Saturday, October 06, 2012

Killing Big Bird

In the Presidential debate Governor Romney suggested that the subsidy to the Public Broadcasting Corporation is one of those things which he would consider eliminating.   He makes a clear point - look at federal spending and if it is not so vital that we do not need to borrow money from China - he would consider eliminating it.   That is a pretty good standard to start thinking about whether something should be included in government spending.   Immediately those on the left came up with two defenses.   The first was almost humorous.  They said Obama killed Bin Laden, Romney wants to kill Big Bird.   But government budgets should be about choices and clearly the choice of whether to spend more money on PBS, for many is a simple one, No.   Killing both Osama and Big Bird may be a very good idea but for very different reasons.

The second defense came from people like Levar Burton.  Burton made a good career working on PBS related projects.  He made the absurd claim that if federal funding were not there, that programs like Sesame Street would disappear.  That is nonsense on many levels.  In 2008, the last year that data is available the Children's Television Workshop made something just south of $20 million in licensing revenues.   At the same time supporters of the PBS subsidy made the case that it was tiny in comparison to the total federal budget in fiscal 2012 - the subsidy amounted to $445 million.   Indeed, that is a very small fraction of the total (bloated) federal budget.  But that is not the point.  Everything in the federal budget was once considered valuable.  Indeed, when the CPB (Corporation for Public Broadcasting) was first being funded they trotted out Mr. Rogers to justify the funding -

But since that original plea was made to Senator Pastore funding for PBS has increased by 22 fold; that is an extraordinary rate of growth.   The PBS supporters also claimed that federal funding is a small but vital part of PBS funding.   Here the best estimate is that it is just under 20%of total PBS revenues.   What would happen if that went away?   Perhaps, the whole system would collapse, although that is highly unlikely.   More likely, the CPB (Corporation for Public Broadcasting - which serves as a distributor for government funds to PBS radio and television stations - would disappear.   At the same time individual PBS stations would be forced to think more carefully about the value of particular productions.  The chance that PBS stations would disappear is negligible.  Indeed, losing that dedicated source of funds might well improve the chances that the Public Broadcasting System would look a lot less like the Government Broadcasting System.

When the PBS was first being set up former FCC commissioner Newton Minnow made a comment about commercial television -

"When television is good, nothing — not the theater, not the magazines or newspapers — nothing is better. But when television is bad, nothing is worse. I invite each of you to sit down in front of your television set when your station goes on the air and stay there for a day without a book, without a magazine, without a newspaper, without a profit and loss sheet or a rating book to distract you. Keep your eyes glued to that set until the station signs off. I can assure you that what you will observe is a vast wasteland."  (Emphasis added)

The problem with Minnow's statement then was that first like many statements by elites it may not have been accurate but second, it fails to consider the consequences of increasing public funding - he can tell you about the "seen" but not the "unseen" of the policy under review (as Bastiat called it).

In a Report to Congress by the CPB in 2008 it was argued that 60% of the PBS stations operate at a deficit. That may indeed be true.  They looked at alternative funding sources and concluded that no other source or combination of sources could replace the federal contribution.  That is just silly.  If PBS is that good and that innovative, it could shift its structure to replace the lost funds.

There is one other consideration when the CPB was first established the TV spectrum was fundamentally three big networks and a handful of local stations.  Today there are hundreds of channels who fulfill all or part of the function that PBS stations once filled.   All of them are supported either by advertisers or funding from the Cable Industry.   Indeed, one of the problems I have when I travel is that I find too many options to consider when I turn on a hotel's TV.

Governor Romney had the integrity to say he would reduce the subsidy for something which many people value.  If they really do value it, they should be creative in figuring out how to fill in for the lost (borrowed) federal money.

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