Newspaper Bailout? No Way!

Cross-posted by Gary Fouse
fousesquawk



(For you current or recent university students, Truman defeated Dewey.)




Even crazier than the bailouts of the auto industry, banks and Wall Street is this latest idea being floated around of Government stepping in to bail out the newspaper industry. Representative Frank Nicastro (D-CT) has spoken out in favor of government action. Senator Benjamin Cardin (D-MD) has just introduced the so-called "Newspaper Revitalization Act", which would allow newspapers to file as non-profits. All this has implications that go far beyond the question of whether failing newspapers ought to be saved or allowed to die.

First of all, let's examine the reason newspapers are dying out (The San Francisco Chronicle and Seattle Post Intelligencer are the latest big papers to fold). One reason is the revolution in news reporting and coverage. It is difficult for newspapers to compete with 24-hour news coverage offered first by cable channels such as CNN and Fox. In addition, news can be obtained instantly via the Internet from a myriad of sources. By the time you receive your daily paper, you already know the news that's in there. While I still subscribe to the Orange County Register, my main focus is the editorial page and the sports page in that order. I basically skim the front pages.

In short, newspapers are becoming more and more obsolete.

Another reason the newspapers are failing is that the public realizes that much of what they are getting is opinion rather than fact. The editorial page is 80-90% slanted to the liberal point of view while even front page writing is often written in such a manner as to slant the news in the liberal direction without the reader seeing between the lines.

The problem is (not a problem, really) the readers are increasingly reading between the lines, and they don't like the bias they are seeing.

Rightfully or wrongfully, many followers of the news are increasingly going to news sources they are comfortable with, whether it be Public Radio, CNN, Fox News or MSNBC. It is the same with the Internet and blogs. People go to the sites they tend to agree with and occasionally check opposing views on other sites.

It doesn't leave a lot of room for newspapers.

Now come various figures who say that government should step in and save the newspapers, either by bailout, takeover or giving them tax breaks on things like advertising revenue. If government can step in and save failing enterprises that are so important to the country, why not newspapers? Are they not crucial to the American Way of Life?

Well, not really for the reasons I listed above. When something becomes obsolete, it naturally dies out in the free market. (Should the government have stepped in and saved elevator operators a few decades ago?)

But even more serious a consideration is the idea of government being involved in newspapers in any form. We are already seeing the effects of government bailouts of GM and Chrysler. Now, President Obama is deciding who should or should not be the CEO of GM. Now, President Obama is telling Chrysler they should merge with Fiat.

Fiat??? When I was living in Italy, I owned a used Fiat. Fiat stands for:

Fix
It
Again,
Tony.

I know, I am digressing. Back on track.

The point is that once government steps in and bails out newspapers or gives them any financial breaks that allow them to keep operating, they have a voice in the editorial content of that paper-whether they ask for it or not. What newspaper is going to bite the hand that feeds it? If we are sceptical of the political agenda of our newspapers now, how trusting can we be if they owe their continued financial well-being and very existence to the government?

I say no. I know what it is like to live in a country at a time they didn't have a free press (Thailand in the 1970s). As much as we complain about the biased coverage of most of our newspapers, we haven't seen anything yet if government steps in to save those that are failing. In fact, I suspect that most of the folks in Washington who are clamoring for government assistance are Democrats who recognize that they may lose a valuable ally.

I say let the newspapers go the way of the elevator operator if they have become obsolete or the customers are rejecting them. The government should have no role whatsoever in the operation of a newspaper-even in a financing role. This would set too dangerous a precedent in a nation like America.