You (S)News, You Lose

Photo by John Vachon, 1942

Conspiracies come in many forms: the attack on Pearl Harbor; the JFK assassination; the 9/11 attacks. Apparently we can add one more thing to this: the concept of supply and demand.

On a personal level, I’ve noticed it quite a bit by having conversations with my coworkers, one of whom is married to a General Motors employee. For them, a bailout for the three American automakers is a no-brainer because people need jobs, and the automakers need money to pay the employees. They’re not really interested in why the automakers need money, because that—in their view—has nothing to do with the immediate issue, that being possible layoffs. For them, businesses—whether they’re multinational corporations or struggling mom-and-pop businesses—exist for one reason: to give people jobs. When money begins to dry up, the simplistic view is not one of asking why things are failing; the simplistic view is to say that the government can just—and should—give out money. The issue of supply and demand never enters the picture.

I also hear a lot of discussion of “creating” manufacturing and industrial jobs, no matter if anyone would buy what was being manufactured or not. “Why should that matter?” they seem to wonder. After all, it’s important to “put people ahead of profits.”

The thing is, profits are what provide people with a paycheck. When there’s a demand for a product or a service, there is then an opportunity to create a supply for it. If that product or service sells well, that provides money to pay for more equipment and/or employees. If the service or product doesn’t sell—such as a General Motors vehicle, for example—and is coupled with poor management, we then have a situation of massive debt.

And now we can add one more hand that might be getting a piece of the bailout pie, regardless of supply and demand: the newspaper industry.

It’s not news (no pun intended) that print newspapers are hurting economically. More and more people are turning to the Internet for news and fewer people are subscribing to print publications. Because of this, advertisers are spending less for exposure in print publications. This has resulted in cost-cutting by the industry, including layoffs.

The solution? Well, according to Connecticut politician Frank Nicastro, the answer is government money. From a recent Reuters story:

Connecticut lawmaker Frank Nicastro sees saving the local newspaper as his duty. But others think he and his colleagues are setting a worrisome precedent for government involvement in the U.S. press.

[...]

Nicastro and fellow legislators want the papers to survive, and petitioned the state government to do something about it. “The media is a vitally important part of America,” he said, particularly local papers that cover news ignored by big papers and television and radio stations.

[...]

Former Miami Herald Editor Tom Fiedler said that a democracy has an obligation to help preserve a free press.

“I truly believe that no democracy can remain healthy without an equally healthy press,” said Fiedler, now dean of Boston University’s College of Communication. “Thus it is in democracy’s interest to support the press in the same sense that the human being doesn't hesitate to take medicine when his or her health is threatened.”

There’s more irony in Fiedler’s comment than there is water in the Atlantic Ocean. The democracy that he wants to help “remain healthy” is the very one that allowed print media to take a backseat in the first place. Perhaps, however, he thinks that the people—the consumers, that is—and the government are not the same “democracy.” He says that “it is in democracy’s interest to support the press.” That’s just it: the democracy didn’t want to support the press by buying the print papers, and now he wants his version of the “democracy”—the politicians—to bail them out. Oops; I mean “support” them. My mistake. How silly of me.

Just imagine if the print newspaper industry does get a handout. How many print newspapers would be willing to publish any stories that would show certain politicians in a negative light? If Frank Nicastro managed to secure some government funds for a newspaper, do you seriously think that that same paper would ever publish a negative story about him? I’m curious to know how “healthy” Tom Fiedler would find a situation such as that. What’s more is that Nicastro might help to hurt the print newspaper business even more if he obtains tax dollars as “support”: when people doubt what they’re reading, they’re not going to continue to buy the papers. It could very well make bloggers even more prominent in the world of current events and information.

The fact is that things change. Automobiles replaced horses and carriages. E-mail took a huge bite out of the U.S. Postal Service. Computers replaced typewriters. CDs replaced records and cassettes. MP3s, sadly, have taken a huge bite out of the CD market (showing that consumers don’t give a damn about sound quality). Each of these things are examples of how times change and people must adapt. The print media industry—and the American automakers, for that matter—can’t be exempt from progress or consumers’ changing tastes. Consumers, after all, helped to build them up. Now consumers are the ones who are in control of their failure, along with too many cases of gross mismanagement.

Supply and demand are real things and jobs aren’t things that are simply invented by the government to be nice to people. Likewise, companies don’t start just to give people jobs. If newspapers fail, customers allowed it to happen.

Reference

MacMillan, Robert. “Government Aid Could Save U.S. Newspapers, Spark Debate.” Reuters. 31 Dec. 2008.

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