Bailout Cash for Newspapers? A Cure That Would Only Worsen the Underlying Disease…

I posted this as a comment here, already, but it bears repeating.

While the concept of a bailout for newspapers (and allegedly for good journalism) seems attractive at first blush, I fear that in practice, the billions in bailout funds would suffer the same fate as the billions bestowed upon the banking industry.

That is, they would be swiftly pocketed in the form of “well-earned bonuses,” and only a few crumbs would make it down to the level where the money would actually do any good.  While I’m not in the “burn baby, burn” camp the way many other digital triumphalists have been (and there’s at least a faint whiff of that hereabouts), I think that dumping fat stacks on media conglomerates will not solve the underlying problems of the crumbling of business models.

Now then – a Manhattan Project (of sorts) to build solid business models to support quality journalism? That would = the hoary “teaching a man to fish” paradigm.

I know faith in The Invisible Hand is in short supply these days (and where it can be found, it’s usually being in the stocks in the town square, being pelted by posters on Angryjournalist.com), but the fact is that there is a demand for something to perform the function of information dissemination that newspapers do/have done. If the Drug Wars have taught us anything, it is that where there is a demand, and money is attached to that demand, there will correspondingly be a supply.

This is all growing out an essay on the op-ed page of the NY Times and chittering in the Twiterverse, as the nervous journalists see the vultures staring downward, and big guy in the hood with the scythe striding through the newsroom.

By endowing our most valued sources of news we would free them from the strictures of an obsolete business model and offer them a permanent place in society, like that of America’s colleges and universities. Endowments would transform newspapers into unshakable fixtures of American life, with greater stability and enhanced independence that would allow them to serve the public good more effectively.

o-rly-2Well, allow me to respond to that one.

Not to get all Reagan on you, but that is complete and utter madness. Newspapers are so important, so crucial to our lives, that it is the duty & obligation of the government to preserve them?

Wow.

OK, it’s a given that journalists have something of a Messiah Complex.  You have to have something else going on psychologically to get into this low-pay high-stress field. But this is really crossing the line. And making an unfortunate conflation between the newspaper industry and good journalism – yes, it gets done at newspapers, and there are some magnificent examples of this. But the industry is asphyxiating itself, and dumping wads of cash on it will not solve the underlying problems.

Government intervention here would create more problems than it would solve. Allison Fine is onto this issue:

So, the fundamental premise of the need to endow newspapers and preserve them at public expense is that false information exists on the Internet? Of course it does, as it does on TV, on the radio (should we also consider endowing Rush?) in magazines, and in many, many newspapers. Which media would the authors like to choose as being least likely to contain false information? And which medium do they think did the best job of  bringing the lies and corruption of the Bush Administration to light — hint, don’t look at newspapers, Josh Micah Marshall and his Talking Points Memo website would be a much better bet.

So, the fundamental premise that only newspapers can hold government accountable is specious. But that isn’t my biggest issue with the article. It is the naive assumption from those outside of the nonprofit sphere that 1) nonprofit status is intended for companies that don’t have a viable business model, and 2) raising billions of dollars in endowment funds is doable, particularly in today’s economy.

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