Examiner Editorial: Where and when will the bailout mania end?

It all started last year when the Bush administration began using tax dollars to keep ailing Wall Street investment banks from going under, culminating in the $700 billion bailout debacle.

Since then, industry after industry has lined up to get in on the action, making the case that they are too big to fail and should therefore be given a healthy helping of federal tax dollars.

How exactly these hundreds of billions of tax dollars have been or will be spent is a mystery, because neither George W. Bush nor the Democratic Congress bothered to require even the most elementary transparency in the process.

Now the bailout mania has spread to state and local governments, and even to the newspaper industry. Governors, led by Arnold Schwarzenegger, are clamoring for billions, citing federal mandates for Medicaid and children’s health care as justification. What they never mention, of course, is how state spending has skyrocketed in recent years on lots of nonfederally mandated programs.
Things have gone too far when government officials offer bailouts for newspapers, as is now the case in Connecticut, and the practice has been hinted at elsewhere. Forget for the moment that newspapers have been losing readers for decades, first to television and more recently to the Internet. Just consider how the concept of a government bailout for newspapers points to the basic, irredeemable flaw in the whole idea of officials using tax dollars to “save” favored industries.

Connecticut Assemblyman Frank Nicastro wants the state to help The Journal Register Co. keep publishing its New Britain Herald and Bristol Press, which serve suburban readers near Hartford, the state capital.

“The media is a vitally important part of America,” Nicastro told Reuters. He said he believes government should save local papers that cover news bigger media outlets miss or ignore.

The bailout would consist of favorable tax treatment, help with financing, funds to train staff and other incentives for publishers — but not cash, according to Reuters.

Reuters quoted Paul Janensch, a former newspaper editor and reporter who teaches journalism at Quinnipiac University in Connecticut, who said, “You can’t expect a watchdog to bite the hand that feeds it.” That is exactly right, and it is why the First Amendment’s establishment of an independent press is so
vital.

The Founders knew from English history that individual liberty and government funding of the press were mutually exclusive. Government controls what government funds. So a newspaper bailout inevitably means bureaucrats decide what to cover and how, not journalists. Similarly, bailouts for other businesses result in products produced to satisfy government edicts, not because consumers want them.

It’s past time to end the bailout madness.