In 2007 a few journalists around the country began to write about the potential for government funding of fledgling newspapers in light of plummeting subscriptions and readership. With the election of Barack Obama in 2008, that concept moved to the front burner as the FTC developed a proposal to save struggling papers by providing tax dollars to certain select news organizations.
The FTC report can be found here.
With the Obama system of bailouts for the big banks and mortgage lenders on Wall Street, automakers GM and Chrysler, and other large corporations such as General Electric, the bailout of struggling newspapers with taxpayers' money fit the paradigm. Large newspapers with a liberal editorial slant such as the New York Times were considered too big and too valuable to fail.
The common perception is that such a bailout was never implemented. But was it? Are newspapers already receiving federal subsidies?
In order to grasp the complicated nature of how government goes about protecting certain private interests, one must separate out the notion of lump sums given to corporations such as GM and the practice of the federal government in providing breaks in taxes and fees to certain industries. .
According to one journalist, the federal government is already subsidizing newspapers using a variety of methods of which the general public may not be aware. For example, newspapers receive major postage breaks for their mailouts. Large organizations such as the New York Times have many subscribers that live outside the local area. These persons receive their newspapers by mail. The New York Times, thus, receives a major break in postage rates for mailing its daily papers to subscribers across the country.
The journalist goes on to recount the fact that at one time in American history, the U.S. Government provided funds so that newspapers could get out to the frontier and rural areas, belieiving that such a thing served the broader public interest.
But there is a major difference in these two practices, and the Left more often than not fails to make the distinction. A subsidy, by definition, is not providing a tax break or allowing certain entities to pay less for bulk mailouts. Rather, a subsidy is when government issues 'real money', a pay-out, lump sums, to certain private interests. TARP I and TARP II are prime examples of subsidies, as the federal government provided direct funds to Goldman Sachs, Bank of America, Citigroup, and a host of other private corporations.
In failing to make the distinction between these 2 entirely different concepts, the journalist in question used the tax and postage breaks as a vehicle by which to advocate for full public subsidies of newspapers today, not only by granting news organizations certain breaks in taxes and fees but by giving them lump sums in tax dollars.
Critics have charged that this concept is a clear and present danger, that the Obama Administration would use the current crisis in newspaper circulation to advocate for such subsidies in order to preserve those newspapers that have demonstrated an unbridled liberal bias in editorial policy. Thus, the old 'big liberal media establishment' would be preserved for poliltical purposes.
But the plan has been met with roadblocks. Conservatives cried foul. Which newspapers will be subsidized and how will the government go about making a determination as to who should receive these funds? If the New York Times receives a bailout, for example, will the federal government also bail out a conservative newspaper that has also struggled, such as the Washington Times?
Conservative objections to these schemes appear to be well-founded. Under the current Administration the FCC and the FTC have taken a decidely leftward turn. Proposals to mandate 'fairness' in media have been aimed primarily at conservative talk radio and bloggers, while no mention has been made of forcing 'fairness' on MSNBC, the Daily Kos, or liberal radio stations.
Further, conservatives have a basic ideological disdain for government subsidies of any kind, even to conservative entities, believing that the free market will decide who survives and who fades into oblivion. This ideological concept is based upon the time-honored American principle of letting the citizens decide what to buy, what to listen to, what to watch, and what to read. If the New York Times or NPR wish to survive, thus, then it is up to them to market themselves to the public in such a way that constomers will want what they have to offer. And if the product that is being offered is not up to par, then the public will decide its demise by simply withholding patronage.
It is not up to government to force upon the public goods and services that reletavely few citizens value. And that is why giving taxpayers' money to newspapers, NPR, GM, or GE is anathama to the American way.
While there is no evidence, yet, that the Obama Administration has given newspapers any such lump sums in bailout money, advocates for such a thing are still quite adamant about its need. But with Republicans now in control of the U.S. House of Representatives it is highly unlikely that such a plan would pass the litmus test at a time when the U.S. debt load has brought the country to the brink of bankruptcy.
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Comments
If we had an Obama like president when Henry Ford was rolling model Ts off the assembly line the federal government would have subsudized the horse and buggy. Newspapers became technologically outdated by advances in the internet and other media formats. But the left cannot allow the NY Times to die a horse and buggy death. Too much political influence is at stake. One more piece of evidence that omnipresent government, which funds and meddles in everything, is costly and oppressive.
Agreed. The same principle applies to the National Endowment for the Arts, NPR, and other federally subsidized entities. Let them raise their own money to survive. And if they can't, then that shows the public did not consider it important enough to save.
Hi Anthony. Your points are well taken. The left thinks it has an absolute right to dictate where the money of others should be directed. Arrogance. NPR? How about subsidizing Fox News so that its syndicates could multiply and equal the number of left leaning networks? Or better yet just keep the government out of the subsidy business period.
People already believe the MSM are shills for the government. If newspapers receive government money people will be convinced of it,like public radio. How is that going to help sales?
It will only lead to more distrust.
Now we get to it: the government organ against all the other organs.
Except, of course, the loudest and strongest opponents against any such subsidy have been the newspaper publishers, editors and reporters themselves because the LAST thing they want is the government -- local, state or federal -- sticking their nose into the news business.
The mail discount is the same one given to all bulk mailers - nothing more , nothing less - and even so, most large newspapers have cut way back on mailings because they still lose money doing it -- the answer is the online.
Of course, the source you cite, Neal Leavitt, is not a journalist - he heads a public relations company -- the antithesis of journalism.
And HIS source is a university president arguing for a subsidized national BROADCAST service -- not print.
Spend a little time on places like Poynter.org if you actually want to know how journalists think.
do you honestly believe the NYT would turn down an offer from the Obama Administration to bail them out of their financial woes? If you do, then your journalistic credential are suspect.
The NYT would jump at the chance to get bailout funds from the taxpayers, and Obama would love to be able to give it. It's a good thing a Republican House would stop it.
More comments from the clueless. NY Times doesn't need or want a government bailout. You might look into the investments of Carlos Slim Helú - currently listed by Forbes as the richest man in the world, ahead of Bill Gates and Warren Buffett.
He poured $250 million into the NY Times parent in 2009 and owns a 7 percent interest -- and they are climbing out of the doldrums of recession shock induced advertising reductions fairly well. As of last week, most analysts were listing its stock as "hold."
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