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A Voice from Fly-Over Country
October 20, 2009

Government: You Can’t Vote with your Pocketbooks!
by Robert L. Hale

MINOT, NORTH DAKOTA — Speaking to editors of the Pittsburgh Post-Gazette and Toledo Blade, President Obama said, “I haven’t seen detailed proposals yet, but I’ll be happy to look at them.” He was responding to newspaper editors looking for bailouts or tax breaks. The President acknowledged his interest in subsidizing newspapers unable to deal with readers not buying their papers.

Senator Ben Cardin (D-Md.) has introduced a bill for consideration by the U.S. Senate, S.673, titled the “Newspaper Revitalization Act.” The measure would give tax deals to news organizations if they restructure as 501(c)(3) corporations -- in short, as nonprofits. Sen. Barbara Mikulski (D-Md.) is a cosponsor.

The free press is a critical institution in our political system. Making it into 501(c)(3)s effectively takes it out of the political reporting and commentary business. These 501(c)(3)s are not permitted to spend more than a small fraction of their income on political speech and are strictly regulated when it comes to expressing opinions on political issues. Entities with such designations are given tax breaks , but these breaks come with government controls — a death knell for a free press.

Why are these news organizations in need of bailouts or tax exemptions? According to the bill’s sponsor, the causes are the economic downturn and dwindling advertising revenues and dramatic drops in subscriptions. Yet ad revenues follow subscriptions. When people chose not to subscribe to a paper, it is because they do not believe they are getting good value. This is the essence of a free market. Producers who do not provide what people want, or who fail to do it efficiently, go out of business.

However, Congress and this administration are happy to give your money and mine to certain entities to continue when the market says otherwise. This is especially the case where political capital is being purchased. Subsidies or tax breaks to news organizations will effectively destroy their objectivity and will subject them to pressure to not offend the provider of the goodies.

Obama said, “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.”

Apparently, some in Congress and the administration think that directing taxpayers’ dollars to news organizations will ensure fact-checking, putting stories in context , and offering responsible opinions.

The fact that the President comforted these editors with his assurance that he is “happy to look at” steps to subsidize their faltering businesses should frighten us all. A statesman would have made it clear that those coming hat in hand seeking taxpayer-funded bailouts will be turned away. Instead, the President gave these beggars credibility.

Will taxpayers ever say, “Enough!”? Those who do not believe that with government money come controls should beware. The financial and auto industries have learned this lesson the hard way. Freedom of the press is at risk. If these organizations take taxpayer s’ money, the bureaucratic offices of government will direct what they do and say. There will certainly be another czar to oversee such a program. Those who wish to see the outcome should read George Orwell’s Animal Farm or Ayn Rand’s Atlas Shrugged. Better yet, they can look at Russia, Iran, Columbia, and Venezuela.

These bailouts are a vain attempt to sustain a status quo that is unsustainable. The only certain outcome is the waste of billions of taxpayers’ dollars and a lower standard of living for hardworking Americans.

While it is difficult for companies to adjust to changing markets, tastes, and consumers who no longer want their products, government subsidies cause far more harm than good. The sooner organizations adapt and change, the sooner everyone will be better off.

Bills such as the Newspaper Revitalization Act are nothing more than a veiled attempt to put control of newspapers in the hands of a politically motivated bureaucracy. All the rhetoric to the contrary is just that — rhetoric. There is nothing “researched,” objections need no “context” to be understood, and “opinions” supporting the proposed legislation distain freedom of the press.

Will our new bailout government let businesses fail and permit people to vote with their pocketbooks? Or will we again be taxed to support those we would not choose to support?

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A Voice from Fly-Over Country is copyright © 2009 by Robert L. Hale and the Fitzgerald Griffin Foundation. All rights reserved.

Robert L. Hale received his J.D. in law from Gonzaga University Law School in Spokane, Washington. He is founder and director of a non-profit public interest law firm. For more than three decades he has been involved in drafting proposed laws and counseling elected officials in ways to remove burdensome and unnecessary rules and regulations.

See a complete biographical sketch.

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