Why Doesn't The New York Times Expose Carlos Slim?

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The New York Times, in its persistent fight for the poor and downtrodden, exposes rapacious lenders who foist unaffordable mortgages on naïve families, shines light on polluters, climate change deniers, and oil spillers, spins pitiful tales of hungry children and uninsured families denied medical care, documents the plight of illegal aliens separated from families and exploited by evil employers, exposes Big Oil and Big Pharma's unwillingness to pay their 'fair share,' and even discloses the misdeeds of non-unionized Walmart in Mexico. After all, the Times must protect Mexican consumers from low prices.

The Times is also an arbiter of what is in the public interest. From the Iran cyber attacks to WikiLeaks, the Times decides which national secrets to expose, even if it puts American allies at risk. No wonder, the "Grey Lady" is regarded as America's newspaper of record.

Although the Times declares itself beyond reproach in the era of Murdoch klatsch journalism, it exempts its second largest shareholder (and lender of last resort), Mexico's Carlos Slim, from its motto: "printing all the news that's fit to print."

The world's richest man, Carlos Slim is a crony capitalist whose world's largest personal fortune was made by charging Mexico's telephone customers monopoly prices. His monopoly stranglehold over Mexico's telecommunications market (75 percent landlines, 70 percent broad bands and 70 percent mobile phones) dwarfs the meager shares of Sprint, Verizon, T-Mobile, and AT&T. If the crusading Times considers them monopolies (Bad Connections), what must it think of Slim's America Movil?

The OECD (Telecom reform would boost competition and growth in Mexico) has actually calculated the price tag Slim imposes on Mexico's families: "From 2005 to 2009, Mexican consumers paid $13.4 billion a year excess for phone and internet services, with high fees disproportionately hitting the poor.... and costing nearly 2 percent of the country's economic output... Mexico is at the bottom of rankings with other OECD countries in market penetration for fixed, mobile and broadband markets."

Slim's overcharges reduce average living standards of the Mexican family more than $600 per year. Mexico's backward telecom infrastructure also reduces GDP by $32 billion per year - a substantial loss in Mexico's $1.6 trillion economy.

The Times second largest shareholder and lender of last resort seems to have drawn a bye from the newspaper's traditionally critical coverage of rich businessmen. The Times avoids mention of the OECD finding that Slim's telecommunications empire has Mexico "at the bottom of rankings with other OECD countries" except for profit margins. Instead, the Times credits Slim with "modernizing Mexico's crumbling telecommunications market" while avoiding the reach of national regulators (Mexico Takes Aim at a Titan in Telecom).
With the election of a new and young Mexican president, the Times will find it harder to maintain its silence on Slim. On December 2, 2012, President Enrique Nieta signed the Pact for Mexico with Mexico's three major parties to take on Slim, the television duopoly, the corrupt national oil company (Pemex), and the obstructive teachers' unions. If the new government's assault on its worst crony capitalists and vested interests succeeds, it will unleash a new era of growth and prosperity in Mexico with untold implications for North America.

The Pact for Mexico has not escaped notice of Thomas Friedman, the Times' mega-trends guy, who applauds Mexico's grand bargain (How Mexico Got Back In the Game) "to work together to fight the big energy, telecom and teacher monopolies that have held Mexico back." Friedman does not mention Slim by name, as one of the big barriers to progress in Mexico. In his optimism, Friedman appears to agree with the OECD assessment that: "Mexico cannot reach its growth potential until the cost of phone and internet access comes down and more people have easy access to telecom services."

In other words, if Mexico wants to prosper, Carlos Slim's monopoly must go.

Slim does not plan to go without a fight. He has asserted his right to use all legal means (including tying up regulatory fines in the courts) to protect his businesses. The Times could editorialize that Slim should join Warren Buffett and Bill Gates in giving away his wealth rather than fighting against the interests of his own people? I guess I missed that one.

The Wall Street Journal has taken aim at the Times' curious silence on the damage Slim has caused his adopted country. (Mexico Takes Aim at a Titan in Telecom):

"The 72-year-old Slim is a case study on how the impact of Mexico's dysfunctional system spills into the United States. In 2009, Slim reached into his deep pockets and bailed out an iconic institution, The New York Times, with a loan of $250 million, which it since has paid back. He also began amassing its stock. Slim and his family are the largest shareholders, after members of the company's founding family, in what's arguably the most influential news organization in the United States. Has Slim's stake influenced the newspaper's coverage of his fortune or Mexico? A Times spokeswoman.... says emphatically no: "The New York Times maintains the highest standards of journalistic ethics."

The world's mega-rich have learned that public relations firms cannot deliver the protection from public criticism and scorn that politicians and the press offer. Carlos Slim prospered by combining business acumen and political connections to become the world's richest man in a relatively poor country. He did so by transferring money from the poor and middle class to himself - a feat that does not breed popularity or respectability in polite company. Slim gained respectability and silence from the newspaper of record with a measly $155 million purchase of New York Times stock, earning the designation by the Times' editor, Pinch Sulzberger of a "true friend of the Times."

George Soros, the world's most visible speculator (no term of endearment in polite circles) purchased immunity by giving more than a half billion dollars to left wing and progressive causes. Soros paid three times as much as Carlos Slim.

At the highest level, Warren Buffett gave three billion dollars to worthy charities in 2012 alone, all the while supporting President Obama's income redistribution campaign. Buffett's companies can fight the IRS with a fury for lower taxes without the slightest risk of controversy or complaint.

Of the three, Carlos Slim got the best bargain.

Paul Roderick Gregory is a research fellow at Stanford's Hoover Institution, and the Cullen Professor of Economics at the University of Houston. 

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