The Next Bailouts

So it has finally come to this. Newspapers are hemorrhaging readership due to shoddy performance and political bias. And now, it looks like Maryland's own Ben Cardin wants to throw them a lifeboat:

Struggling newspapers should be allowed to operate as nonprofits similar to public broadcasting stations, Sen. Benjamin Cardin, D-Md., proposed Tuesday.

Cardin introduced a bill that would allow newspapers to choose tax-exempt status. They would no longer be able to make political endorsements, but could report on all issues, including political campaigns.

Advertising and subscription revenue would be tax-exempt, and contributions to support coverage could be tax deductible.

Now, there are a couple of interesting caveats to this, of course. Not the least of which is the fact that, theoretically, newspaper companies could already operate in a non-profit status. There are a number of non-profit organizations that produce publications and periodicals; why do we need a federal law to create a new classification of newspaper. Maybe a lawyer could fill me in more on this matter.

Secondarily, a little more disturbing to me, is the idea that we would have any federal legislation addressing the corporate status of newspapers. Right now, newspapers and newspaper ownership is not covered by any facet of federal law. I have a bad feeling that Cardin's legislation is the foot towards the regulation and the overregulation of newspaper ownership. We have already seen what happens when government proposes the regulation of television and radio station ownership; it was government policies of both Democratic and Republican administrations that led to the consolidation of radio station ownership, the demise of locally owned and operated radio stations, and the elimination of good locally based radio content. Cardin's bill starts us down a dangerous and slippery slope, a slope all the more dangerous when you consider the Democrats seemingly fervent opposition to the First Amendment.

If Ben Cardin wants to help local newspapers stay afloat, maybe he should invest his personal funds into one. Failing that, Cardin needs to allow the market to take its course and let these papers fail. If local papers go under or aren't doing their jobs, the market will either see a new paper or the blogs fill the slack (much as they have to the dismay of some in the most heavily scrutinized city government in the world). But Congress needs to be spending its time cutting spending and reducing taxes, not creating a new status of newspaper ownership.