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A Media Welfare State?

Progress Snapshot
Release 6.12, July 2010

by Adam Thierer*

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[Originally published in City Journal on June 28, 2010]

Imagine a world of "post-corporate" newsrooms, where the state serves as the primary benefactor of the Fourth Estate. Billions flow from bureaucracies to media entities and individual journalists in the name of sustaining a "free press." And this new media welfare state is funded by steep taxes on our mobile phones, broadband connections, and digital gadgets.

Sound Orwellian? Well, it's the blueprint for a press takeover drawn up by Robert W. McChesney and John Nichols in their new book, The Death and Life of American Journalism. McChesney, the prolific neo-Marxist media scholar who teaches at the University of Illinois at Urbana-Champaign, and Nichols, a journalist with The Nation, aren't shy about their intentions. Along with Free Press, the absurdly misnamed regulatory activist group they co-founded, McChesney and Nichols outline a self-described "radical" agenda for what they hope will become a media "revolution." And, shockingly, some folks in the Obama administration are listening.

McChesney and Nichols model their $35 billion annual "public works" program for the press after the Works Progress Administration of the New Deal era. Their media WPA would include a "News AmeriCorps" for out-of-work journalists, a "Citizenship News Voucher" to funnel taxpayer support to struggling media entities, a significant expansion of postal subsidies, a massive new subsidy for journalism schools, corporate welfare for newspapers sufficient to pay 50 percent of the salaries of all "journalistic employees," and more. Using its growing lobbying muscle in Washington, Free Press promotes the McChesney-Nichols plan under the framework of a "National Journalism Strategy," a veritable industrial policy for the press that resembles a Soviet-style five-year plan.

McChesney, Nichols, and the media reformistas at Free Press rest their case for "massive public intervention" into the news business on several dubious assertions: commercial journalism is dying, and nothing can save it; news has always been a "public good" and would be better provided through noncommercial means; and America has a long history of public subsidies for the press—even the Founders would endorse an expansive role for the state to "save the news."

That last claim is perhaps the most audacious. McChesney and Nichols spin a rich revisionist history and ask us to believe that the Founders—especially Jefferson and Madison—were practically media Marxists, enthralled with public subsidization of the press. They base that claim entirely on the existence of postal subsidies. Apparently, because we've had reduced rates for media mail since the Republic's early days, we should believe that the Founders would welcome a wholesale government takeover of the press. But a modest postal subsidy for press materials doesn't suggest that the Founders believed government should be micromanaging or massively subsidizing media. The language of the First Amendment—"Congress shall make no law … abridging the freedom of speech, or of the press," confirms that. Having rebelled, in part, against British restrictions on free speech, the Founders' prime directive toward the press was not subsidization, but freedom from state meddling.

Even if it is true that news has some public-good qualities, it does not necessarily follow that the state must or should fund it. Indeed, the entire history of American media belies this argument: entertainment, journalistic, and informational media of all varieties have primarily relied on private, commercial funding for over 200 years—particularly through advertising, which rewards publishers for attracting and holding on to audiences. Once one embraces the fallacy that only the state can produce high-quality public goods, sweeping calls for government intervention inevitably follow.

It's certainly true that we're in the midst of a major media revolution, and that many operators are struggling to cope with intensifying competition, digitization, declining advertising budgets, and fragmenting audiences. Pundits and policymakers wonder what the future holds for many traditional news providers or whether they'll even have one. But McChesney and Nichols seize on such anxieties to suggest that nothing short of a government press takeover is required. In true Rahm Emanuel-like fashion, Free Press insists, "We have a crisis. We have an historic opportunity. We can't let either go to waste."

Who pays the bill and how much will the takeover cost? McChesney and Nichols take a remarkably cavalier attitude about it: "The money must be spent and we will worry about where it comes from later." Such "we're-all-dead-in-the-long-run" reasoning seems to be the dominant philosophy in Washington policy circles these days. But the estimated $35 billion annual price tag for a "public works" program for the press should give us pause. Moreover, like every other corporate-welfare program (think agriculture subsidies), a journalistic welfare state would no doubt grow in scope and cost over time.

McChesney and Nichols suggest several potential funding sources for the program, many of which would end up burdening commercial media providers in order to subsidize their noncommercial/public media competitors. They advocate a four-part tax plan that would include: a 5 percent tax on new purchases of consumer electronics, which they estimate would bring in $4 billion a year; a 3 percent tax on monthly ISP & mobile-service bills (estimated at $6 billion a year); a 2 percent sales tax on advertising (estimated at $5 to $6 billion a year); and a 7 percent tax on broadcasters' spectrum licenses (estimated to sap another $3-6 billion a year from an already reeling industry). Free Press has enthusiastically endorsed these proposals. In recent FCC testimony, managing director Craig Aaron offered specific revenue projections for the creation of a "Public Media Trust Fund."

What McChesney, Nichols, and Free Press essentially advocate is a radical form of media redistributionism—with struggling private entities and others forced to fund public or non-commercial media outlets. What these regulatory advocates seek is not so much a bailout for the familiar private media that has served America so well for two centuries, but rather a massive wealth transfer from one class of media to another, with the stipulation—which they repeat numerous times—that state-subsidized entities are to forgo private advertising revenues, copyright protection, and any affiliation with corporate parents. These restrictions are an essential part of their push for a "post-corporate," government-controlled press. Indeed, it would virtually make such a press a self-fulfilling prophecy, since copyright laws and advertising have been core ingredients of a successful private media system in the U.S. They're also why we haven't had to resort to massive public subsidies for media, as many other nations have.

McChesney and Nichols want us to believe that they (or the state) wouldn't play favorites with public funds. But it's hard to take such claims at face value when they dedicate their book to liberal darling Bill Moyers (who has keynoted Free Press "media reform" conferences), and when every page of their book drips with derision toward commercial media. In reality, McChesney, Nichols, and Free Press are out to destroy the private provision of media in America, but they've softened up their recent rhetoric to cloak their true aims. In their 2002 book, Our Media, Not Theirs: The Democratic Struggle Against Corporate Media, they were more direct, arguing for "the need to promote an understanding of the urgency to assert public control over the media." And during a 2009 interview with the Canadian-based "Socialist Project," McChesney confessed that "the ultimate goal is to get rid of the media capitalists," and noted that, "unless you make significant changes in the media, it will be vastly more difficult to have a revolution."

Similarly, The Death and Life of American Journalism concludes by noting that "We have responded in a time of crisis not with tinkering reforms but with revolution." Indeed they have, but what's more shocking is the warm reception their calls for "public control" and "revolution" are receiving within the Obama administration.

The Federal Trade Commission is holding a workshop series called "How Will Journalism Survive the Internet Age?" The agency released a 47-page discussion draft entitled "Potential Policy Recommendations to Support the Reinvention of Journalism," which reads like the Cliff's Notes for the McChesney-Nichols book and Free Press's National Journalism Strategy. The draft cites the authors over a dozen times and reproduces their proposals almost verbatim. McChesney was recently invited to deliver a major address at an FTC event on these issues. Meanwhile, Susan DeSanti, the FTC's Director of Policy Planning, who spearheads the agency's "media reinvention" effort, has publicly praised McChesney and Nichols' "excellent book" despite its call for radical steps that would hobble private media and impose crushing taxes to subsidize public, state-blessed media. Isn't the FTC supposed to safeguard marketplace competition and innovation? Finally, the Federal Communications Commission is conducting an open proceeding of its own on the "Future of Media." So far, it has featured plenty of talk of expanded public media and "public-interest" programs.

Perhaps most insultingly, McChesney, Nichols, Free Press, the FTC, and the FCC all ignore the burdens on private media operators that they themselves have had a hand in creating or preserving. For years, the media marketplace has been smothered with layers of red tape that has hindered operators' ability to respond promptly to new developments. In particular, a crazy-quilt of media ownership regulations has artificially restricted business models from developing that might have saved many news organizations from the fate that McChesney and Nichols now decry. Stunningly, the FCC and FTC show no sign of willingness to loosen those chains, especially with Free Press and other media reform groups aggressively hounding them and congressional lawmakers to impose even more regulation.

It remains to be seen whether the Obama administration implements the McChesney/Nichols blueprint for a media welfare state. But their book clearly draws the battle lines for the future of media—and provides a fresh reminder, for those of us who still care about our fundamental First Amendment freedoms and a truly free and independent press, what it is we're fighting for.

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*Adam Thierer is President of The Progress & Freedom Foundation and the coauthor, with Brian Anderson, of A Manifesto for Media Freedom (Encounter Books, 2008). The views expressed in this essay are his own, and are not necessarily the views of the PFF board, fellows or staff. This essay is a review of The Death and Life of American Journalism: The Media Revolution that Will Begin the World Again, by Robert W. McChesney and John Nichols. It originally appeared in the City Journal on June 28, 2010.




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