IT'S THE STOCK HOLDERS, STUPID

Q: What are the similarities between Hollywood, the automobile business, and the news business?

A: The high costs of starting competing businesses.

New competition for the slumping Los Angeles Times evaporated when it became clear that startup costs would exceed $100 million dollars plus the several years of losses before the paper had a chance to be on its feet; estimated losses before turning the corner were nearly a billion dollars. The "Book Values" of the car companies exceed a billion dollars, which means startup costs would be near ten billion if you count the dealerships, engine manufaturing plants, and so on. Hollywood is different in that one movie can be made outside of the system and then distributed to theatres via the system, BUT Dreamworks couldn't last as a separate entity more than a few years because in spite of hits they had trouble with pictures that didn't make money. Their losses on failures exceeded the profits from the hits and they didn't have the staying power of a multi-national. Soros paid a billion for their library so their lenders probably came out clean.

It is generally conceded that the car business is so badly managed (and has such bad labor contracts) that nothing other than an entirely new management can possibly save it. The Newspapers continue to bleed but nobody is fired, and in fact large pay raises as a reward for failure continue. Hollywood continues to make pictures guaranteed to lose money, the latest being Susan Sarandon, who stars---she has never been in a movie that made back costs of production---as Cindy Sheehan; another far Left movie that will have to come in under ten mil including prints and advertising in order to break even. This movie could not be made unless there is a guarantee of distribution including prints and advertising from a major studio in advance, or which is most likely, the movie is completely financed by Left Wing idealogues who don't care if their movie makes money as long as their "message" gets out. But failures ruin the theatres so badly that money losing movies cannot continue.

So what about the stockholders? Yeah, what about them? All refuse to do what the system allows and demands that they do when a company begins to fail or fails repeatedly: take over the companies and put in new managements.

So what? What's all that to me? Here's what: when costs of entering any business get too high, freedom dies. Freedom of speech is the first to go but all freedoms of economics die too. And it means that all of our freedoms will eventually collapse in the face of "reality."