The voices of Tax Policy Center's researchers and staff
It has become fashionable for high-profile establishment journalists to call for government subsidies to save the newspaper business. It is a terrible idea.
In a 100-page paper commissioned by The Columbia Graduate School of Journalism, former Washington Post executive editor Len Downie and J-school professor Michael Schudson argue for a package of government aid for newspapers, including both tax breaks and direct subsidies.
The Downie argument, echoed by many others, goes this way: Democracy requires independent reporting, but this news gathering is jeopardized by the Web-driven technological revolution, dramatically changing readership patterns, and the decline of corporate journalism (my phrase, not theirs). As a result, newspapers, in the words of John Nichols and Robert McChesney of the media reform group Free Press, “deserve” government subsidies.
No they don’t. Indeed, I can’t think of any business that deserves government subsidies simply because of what it does. Policymakers obviously disagree since I’d be hard-pressed to think of an industry that is not, in some way, subsidized by government. But this sense of entitlement is both troubling and costly.
When it comes to getting news, the market is speaking—rather loudly. It wants blogs, web-based and cable news, and even direct access to government documents. (Read the bill!!) Increasingly, it doesn’t want daily newspapers, weekly news magazines, or local broadcast news.
There is no doubt that much of what consumers are getting is rubbish, and I share Downie’s concerns about the effect of trash news on democracy. Opinion, lies, and comedy are not news, even though they masquerade as such these days. But none of this is new. The history of American journalism is replete with scoundrels, partisan hacks, and country-club publishers taking care of advertisers and fat-cat pals.
I may be a blogger now, but I have spent most of my career writing for traditional print media—newspapers, magazines, wire services, and books. On some level, I find the decline of newspapers very sad, but government can no more stop it than it could save Big Steel or the domestic auto industry. For a similar take, see this piece by Seth Lipsky in the Wall Street Journal.
Downie and Schudson still want to try a menu of subsidies. Among them: making it easier for news organizations to organize themselves as non-profits, and requiring the Federal Communication Commission to create a “fund for local news” that would work something like the endowments for the humanities and arts.
This is TaxVox, so let’s just look at the idea of tax subsidies.
The authors would make “news reporting” an exempt purpose under the Internal Revenue Code. Do we really want the IRS defining “news reporting?” This gives me serious chills.
While Downie and Schudson want tax subsidies to encourage start-ups, the reality is that such incentives almost always limit competition. The lobbyists for the big players get to help write the rules. The guy with a creative new way to disseminate news from his kitchen table has no lobbyists. As a result, there is little evidence that this sort of industrial policy ever encourages either innovation or job creation.
Technological transformation is scary and while newspapers suffer through their own phase of creative destruction, many good journalists will be hurt. That is very sad, but government intervention isn’t going to help them.
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