The number today was staggering, the United States deficit for the current year has grown to $1.84 trillion. This President who talked about fiscal responsibility during the campaign, grew the projected national debt by $600 Billion in less than four months. It also means that those Congressional Budget Office numbers that the President ignored were right. You may remember the chart that compared the CBO Estimates the President’s, based on the CBO, the United States is facing crippling deficits for at least the next ten years.
So with the federal treasury facing insolvency what industry do we take over next? Well it looks as if the Democrats are going to try and save the public relations arm of the Democratic party, the newspaper industry. That way when our Taxes go even higher they can tell us that it is a great idea:
Failed Liberal Newspapers Earn Boot, Not Bailout
The struggling newspaper industry is the most likely candidate to receive the next government-funded bailout. Although the proliferation of new media has provided enormous economic challenges to traditional newspapers, firms that adhere to the highest journalistic standards continue to thrive, suggesting a bailout would save publications that are favorable to Democrats.
When last week’s employment report came in a tad better than expected, it sent a chill through the hearts of Washington’s Democrats.
If the recession ends, then the bailout frenzy will end, and it will be much harder to hand out taxpayers’ cash to political allies. With time running out on the crisis atmosphere, our hard-working public servants put in overtime last week to introduce to the public the next bailout candidate: the liberal newspapers.
Former Los Angeles Times columnist Rosa Brooks captured the mood well in her final column before joining the Obama administration. “It’s time for a government bailout of journalism,” she wrote, citing such possible steps as tax credits for newspaper subscriptions and more funding for public broadcasting. The parent company of the Times, by the way, is already in bankruptcy.
Senator John Kerry, Democrat of Massachusetts, held hearings last week to lay the foundation for a newspaper bailout. He is anxious about the fate of the Boston Globe, which is projected to lose $85 million this year, and he has argued for relaxing antitrust legislation that limits ownership of local media outlets.
Such a relaxation might allow for substantial consolidation in the news industry, which would, not insignificantly, advantage newspaper owners vis-à-vis their workers.
It seems to be acceptable in Democratic circles for an employer to take a hard line against workers, so long as that employer serves the greater political good. Which explains why nobody was dragged before an angry panel when the New York Times Co., owner of the Globe, walloped workers there.
Howard Kurtz of the Washington Post described the company’s actions thusly: “In a striking example of corporate hardball, the New York Times Co. has threatened to shut down one of its journalistic jewels, the Boston Globe, unless the New England paper’s unions agree to sweeping concessions.”
To save the newspaper, the Globe’s largest union will have to accept a deal that includes an 8.4 percent pay cut and other concessions, the Globe reported on May 8. The union will vote next month.
Relaxing antitrust rules, as Kerry supports, would only increase the bargaining power of the largest media owners.
This recession has hit the newspaper industry hard. The New York Times Co., which owns the Times, the Globe, the International Herald Tribune and 15 other newspapers, had a net loss of $74.5 million, or 52 cents per share, during the first quarter of 2009, and experienced an advertising revenue decline of almost $124 million.
Relaxing antitrust rules would only increase the bargaining power of the largest media owners.
The Rocky Mountain News and Seattle Post-Intelligencer both closed this year. These newspapers were among the top 100 in newspaper circulation in 2007, and had combined daily readership of almost 400,000.
Bankruptcies and Layoffs
The companies that own the Los Angeles Times, Chicago Tribune, Chicago Sun-Times, Philadelphia Inquirer, Minneapolis Star-Tribune and Philadelphia Daily News have all filed for bankruptcy. Newspapers that aren’t closing their doors are making steep budget cuts. Almost 9,000 newspaper jobs have been eliminated in 2009, according to a Web site that is keeping track.
Interestingly, the news isn’t bad everywhere. In a pattern that is reminiscent of Fox News’ climb to television dominance, circulation for the right-leaning Wall Street Journal increased last year.
The Internet and proliferation of new media have provided enormous economic challenges to the old model of the local paper, but some firms continue to thrive nonetheless, firms that adhere to the highest journalistic standards. That suggests there is a political force that explains the bailout urgency of Democrats. They don’t want to lose their mouthpieces.
Media for Obama
An October 2008 poll by the Pew Research Center for the People and the Press found that, by a margin of 70 percent to 9 percent, American voters “overwhelmingly believe that the media wants Barack Obama to win the presidential election.”
With numbers that lopsided, is it any wonder that newspaper subscriptions are waning? How can you trust a news source that has established bias so convincingly?
If the Democrats succeed in passing a bailout package for newspapers, the potential for political harm will be unbounded.
Think about it: Creditors of Chrysler LLC that have participated in the government’s bailout of banks played along with the Obama administration’s attempt to use bankruptcy to provide a lucrative deal to organized labor. Creditors outside the bailout program, by contrast, recognized the raw deal they were being offered.
A news bailout would create a set of newspapers that are even more beholden to the Democrats than they have been in the past. We would adopt the Pravda model of journalism.
Supporters of a newspaper bailout argue that unbiased and professional journalism is necessary for the success of our democracy. On that, they are correct. But bailing out the firms that are currently struggling will do nothing to advance truth and freedom.
Sometimes, no news is good news.
Kevin A. Hassett is a senior fellow and the director of economic policy studies at AEI.