Fox News' Settlement and Future Defamation Suits.

Justice William J. Brennan, 1972. 

(Author of opinion in New York Times v. Sullivan.)

Library of Congress, Public Domain.

via Wikimedia Commons. 

The Economist today reports on the recently settled defamation lawsuit between Fox News and Dominion Voting Systems for $787.5m over Fox's coverage of the 2020 US election. Dominion accused the network of knowingly spreading lies about its voting machines, resulting in Joe Biden's victory. The lawsuit revealed the extent to which Fox's coverage is shaped by a desire to tell its audience what it wants to hear and by its competition. The case also shed light on the network's tumultuous relationship with former President Donald Trump.

Fox's audience declined after the 2020 election, as Trump urged his supporters to switch to other networks. The network then sought to appease Trump's supporters, giving credibility to false claims made by his lawyers. Fox tried to shift its audience's focus to Florida Governor Ron DeSantis, but viewers ultimately did not follow this lead. The network continued to defend Trump during various legal troubles, as its influence on viewers appeared limited.

Despite the significant financial settlement, the lawsuit's impact on Fox News is, in the opinion of the Economist, negligible. The network can afford the payout, which is about a quarter of its estimated revenue last year, and it will not have to air retractions or corrections. As the lawsuit did not receive extensive coverage on Fox, viewers who learned about it elsewhere were likely to take the network's side. Another voting technology company, Smartmatic, is suing Fox for $2.7bn over its 2020 election coverage, which may draw more attention to the problem.

I think the article misses an important potential consequence of this case. The article highlights the network's influence on the American right, but fails to address the broader implications for libel law jurisprudence. Despite Fox News' potentially defensible behavior under  New York Times v. Sullivan, which protects news organizations from defamation suits unless they knowingly published false information or exhibited "reckless disregard" for the truth, the article does not discuss how the case could affect future defamation suits.

Justices Clarence Thomas and Neil Gorsuch have questioned the basis of New York Times v. Sullivan, and the Fox News case may impact the Supreme Court's willingness to maintain such a powerful shield for the press. The network's repeated dissemination of misinformation, deception, and conspiracy theories could prompt the Court to reevaluate the limits of defamation protections for news organizations.

Overall, the article provides a detailed account of the Dominion lawsuit, Fox News' influence on conservative politics, and the network's relationship with former President Donald Trump. However, it would have been valuable for the piece to discuss the potential consequences of the case for future libel law jurisprudence and the role of the Supreme Court in shaping these outcomes.

Fox News' $787.5M Settlement with Dominion: A Wake-Up Call for Media Accountability and the Future of Democracy.

"Dominion Voting Systems v. Fox News."

© 2008 Xrmap.

Public Domain.

via Wikimedia Commons.

Jim Rutenberg and Katie Robertson of the New York report today that Fox News has reached a $787.5 million settlement with Dominion Voting Systems, avoiding a lengthy trial that would have seen its top executives and personalities face intense questioning over their role in spreading false claims about the 2020 election. The settlement, one of the largest defamation settlements in history, includes a rare admission by Fox News acknowledging that certain false claims about Dominion were aired on their network. However, the agreement did not require Fox to apologize for any wrongdoing in its programming, a point Dominion had been pushing for.

The settlement follows several pretrial findings by the presiding judge, Eric M. Davis, which cast Fox's programming in a negative light, significantly limiting its ability to argue that it was acting as a news network pursuing newsmaker claims. Dominion had collected substantial internal documentation from Fox, showing that many within the company knew the conspiracy theory about Dominion's election involvement was baseless. The settlement raises the question of whether Fox News will change its approach to handling defamatory conspiracy content in the future.

When I began writing online (blogging?) in 2012, the first significant post I made concerned the sale of the Santa Rosa Press Democrat, The North Bay Business Journal, and the Petaluma Argus-Courier. While the sales price at the time was not disclosed, the value of the Press Democrat had dropped and related enterprises had, on the evidence, declined by over 90% since the purchase of the papers by the New York Times in 1985. That was consistent with the decline of the newspaper industry overall in recent times. I speculated then about the consequences of the collapse of the economics supporting newspapers and the possible impacts of the same. 

The experience since 2012 in America, and the decline of its papers, has been bigger news than I might have imagined. The end of the Fairness Doctrine in 1987 allowed conservative voices like Rush Limbaugh to dominate talk radio, as broadcasters no longer needed to present balanced viewpoints. The culture that developed in that context has since spread into newspapers and cable TV news. This change contributed to the polarization of political discourse in the United States and helped shape the nation's political landscape. 

Rather than merely be conservative, the Dominion case suggests that, over time, the lack of balance has led to Richard Hofstadter's "Paranoid Style" of American politics rising to the fore. A political culture founded on falsehoods, deceit, or misinformation can undermine trust in democratic institutions, erode the credibility of political leaders, and ultimately sap the stability and effectiveness of the political system as a whole. This has severe consequences for the functioning of a democratic society, leading to increased polarization, ineffective decision-making, and weakened accountability.

The decline in the economics supporting newspapers, the end of the Fairness Doctrine, and the subsequent rise of polarizing voices have significantly impacted the American political landscape. The Fox News settlement with Dominion Voting Systems highlights how unbalanced reporting and conspiracy theories have permeated mainstream media, eroding trust in democratic institutions and increasing political polarization. As we move forward, it is essential to address the challenges posed by this shifting media environment and work towards fostering a political culture that values accuracy, integrity, and balanced perspectives, to ensure the continued stability and effectiveness of our democratic system.

Beyond Market Mantras, and the Benefit-Cost Conundrum in Policy.

Takashi Negishi, 2014

 Gov't of Japan Standard ToU (Ver.2.0)

via Wikimedia Commons. 

In a brief post today, Brad DeLong, an economist and historian at Berkeley, shared his thoughts on the importance of benefit-cost analysis in policy-making, largely agreeing with Henry Farrell's views. Farrell's argument in question is that the long-held belief that the market knows best has left government policymakers ill-equipped to intervene in the economy effectively. The focus on neoclassical economics in elite US policy schools has resulted in a lack of understanding about how markets actually work. Farrell believes that the price signal cannot convey as much information as previously thought, and some goods are not efficiently provided by market arrangements. He suggests that the assumption that government actors lack the knowledge to intervene has become a self-fulfilling prophecy. To address this issue, Farrell proposes rethinking public policy education to include not only traditional economic reasoning but also new approaches.

DeLong emphasizes that benefit-cost analysis, or "economistic reasoning," is more than just beneficial; it is essential. This approach requires policymakers to count and compare the benefits and costs of a proposed policy, helping them decide what should be done. DeLong also highlights the value of comprehensive benefit-cost analysis, which takes into account all externalities in a system. By driving shadow and real prices towards social-welfare maximizing values, this framework helps conceptualize policy goals. DeLong believes that checking whether these goals have been achieved is the only way to determine a policy's success. However, he acknowledges that benefit-cost analysis has its limitations, particularly in addressing wealth and inequality.

Despite its shortcomings, DeLong argues that considering wealth distribution and its correlation with political power is essential for effective policy-making. Ignoring this aspect could result in policies that threaten the existing distribution of power, which would make it impossible to implement any meaningful changes. In other words, technocracy can only succeed with the support of raw political power. In explaining this, DeLong turns to the work of Takashi Negishi, whose social welfare weights have been controversialy applied in a series of contexts, including the Kyoto Protocol. I had intuitivelly understood Negishi weights for a long time, but this was the first instance where the articulation of it in terms of his scholarship registered with me. I make this note todady as a marker for the future, and a recognition of a nascent idea in an earlier post. 

Economics and the Mona Lisa Smile.

"Mona Lisa."

Leonardo da Vinci.

Public domain.

via Wikimedia Commons.

The Economist this morning observes that economic forecasting has become increasingly unpredictable, with analysts struggling to accurately forecast many key international measures. Contributing to the confusion are challenges in data collection and interpretation due to Covid-19 disruptions and declining response rates to official surveys. The pandemic caused significant fluctuations in growth, complicating seasonal adjustments in economic numbers. Also, reduced response rates to surveys may have led to increased data volatility and potential bias, as non-respondents tend to be less prosperous, which could distort income statistics. The article uses the ambiguous "smile" of Mona Lisa, painted by Leonardo da Vinci via the sfumato technique, as a metaphor for the difficulty of discerning the true state of the economic environment given this unpredictable data. 

One source of confusion arises from the discrepancy between "hard" and "soft" data—objective indicators such as unemployment rates, and subjective variables like individuals' future expectations. Typically, these two classifications of data are congruent. However, at present, they exhibit a stark contrast. "Soft" measures indicate a recessionary trend, while "hard" measures suggest a reasonable economic expansion. This divergence may be attributed to the public's discontent with inflation. In affluent nations, prices continue to escalate at an annual rate of 9%.

Economic measures really matter for government budgeting, as California's Legislative Analyst's office (LAO) relies upon that data in planning future budgets. Necessarily, many of the points the Economist makes about uncertainty get resolved by the LAO in the "negative" (that is, they accept the more dire forecast). As the LAO (accurately) writes in their 23-24 budget analysis, the U.S. economy experienced rapid expansion from summer 2020 through 2021 due to pandemic-related federal stimulus. However, this growth was (as far as the LAO is concerned, and many others) unsustainable, leading to record low unemployment and supply chain challenges, causing consumer prices to rise 8% year-on-year. To combat inflation, the LAO points out that the Federal Reserve has enacted large interest rate increases throughout 2022. The LAO interprets the hard data it sees, that California is experiencing decreased home and car sales and falling stock prices, as well as weaker state tax collections, and concludes there is a slowdown in the economy. 

The LAO, though, is looking at some of the same data as the writers of the Economist, and thus notes that while overly optimistic projections could result in future shortfalls, an excessively pessimistic projection could lead to premature cuts to public services. Further, despite all the foregoing, the LAO points out that "the state can afford to maintain its existing school and community college programs and provide a cost-of-living adjustment of up to 8.38 percent in 2023-24," which would essentially meet the rate of inflation for educational funding in California. Despite the economy's sfumato, at least that is clear.