Libertarian Seattle Times calls for government handouts

In recent editorials, the Seattle Times editorial board and publisher have called for government aid to help save locally-owned journalism, which has suffered due to the economics of the internet, media consolidation, Wall Street predation, and, recently, the covid-19 virus.

In a full-page letter to readers (Sunday, Aug 9), publisher Frank A. Blethen called for the creation of a “Free Press Super Fund,” to be financed by fees on the major internet giants (Facebook and Google). Likewise, Blethem calls for anti-trust action against the internet giants and for enforcement of public service requirements on them.

These calls for government assistance and regulation are ironic coming from a publication known for its libertarian views. But they illustrate the need for government action to fix the inequities of the market system, which doesn’t always allocate resources in a fair or socially advantageous way, and which needs help from the government in times of crisis.

Corporations and Wall Street came begging to Uncle Sam for bailouts in 2008, when the housing market crashed and banks failed. Now they’re begging again.

So much for free-market capitalism.

But one can make a plausible case that the challenges facing journalism reflect, not a fundamental failure of free-market capitalism, but rather a failure to adequately regulate the monopolistic and anti-competitive practices of corporations. The 2008 market crash could probably have been prevented if Congress had not deregulated financial markets, e.g., by the repeal of the Glass-Steagall Act. Likewise, local journalism would be in much better shape if the government had enforced anti-trust laws on the internet giants, and if it did a better job at policing the sharing of copyrighted content.

On the other hand, one can also argue that — given the nature of information sharing on the internet, and its economies of scale — locally-owned, for-profit journalism will never be able to compete without substantial government aid. The Founding Fathers realized the importance of a free press and subsidized its operations by making a postal service that would keep postage rates low.

This conclusion, that journalism needs government assistance, is not cause for despair. The police, the courts, public education, the military, and the Veterans Administration are already funded by taxation. Journalism is as necessary for a healthy democracy as those institutions.

Likewise, no first-world nation has a health care system based on a pure market approach. One reason the U.S. has the highest cost health care system in the world is its hyper-reliance on the market to set prices. (People are willing to pay all their savings to save their lives; often in America they do.) Hospitals used to be mainly non-profit. A pure free market system has always been a myth. Historically, corporations have gotten substantial aid from government research, spending, trade policies, tax breaks, and wars.

As Blethem points out, if the government subsidizes journalism, the challenge will be to direct tax money to worthy journalistic enterprises in a way that avoids censorship, favoritism, and extremism. We don’t want politicians deciding which views are legitimate. But nor do we want to allow disinformation and extremism to thrive. Which journalistic enterprises deserve subsidies? The Seattle Times? The Seattle P-I? The Stranger? KOMO TV? KIRO TV? The Bellevue Reporter? Fox News affiliates? Huffington Post? How about newspapers that recently shut down?

In his letter to readers, Blethem expresses support for the bipartisan bill H.R.7640 (“To provide tax incentives that support local newspapers and other local media, and for other purposes”). The text for this bill is not yet available on Congress’s website (at Not a surprise! The crafting of such a bill needs to answer the substantial challenges outlined in the previous paragraph.

But this issue has been handled, imperfectly, by how government funds the courts, the police, the military, and public schools.

The free market is imperfect. So is the government. We need each to balance the other.

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