The LIBOR scandal is big. In 2008 we saw the potential economic cataclysm that irresponsible bankers can cause, and as of June 27th, we have been presented with hard evidence that at least one major bank has a habit of manipulating markets and lying about its financial situation, sometimes on a daily basis.
When a story like the LIBOR scandal surfaces, it would make sense that journalists would be fighting tooth and nail to cover it. It would make sense that the news media stations would be eager to air stories about the LIBOR scandal. Even if they are simply trying to get high ratings and large numbers of viewers, it would be difficult to compete with a story that exposes the corruption at the very heart of the global economy.
Is this the case? Apparently it is not. I have checked several mainstream news media websites, and it seems that none are very interested in drawing attention to this story. ABC, CNN, Fox and NBC have nothing on their front pages about LIBOR.
BBC UK and Telegraph UK each have a story about LIBOR on their front page, but these stories are pushed towards the bottom of the page and lack any images or videos to draw viewers in.
However if you do a search for "libor" on these news sites, there are plenty of stories that could have been presented on the front page:
...and the UK:
Why would none of the four major U.S. media outlets push this story on their front pages when they have plenty of stories available on their websites? One possibility is that there are "gatekeepers" keep the information out of the spotlight.
The wikipedia definition does a good job of describing what is meant by "gatekeeping" (emphasis added):
"Gatekeeping is the process through which information is filtered for dissemination, whether for publication, broadcasting, the Internet, or some other mode of communication... Gatekeeping occurs at all levels of the media structure - from a reporter deciding which sources are chosen to include in a story to editors deciding which stories are printed or covered, and includes media outlet owners and even advertisers..." (Source)
Stories in news media must run through a gauntlet of censorship before they ever make it to publication, and even if they are published, they can still be pushed into obscurity if the right (or wrong) people would rather it didn't draw much attention.
This begs the question, "who would want LIBOR stories to stay off of the front pages of news media?" The most obvious answer would be "bankers," but how much influence do bankers have over mainstream media?
In a recent article on his website, David Wilcock pointed out that a group of Swiss scientists asked a very similar question in a study they conducted using a supercomputer with access to huge databases, and their results were published last year.
In a recent article on his website, David Wilcock pointed out that a group of Swiss scientists asked a very similar question in a study they conducted using a supercomputer with access to huge databases, and their results were published last year.
"A common intuition among scholars and in the media sees the global economy as being dominated by a handful of powerful transnational corporations (TNCs). However, this has not been confirmed or rejected with explicit numbers. A quantitative investigation is not a trivial task because firms may exert control over other firms via a web of direct and indirect ownership relations which extends over many countries. Therefore, a complex network analysis is needed in order to uncover the structure of control and its implications." (Source)
The researchers formed a list of over 43,000 transnational corporations, using a sample of over 30 million economic actors from 194 countries in the Orbis 2007 database. Then they made graphs to show how the ownership of these corporations overlaps.
According to the researchers, 737 TNCs control 80% of the value of the rest of the 43,000 identified TNCs. In other words a little over 1.7% of the transnational corporate world controls 80% of its total value.
According to the researchers, 737 TNCs control 80% of the value of the rest of the 43,000 identified TNCs. In other words a little over 1.7% of the transnational corporate world controls 80% of its total value.
What do they mean by control?
"...our notion of control can be related to Weber’s definition of “power”, i.e. the probability of an individual to be able to impose their will despite the opposition of the others." (Source)
Why is this significant?
"...this implies that the global financial network is also very intricate. Recent works have shown that when a financial network is very densely connected it is prone to systemic risk. Indeed, while in good times the network is seemingly robust, in bad times firms go into distress simultaneously. This knife-edge property was witnessed during the recent financial turmoil." (Source)
Which corporations are at the top of this "1.7%"?
"Notice that many actors belong to the financial sector... The interest of this ranking is not that it exposes unsuspected powerful players. Instead, it shows that many of the top actors belong to the core. This means that they do not carry out their business in isolation but, on the contrary, they are tied together in an extremely entangled web of control." (Source)
More specifically, here are the top 20 TNCs (the top 0.0004%):
Note that according to this study, Barclays is the most powerful entity in the transnational corporate world (which they defined as the ability to impose its will despite opposition). Is it possible that Barclays, or the banking system in general, would prefer to stay in obscurity and has the right connections to use their leverage to keep LIBOR out of the news?
According to www.globalissues.org, there are eight media conglomerates in the United States, which own all of the mainstream media outlets. These eight conglomerates are:
- Disney (ABC)
- AOL-Time Warner (CNN)
- Viacom (CBS)
- General Electric (NBC)
- News Corporation (Fox)
- Yahoo!
- Microsoft
The website www.fair.org has a page that shows specific relationships between media conglomerates and other corporate entities through what are called "interlocking directorates." According to the page (emphasis added):
"Media corporations share members of the board of directors with a variety of other large corporations, including banks, investment companies, oil companies, health care and pharmaceutical companies and technology companies." (Source)
By interlocking their boards of directors, corporations share control of their companies with one another. The Swiss research showed that the most powerful TNCs were financial institutions, and fair.org shows that all of the listed media conglomerates have interlocking directorates with financial institutions. The bank at the center of the LIBOR scandal, Barclays, has interlocked with a media conglomerate called Knight-Ridder:
According to Wikipedia (emphasis added):
"Knight Ridder was an American media company, specializing in newspaper and Internet publishing. Until it was bought by The McClatchy Company on June 27, 2006, it was the second-largest newspaper publisher in the United States, with 32 daily newspapers sold." (Source)
The information on fair.org may be outdated, but Barclays may have interlocked with other media conglomerates, so I will dig for more info. In any case Barclays remains the #1 most powerful transnational corporation on the planet according to the Swiss study, and the obscurity of the LIBOR coverage in the US media is notable to say the least.
In the next section of this story, I will explore the significance of what the mainstream media has been focusing on while the LIBOR scandal has been unfolding.
