Issue Report: Should governments bailout journalism?

In 2008 and 2009, journalism entered what many called a crisis in its existence, with many newspapers and media companies failing to become profitable in the wake on significant shifts to online content and online advertising, in the face of rising competition from classifieds services such as Ebay and Craigslist, and in the face of the 2009 and 2009 financial crisis.[[Image:United States With many major newspapers closing down, such as the Seattle PI and Rocky Mountain News, media companies declaring bankruptcy, The Tribune Company (which owns many of US newspapers) – including the Los Angeles Times – filing for bankruptcy protection in December of 2008, and with significant government bailouts going to the banking and automobile manufacturing industry, many began calling for a “bailout” or government subsidization for the journalism industry.

ariety of proposals have been presented for how the government might “bailout” the journalism industry. Some have suggested a direct lump sum gift to specific companies, amounting, some suggest, to between 5 and 10 billion dollars. Others suggest a tax exemption of various kinds for newspapers, or the elimination of postal fees. Another proposal includes offering credits of around $200 to all citizens to be used to subscribe to any news publication they choose. There is much debate about these approaches, covered below in this pro/con article.

Public good: Is journalism a public good warranting of subsization?

Journalism is public good for democracy, deserves subsidies

John Nichols and Robert McChesney. "The Death and Life of Great American Newspapers". Nation. March 18, 2009:

“We begin with the notion that journalism is a public good, that it has broad social benefits far beyond that between buyer and seller. Like all public goods, we need the resources to get it produced. This is the role of the state and public policy. It will require a subsidy and should be regarded as similar to the education system or the military in that regard. Only a nihilist would consider it sufficient to rely on profit-seeking commercial interests or philanthropy to educate our youth or defend the nation from attack. With the collapse of the commercial news system, the same logic applies. Just as there came a moment when policy-makers recognized the necessity of investing tax dollars to create a public education system to teach our children, so a moment has arrived at which we must recognize the need to invest tax dollars to create and maintain news gathering, reporting and writing with the purpose of informing all our citizens.”

Creative destruction in journalism would be good for society

Declan McCullagh. "Should you be taxed to subsidize 'The New York Times'?". CNET. September 28, 2007

– “probably the biggest reason to be wary of higher taxes to help out newspapers is the broader one: Bailing out an industry that’s suffering because of technological change or increased competition is not a wise choice in the long run. Afternoon newspapers are largely a defunct breed for the obvious reasons; would society really be better off if taxes were raised to subsidize such money-losing ventures for purposes of nostalgia?”

Crisis? Is journalism in crisis?

Journalism industry is in crisis, requires government help

Sara Catania. "Hey President Obama, Spare Any Change?". Huffington Post. January 1, 2009

– “Attention Barack Obama: journalism needs your help. […] In 2008 more than 15,500 journalists were laid off or bought out (or, considering the corporate greed driving much of the cuts, laid out and forcibly bought off), a 700 percent increase over the second half of 2007, according to a running tally on Paper Cuts, a website created by a journalist from the St. Louis Post Dispatch. […] we are in desperate need of some major help. As in government cash. Non-profits like ProPublica and the Poynter Institute can’t do all the heavy lifting. […] With advertising revenues and subscriptions plummeting and newsprint costs soaring, someone needs to help maintain the infrastructure of American journalism.”

The collapse of journalism would be devastating for society

Rosa Brooks. "Bail out journalism". Los Angeles Times. April 9, 2009

– “I also can’t imagine anything more dangerous than a society in which the news industry has more or less collapsed. […] If newspapers become mostly infotainment websites — if the number of well-trained investigative journalists dwindles still further — and if we’re soon left with nothing but the yapping heads who dominate cable “news” and talk radio, how will we recognize, or hope to forestall, impending national and global crises? How will we know if government officials have made terrible mistakes, as even the best will sometimes do? How will we know if government officials have told us terrible lies, as the worst have sometimes done? A decimated, demoralized and under-resourced press corps hardly questioned the Bush administration’s flimsy case for war in Iraq — and the price for that failure will be paid for generations. […] It’s time for a government bailout of journalism.”

Journalism is not dying, it is more alive than ever

Duncan Riley. "Journalist Calls For Government Assistance…For Journalists". The Inquisitr. January 2, 2009

– “The argument that journalism is dying has already been disproved many times before. It is the last argument of those unable to adapt to the new reality of publishing news. Quite the opposite, journalism, in its many forms is the strongest it has ever been in the history of man kind. No longer is the written word the exclusive domain of an elite few, and guided by media proprietors with set agendas.”

Daily newspapers add little, let them die

Joseph Farah. "Bail out newspapers?". World News Net. April 28, 2009:

“Now, it occurs to me that Brooks is laboring under the delusion that newspapers like the one that formerly employed her services are actually doing investigative journalism into government waste, fraud, abuse and corruption. They aren’t. They haven’t been for a long time. […] And this is the very reason they are going bankrupt. No one wants to read them any more – at any price. They have out-served their usefulness.”

Newspapers can succeed by adopting new media

Duncan Riley. "Journalist Calls For Government Assistance…For Journalists". The Inquisitr. January 2, 2009

– “That some journalists are finding it tough does not equal there is no money to be had either. Smart journalists, and media companies have embraced new media, and while they may not have replaced their offline revenue streams in full yet, even during the recession online streams at some outlets have actually increased at a time print advertising in particular is dying. The true difference today is that the closed markets of old have been replaced by open markets with vibrant competition, and it is in these spaces that some journalists believe that the market is unfair. The time of Journalism as a closed shop with life long opportunities has passed.”

Independence: Can journalism remain independent while receiving subsidies?

Journalism has/can maintain independence following subsidization

John Nichols and Robert McChesney. "The Death and Life of Great American Newspapers". Nation. March 18, 2009:

“Only government can implement policies and subsidies to provide an institutional framework for quality journalism. We understand that this is a controversial position. When French President Nicolas Sarkozy recently engineered a $765 million bailout of French newspapers, free marketeers rushed to the barricades to declare, “No, no, not in the land of the free press.” Conventional wisdom says that the founders intended the press to be entirely independent of the state, to preserve the integrity of the press. […] We are sympathetic to that position. […] Fortunately, the rude calculus that says government intervention equals government control is inaccurate and does not reflect our past or present, or what enlightened policies and subsidies could entail.”

Governments already subsidize journalism without problem

Rosa Brooks. "Bail out journalism". Los Angeles Times. April 9, 2009:

“If the thought of government subsidization of journalism seems novel, it shouldn’t. Most other democracies provide far more direct government support for public media than the U.S. does (Canada spends 16 times as much per capita; Britain spends 60 times as much). And as Nichols and McChesney point out, our government already ‘doles out tens of billions of dollars in direct and indirect [media] subsidies,’ including free broadcast, cable and satellite privileges.”

Journalism is not independent under control of media moguls

John Nichols and Robert McChesney. "The Death and Life of Great American Newspapers". Nation. March 18, 2009:

: “Our founders never thought that freedom of the press would belong only to those who could afford a press. They would have been horrified at the notion that journalism should be regarded as the private preserve of the Rupert Murdochs and John Malones. The founders would not have entertained, let alone accepted, the current equation that seems to say that if rich people determine there is no good money to be made in the news, then society cannot have news. Let’s find a king and call it a day.”

Subsidization would damage independence of journalism

Declan McCullagh. "Should you be taxed to subsidize 'The New York Times'?". CNET. September 28, 2007

– “The main reason I say the answer should be [that government do] nothing [for the journalism industry] is that government money tends to come with strings attached. Sure, at first, a handout may seem free. But over time, that tends to change. Look at the ongoing controversies over the National Endowment for the Arts. In response to controversial photographs (including a provocative retrospective of photographer Robert Mapplethorpe’s work) in an NEA-funded exhibit, Congress did two things. It reduced the NEA’s budget for the next fiscal year and then slapped a new restriction on the agency, saying that its grants must take ‘into consideration general standards of decency and respect for the diverse beliefs and values of the American public.'”

Subsidization damages journalism's freedom to criticize

Declan McCullagh. "Should you be taxed to subsidize 'The New York Times'?". CNET. September 28, 2007

– “One argument for tax subsidies, and the Columbia Journalism Review article invokes it at length, is that newspapers’ ‘role of informing citizens is crucial to democracy’ through aggressive reporting on government malfeasance. But supporting that kind of aggressive reporting, it seems to me, is the worst argument for government funding–it would be the first type of reporting killed, openly or covertly, when the inevitable political pressure is brought to bear. (I wonder if I’d even be permitted to write this commentary if my salary were paid by the government. And would a taxpayer-subsidized newspaper ever publish an editorial calling for lower taxes?)”

Journalism bailout would be payoff for biased election coverage

Gerry Storch. "Gov't Bailout for Newspapers?". Our Blook:

“Consider also that many people feel America’s newspapers were basically in the tank for Obama with slanted coverage during last year’s presidential election. As Washington Post ombudsman Janet Howell wrote after the election, ‘I’ll bet that most Post journalists voted for Obama. I did.’ If papers were now to take a bailout from the Obama administration, wouldn’t it have the look … and smell … of a payoff?”

Free markets: Is it best to leave journalism to the markets?

Founding Fathers envisioned government fostering journalism

John Nichols and Robert McChesney. "The Death and Life of Great American Newspapers". Nation. March 18, 2009:

“The founders regarded the establishment of a press system, the Fourth Estate, as the first duty of the state. Jefferson and Madison devoted considerable energy to explaining the necessity of the press to a vibrant democracy. The government implemented extraordinary postal subsidies for the distribution of newspapers. It also instituted massive newspaper subsidies through printing contracts and the paid publication of government notices, all with the intent of expanding the number and variety of newspapers.”

Leaving journalism to the markets risks degrading the trade

Marty Baron, the Editor of the Boston Globe, said at a lecture in April 2009 at the University of Oregon School of Journalism and Communication: “There will be many experiments, many new models. Some will be nonprofit. But many will seek to make a profit, a big one. An era of entrepreneurship for journalism has begun. Entrepreneurship comes with greater risks…. There also are risks for the practice of journalism. There are risks that journalism will turn cynically to the quick, the easy, and the cheap — that a story’s greatest accomplishment will be to get a million page views, rather than to correct an injustice, or unearth wrongdoing, or give voice to people who would not otherwise be heard.”[1]

Subsidization is needed to restore journalism to competitiveness.

John Nichols and Robert McChesney. "The Death and Life of Great American Newspapers". Nation. March 18, 2009:

“Alas, the press may have to rely upon a democratic state to create the conditions necessary for a democratic press to flourish and for journalists to be restored to their proper role as orchestrators of the conversation of a democratic culture.”

Government subsidizes many things; subsidize journalism too

Rosa Brooks. "Bail out journalism". Los Angeles Times. April 9, 2009:

“If we’re willing to use taxpayer money to build roads, pay teachers and maintain a military; if we’re willing to bail out banks and insurance companies and failing automakers, we should be willing to part with some public funds to keep journalism alive too.”

Government subsidization of journalism would not be expensive.

Robert Kall. "Bail Out Investigative Journalists". Huffington Post. December 17, 2008:

“Imagine if the government funded a ‘news conservation corps’ of 10,000 investigative reporters at $50-80,000 salaries, plus health care benefits — costing, say, an average of $75,000 each –probably a high estimate. Throw in another $225 million to pay for 3000 more editors. That would cost less than a billion dollars and provide the nation with probably 50 times more investigative reports than we now have. The reporters could work with one or more publishers and their reporting could be open source — without copyright, just as TV networks share a common feed. Or publishers could share in the cost.”

Subsidization keeps journalists in work, stimulates economy.

John Nichols and Robert McChesney. "The Death and Life of Great American Newspapers". Nation. March 18, 2009:

“It would keep the press system alive. And it has the added benefit of providing an economic stimulus. If these journalists (and the tens of thousands of production and distribution workers associated with newspapers) are not put to work through the programs we propose, their knowledge and expertise will be lost. They will be unemployed, and their unemployment will contribute to further stagnation and economic decline–especially in big cities where newspapers are major employers.”

Government should not bailout journalism in the face of competition.

Declan McCullagh. "Should you be taxed to subsidize 'The New York Times'?". CNET. September 28, 2007

– “everyone says they like competition in theory, but nobody actually likes to have competitors in practice. For the better part of a decade, Craigslist and eBay have been slowly nibbling away at newspapers’ classified-ads business. A 2005 MediaPost article says that as a result, according to McKinsey, newspapers have lost as much as 75 percent of their pricing abilities in key categories such as employment and general merchandise. Google is another competitive threat, with both broad and very targeted ads, and the cost of newsprint probably isn’t helping. […] So the threat to newspapers’ long-term existence, at least in their current form, is real. The real question is: what should the government do about it? […] I believe that the answer is nothing. We didn’t see taxpayer subsidies bail out stock brokers (unhappy about E*Trade) or travel agents (unhappy about Expedia). In fact, the federal government officially chose to side with disruptive technologies.”

Government should not preserve newspapers that fail in markets

Ken McIntyre, a media and public policy fellow at the Heritage Foundation, was quoted in an April 16, 2009 Fox News article: “Licensing is a simplistic solution for historic trends battering the traditional newspaper industry.” He continued that the government should not “preserve businesses that free enterprise and competition marked for failure — or a transition into something else.”[2]

Ben Scott, policy director of Free Press, testified at an April 2009 Congressional hearing against any government bailout of journalism: “It is especially important to resist the temptation of bailouts because the first papers to fail will be those who least deserve a bailout. Those are the papers whose own business decisions placed them under a crushing debt-load in pursuit of consolidated ownership and short-term gains. Few could welcome handing Sam Zell a fat check from the Treasury after his ill-fated adventure with the Tribune Company. That’s not to say we should let the journalism or the journalists fade away. But there are other ways to preserve those critical elements that do not involve bailouts.”[3]

Journalism can monetize demand without government bailout

Declan McCullagh. "Should you be taxed to subsidize 'The New York Times'?". CNET. September 28, 2007

– “I’m not sure what’s going to happen to newspapers in their current form, but I am optimistic about the future of journalism. My own employer, CNET Networks, has found a way to make money by publishing news and reviews without collecting taxpayer handouts. If readers (or viewers) continue to want original reporting, and I believe they will, news organizations will find a way to meet that market demand. Without a taxpayer bailout, newspapers may not look exactly like they do today, but journalism itself will remain alive and well.”

Keith Cameron. "Bailing out print journalism would only prolong the inevitable". Northern Star. April 15, 2009:

“The industry as a whole does not need to be saved, and news reporting can still be profitable without government aid.”

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