Porn king Larry Flynt is now an economic pundit.

The founder of Hustler magazine appeared on MSNBC to discuss the efforts of some cash-strapped states to tax pornography. Flynt, who as far as I know is not a member of the libertarian Cato Institute, got straight to the point: "What do they want you to do? Participate in it less?"

Taxing porn is an old idea that is being revived, which worries the adult entertainment industry. A proposal by New York Gov. David Patterson to institute such a tax spurred this headline on the Village Voice's website: "Patterson's Porn Tax Sparks Criticism, Hilarity." Legislators in Washington state recently rejected a proposal for an 18.5 percent porn tax. The New York Times' Freakonomics blog noted last year that a proposed California smut tax would just cause the porn industry to move out of state.

Officials in the adult entertainment business are not laughing.

"The industry takes calls for a porn tax very seriously," said Diane Duke, a spokeswoman for the Free Speech Coalition, said in an e-mail. "Our industry is legal, accessed by a broad base of citizens, already contributes to the tax base and employs over a hundred thousand people. At a time when all businesses, including those in the adult entertainment industry, are fighting to stay afloat, imposing an unconstitutional tax based on content is a really bad idea."

Lux Alptraum of the blog Fleshbot (link not safe for work) notes that many of the proposals would levy steep taxes on a financially struggling industry. Moreover, she notes that proponents of these taxes assume that people will consume porn no matter what the price, "an assumption that's pretty flawed, given flagging porn sales in the wake of free, plentiful, pirated porn all across the internet."

Such an idea would create a logistical nightmare, considering that much adult entertainment is not "consumed" in the same state it is "produced." Then there is the nagging problem of the First Amendment. Besides, as Alptraum noted, porn "consumers" can find oodles of "product" for free online. That explains why Flint and his erstwhile colleague Joe Francis of "Girls Gone Wild" recently asked for a "government bailout."

None of that, though, made it onto the air at MSNBC, which no doubt pleased Flynt. The network asked Flynt for his take on the economy. For the record, he thinks that the automakers should file for bankruptcy. He also doubted that the octuplet mom Nadya Suleman really received a $1 million offer to do pornography.

Why no questions about his porn parody of the Sarah Palin (link not safe for work, really!)? It was a huge hit -- or so I am told. Overall, the interview was softer than a pillow. An MSNBC spokesman could not be reached for comment.

In general, the business press has a schizophrenic attitude toward the sex business.

On the one hand, it tries to argue that it's above reporting titillating stories that are not of interest to investors. Yet, almost every action of Playboy Enterprises Inc. (PLA) is reporting in breathless detail. I know the company is an American icon, but still. The company is too small to otherwise merit much national media attention.

CNBC is just as guilty. The business news channel recently posted a slide show of the best-selling adult videos of all time. I can't find the link but trust me it was there. CNBC's "American Greed" documentary series is featuring the famous Mustang Rang brothel in Nevada. Another program discussed the trials and tribulations of high-class prostitutes. The channel and many other mainstream media outlets regularly cover the big adult entertainment industry convention in Las Vegas.

It's no wonder that the media has recast Larry Flynt as a free-market conservative.


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