Obama Administration “Open” to State Run Newspapers

image In today’s “I’m from the government and I’m here to help” news, it was reported loudly at in the political blog TheHill that President Obama is “open” to looking at a government bailout for the nations ailing newspaper industry.

I am itching to rant on how bad of an idea this is. First, though, the facts. From TheHill’s coverage:

“Sen. Ben Cardin (D-Md.) has introduced S. 673, the so-called "Newspaper Revitalization Act," that would give outlets tax deals if they were to restructure as 501(c)(3) corporations. That bill has so far attracted one cosponsor, Cardin’s Maryland colleague Sen. Barbara Mikulski (D).”

“Obama said that good journalism is "critical to the health of our democracy," but expressed concern toward growing tends in reporting — especially on political blogs…”

"I am concerned that if the direction of the news is all blogosphere, all opinions, with no serious fact-checking, no serious attempts to put stories in context, that what you will end up getting is people shouting at each other across the void but not a lot of mutual understanding," he said.

I’ve said for a very long time – since the start of the Obama online campaign – that it seems to me that the then candidate, now President, has a very tenuous grasp of New Media.  This has been borne out in much of the choices he’s made in terms of tech policy and presidentially appointed thought leaders.

I chronicled a snapshot of the new administration’s #techfails in the context of the larger #fail of US CIO Vivek Kundra:

Given that the habit of past presidential and congressional administrations to simply throw money at the problem has been ratcheted up to eleven by the current administrations, there’s a strong possibility that this bill will see traction, which alarms and irritates me.

In essence, it takes the view that in hopes that rewarding failure will yield success in the future. The newspaper industry is in a death spiral, and bequeathing them with a sack of cash will only prolong the inevitable.

Isn’t it Obvious that we don’t want State Run Newspapers?

image More importantly, though, isn’t journalism supposed to be the lauded and independent “Fourth Estate,” free of bias and loyalty to any governmental institution?

Obviously, bias is pervasive in the old Heritage Media, but assigning journalism governmental overlords will almost ensure that journalistic independence will end. A bailout is the only hope of continued existence for the majority of newspapers, since almost without exception they’re too proud or ignorant to fundamentally change the way their organizations operate to adapt to the new media ecosystem.

If one examines the extent to which the government has structured their relationships with the large banking institutions and the automakers, it isn’t a great leap of logic to see how the interference will play out with newspapers (and who would be more aware of that than the journalists that have covered those stories?).

Rather than see their salaries axed for running afoul of the government’s sensibilities, journalists and editorialists will no longer have to worry about the marketability of their work and offending readers and advertisers, but their governmental bosses as well. 

In other words, if you don’t think partisan politics would quickly play into budgetary concerns, I’ve got a newspaper on the other side of the Brooklyn Bridge I’d love to sell you.

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Mark 'Rizzn' Hopkins

Mark “Rizzn” Hopkins was the Founding Editor of SiliconANGLE, as well as the creator of and Executive Producer for theCUBE. He has since left the company to found the digital agency Roger Wilco and take a partnership with Barista Ventures.

He’s a Bitcoin early adopter, as well as a blogging, podcasting and social media pioneer. Prior the founding of SiliconANGLE, Hopkins worked as Associate Editor at Mashable during its formative years. Prior to his career in startups and media, he worked as a developer for large corporations like Nokia, IBM, Apple and Cox Communications. Hopkins lives in Dallas, Texas with his wife and two children.
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  1. Mark,

    What did Obama specifically say on this issue? Because a bailout does not necessarily equate to state run newspapers. I’m not fond of this concept though.

    Newspapers are going away bc their business model is expensive and their journalists are not keeping up as well as they should. I get frustrated bc they have access to people a blogger wouldn’t, but they don’t use interactive tools to leverage those contacts effectively.

  2. He’s admittedly non-comittal right now – he’s open to the idea, and will read over the bill.

    The proper answer should have been “sorry, not interested.” Bailout, in my mind, automatically is equivalent to state-run, particularly given how the government has handled the bailouts of finance and auto recently.

  3. It’s a short bill, but here are the sections that bother me the most:

    (r) Qualified Newspaper Corporation- For purposes of this title, a corporation or organization shall be treated as a qualified newspaper corporation if–
    ‘(1) the trade or business of such corporation or organization consists of publishing on a regular basis a newspaper for general circulation,
    ‘(2) the newspaper published by such corporation or organization contains local, national, and international news stories of interest to the general public and the distribution of such newspaper is necessary or valuable in achieving an educational purpose, and
    ‘(3) the preparation of the material contained in such newspaper follows methods generally accepted as educational in character.’

    (source: http://www.govtrack.us/congress/billtext.xpd?bill=s111-673 .. emphasis added. )

    The third part is the one that bothers me: The preparation of the material contained there follows methods “generally accepted as educational in character.”

    Does this mean if editorial content strays too far afoul of the current prevailing partisanship or has too much influence, their 501c3 status could be revoked?

    The effect of this bill would be to make all advertising dollars in print media tax deductable, which would be a boon to the business. It’s further defined in the bill that no more than 50% of the paper could be devoted to ad space, which would artificially create scarcity and limit both the types of and price of ads in the paper.

    Still, the tax-deductable status of those ads might more than make up for the increase in price. Given that, the newspaper business would be completely beholden to their 501c3 status, and it would add new powers to revenue inspectors, GAO and the Congress.

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