BlackRock emerged as one of their principal advisers as the agencies bailed out major companies and tried to put a price on their toxic assets. BlackRock is also managing tens of billions of dollars worth of AIG assets for the government. In August, officials selected the company to help arrange the purchase, partly using taxpayer money, of toxic assets from banks. Although BlackRock, which avoided the plague of toxic assets, has turned to Washington by choice, some firms have been forced to Washington.

Schwarz's response can hardly contain his excitement:

Impressive! Impressive work there by BlackRock! Let's stroll over to BlackRock's own website, so we can find out who owns them and extend our congratulations:

Merrill Lynch & Co., Inc., a wholly-owned subsidiary of Bank of America Corporation, and The PNC Financial Services Group, Inc. own approximately...47.4 percent and 31.5 percent of BlackRock’s capital stock...

Whoops!

Bailout Recipients

Bank of America $45.0 billion
Bank of America, NA $6.0 billion
PNC Financial Services $7.6 billion

But Schwarz really feels "there's no need for the Washington Post to report on what's going on in this universe," since "it would only upset and confuse their readers."

Instead, Baker writes "readers got to see the comment of Robert Profusek, a lawyer at Jones Day who is identified as having advised major banks on compensation matters," and Linda Rappaport, "head of the executive compensation practice at the firm Shearman & Sterling"--both of whom unsurprisingly argue for maintaining high executive pay in order to attract "talent" that will "make the money for the shareholders."

Baker voices the unspoken aspects of this assertion:

If the Post had solicited the views of a populist, or an economist, they might have told readers that much of what the banks earn comes directly at the expense of consumers and businesses....
The public has no obvious interest in subsidizing traders to speculate in financial markets. If the speculators win, then the loans that Goldman and the others receive will be repaid, but this repayment will only be a portion of the higher prices paid by consumers and lower profits earned by producers as a result of Goldman's speculation.

And, "moving beyond the world of speculation," Baker doubts that "if most of these individuals were replaced by the person next in line...the bank's profits would suffer in any big way." Which means that "these high salaries are just a drain on the bank, its shareholders and the taxpayers. But you won't see this argument presented in the Post."

Listen to the FAIR radio show CounterSpin: "Robert Johnson on AIG Bonuses" (3/20/09).

• Should a Connecticut trader receive $100 million in executive pay from a bank that would be dead had it not received $45 billion in taxpayer money? Apparently, the guy's genius was to drive up the price of gas to $4 a gallon. Does he deserve 100 million bucks from you for that?
• Should unemployment benefits be extended for 1.5 million jobless Americans who will otherwise run out of money by the end of the year and fall into destitution and, sometimes, homelessness?

Chazelle notes that "the New York Times features both stories on its front page, but never connects the two" --their job "explaining the complexity of the issue" encapsulated by him as, "If the trader fails to be paid, it'll get truly ugly: The guy will go trade somewhere else!"

"On the other hand," writes Chazelle, "if mom and dad don't get their unemployment benefits, things are not quite nearly as bad: Only their kids will die." Leading him to sarcastically exclaim, "Thank god I am not in government having to make tough choices like that!"

Read the FAIR magazine Extra!: "The Recession and the 'Deserving Poor': Poverty Finally on Media Radar—but Only When It Hits the Middle Class" (3/09) by Neil deMause.

However simple this distinction might seem, it somehow escaped the NYT, which discussed the policies promoted in recent decades as though they could be plausibly described as "free-market fundamentalism." It should be perfectly apparent to everyone at this point that the people designing economic policy in recent decades had no philosophical commitment to "free markets"; they were trying to design policies that had the effect of redistributing income upwards.

In the case of the banks, this meant giving them implicit government insurance, both through the FDIC and the "too big to fail" policy, without constraints on their behavior or making them pay for it. This approach has nothing to do with free markets; it is a story of wealthy people using their political power to get valuable benefits from the government.

The upshot, according to Baker, is that "the NYT is insulting its readers by implying that these policies had anything to do with free market philosophy."