With the proliferation of news on the Internet, Americans aren't supporting their local newspapers. Circulation and ad revenues are way down, while web readership at places like the Huffington Post and my publication, Reason magazine -- where the news is likely to be free and up-to-the-minute -- is way up. Technology has changed the game. But for those who see a connection between American democracy and the demise of the newspaper industry, it's time to get the government involved to save the news business.
Sen. Ben Cardin (D-Md.) recently introduced the Newspaper Revitalization Act, a bill that would allow newspapers to operate as nonprofits and Sen. John Kerry (D-Mass.) warns of the "serious consequences for our democracy" if his hometown paper, The Boston Globe, goes belly up. House Speaker Nancy Pelosi (D-Calif.) has publicly argued for an antitrust exemption to save the San Francisco Chronicle, a paper that has long supported her political career. Rep. Hank Johnson (D-Ga.) recently argued that "If Congress does not act...a major city in the United States will be without a newspaper in the fairly near future."
Washington can give newspapers tax breaks or generous subsides to keep them afloat; there are many ways of extending the life of a terminally-ill patient by forcing onto life support. But why should the government support an industry that consumers are rejecting?
The more important point, though, is that if failing newspapers are propped up by Washington -- in the name of democracy, of course -- what mechanism would force them to innovate or to address the deep institutional problems of a declining industry? Such interventions could potentially ensure survival, albeit temporary, of failing media outlets, but it is ludicrous to assume that a government bailout would reverse a steep decline in readership. Short of a Nicolas Sarkozy-like plan to force newspaper subscriptions upon those indolent, insolent, and ill-educated youths of Denver, a Washington stake in the Rocky Mountain News would be an investment only Jim Cramer could love.
YouTube video - http://www.youtube.com/watch?v=kQy6s--ZGbs