All the News That's Fit to Subsidize

Even after struggling at small papers, I believe the best protection for press freedom lies in private property.

OCTOBER 21, 2009, 8:35 P.M. ET
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By SETH LIPSKY

Leonard Downie, who stepped down a year ago as executive editor of the Washington Post, was famous for declining to vote as a matter of journalistic principle.

"I decided to stop voting when I became the ultimate gatekeeper for what is published in the newspaper," he once explained. "I wanted to keep a completely open mind about everything we covered and not make a decision, even in my own mind or the privacy of the voting booth, about who should be president or mayor, for example."

This week Mr. Downie is in the news for declaring in favor of government subsidies for the press. He has written a report, commissioned by the Columbia Journalism School, called "The Reconstruction of American Journalism," which recommends legislation and regulatory changes to enable news organizations to operate as nonprofits or hybrids between limited liability companies and charities. The report also recommends that the government use money from various fees to subsidize the news business.

The report focuses on what it calls "accountability journalism." According to the dean of the Columbia Journalism School, Nicholas Lemann, in a note published on the CJR Web site, Messrs. Downie and co-author Michael Schudson make clear that the Internet "has brought the days when privately owned newspapers could be the main bearers of this reporting function to an end."

The authors insist they are not recommending "a government bailout of newspapers, nor any of the various direct subsidies that governments give newspapers in many European countries," even though, they reckon, "those subsidies have not had a noticeably chilling effect on newspapers' willingness to print criticism of those governments." They acknowledge that most Americans distrust government involvement in reporting and say they share it. But they write that this "should not preclude government support for news reporting any more than it has for the arts, the humanities, and sciences, all of which receive some government support."

They say there's been "a minimum of government pressure in those fields," though they note the exceptions, such as when the National Endowment for the Arts came under fire in the 1990s. The authors assert that "any use of government money to help support news reporting would require mechanisms, besides the protections of the First Amendment, to insulate the resulting journalism as much as possible from pressure, interference, or censorship." They propose that the government siphon money into the news business from the Federal Communications Commission's surcharge on phone bills. They suggest the revenues be tapped for a Fund for Local News, which could direct the money to "worthy initiatives in local news reporting."

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Martin Kozlowski
The report suggests they would fund "categories and methods" of reporting, rather than individual stories or reporting projects. It likened the way Local News Fund Councils would operate to the ways State Humanities Councils have been in business since the 1970s—nonprofits whose volunteer boards have, in some places, gubernatorial appointees, all serving limited terms. When I asked Mr. Downie for more detail on what he had in mind, he said he envisioned government money more for innovation than continuing operations, though he also suggested that grants could be renewable.

Mr. Downie has stepped onto an exceptionally slippery slope. It's a view I've reached after 20 years working almost constantly to raise private capital for independent, privately-owned newspapers. One was the Forward, the weekly newspaper covering the Jewish beat that was launched in the 1990s on the foundation of the famed Yiddish-language broadsheet known as the Jewish Daily Forward. The other was The New York Sun, which was launched in 2002 to try, among other things, to seize the local beat from which the New York Times was retreating as it sought to become a national newspaper.

Though those were joyous decades in a happy newspaper life, I don't mind saying there were often desperate days. There were weeks at the Forward when its chairman, Harold Ostroff, and I basically covered the payroll with an American Express card. At the Sun, I was once warned by a lawyer that if the investors didn't come through, officers of the company could be held personally liable for any unpaid payroll taxes. (There were no unpaid taxes, and the investors did come through.)

One thing that kept me going was the prospect that at least some of our competitors, who were also losing money, might crack before we did. The notion that any of them might be sustained by government subsidies strikes me as profoundly contrary to a free press. In the event, the Sun folded without government help.

I take no comfort from the analogy the authors of this report draw with government funding for the arts. In New York City, there came a time when the leaders the voters entrusted with their tax money concluded that what was being done with it in the arts was so abhorrent they tried to stop it. This happened in 1999, when Mayor Rudy Giuliani confronted the Brooklyn Museum over its display of a depiction of the Madonna that had been splattered with elephant dung. A federal court wouldn't let the city stop funding the museum.

What would happen today if some modern-day version of Jay Near's "Saturday Press," an anti-Semitic, anti-Catholic, racist newspaper issued during the 1920s, were to look for innovative funding by one of these state councils today? Minnesota tried back then to suppress Near's paper as a nuisance. The U.S. Supreme Court, in Near v. Minnesota (1931), protected his freedom from prior restraint. It's one thing for the Supreme Court to say a Jay Near can't be stopped in advance from publishing on his own dime. It would be another to use state power to force the rest of us to pay for it whether we want to or not.

Even if one could get around this sort of thing, I've come to the view that the real protection of press freedom is in the idea of private property. Press freedom in Soviet Russia was lost precisely on this issue when, as American journalist John Reed told the story in his famous book, "Ten Days that Shook the World," a proposal was put on the table to restore the press freedom that had been suspended on the first day of the Bolshevik revolution. Lenin shouted it down with a diatribe about how that would mean restoring to capitalists privately owned printing equipment, paper supplies and ink.

I don't mean to suggest, in any way, that Mr. Downie is a Bolshevik. I do mean to suggest that the best strategy to strengthen the press would be to maximize protection of the right to private property—and the right to competition. Subsidies are the enemy of competition, and as the newspaper industry flails around for a solution, I can't help but think of the hapless Roscoe Filburn.

He was a farmer in Ohio who had the misfortune to be growing wheat during the 1930s, when subsidies were brought in for farmers. With subsidies came restrictions on how much wheat one could grow—even, Filburn learned in a landmark Supreme Court case, Wickard v. Filburn (1942), wheat grown on his modest farm. Years later we have fewer family farms and more industrial farms vying for vast federal subsidies.

Could such a thing happen in news? Speaking as one entrepreneur who has tasted failure in the news business, let me say that if government subsidies for news gathering ever come up for a voter referendum, I hope Mr. Downie, a great editor to be sure, stands on his original principles and stays home.

Mr. Lipsky, a member of the adjunct faculty at the Columbia Journalism School, is the author of "The Citizen's Constitution: An Annotated Guide," which will be published later this month by Basic Books.

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