Chicago Booth Review Podcast Trumponomics: Is the Media Taking Orders from the White House?

Luigi Zingales: I think they need to be clear. If you are saying we create a lobbying instrument to influence the Trump administration, let's call it a lobbying instrument, but it's not a newspaper, at least the way I understand newspapers.

Hal Weitzman: As well as being the founder and CEO of Amazon. Jeff Bezos owns the Washington Post, the newspaper that famously broke the Watergate scandal, which ultimately led to the resignation of President Richard Nixon. But critics are now concerned that he's bowing too much to the Trump administration following a policy shift in February in which Bezos said, "The Post's opinion section would focus on contributions that support personal liberties and free markets and would not run any opinions that opposed those two values."

The section's editor resigned and hundreds of thousands of people reportedly ended their subscriptions, although the publication has also gained readers as a result, but the episode provokes bigger questions. What responsibilities does a newspaper have to uphold freedom of speech and feature contrary opinions? And is the Trump White House setting the media's agenda? Welcome to the Chicago Booth Review Podcast, where we bring you groundbreaking academic research in a clear and straightforward way. I'm Hal Weitzman, and today I'm talking with Chicago Booth's Luigi Zingales, who responded to Bezos' move by calling for a boycott of the Washington Post by opinion writers. What does he think it tells us about media coverage in the age of Trump? Luigi Zingales, welcome to the Chicago Booth Review Podcast.

Luigi Zingales: My pleasure.

Hal Weitzman: Now we're here to have you talk about Jeff Bezos and the Washington Post. Of course, Jeff Bezos in February committed the newspaper to run opinion articles that support and defend two pillars, personal liberties and free markets. What's wrong with that?

Luigi Zingales: What is wrong is that you want to know whether a piece is advertising or not, and people are free to advertise when they advertise, but they have to separate advertisement from SEO discussion. And I think that that's number one. Number two is I respect people who are pure editors and they risk their fortune in the marketplace. For Bezos, the Washington Post is just a toy, irrelevant from a financial point of view. And the only reason why I bought it in my view is for as a lobbying instrument. As an Italian, I am very familiar with that because most of the Italian newspapers are toy for large conglomerates and they just push a particular agenda. Agnelli whose grandchild now owns a big chunk of the economies, by the way, was very proud that he never made a dime with his newspaper. If you never made a dime, means that you have subsidized a newspaper and you subsidize only if the newspaper pays you off in different ways. And that's sort of the source of the problem.

Hal Weitzman: Yes. Hasn't that always been going on? I mean, proprietors have been owning newspapers forever.

Luigi Zingales: No, but proprietors, that's true. But the big difference is take the New York Times. The New York Times is a family whose basically entire fortune is in the New York Times, and so if they screw up, they pay big time. And so they are catering mostly to the consumer. The Washington Post is owned by somebody that doesn't even receive. I think the impact of what the Washington Post is, is rounding era of his fortune and is much more important in the way influence politics and the way pleases and doesn't please the current administration rather than anything else. And what is particularly painful and says if you start a newspaper in this way, at least people know what they're buying is particularly painful because it took over a newspaper with a long history of being an independent newspaper that was crucial in exposing corruption. And actually, ironically, he was the one, I think that added the term that democracy dies in darkness and then being sort of the master of darkness is a bit sad.

Hal Weitzman: But you may be a caricature of the master of darkness. I mean, presumably he said in his note to his staff, we'll cover other topics of course, but viewpoints opposing those pillars will be left to be published by others. I mean, I think back Luigi, I started my career at the Financial Times. Financial Times publishes a broad range of views, but there are some things that are beyond the pale, even for the Financial Times. It doesn't publish a lot of radical left-wing or radical right-wing opinion. It tries to be somewhat centrist. In other words, there's always going to be a bound, sort of an area that is deemed acceptable even by organizations that don't have a proprietor.

Luigi Zingales: It's true, but I think that I am surprising that you raised this point. I think probably you do it only for rhetorical reason because you're a journalist and you know the kind of self-censorship that is imposed when you get a direction from the top. Throughout the organization, people tend to be overly cautious. A funny story that is related is one of my friend Harvard Business School as the privilege of being the only one who got a case rejected by the company and his colleagues said, "How did this happen? This never happened in the entire thing". And of course it never happens because people censor themselves in anticipation. They know that a case needs to be cleared by the company and so they go away in the excess and the other way.

And when you are somebody so powerful as Bezos at the top of an organization and you send such a strong signal after you also send a signal, we're not going to endorse the candidacy this time is basically saying the newspaper must please Bezos in a particular direction. And so there will be a race of who pleases Bezos the most. And so the paper is moving dramatically in the direction of pleasing Bezos and pleases the current administration because at the end of the day, I don't think that Bezos is a particular interest except the one to be in good terms with Trump because he needs to do business with the government.

Hal Weitzman: Okay. So everything you say may be fair. I mean the Washington Post has got a tradition of exposing corruption and which it has milked quite a lot. But anyway, Donald Trump told, there was an interview with Outkick Outlet in March and he told the outlet that Jeff Bezos had complained to him that he sunk, as you say, millions of dollars into Washington Post. And it still ran negative articles about him, which presumably you think indicates that that's a good thing. But you could say, doesn't the owner have the right to focus the coverage as he sees or she sees fit? And then let the market decide if the move is a good one or not.

Luigi Zingales: First of all, of course the owners can choose, but my article was teacher lessons about free markets. People should choose with their feet to abandon the Washington Post. Abandon and particularly if you are an economist, I don't think you should send an op-ed to the Washington Post because there's only one version of what is going to be published. So it's not a marketplace of ideas, it's simply an instrument of propaganda, number one. Number two, and I'm pushing here a bit, but it's not out of the question. In other products, if you damp a product, if you sell a product below marginal cost, you accused of predation. So in the [inaudible 00:08:26] fact that he has lost so much money is suggesting that he's actually distorting the marketplace in newspapers because he's subsidizing below marginal costs in newspapers and crowds out the demand for other people. So I think in a sense, antitrust authority should intervene and punish the Washington Post for what it's doing.

Hal Weitzman: But do you think that media owners should be forced to run articles they don't agree with?

Luigi Zingales: No, but they should be forced to not subsidize the newspapers.

Hal Weitzman: I see. Okay. So that's your answer is that they would have to be profitable, which basically no newspaper would survive, including the Financial Times maybe at times. I mean they would might survive digitally, but the actual print copies would never survive, right?

Luigi Zingales: But then why do they sell the print copy?

Hal Weitzman: Go ahead. That sounds like a rhetorical question. Tell us-

Luigi Zingales: No, no, it's not a rhetorical question. Exactly question. Why the financial... Sell the print copy?

Hal Weitzman: Well, I don't want to speak for them, but I would assume that there's a sort of status, there's kind of a, there's a tradition and status involved in having a print copy as well as just a digital copy. It's part of branding, isn't it?

Luigi Zingales: Yeah. But that's part of a multi-product strategy. But if overall you sell all your products below marginal cost, then there is a problem, right?

Hal Weitzman: Well, I mean, yes, to a certain extent, but I think media companies have been doing that for quite a long time. I mean, they've been selling a, so we have been at a particular point where media companies have been selling a print product, which in often cases they're losing money on and they're running a digital product, which is really where they're generating subscribers and generating revenue.

Luigi Zingales: But that's fine. If you are in the fashion industry, you lose money with Haute Couture and you make money with Prêt-à-porter, but the Haute Couture gives you prestige. So I have nothing against that. But if you are purely losing money period, I think that basically you are the product and it does distort the market because it takes away subscribers from actually newspapers who are catering to the demand for news and not catering to the desire of propaganda of a large owner.

Hal Weitzman: Yeah, I mean, so again, just to kind of play devil's advocate a little bit, you mentioned the New York Times. I'm guessing that New York Times is not widely read in the White House, but the Washington Post presumably is now, isn't that exactly what an owner would want?

Luigi Zingales: I think they need to be clear. If you are saying we create a lobbying instrument to influence the Trump administration, let's call it a lobbying instrument, but it's not a newspaper, at least the way I understand newspapers. And actually let me tell you this story because it's very funny. In 2016 before Trump was elected, the first time I was at the book party in New York and with two journalists, I think one was from the FT and the other was from Bloomberg, I don't remember their names. So I'm not trying to protect the identity, I really don't remember their names. And we were discussing about Trump at the time was this strange character. And I said, "Of all the things that Trump says, the fact that Bezos bought the Washington Post as a lobbying instrument doesn't strike me as the worst ones." And the two guys jump at me like say, "How could you possibly say this? This is crazy", [inaudible 00:11:59].

And then I start to say, "Okay, I'm not American. I'm Italian in Italy, this takes place and I have a friend who is from Israel in Israel, it takes place. Now I know a few people in France, same thing, in Germany, same thing. Not to mention Latin America, not to mention. So it takes place all over the world, maybe in the United States doesn't take the place, but you have to explain to me why the United States is a different market because I can tell you in the rest of the world that's a standard." So they challenged me and said, "Okay, give me a proof that there is something wrong here." I said, "Okay, remember that the New York Times recently, so this was in September, I think 2016, published an article very critical of Amazon." I said, you see the media works at, yeah, wait, wait.

"And then Bezos appealed to the public editor of the New York Times, and in unprecedented fashion, the public editor of the New York Times face sided, not with the New York Times itself, but with Bezos." they said, "Okay, what's wrong?" And I said, "Guess where did this public editor go work within a month? To the Washington Post." At which point, one of the two, I think the Bloomberg guy said, "He has a point." And the other one left saying that I was completely, I lost my mind that I thought everybody was corrupt. So it is actually funny because the journalists are the first one to see the corruption in the regulator, politician, academics, everybody except in the journalists themselves.

Hal Weitzman: But everyone knows now presumably that the Washington Post is not only owned by one of the wealthiest people in the world, but also has stated very clearly that it's biased. So there must be a big discount as you economists would say, on any information that one gets from the opinion page of the Washington Post.

Luigi Zingales: I hope that eventually this will be the case. I don't think it's fully incorporated, number one. Number two, what I think you underestimate is the impact that it has everywhere else because you know better than I that today there are not a lot of places where is worth working. If you are in the United States is what the Wall Street Journal, New York Times, Washington Post, Bloomberg, and the FT. So if you are, let's say work in the New York Times, you have four options to go. Do you want to burn 25% of the outside option by annoying Jeff Bezos? Absolutely not. And so the real effect is not the impact that you have on your own newspaper, but the indirect impact that you have on your own [inaudible 00:14:56].

Hal Weitzman: Have you seen a chilling effect like that in the coverage of Amazon?

Luigi Zingales: I don't have the data to show that, but I know as a fact that in Italy this was taking place all the time. And in fact, that was the main reason why a titan of industry or a tycoon had a newspaper, was not necessarily because his own newspaper was censoring, but as a threatening point and as a way to basically reward the people were nice with him. And I don't think the United States is different in this dimension.

Hal Weitzman: If you're enjoying this podcast, there's another University of Chicago Podcast Network show that you should check out. It's called Not Another Politics Podcast. Not Another Politics podcast provides a fresh perspective on the biggest political stories, not through opinions and anecdotes, but through rigorous scholarship, massive data sets, and a deep knowledge of theory. If you want to understand the political science behind the political headlines, then listen to not another politics podcast, part of the University of Chicago Podcast Network. So Luigi, in the first half we talked about your views on the Washington Post. You're not particularly excited about this change of direction from Jeff Bezos. You've called for a boycott by opinion writers of the Washington Post. What do you think that's going to achieve? Do you think he's going to be that bothered by your refusal to give him your opinions?

Luigi Zingales: I'm sure that he doesn't even notice, he doesn't even care. But I think that is actually important that people choose with their feet. I think that there is not enough of this sanction these days and can be important and particular in each market, the one in economics. I think that if [inaudible 00:16:47] economists boycott it, I think that the journal will suffer as a consequence.

Hal Weitzman: Has any other economists that they will?

Luigi Zingales: No, I didn't get a lot of endorsement, but let's wait for somebody important to submit an article and we'll try to shame them and see what happens.

Hal Weitzman: Very good. Yeah, look forward to that. Now, I mean, one of the concerns I think is generally that this doesn't stop with opinion. And I think that Jeff Bezos reportedly has told some of his senior newsroom staff at the Post that he's not, he doesn't want to interfere with news, but are you worried that that might come next?

Luigi Zingales: Do you think he would publicly say I wanted to interfere with-

Hal Weitzman: Well, he publicly said he's going to change the opinion section.

Luigi Zingales: That's what is shocking. As I told you, the 2016 story, because I said I anticipated that, but I am cynical because I grew up in Italy, and so you are trained to be cynical, but most Americans are not. So they were living under the assumption that this was unbiased, and the statement is pretty loud and clear, and I think it's hard to imagine that would be unbiased in the future.

Hal Weitzman: Okay, so you are worried about the news section?

Luigi Zingales: Oh, absolutely.

Hal Weitzman: Yeah. Okay.

Luigi Zingales: And most important, I don't think he's going to report a false news, is the stuff that is not reported is not discussed. That's the most important issue.

Hal Weitzman: Okay. So let's sort of draw a bigger canvas here. What do you think this tells us about the relationship between Trump White House and big business in general? Bear in mind that Bezos is not just a newspaper or as you said, that's not really very significant. What's important is he's a big wealthy business person.

Luigi Zingales: So I actually, in my podcast interview Brody Mullins who wrote this book about, The Wolves of K Street, and he was describing lobbies under different administration, and he said that he was anticipating, because this was before the election, but he was anticipating that lobbying under a new Trump administration will be completely different than used to be because in recent years, lobby has been a very organized effort, very quote unquote professional. With Trump, will be a very personal touch element. So I think that it's clear that he likes to be pleased and is willing to concede favor to people that pleases him, people that please him, people who please him. And so I think that all the big business, because make so much money from the government, will end up pleasing him.

Hal Weitzman: And so were you surprised when all the business people, the big tech tycoons, gave millions of dollars to his inauguration and fell in line so quickly?

Luigi Zingales: Yes and no. In the sense if I put my Italian hat, I say no because that's what always happened in Italy all the time. I think that what was interesting is in the first Trump administration, that was not the case. They actually put up a fight. So I think that I'm more concerned about what this is saying about, number one, the expectation of big business because I think that their willingness to quote unquote resist in the first time administration was suggesting that they trust an American institution to be fairly unbiased. I think they lost that trust. That's one interpretation.

The other which is not mutually exclusive, is that something changed that made them embrace a more MAGA policy. And my suspicion, and I will discuss in the next episode of the podcast coming up in a couple of days, but is the fact that-

Hal Weitzman: You're talking about capitalism, of course, your podcast, yeah.

Luigi Zingales: Capitalism, that Silicon Valley is really concerned about the social disruption that artificial intelligence will bring to the economy. And so they are really buying into a more auto Italian approach to repress this descent. And they are afraid that this descent will lead to a slowdown. And because they seem to believe that the only God is technology as fast as possible. And I love technology, but I don't think it's a God. I think that they decide that they sacrifice democracy on the altar of a acceleration of technology.

Hal Weitzman: Okay. I mean, because your podcast is capitalism, of course, and we've referred to it a couple of times. So your focus is capitalism in general. And so what do we learn about capitalism here by the fact that we have, as you say, business people are now using this sort of, I mean Washington Post is not an institution, but it sort of is a well-established organization for their own ends that the idea of maybe free expression is being threatened. What does that tell us about capitalism more generally and where it's going?

Luigi Zingales: So one of the classes I teach at the University of Chicago is called Chronic Capitalism because I try to teach people the difference between a system that tries to be fair and work on sort of competition principle and a system that as the rules distorted by lobbying and other form of influence. And the latter one is the chronic capitalist. So I think that is more important than ever to try to make this distinction.

Hal Weitzman: Okay. But are we you in a chronic capitalist society?

Luigi Zingales: I think we're going very fast down that path. More than 10 years ago, I wrote a book, Capitalism for the People where I made this analogy between the country, I come from, Italy and the country I moved to, the United States. And over the years, the United States looks more and more like Italy, but not in the good food and wine, but in all the defects that Italy has.

Hal Weitzman: Okay. And so the other theme here is big business, the influence of big business over government policy, and this is maybe the Washington Post is just one example of attempt to have even more influence. And that is of course a theme that you are very interested in through your work with the Stigler Center. And I know you've got a forthcoming conference talking about antitrust. Tell us, because we haven't really talked about what the trends will be, what do you expect will happen with antitrust, but what are you going to be talking about this conference?

Luigi Zingales: So I have to warn you that the theme has been set nine months ago. So we did not know who will be the president, but the idea was trying to study the link between economic concentration and the so-called marketplace of ideas. As academics we are particularly attached to this marketplace of ideas. And of course as a journalist, because this is the market we live in. And so the conference will try to draw two major points. The first one is how concentration of ownership or concentration of means of diffusion, like platforms distort or can distort the marketplace of news. So more in your realm and what can be done about it. So one of the keynote speakers would be Thierry Breton is the former European Commissioner who was in charge of designing and implementing the Digital Service Act, which is the European approach to regulation in this area.

So people might like or dislike, but at least it's a piece of evidence in that direction. The second day is more in sort of my realm. It is how much concentration in any sector impact kind of conversation you had in that sector. Because at the end of the day, if you have only two or three potential firm hiring you because you're in a specialized sector, you end up catering to these firms because either you work for them or you might work for them in the future. And so there's not really a real debate, but everything is contained and everything is sort of catering to a particular economic power. And I fear that we are going more and more in that direction in the United States.

Hal Weitzman: Okay. And just to remind our listen, where they can catch up with all the action from the conference.

Luigi Zingales: Oh, it's very easy. You can follow online. If you just Google Stigler 2025 Antitrust conference, you can register and stream the entire two days of conferences.

Hal Weitzman: Okay. And I'm sure we'll have a lot of antitrusts aficionados who'll want to do exactly that. Luigi Zingales, thanks very much for coming on the Chicago Booth Review Podcast.

Luigi Zingales: My pleasure.

Hal Weitzman: That's it for this episode of the Chicago Booth Review Podcast, which was produced by Josh Stunkel. If you want to follow the Stigler Center's Antitrust Conference, you can find a link in the show notes. For more research, analysis, and commentary, visit us online at chicagobooth.edu/review. Please do subscribe, and please leave us a five-star review. Until next time, I'm Hal Weitzman. Thanks for listening to the Chicago Booth Review Podcast.