As we wrote this morning, President Obama is looking at a newspaper bailout because he is concerned that blogs will take over the world, which would be a threat to democracy.
Now, Scott Reeves at Minyanville, argues that a bailout would have the reverse effect as it would kill the independence of the press by killing its watchdog role. Who wants to read a newspaper that has to kow-tow to the government in order to preserve its tax-free status?
Reeves also says that from a business perspective, it doesn’t make any sense either as it won’t solve the core of the problem: crashing ad revenue and declining circulation.
The pending bill Obama offered to look at is Newspaper Revitalization Act, brainchild of Senator Ben Cardin, which would offer tax breaks to newspapers if they were to reorganize as non profits.
It’s hard to see how newspapers dependent on government tax breaks for their survival retain their independence. What happens to a non-profit newspaper’s endorsements during election season? Or investigative stories about members of Congress? Or even this week’s sex scandal?
Cardin’s bill could easily morph into industrial policy for the mass media, enabling the government — not the free market — to determine winners and losers. That would value political connections over minor details like, oh, the public’s need to know what’s going on.
We agree. Just let’s take a quick look at what happened with the rating agencies oligopoly.