Should you be taxed to subsidize 'The New York Times'?
The stiff winds of Internet competition have already swept through countless businesses, including travel agents, car dealers, wine retailers and stock brokers.
Some have adapted. Some have perished. I have a friend who, to his chagrin, became a licensed stockbroker in Pennsylvania just as E*Trade and other Internet brokerages were becoming popular. And does anyone even remember travel agents anymore?
Now newspapers are facing a hurricane-strength competitive gale, and they, understandably, don't like it one bit. A recent article in the Columbia Journalism Review titled "The Uncle Sam Solution" suggests everything from ownership tax incentives and R&D subsidies for the development of electronic paper--to a straightforward redistribution of wealth from taxpayers to newspaper owners and employees.
It concludes, "To survive, journalism and journalists need to let go of their aversion to Uncle Sam."
Now, 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. Here's an article I wrote last year discussing the Justice Department's lawsuit against the National Association of Realtors, and testimony I gave to the Federal Trade Commission (PDF) when it held a workshop on barriers to e-commerce a few years earlier.
Strings attached
The main reason I say the answer should be nothing 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."
Mapplethorpe was, of course, a brilliant photographer, and some of his work has inspired my own modest efforts. But the U.S. Supreme Court upheld the NEA funding restrictions as constitutional, concluding that they're perfectly OK "when the government is acting as patron rather than as sovereign."
That patrons can muzzle the recipients of their largesse should be no surprise. Last decade, librarians lobbied Congress to create the E-rate program, which levied taxes on Americans' phone bills to pay for wiring schools to the Internet. It was an unalloyed, billion-dollar political win for the librarians--until Congress decided to force them filter out porn if they wanted the cash.
They howled, they complained, they sued. They lost. The Supreme Court ruled in 2003 that the law "is a valid exercise of Congress' spending power."
I'm sure that at this point, some readers might be thinking, "What about National Public Radio? It's taxpayer-supported, right?" Yes. NPR and PBS receive about 15 percent of their combined budget from the government.
Even though that's not a huge amount by percentage, it has made NPR the target of political threats by President Richard Nixon and House Speaker Newt Gingrich, both Republicans, to eliminate its funding. Conservatives say NPR itself has admitted a liberal bias while liberals accuse it of being elitist. Do newspapers really want that controversy spilling over into their pages?
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?)
But 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?
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.
Declan McCullagh, CNET News' chief political correspondent, chronicles the intersection of politics and technology. He has covered politics, technology, and Washington, D.C., for more than a decade, which has turned him into an iconoclast and a skeptic of anyone who says, "We oughta have a new federal law against this." E-mail Declan. 
handouts on the shape of an economy might have been open to
question to some small degree. After the widely publicized
experiments with such during the 20th century, the effects are
very well known. Such handouts lead to stagnation and
economic death.
I have one small example of one improvement of internet-
implemented alternatives to "dead tree" journalism, in the area
of classified ads. Not really journalism, but one aspect of a
newspaper's business that has been useful in the past. I signed
up for a tiny, 4-line ad in my local paper (Salt Lake City). It will
run 9 times in that paper and a couple of affiliates, starting
tomorrow. That includes three newspapers and three websites. It
cost $71.60. A few hours later, I put an ad for the same item
into KSL's web classified setup for free, and have already
received two responses. That ad system allowed multiple
640x480 photos for no direct cost to me. It's an Ad-supported
Ad system, if you will.
So far, propping up the dead tree seems like an unattractive
option. Poor "progressives", there is less support for their
philosophy than ever before.
Seriously. This is not a controversial statement. The Washington Post's Howard Kurtz describes the media landscape as "from those who cheer Fox to those who swear by NPR."
http://www.washingtonpost.com/ac2/wp-dyn/A46805-2003Oct18
the news staffs and hosts of NPR shows. Maybe you would care to
name one.
source of unbiased news. And I will not shed a tear for them.
They need to get back to reporting the news and not trying to
make the news. And they need to set aside their own personal
beliefs and just report the facts.
Anyway, it was a good article. I do most of my reading online
these days because I don't like paying for pages mostly full of
propaganda slanted to one side or the other. Just mu thoughts.
One example of good journalism is Democracy NOW!
Finally, I do agree that government funding may not be the way to go as the author points out. However, I wouldn't go so far as to suggest that CNET's model is the way either.
The quicker hard line left wing, anti-American outfits like the New York Times are allowed to die a natural death, the better for this country.
Phil Donahue was fired because his stance was incompatible with NBC's decision to support the war and NBC argued that his public oposition to the war would drive ratings down.
To have good news media, the media truly needs independance. If a government interferes with neutrality of media, electors can throw the government out. When advertisers directly or indirectly dictate what slant they want the news to have, citizens have no recourse.
Media need to be able to report on what people NEED to know instead of reporting on what they WANT to know.
Consider the BBC. A world renowned news network you can generally trust. It is tax funded and there are strict rules about independance between government and BBC.
Citizens cannot make informed decisions if they are not properly informed. And since politicians are polling driven, the responsability now rests with the media to shape public opinion.
When did the BBC become trustworthy?
Where have you been during the recent BBC scandals?
In fact the British public's trust and confidence in the BBC is currently at an time low.
Read these:
http://media.guardian.co.uk/site/story/0,,2155310,00.html
http://media.guardian.co.uk/site/story/0,,2129708,00.html
http://blogs.guardian.co.uk/organgrinder/2007/07/bbc_scandals_who_is_really_car.html
The BBC has ZERO credibility.
She not only worships one of the most corrupt businessmen, but also the most mean spirited, ignorant, racist piece of garbage on TV and Radio.
Far from getting my tax dollars, the New York Times and it's editors should be on trial for treason even as we speak.
It is corporations that have FUBARed the news industry. It is the corporations that torn down the wall between the news and the advertisers and that is the catalyst for the decline in news quality.
Just more simple mindedness that I have come to expect from the author.
You can't "out" a woman who is already "out", a woman who had a big spread(complete with pictutres), of her and her weaasel husband in Vanity Fair mag.
Nor had Plame been posted out of the country on an undercover assigment in the 5 years before she was "outed", as the law in question clearly states.
Not to mention Plame was in reality "outed" by Richard Armitage, an anti-Bush creature that worked under Colin Powell.
Scooter Libby was railroaded by Domocratic Party hack Fitzgerald, who on finding that Libby had nothing to do with Plame's "outing" decided to go after him for "perjury" . There was no uderlying crime commited by Libby.
Don't let me start, dude.
Liberalism is a disease. Go get treatment!
As for diseases, conservatism is a bona fida metal illness at least according to study conducted by the U.S government. The study said conservative values are the result of a set of neuroses rooted in "fear and aggression, dogmatism and the intolerance of ambiguity".
start taking your meds already.
There are a multitude of other communications channels and if
newspapers can't cut it then they should be left to fall by the
wayside because they simply are not needed.
should have changed over to a web based forum long ago! Even the
older people who are sighted for still wanting to hold it in there
hands have adopted the internet by now.
Stop wasting tree's and polluting our world with that nonsense!
On the flip side my city's free automated telephone time is no longer. So if I can't discover what time it is by the city why should I know what's the news?
The ONLY wzy I would approve if such a transaction if newpapers was free. Then most would not mind the government red tape.
- by bhl4lindsay May 1, 2009 8:20 AM PDT
- We've created a pro/con article on Debatepedia on government subsidization of journalism. It frames the argument in this article and others, like Catania's. May be a worthwhile read:
- Like this Reply to this comment
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