radio frequency bandwidth is a finite number and there was a lot of overlap. Control needed to be exercised and was for the most part until the abomination called The Telecommunications Act of 1996. Prior to this undemocratic law no single entity could own more than one AM radio station, 1 FM, 1 TV station and 1 newspaper in a single market/city. Many radio stations operated largely as hobbys to community merchants who had other means of income. Easch and every one of them was bought out and now there is no limit to how many broadcast stations a single corporation can own in any number of markets. And prior to 1996 public service announcements had to be aired, and broadcast frequency license holders had to appear before the FCC every time their license expired to show compliance with public service mandates. No such requirements exist anymore. Your theory that an unneccessary FCC is largely responsible for expensive ad rates flies in the face of what is currently happening right now. Rates are at or near twenty year lows for radio. I have less knowledge about television. But if Steven is right that TV is being crushed by its own weight then we should all be afraid. TV news entities mostly relied on newspapers for stories already and newspapers have drastically cut back their reporting staffs. With TV doing the same thing responsible professional journalism will have increasingly limited outlets and we will collectively be dumber as a society. A weak dollar has nothing to do with the lack of a Gold standard. we've been off of Gold for about 100 yrs and the dollar has intermitently been strong and weak (mostly strong). It's weak now because there are so many bills out in circulation now, interest rates are incredible artificially low, and Congress doesn't put any value on the dollar whatsoever. We're a 2 party system and always have been. There has never been a successful third party in this country. The fact that each party has corruption is also nothing new. People know this, and working within the system is how things get done. Yelling from the outside as a third party will only leave one horse. :ast;y, I love the fact that you called it a representative government. Too many call it a democracy, which it isn't and hopefully will never be. Steven you clearly have a grasp for history that is to be respected. Again I thank you both for your comments. Michael Schuett total Broadcasting Service www.totalbroadcasting.com
Posted by Michael Semer, Beverly Hills, California | Jan 28, 2010

Superb posts, and your followup was especially illuminating, Steven. By granting corporations the same rights as individuals, we've created an enduring dissonance with the basic notions behind the republic (don't get me started on direct election of the Senate!). Coprorations aren't members of the electorate, and they can't honestly purport to represent the interests of any share of the electorate -- stockholders and stakeholders aside -- just their own interests.

Nor can they be blamed for doing exactly what's permitted under the law. That's an issue of governance, and the ultimate responsibility for it needs to be shouldered by an empowered citizenry. If the election of 2008 demonstrated anything to skeptics, it should be that concerted effort by an informed mass of voters can actually effect change: the system still works, as monolithic and rigged as it sometimes appears (I'm from Chicago -- I know whereof I rant).

But if we, as citizens, allow any or all of this to continue...well, you get the government you deserve, certainly. Bought and paid for.
Posted by Brian Willoughby, Bellevue, Washington | Jan 29, 2010

I did not intend to imply any conspiracy, as I am referring to the outcome, not any original goal. There are certainly many ways to manage the airwaves without a centralized FCC. I am merely pointing out that there are consequences, even if unintended, of giving power to a single body to make broad-reaching decisions about management of a finite resource - a resource that does not have fixed boundaries even though there are range limitations.

Gold is not the only option - it's certainly not magic or unique - but my point is that we have no backing of any kind now. We have a fiat currency which has no external strength. We've only been off the Gold Standard officially since Nixon, less than 40 years, not 100. But you are correct that we have not consistently been adhering to any Gold standard for about 150 years. What's important to note is that the value of the U.S. dollar has never risen since we went off the standard. You may consider the dollar to have been "strong" at certain points in time when it was not backed by Gold, but it has not been strong enough to rise in value. In my definition, a currency which does not rise in value is not strong. Prior to leaving the Gold Standard, citizens of our fine country actually experienced the opposite of inflation - the price of goods dropped across the board for decades at a time (1812-1850, 1865-1900, and a slower gain from 1920-1928). Perhaps gold wouldn't work for everyone, or even paper backed by gold, but it would be better than what we have. Ron Paul is also introducing legislation to give us back our freedom to choose currencies voluntarily.

Finally, we've not always been a 2-party system. There have been times when we had no parties, and times when we had a single party with nothing but a token "opposition" party. Historians have divided the history of the U.S. into about 5 different "Party Systems" that each spanned about 30 to 40 years each. Independent and Third Party presidents have been elected many times over the years, including Federalist, Democratic-Republican, National Republican, Democratic, Whig, Republican National Union, Democratic National Union, National Union Independent, and Republican. Third Party Presidents include such names as Thomas Jefferson, John Quincy Adams, Andrew Jackson, William Henry Harrison, Abraham Lincoln, Andrew Johnson, and Ulysses S. Grant. When you consider the important changes effected by some of these Presidents - Lincoln's abolition of slavery comes to mind - I think it's dangerous to make the claim that there has never been a successful third party in the country. On the contrary, third parties have not only been successful, but they have been necessary for the improvement of our country. Don't be confused by the similar party names - many of the parties which boast the name "Democratic" or "Republican" are unrelated. Parties often ended when they split in half, with new parties growing out of combinations of supporters from both previous parties. We're basically due for another shift in the party system, but the ballot access laws that we have in place now are preventing the natural evolution from occurring. It has nothing to do with campaign finance, and everything to do with unconstitutional limitations on ballot access.
Posted by Steven Washer, Windsor, Connecticut | Jan 29, 2010

Brian, I loved your exegesis of our republic's love affair with political parties. But I'm not sure I can agree with your inclusion of Adams and Jefferson. Political parties here sort of began with those two frenemies, so to claim third-party status for either of them is, I think, a bit of a reach when neither had been around long enough yet to become incumbents.

The main point of my take can probably be summed up by a friend's analogy of the strip mining of media properties by large corporations.

Simplistically stated, they came in, raised profits by cutting expenses, then when quality fell below a certain threshold, they found they could no longer make ad sales. So they began cutting content, which means cutting staff reporters.

Eventually they dumbed down the "news" to the spectacle of left-right arguments of massively silly proportions. Sound and fury signifying...well, you know.

Now these guys have the audacity to declare that news should be a public function. Right. Now that they've looted the trust, killed the golden goose, however you'd like to put it.

The point is, there's no going back now. We're just too dense to see it for the horror show that it is. That means we'll be getting ever dumber takes on the news until finally, we'll be treated to "scoops" from internet gossip sites splashed on prime-time TV news operas.

Whoops. Too late. It's already happening. The Today Show just featured a 10 minute interview with the Dailybeast.com on speculations about Tiger Woods. They said none of this was confirmed, then dived headlong into the fray, like the deranged paparazzi that they truly are.

By the way, it may seem counter-intuitive, but even though the history of broadcasting ran into those TOM-DICK-HARRY problems, the logical conclusion was not necessarily federal control over private activities, just as the solution to the problems caused by deficit spending by quasi-government agencies is not more deficit spending paid for by private enterprise.

I wish we would more thoughtfully check our assumptions about what the public good might be, remembering we have a dog in the fight. The truth is, when you invite in those who have a monopoly on the use of violence, you can never predict the outcome, except to know it won't be terribly elegant.

There are, after all, no i-Radios.
Posted by Michael Schuett, Renton, Washington | Jan 29, 2010

We have NEVER EVER had a successful third-party in this country. Federalists, Whigs, Democratic-Republicans were at each of their times one of the two parties in power. The Republican Party essentially replaced the Whigs. At no time did three political parties with any significant elected representation EVER exist in the U.S. The Presidents you mentioned were not 3rd party candidates they were representatives of Fderalists, Democratic-Republican, and Whig parties all of which shared power with only one other party at that point in history. It's a misleading tactic frequently used by Paulastinians to claim previous 3rd party success for which there is no record of support. But I don't disagree with your gripe about ballot access laws. The Gold Standard officially ended under Nixon but for essentially the last 60-70-80 yrs of its existence the gold-to-dollars ratio was so small as to be insignificant and the Nixon administration and Congress just ended what had been self evident for most of the previous century. Overlapping radio signals interfering with each other was certainly a problem worthy of Federal intradiction. Lastly, Ron Paul and many of his followers is a racist for which I have zero tolerance. Michael Schuett Total Broadcasting Service www.totalbroadcasting.com
Posted by Brian Willoughby, Bellevue, Washington | Jan 29, 2010

Agreed. Adams was merely first. That's hardly a third-party upset. Actually, he'd be the first party. Similarly, Jefferson would be the second party, since Washington was technically independent. I really only put them on the list because nobody had ever been elected by their party before, and that is significant in some way.

I see your point about the low quality of the press and media, but it's really always been that way. If you read some of the media from 300 years ago, there are still some really dumb ideas, rallying of the mob, and other low-brow discussions.

Freedom is, after all, a constant battle. But it shouldn't really be a matter of assumptions about public good when the real issue is that the public should not have anything forced upon them based upon anybody's assessment of the public good. It's up to the public to decide what's good, and I don't mean 51% of voters forcing their choice upon the remaining 49%. I'm talking about a free market.
Posted by Brian Willoughby, Bellevue, Washington | Jan 29, 2010

You have a good point, Michael, that parties tended to die out by the time a "third" party came into power. But my point is that we can't have that natural evolution now when the federal government gives around $16 million each to the existing parties every election, and ballot access laws exclude new parties. But there always has to be a "first" election where a new party gets a President elected. If they're excluded from the ballot, this can't happen.

Ron Paul is not a racist by any stretch of the definition.

I don't doubt that he has racists who support him - in fact there are some really fringe elements supporting him. But you cannot judge the character of a man based upon those who claim association with him. Ron Paul has been serving our country for three decades, and there have been a wide variety of people claiming to belong to his team during that time. It's not like he has the opportunity to hand-select everyone who joins or speaks.
Posted by Michael Schuett, Renton, Washington | Jan 29, 2010

Again, I appreciate your comments. My previous article, "Would Martin Luther King like this?" dealt with the subject of freedom and rights. Basically, it comes down to whether you believe in rights protecting a group, or community within a society or whether you believe in protecting the individual liberty of each person within that group. The two are not always compatible. I believe in individual liberty, because I believe most individuals when left to their own devices and motivations will do that which is in the community's best interest....most of the time.

Michael Schuett Total Broadcasting Service www.totalbroadcasting.com
Posted by Atticus Thomas, Dallas, Texas | Feb 03, 2010

Quoted from above; "By granting corporations the same rights as individuals, we've created an enduring dissonance with the basic notions behind the republic (don't get me started on direct election of the Senate!). Coprorations aren't members of the electorate, and they can't honestly purport to represent the interests of any share of the electorate -- stockholders and stakeholders aside -- just their own interests."

This is exactly what is wrong. Corporation expenditures are controlled by management, not stockholders. Corporations can't vote, but this new ruling gives them more than a mere vote since they can now influence how others vote. The same applies to Unions which will contribute to campaigns based on decisions made by union leaders, not rank-and-file members.

We seem to be moving away from democracy to a system controlled by campaign contributions.
Posted by Brian Willoughby, Bellevue, Washington | Feb 04, 2010

I think you touched on the right issue, but lost it. To say that corporations are a concern because they can influence how others vote is misleading. All citizens can influence how others vote - that's the nature of society and humanity. When a corporation contributes to a campaign, it's no different than if the individuals contributed on their own, and not really any different than if they paid the candidate a salary for some work, and then the candidate used their own money for their campaign.

The trouble is not the actions that corporations or unions take, but whether they utilize force, and also whether there can be punishment.

The real problem with giving rights to corporations is that we cannot put a corporation in jail. We can fine a corporation, but there are no other real consequences for their actions. This is why we should abolish the rights of corporations, or at least make sure that the members suffer the consequences for their decisions.

Similarly, unions cause damage when they force members to strike, or force employers with the power of government. Unions should be a voluntary right, not a requirement, and certainly not with the power to force their decisions upon others.
Posted by Elvis Arias, Jersey City, New Jersey | Nov 07, 2010

great article Michael !