Tuesday, February 26, 2008

Transparency in Congress

Jim Cramer is the host of the hot (what to do with your money) show called "Mad Money" on CNBC. He has taken interest in the ever popular Sirius/XM merger that has been held up in Congress for over a year now. He is baffled at the attention this merger is getting. So baffled, he started to do his own investigating as to why this merger is being shot down in Congress. Click here for the article. Congress claims that the merger would violate anti-trust issues and would create a monopoly. How can satellite radio be a monopoly, when the competition (terrestrial radio) is free? This doesn't even take into account the other competitors... Ipods and CD's. I pay $12.95 a month for a subscription to SSR, but still listen to terrestrial radio.

Jim Cramer does not own stock in either of these companies. In fact, he doesn't own any stock... for obvious reasons. He sees what is going on in Congress and is name dropping. Cramer is a true financial hero. He mentions many Congressmen that have their pockets filled with terrestrial radios money. He then reveals how the average person can find this information out for themselves. Using sights like opensecrets.org and opencongress.org , one can find out all contributors to Congress, bills being introduced and who voted for what.

The transparency of our government is shining through. Cramer suggests that the only person being hurt by the merger of Sirius and XM Radio is Terrestrial Radio. But, how much will this actually hurt them? TR is free! Congress states that the merger will eventually lead to the rise of prices for the service. But, SR has to keep their prices down because the competitor is free. So this is a non-issue.

If Congress is so worried about rising prices, why did they let the two most profitable oil companies merge in the late 90's?... Exxon/Mobile ... If Congress cares so much about the consumer, why did they let the two most profitable Washer and Dryer Companies merge in 2006?... Maytag/Whirlpool. Does congress think that these mergers are creating monopolies?

Cramer claims that this attention being focused on Sirius and XM is deliberate and is for the sole reason to bleed these companies dry. The ultimate goal is to have these two companies fight the issue until one folds. Congress can no longer hide in these situations. There will always be situations like this in the future. 20 years ago, this would go unnoticed to the public. Not today. Our world is increasingly getting more and more transparent. I love it. Until next blog...

1 comment:

David said...

I heard Cramer discuss this issue in an interview on the Howard Stern Show, who obviously has a great interest in this issue. It's ridiculous that it takes less time to pass a oil industry merger, which has a huge influence on the overall economy, than a satellite radio merger.

BTW, I never knew about opensecrets or opencongress before; those are great resources. Thanks for pointing them out.