Dear Commons Community,

The New York Times and other media are reporting that Rupert Murdoch has made a bid to buy Time Warner that would set in motion a massive merger of entertainment media conglomerates. As reported:

“21st Century Fox, owned by Murdoch, offered to purchase Time Warner for $80 billion, but was turned down.

21st Century Fox eventually confirmed that it had made an offer, but said it was not currently in discussions with Time Warner.

Time Warner (which includes CNN) issued a statement of its own, explaining why it had rejected the deal:

‘In making its determination, the Time Warner Board considered, among other things, that: The execution of Time Warner’s strategic plan will continue to drive significant and sustainable value for Time Warner stockholders; the unique value of Time Warner’s industry-leading businesses including its portfolio of networks and its film studio and television production business is only going to increase; there is significant risk and uncertainty as to the valuation of Twenty-First Century Fox’s non-voting stock and Twenty-First Century Fox’s ability to govern and manage a combination of the size and scale of Twenty-First Century Fox and Time Warner; and there are considerable strategic, operational, and regulatory risks to executing a combination with Twenty-First Century Fox.’

It would be a horror for anything owned by Murdoch to expand its control of news and media in this country. Murdoch is still trying to live down the hacking scandals dubbed “Hackgate”, “Rupertgate”, or “Murdochgate” that involved the now defunct News of the World and other British newspapers published by News International, a subsidiary of Murdoch’s News Corporation. If that isn’t bad enough, how about imagining a scenario where Fox  News’ Sean Hannity takes over Wolf Blitzer’s spot on CNN.

Tony

Dear Commons Community,

Robert Reich, Secretary of Labor in the Clinton administration and now the Chancellor’s Professor of Pubic Policy at the University of California, Berkley, has a blog posting reviewing the tax policies during the Ronald Reagan and George W. Bush presidencies that have resulted in “the largest inter-generational wealth transfer in history”. Here is an excerpt:

“The wealth is coming from those who over the last three decades earned huge amounts on Wall Street, in corporate boardrooms, or as high-tech entrepreneurs.

It’s going to their children, who did nothing except be born into the right family.

The “self-made” man or woman, the symbol of American meritocracy, is disappearing. Six of today’s ten wealthiest Americans are heirs to prominent fortunes. Just six Walmart heirs have more wealth than the bottom 42 percent of Americans combined (up from 30 percent in 2007).

The U.S. Trust bank just released a poll of Americans with more than $3 million of investable assets.

Nearly three-quarters of those over age 69, and 61 percent of boomers (between the ages of 50 and 68), were the first in their generation to accumulate significant wealth.

But the bank found inherited wealth far more common among rich millennials under age 35.

This is the dynastic form of wealth French economist Thomas Piketty warns about. It’s been the major source of wealth in Europe for centuries. It’s about to become the major source in America – unless, that is, we do something about it.”

I am presently reading Piketty’s book and Reich is correct in his assertions and sounding the alarm.   Echoing Piketty, Reich recommends:

“First, restore the estate tax in full.

Second, eliminate the “stepped-up-basis on death” rule. This obscure tax provision allows heirs to avoid paying capital gains taxes on the increased value of assets accumulated during the life of the deceased. Such untaxed gains account for more than half of the value of estates worth more than $100 million, according to the Center on Budget and Policy Priorities.

Third, institute a wealth tax. We already have an annual wealth tax on homes, the major asset of the middle class. It’s called the property tax. Why not a small annual tax on the value of stocks and bonds, the major assets of the wealthy?

We don’t have to sit by and watch our meritocracy be replaced by a permanent aristocracy, and our democracy be undermined by dynastic wealth. We can and must take action — before it’s too late.”

Tony