The New Robber Barons

Cynical viewers of the media produced by News Corporation would readily take the position that the reality peddled by its subsidiaries and its owner, Mr. Rupert Murdoch, is somewhat different from the one that the masses perceive on a daily basis. A recent example of Murdoch’s nonparticipation in reality was a quote surprising for both its solipsistic provinciality and that Murdoch said it himself, rather than procuring one of his media proxies to do so. âÄúHard times are good for big companies,âÄù Murdoch told the âÄúSilicon Alley Insider.âÄù All other evaluations of character aside, the troubling fact remains that this take on our economic woes is insightful and entirely correct. At first glance, this may not seem to add up. A cursory glance at the fortunes of Bear Stearns, AIG, Lehman Brothers and other recent catastrophes may lead one to conclude that Rupert is suffering from some unidentified boardroom dementia. However, if you consider the companies that do not do business in finance, the picture starts to clearly emerge. For instance, General Electric recently acquired the Weather Channel through NBC Universal for $3.5 billion. Hard times have been good for ExxonMobil, as well. This time last year, politicians and consumers alike were demanding inquiries of the leviathan-esque windfalls being received by American oil concerns. But the nosedive of the dollar, and subsequent rise of gas prices, handily replaced public animus toward gas companies with public animus toward politicians who refuse to budge on offshore drilling. Perhaps David Sokol, chairman of Berkshire Hathaway MidAmerica, described the effect best. Talking about his companyâÄôs move to annex utility company Constellation Energy at half of its original bid price, he said, âÄúThe recent situation has brought a number of companies down to where we think they are a fair value.âÄù In other words, industry giants fatten, fledgling companies disappear. Some people may defend this as survival of the fittest businessmen. But a few generations ago, such âÄúfitâÄù businessmen were called Robber Barons.