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Jun 11, 2010

Saving newspapers, Cobb & Co, and the whaling industry.

At the time of the US bailouts of banking, the motor industry, and debtors there was considerable speculation as to the possibility of extending it tom the newspaper industry. This has not happened but it is in the wind. The Federal Trade Commission (FTC) is considering several ways to help the struggling newspaper industry, but Americans strongly reject several proposed taxes to keep privately owned newspapers going.

Rasmussen Reports national telephone survey indicates overwhelming opposition among voters towards a (3%) tax on monthly cell phone bills to help newspapers and traditional journalism, a proposed five percent tax on the purchase of consumer electronic items such as computers, iPads and Kindles, and a proposal to tax web sites like the Drudge Report to help the newspapers.

Among ideas other than straight taxes the FTC is flying are, establish a “journalism” division of AmeriCorps, increase funding for the CPB, establish a National Fund for Local News, provide a tax credit to news organizations for every journalist they employ, establish Citizenship News Vouchers, and provide grants to universities to conduct investigative journalism. There is a limit to the university investigative journalism, as most of the things Bush and Cheney did are already out there, although breaking up Al Gores marriage has yet to be fully explored.

Throughout history industries have risen over the top of other industries and eventually failed and disappeared. The reason for this is human innovation, which has constantly come up with new ideas, new methods, and new technologies, which have revolutionized human progress.

While the news media tend to claim, “It is not our fault, we had no reason to think the Internet would become popular, it’s the economy, we didn’t do anything wrong,” the fact is that they have not moved with the times and are being superseded. We are currently in evolutionary times and over the next ten years or so something completely foreign to all we now know or understand may develop.

This may mean the death knell of online news as we have it now. Should HuffPo Drudge and Redstate be subsidized if this happens?

The industrial revolution destroyed many cottage industries, but in the process produced those products which were so expensive that in many cases could only be afforded by the rich, cheaply enough that the poor had access to them. It also produced new products, which were unimagined at the time.

The whaling industry was effectively destroyed by John D Rockefeller, who through innovation and efficiency produced kerosene so cheaply that it replaced whale oil for lighting. In doing so he removed the main market of the whalers and saved the species from extinction. It is interesting to speculate whether there were calls for government assistance to preserve this vital industry, and preserve the jobs of the seamen who would starve in unemployment at the time.

Similarly, modern transport wiped the old horse drawn coaches off the road. Just think of it, a vital industry condemned to oblivion, and after providing a great service for so long. There must have been those who, like the FTC felt that the government should step in and save it.

Times change, ideas change, and maybe the print media will find an economic niche where they can continue to be relevant. I hope so, I rather like my papers.

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