Bad time to be losing newspapers

With our attention diverted to the tragicomedy of GM and Chrysler, one or two major newspapers seems to dying each month.  As taxes increase and government expands as a percentage of GDP, this is worrisome.  Mancur Olson wrote that the fundamental cause of economic stagnation in a rich country was special interest groups getting the government to do them a favor at the expense of dispersed consumers.  Stories about government handouts aren’t visually interesting and don’t work well on TV news.  A story about some sort of sweetheart deal for a particular group would usually require a lot of numbers to be understandable and therefore wouldn’t work well on radio.  The local newspaper may be the only representative of the average taxpayer or consumer on an issue where a special interest is lobbying state or local government.  How much is at stake?  State and local governments spend about $3 trillion per year, not too different from federal spending ($4 trillion; source).

If need be, we could get cars from China and India.  Without local newspapers, though, how will consumers and taxpayers find out how seriously they are being bled?  A guy in Shenzen or Bangalore cannot be an effective reporter here.  A typical example of good local reporting is this New York Times story on the Long Island Railroad, It required four reporters and ran to 7 pages.  The story includes facts about how some train drivers earned $215-277,000 per year due to hard-to-understand work rules, how more than 90 percent of L.I.R.R. retirees, most in their 50s, were classified as disabled and received additional pensions (totaling up to $170,000 per year).  Despite the billions of dollars in extra costs to taxpayers, the cost of this disability pension festival to most individual taxpayers is never going to be more than a few thousand dollars per year, not enough for them to spend a year digging around in public records.  Even if an individual taxpayer did discover the same facts and published them on a personal Web site, would he or she attract the attention of public officials?  (so far Mancur Olson has proved to be correct; various elected officials promised to investigate while the scandal was in the public eye, but there don’t seem to have been any conclusions or changes in policy)

When the dust settles on our downsized economy, we may we may find that the loss of hundreds of local newspapers hurts long-term growth more than the loss of a few automotive brands.

Question for readers:  What could replace the local newspaper as a check to special interest power in state and local government?  The replacement needs to generate enough money for a comparable number of full-time reporters.  I don’t think that the answer is as simple as “an online newspaper” because ad revenues right now aren’t strong enough to pay for a full staff of reporters.

14 Comments

  1. Rob Schoening

    April 2, 2009 @ 4:08 am

    1

    Mark Cuban had some interesting thoughts about this with regard to sports. His claim was that sports franchises need good local sports writers to ensure that there is a sense of community surrounding the team. His claim was that it might make sense for the teams to fund a small group of sportswriters….that it is better business than the same dollars fed into advertising.

    Doesn’t apply to local politics, of course, but it does suggest the potential for completely different streams of funding/revenue than we’ve seen in the past.

    Here’s another crazy idea: Craig Newmark.

  2. John Oglesby

    April 2, 2009 @ 8:15 am

    2

    Phil,
    It seems a big part of the problem is that local newspapers are not truly local. They are often owned by larger corporations, based in some other city, and decisions are not made by people in the community where the paper is distributed. Also, with so many papers getting a great deal of their content from wire services further dilutes local content, which spirals into loss of subscribers, loss of ad revenue, loss of reporters.

    I don’t know if there is a solution. I hope for one, for the very reasons you state.

  3. Alan Wilensky

    April 2, 2009 @ 8:55 am

    3

    I would like to draw special attention to Mr. Steve Rosenberg, North Shore Bureau reporter for the Boston Glob. Steve is out there every day, digging the local stories, and some bigger ones, too. The Glob is doing its best to cut the best and most experienced staff, moving in very young, green reporters (that’s not all bad), and generally screwing up. The regional sections have suffered.

    Yet, Steve R. has dodged the bullet. Keep it up. One man isn’t much a of team to cover the entire North Shore.

  4. fortes

    April 2, 2009 @ 10:02 am

    4

    If we, as a society, choose to decide that newspapers are a greater good, then we should run it like other public goods: through public money.

    We fund most roads and infrastructure (and now banks) through government money, why not the newspapers? We already have public broadcasting.

  5. Rob Sama

    April 2, 2009 @ 12:48 pm

    5

    You mean local reporting like this?

    http://www.universalhub.com/node/24250

    there’s plenty of it going on, mostly by small-time entrepreneurs and volunteers who care about their communities. In many if not most cases, they’re not objective, i.e. they’re opinionated. But they’re out there. Also check out Blogging Belmont. http://bloggingbelmont.com/

  6. Phil Wise

    April 2, 2009 @ 1:30 pm

    6

    As someone said recently, the problem isn’t the lack of newspapers, it is the lack of journalism.

    How we pay for it, who controls it and how we access it all need to be fixed, but there is no fundamental reason why the future of journalism has to be modeled around 20th century newspaper publishing.

  7. Jim

    April 2, 2009 @ 4:17 pm

    7

    Phil,

    I echo John’s comments – local newspapers are no longer local. I recently cancelled my subscription after more than 20 years. The past several years saw the “local” paper charge significantly for obituaries (which subsequently became a non-existent section of the paper) and “combine” town/county news with state news so that only one local section now exists (2 pages long not counting ads). The rest of the paper is from the wire and it’s news that was available online the day before.

    The problem with Rob’s solution is that whoever “pays” for the reporters will demand favorable coverage. This has been an accusation leveled at the Boston area newspapers regarding the Red Sox for years.

    I wish someone had an answer to your question, because I certainly don’t.

  8. Bob

    April 2, 2009 @ 8:58 pm

    8

    This reminds me of the old saw about whether a tree falling in the forest makes a sound if there is no one there to listen. The newspapers have a universal left wing bias and reporters see themselves as advocates for their left wing causes rather than tellers of the facts. So, is erroneous and biased news better than none at all? I say no because I believe in the free market. If there is a demand for the news someone will figure out a way to make money from it. Right wing talk radio is doing fabulously (google-news on “talk radio Hewitt” for his piece).

    The main danger is that the Democrats will create state owned newspapers analogous to PBS and NPR. Controlling the news media is too valuable for them to let left wing newspapers disappear. News will continue to ghettoize as talk radio is now with the left wing Pravda like state media like NPR and free enterprise commercial radio.

    This is already starting. Pelosi wants give newspapers special tax breaks. Outright subsidies are not far behind.

  9. Russil Wvong

    April 3, 2009 @ 1:32 am

    9

    The Huffington Post is setting up a fund to support investigative journalism, enough for a staff of 10 journalists. But that would likely only cover national stories, not state and local stories.
    http://www.cbc.ca/arts/media/story/2009/03/29/huffingtonpost-investigative-team.html

  10. Tom

    April 3, 2009 @ 1:45 am

    10

    I believe the San Jose Mercury News initially launched an online version in 1996 and charged $20/month for access. This obviously did not last and to my knowledge only the specialty online journalism sources like WSJ have a user base willing to pay.

    I do not believe the masses will ever be willing to pay for online news so we have to come up with a way to make online journalism more profitable so we can support rooms of reporters and photographers. I agree with Philip in that we could end up in bad shape if we lose these large, well backed news departments.

  11. patrick giagnocavo

    April 3, 2009 @ 8:47 am

    11

    It might be useful to read Michael Crichton’s article “Mediasaurus” written in the mid-1990s. Most newspapers just recycle news and editorials from AP, Reuters, and the big papers: for example, most of the editorials are from EJ Dionne, George Will (both WashPost), Cynthia Tucker (Atlanta Journal-Constitution) etc. You can get all that online for free, and you don’t get black ink on your hands either.

  12. PaulS

    April 3, 2009 @ 5:42 pm

    12

    I am gleefully watching the demise of the Boston Globe. The problem with newspapers is they do not report any more, they advocate in a very partisan fashion. Say what you want but this country is still pretty much split down the middle politically. If they would leave the opinion in the editorial pages and report facts rather than conjecture I think their circulation issues would turn around. Unfortunately publishers like Sulzberger seem intent on riding their half dead horses into the ground.

  13. waylon

    April 7, 2009 @ 10:11 am

    13

    weekly local papers.

  14. Bob Stepno

    May 18, 2009 @ 11:29 am

    14

    I like the local weeklies idea too. See http://newhavenindependent.com

    Meanwhile… from my in-box:

    “Two universities and the Committee of Concerned Journalists are bringing together journalists, researchers, scholars, entrepreneurs, technologists, regulators and the public in Washington, D.C., on May 27 for a “critical convening” on the future and sustainability of journalism and America’s newspapers.

    ONE DAY: Wednesday, May 27, 2009
    The George Washington University
    805 21st St. NW / Washington, D.C.

    DETAILS/REGISTRATION: http://www.journalismtrust.org
    TWO-PAGE FLYER: http://tinyurl.com/cymuke

    “The news about the news is jarring,” says Bill Densmore, a fellow at the Donald W. Reynolds Journalism Institute (RJI). “It includes hearings on Capitol Hill, new ideas about charging for content, services that profoundly affect user privacy, huge business losses among icons of American journalism and thousands of layoffs.”

    “From Gatekeeper to Information Valet: Workplans for Sustaining Journalism,” is set for Wed., May 27, from 10 a.m. to 4 p.m. at the downtown Washington, D.C., campus of The George Washington University. Topics to be covered include privacy, advertising, personalization and subscription networks for web news and services.”

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