Wednesday, February 24, 2010

The Fourth Estate in Trouble

News today that The Oregonian is laying off news room staff is deeply troubling.  Why?  Well, let me give you just one example: Harry Esteve's excellent reporting on the cost of the business energy tax credit (BETC) and the subsequent legislative actions to reign in the runaway costs of the program as a direct result.  In other words the role of the press as a government watchdog.  I study too many developing countries rife with corruption to feel comfortable with the shrinking press corps in the US.

The newspaper business has always been a private concern in the United States and for a very good reason, if the press is truly the fourth estate it cannot be beholden to the government.  And yet, in broadcast media, we subsidize news gathering though the Corporation for Public Broadcasting and feel comfortable that, in general, public broadcast news is not unduly influenced.   But if news reporting is a public good (and it meets the test of being to a large extent non-rival and non-excludable) we know full well that private markets will provide too little.  So how much longer can we leave the whole business to the private market?

Today's announcement by The Oregonian is an example of the struggle of the private market to provide a socially optimal amount of reporting and oversight.  At a time when politics appear to be more polarized than ever, when beliefs seem to trump facts, I despair over the fate of the newspaper industry.

[Note, I know that these last two impressions are the subject of some debate - it may not be true historically, but it does seem to me that the more that simple facts are disseminated the better]

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