ALL THE NEWS THAT'S FIT TO SUBSIDIZE

October 22, 2009

The news business' tenuous hold on profitability has threatened its sustainability and requires massive government involvement, according to a new report authored by Leonard Downie Jr., former executive editor and current vice president at large of the Washington Post, along with Michael Schudson, a professor at the Columbia Journalism School.  In other words, newspapers need a federal bailout like General Motors, says Investor's Business Daily (IBD).

"American society," say Downie and Schudson, "must now take some collective responsibility for supporting news reporting -- as society has, at much greater expense, for public education, health care, scientific advancement and cultural preservation, through varying combinations of philanthropy, subsidy and government policy."

Among their alarmingly anti-competitive recommendations:

  • A national Fund for Local News paid with fees the Federal Communications Commission collects from or could impose on telecom users, broadcast licensees or Internet service providers.
  • A gigantic ramping up of public radio and television, reoriented to provide significant local news reporting in every community served by public stations.
  • Universities and colleges becoming institutional sources of local, state and accountability news reporting.

To be fair, the Downie and Schudson also call for tax credits for nonprofit journalism.  That's not wrong, as more reporters and editors move to think tanks that do investigative journalism, says IBD.

Subsidies are the enemy of competition, says Seth Lipsky, a member of the adjunct faculty at the Columbia Journalism School.  The best strategy to strengthen the press would be to maximize protection of the right to private property -- and the right to competition. 

Source:  Editorial, "Subsidies For News?" Investor's Business Daily, October 22, 2009; Seth Lipsky, "All the News That's Fit to Subsidize," Wall Street Journal, October 22, 2009; and  

For IBD text:

http://www.investors.com/NewsAndAnalysis/Article.aspx?id=509812 

For Journal text:

http://online.wsj.com/article/SB10001424052748704597704574486242417039358.html

 

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