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Let Newspapers Fail!

The commentary below is for the benefit of our readers from opinion makers and writers not associated with Euro Pacific. We do not guarantee the accuracy and completeness of third-party authored content. Opinions expressed are those of the writer, and may or may not reflect those held by Euro Pacific, or its CEO, Peter Schiff.
Wayne Allyn Root
September 25, 2009
Members of Congress have recently suggested that the federal government should undertake a billion dollar newspaper bailout. President Obama seems interested. Really? Why? Because the other bailouts worked out so well? Congressional investigators recently disclosed their doubts that AIG will ever be able to payback its government loans. At the same time, economists suggest that at least $20 billion of the government loans to U.S. automakers are lost forever. GM and Chrysler now constitute a $100 billion welfare program which just happens to sell cars (that no one wants). Meanwhile the economy continues to flounder despite the $800 billion economic stimulus package (a giveaway to more fat cat corporations and Obama contributors). This disaster just keeps on growing – because government is involved.

Now we're discussing billion dollar government loans to newspapers? Who suggested that idea? Let me guess; perhaps newspaper publishers whispered in the ears of Democratic Senators and Congressmen who have accepted their contributions and editorial endorsements over the years? And what did they promise in return for a bailout? More contributions? More endorsements? Did they promise favorable news coverage of the pet programs of Obama and the Democratic Congress? Perhaps they promised negative news coverage (or complete blackouts) of the massive Tea Party rallies and protests gathering steam across America. Isn't that called “pay for play?” Doesn't the idea of newspaper bailouts threaten the very image of media impartiality and independence? Who is going to report on this scandal if the entire media is complicit?

Bailouts are symbolic of government at its worst – showcasing incompetence, corruption, favoritism and arrogance. Let's start with the simple idea that this is all unconstitutional. The Constitution bans government from getting involved in private enterprise. PERIOD. But setting aside that little problem, common sense alone should frown upon the bailouts. The free market and consumers are the best judges of who survives and who thrives – not government.

Let's look at the auto industry. Perhaps there are simply too many auto brands and dealerships. Perhaps thousands of auto dealerships need to go out of business in order to heal the industry and jump-start the comeback. Perhaps reducing 5,000 auto dealerships nationwide to 2,500 would make the survivors healthier, stronger, and more profitable. Perhaps if the auto industry contracted, the surviving players would create even more jobs in the long run. No pain, no gain. Perhaps by keeping failing companies alive, we are hurting consumers and costing more jobs.

When airlines like TWA, Eastern and Pan Am went out of business, consumers simply turned to different brands, such as Southwest. When Zenith went out of business, consumers simply bought more Sonys. Did life as we know it cease to exist? Of course not! In the long run, these business failures were healthy for the system. Consumers benefited from newer and less expensive alternatives. In any case, it isn't government's job to pick winners or prevent failures. History proves politicians and government bureaucrats are poor (and corrupt) decision-makers.

What holds true for automakers holds true for all businesses in a capitalist economy. Would the world have survived the loss of AIG? Certainly. Other insurance companies would have taken over their niche, and perhaps done a better job. We survived the loss of Wall Street behemoths such as Lehman Brothers, Bear Stearns and Merrill Lynch. Dozens of banks have failed in the past year, yet our banking industry has survived. Why didn't we save each of them? Casino giants like MGM’s Mirage and Las Vegas Sands’ Venetian teetered on the verge of bankruptcy and insolvency. Yet, Las Vegas survived. Even lawyers are struggling in this terrible economy. The contraction in the legal profession will put hundreds of law firms out of business, costing thousands of lawyers their jobs. Should we bailout lawyers to save the economy? (To the contrary, my educated guess is that the world will be a better place with fewer lawyers).

The same holds true for newspapers. Perhaps there were far too many newspapers in this country in the first place. Perhaps there weren't enough advertisers to go around. Perhaps it's healthier for the newspaper industry if a few hundred (or even a few thousand) newspapers go out of business. Perhaps the ones who survive will be stronger. Perhaps the failed newspaper companies will be replaced by media mavericks with better business models.

Or maybe newspapers are a dying business, slated for extinction. Within a few short years, we may be all getting our news exclusively from the Internet. What's wrong with that? Isn't that up to consumers to decide? Why should government artificially prop up a failing industry that the consumer no longer wants to buy or read? That's the point of capitalism: if consumers wanted to read those newspapers, they wouldn't be going out of business. Why is it government's job to prop up a company that is rejected by consumers in a free market economy?

But the biggest (and worst) danger of all in a possible newspaper bailout is the potential for political corruption and censorship. If President Obama saves the New York Times, will that newspaper ever write a negative editorial about Obama? (Of course, it never has and never will, but that's another commentary about left-wing media bias). If the Democratic Congress saves newspapers in Seattle, Chicago, New Orleans, Boston and Philadelphia, would it surprise you to think that the editors of those newspapers will only endorse Democrats for Congress as a thank you to their benefactors? Or vice versa: perhaps a Democratic Congress will only choose to bailout newspapers that have reliably endorsed Democrats for decades. The potential for corruption, bias and censorship is startling. The potential to silence freedom of speech based on partisan politics and what can only be described as “open bribery” is enormous.

The bailout of banks, insurance companies, and automakers was unfair, immoral and unconstitutional. But the potential bailout of newspapers is the worst mistake of all. The very underpinnings of America – free speech, an unbiased and independent media, separation of editorial opinions from financial dependence – are all at stake. But perhaps that's exactly what President Obama and the Democratic Congress are banking on. After all, once the Obama cabal controls the media, the rest of their plan falls easily into place.

Wayne Allyn Root was the 2008 Libertarian Party vice-presidential candidate. His new book is entitled,“The Conscience of a Libertarian: Empowering the Citizen Revolution with God, Guns, Gambling & Tax Cuts.” For more of Wayne's views and commentaries, please visit his web site at: www.RootForAmerica.com.

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