The tyranny of the media

By Brian O’Brien
thetyrannyofthefederalreserve@yahoo.com
10/22/2015

Many Americans are under the misconception that the purpose of the media is to make money. But the quickest way to lose a fortune is to go into the media business. The reality is the money comes first—you need a whole lot of money if you are going to run a newspaper, television network or radio station and play the media game.

The people who run the media do not do so to make money. They go into media because they already have access to a great deal of money and they want to employ it to influence the public.

The story of an American newspaper magnate named Dean Singleton illustrates how the media game is played in our modern era.

Dean Singleton was a college dropout from a poor family from the small Texas town of Graham. He had tried his hand at being a newspaper reporter which hadn't worked out for him. At age 21, while working as a copyeditor at the Dallas Morning News, some entrepreneurs offered him the chance to run a small town weekly newspaper, which he accepted.

Then, at age 34, Singleton began acquiring newspapers and building one of America's biggest newspaper empires, purchasing one newspaper after another around the nation. When he was 36, he spent $150 million to buy the Houston Post and another $95 million for the Denver Post.

Singleton's game was to use debt to buy struggling newspapers, often from heirs who had inherited the papers from their fathers and did not wish to run them. Singleton would buy these papers and then ruthlessly cut costs by firing reporters, photographers, copyeditors, editors and any personnel that he could. He bought up all the papers he could and consolidated staff and content on a regional basis. Editorial and copy desks were centralized by region to cut expenses. The opinion pages and editorial content were made the same across regions, meaning that where once you could find a variety of opinions from various papers regarding different topics, the same opinions would run across Singleton's MediaNews Group empire. The same politicians would be supported or attacked or ignored and the same issues and topics were covered in the same way. The front pages in Denver, Oakland or Detroit were often exactly the same.

By age 40, Singleton was a wealthy media mogul with a great deal of influence. By 2005, he controlled 56 daily newspapers and over 100 non-dailies in 12 states with a circulation of about 2.5 million. From 2007 to 2012, he served as the chairman of the Associated Press, the world's largest wire service that provides news content to media outlets around the world.

In the many articles on the Internet about Singleton, never is it explained how a small town Texan who was never much of a reporter and not a businessman suddenly rose up meteorically from the copy desk to build and own one of the nation's largest newspaper companies.

Singleton has been described as having a strong work ethic, but his business experience amounted to running a small-town weekly paper purchased with other people's money. Yet by age 36, he had spent $150 million to purchase a metropolitan newspaper in one of the nation's largest cities.

How does one do that?

The answer lies in Singleton's business partner, a man named Richard Scudder. Scudder, who died in 2012 at age 99, was an interesting character with an obscure past. Not much is written about him online, but unlike Singleton, who is essentially reviled by reporters as having had a negative impact on journalism, Scudder is written about in positive terms. Scudder was an inventor from a family that had long been in the newspaper business on the East Coast. Most articles emphasize that his lineage is distinctly American and traces back to before the Revolutionary War. Articles about him call him the financier who backed the rise of Singleton's MediaNews Group.

What is intriguing about Scudder is that he was a U.S. Army military intelligence officer during World War II. According to an article in the New York Times, Scudder was assigned to Operation Annie, Annie being short for anonymous. The operation was an underground German-language radio station that broadcasted misinformation to the German people.

Scudder worked in psychological operations warfare, or PSYOPS for short, which is a military field that specializes in producing and disseminating misinformation and disinformation to persuade, change and influence populations in order to achieve strategic goals.

After the war, Scudder returned to the United States to work in journalism. His connections in the financial industry enabled him to provide Singleton with the money to buy up newspapers around the country, consolidate them and centralize the themes and messages that his papers were using to influence the American population.

Scudder was the money man. He chose Singleton to be his hatchet man and the public face of the company. Singleton is notorious in the field of journalism as a man who was less concerned about the quality of journalism than he was about paying back his creditors. He also had no compunction when it came to laying off personnel. If you were a reporter who worked for a newspaper that was purchased by Singleton, you knew right away that layoffs were coming and there was a good chance you would soon be looking for a new job.

If you read MediaNews Group newspapers with a critical eye, certain themes and messages will become apparent. MediaNews Group newspapers report the day to day news on crime, local politics, sports, entertainment and so on; but at the macro-level the themes and messages are hard to miss.

First of all, the papers are pro-immigration and very sympathetic to illegal immigrants. The irony is that Singleton's reporters who write pro-immigration stories tend to be liberal with strong pro-labor sentiments. These reporters have been laid off in large numbers, seen their salaries slashed, their health insurance benefits reduced, their 401k matches taken away and their unions crushed under MediaNews Group's harsh anti-labor tactics. All the while MediaNews Group reporters continue to promote the need for more immigrants never questioning why a company that treats its own workers so harshly is so driven to promote increasing the level of immigration into our country. These pro-immigrant reporters never put two and two together and realize that immigration is a tool the rich use against American labor, especially for the purpose of weakening unions and lowering wages.

Second, the papers are always supportive of free trade. Free trade is mentioned as a net benefit to the nation, while the negative effects, such as job loss, wage stagnation, community disruption, and so on, are downplayed or blamed on other causes. Every now and then, the editorial pages in MediaNews Group newspapers will issue warnings about the dangers of protectionism. The ghosts of Reed Smoot and Willis C. Hawley often haunt the editorial pages whenever a whiff of protectionist sentiment is detected in the public.

Third, the papers are supportive of America's interventionist foreign policy. Establishment politicians who advocate for American action against Iran or Russia or anywhere else around the world are portrayed as being mainstream while politicians who do not support America's world police role are portrayed as fringe characters and isolationists.

Fourth, the primacy of the Federal Reserve is faithfully supported. Specific actions and actors can be criticized when it comes to monetary policy but the monetary system itself is never questioned. MediaNews Group newspapers always support this system and defend it. For example, in July 2009, during the depths of the housing bust, MediaNews Group newspapers in Northern California ran an opinion piece that was a spirited defense of the Fed. The op-ed stated that Fed Chairman Ben Bernanke was taking criticism from both sides of the aisle in Congress due to the Fed's failure to uncover unsound lending practices by financial firms.

“The Obama administration wants to give the Fed greater authority to oversee financial institutions, something it should have had in the past,” the editorial stated. “A particularly troublesome idea that Bernanke is wisely rejecting is a congressional proposal to let the Government Accountability Office audit the Fed. … It is essential that the central bank remain independent of congressional influence, which could result in financial decisions by the Fed being based more on partisan politics than sound economics. … The Fed should be given a chance to show that with some additional new authority, it can keep a check on the lending practices of financial institutions without the aid of a new consumer protection bureaucracy and the meddling of Congress.”

There you have it in a nutshell. The purpose of buying up all these newspapers in communities from coast to coast was to persuade, change and influence the American people to accept the strategic goals of mass immigration policy, free trade policy, American interventionism abroad, and to protect the independence of the Federal Reserve from democratic reforms. The Fed must remain independent and free to control the monetary system without the interference of our elected representatives and the democratic process.

Now, some people might think this is freedom of the press and how capitalism works, that Singleton and Scudder were buying up newspapers in an industry undergoing change and that they were doing what they could to make a buck in the good old American capitalist spirit—that Singleton's empire is an example of the creative destruction the economic theorists tell us about, and that Singleton and Scudder were providing a greater good by buying up struggling newspapers and reorganizing them during a period of change to make them profitable once again. But this was demonstrably not the case.

In 2010, MediaNews Group filed for Chapter 11 bankruptcy. According to a March 19, 2010 article in the Denver Business Journal, Singleton and Scudder had lost hundreds of millions of dollars during the course of purchasing their empire. They had borrowed nearly a billion dollars and had squandered almost all of it.

Under a reorganization plan, MediaNews Group was allowed to reduce its debt from $930 million to $165 million. The creditors agreed to reduce the debt in exchange for equity in the company. The two biggest creditors were Wells Fargo and Bank of America, which received the lion's share of the equity. The plan specified that Singleton would receive a base salary of $994,000, plus 6 percent of the restructured company’s stock and annual bonuses of up to $500,000 if the company hit earnings targets. The plan specified that the president of the company, Joseph Lodovic, would earn a salary of $1 million and annual bonuses of as much as $500,000, and receive 3 percent of the restructured company’s stock. Lodovic had received a $500,000 bonus for his work on the restructuring and for initiating the bankruptcy proceedings and received another $250,000 more when the bankruptcy plan was approved.

So, essentially, Singleton racked up nearly a billion dollars in debt from big banks to buy up newspapers around the country. He couldn't pay back the debt so the banks basically cut their losses of $765 million while continuing to pay Singleton around $1 million a year for his work for them.

Is this the free enterprise system?

Apparently, money wasn't the object here, at least not for the banks when it came to financing Singleton and Scudder. The banks were willing to hand over hundreds of millions of dollars to them and they lost most of it, but the banks were still happy enough with the outcome to continue paying Singleton nearly $1 million a year despite the massive monetary losses.

In 2013, Singleton retired a very wealthy man at age 62. He is physically weak and his hands shake from multiple sclerosis, which he had been battling for 26 years while building his empire. But his work for the banks is done and he now lives on a large ranch in Colorado.

The Singleton story is not unique to the newspaper industry nor to the United States. Bankers spend millions and are willing to lose it all to put their people in control of the media. After all, it's just money they are spending, and money is just numbers on a screen or pieces of paper printed off a printing press. When you control the system that creates money then you can always make more of it. And the media is a crucial resource that must be controlled if you are going to maintain control of that system.

Brian O’Brien is the author of “The Tyranny of the Federal Reserve.”