I said it about the banks, I said it about the car companies, and it goes double for newspapers: Capitalism without failure is like Christianity without Hell.
I have heard for the past year that capitalism has failed. What has failed is our understanding of capitalism. Investment banks shouldn't leverage themselves 40-to-1. No government oversight caught this problem. But the market did. And when it was revealed that the emperor had no clothes, the investment banks failed for their hubris and stupidity, only to be put on life support by the even greater hubris and stupidity of our government.
Every time I hear a politician talking about how there was insufficient oversight of the banking industry, I hear it as an admission that planned economies can not work. Because there can never be enough oversight in a free and dynamic market. There is too much to oversee.
The housing market was an artificial bubble for much of the past decade. So what happened? It burst. In the face of everything that the government (Republicans and Democrats alike) tried to do to continue to prop it up and inflate it, it burst. It was a lie and thanks to the market, Truth prevailed. The markets could no longer withstand the pile of lies that the bubble was built on. Once the first domino was tipped, everything built on that shaky ground came collapsing down.
When a business fails, it is the market telling it that its services are no longer necessary. Is it painful? Yes. Does it effect us in ways we do not like? Absolutely. But that doesn't mean we can continue to build on shifting sand, just because we liked the view. We must learn from failures, and build on higher ground. Businesses fail for a reason. Find the mistakes that caused that failure and correct for them. Build a better business. When your immune system kills off an infection, don't try and save the virus.
So Senator Cardin wants to save newspapers. Not journalism. Not news media. Papers.
Because newspaper profits have been falling in recent years, "no substantial loss of federal revenue" was expected under the legislation, Cardin's office said in a statement.
Anyone believe that? Does that statement even make sense?
"We are losing our newspaper industry," Cardin said. "The economy has caused an immediate problem, but the business model for newspapers, based on circulation and advertising revenue, is broken, and that is a real tragedy for communities across the nation and for our democracy.
Newspaper subscriptions and advertising have shrunk dramatically in the past few years as Americans have turned more and more to the Internet or television for information.
The business model is broken. News is important to America, and many organizations like Politico and Slate are finding ways to support themselves with online ad revenue. As a blogger, I have a deeper vested interest in protecting good journalism more than most. But I won't take your money to do it.
More importantly, I take exception to the idea that our democracy needs a protected delivery medium to thrive. Good journalism isn't only to be found on paper. We need to realize that "news" and "paper" are separate words. A free people, making free decisions, have decided that paper is no longer the preferred delivery method for their news. So Senator Cardin proposes that we tax them to build a mandatory market, just because newspapers have become accustomed to a certain profit level that can no longer be sustained when exposed to direct competition from far more efficient online advertising.
If Cardin were in office 100 years ago, he'd probably support a tax exemption for buggy whips.
h/t K-Lo, a phrase that William never though he'd see at the tail end of one of my posts.