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Money, Journalism and Democracy

The business model on which most American journalism relies

The business model on which most American journalism relies, making a profit by attracting enough readers to sell advertising, is failing. With the closure of several major daily newspapers, such as the Seattle Post Intelligencer, and risks of closure at other major papers, such as the Boston Globe, alarm bells are being sounded. Citing the importance of the press, and particularly newspapers, to democracy, political commentators, concerned citizens, scholars, journalists, newspaper owners and politicians, including, it seems, President Obama, are moving to secure some sort of government assistance for newspapers.

The underlying concern about the vitality of journalism is well founded; effective journalism is crucial to democracy. It is no accident that the press is the only business protected by the American Constitution.

Unfortunately, none of the policy approaches currently at the center of the discussion, such as assisting newspapers with tax credits or tax exemptions, actually would strengthen American journalism. That is because these approaches overlook a second reason that American journalism is failing: the professional model on which it is based is fundamentally dysfunctional. Instead of scrutinizing those in power, the press principally reports what the powerful want reported.

One policy alternative, which would address the failure of both journalism’s business model and its professional model, would be the institution of a federal voucher system. Under such a system, every adult would receive a fixed sum, e.g., $200 per year, to assign to the news outlet, or portions thereof to news outlets, of his or her choice.

In order to see why the current policy discussion is off the mark, and why the voucher approach is so promising, one must examine the journalism newspapers and the American press in general actually provide and the journalism they typically fail to provide.

The journalism the American news media provide principally consists of reports and analyses predicated on official sources. That is, the news they produce is principally a distillation of representations by senior government officials, spokespersons for large corporations, dependents of large corporations and corporate and government think tanks. Conversely, reporting that derives from sources which senior corporate and governmental officials may find objectionable, such as labor unions and antiwar groups, is the exception. This bias in source selection yields a bias in news content toward topics and viewpoints preferred by corporate and governmental elites, i.e. to official stories.

The principal reason journalists emphasize official sources is that the careers of journalists who make a practice of reporting unofficial stories, even those of Pulitzer Prize winners, typically suffer and may end prematurely. This is a consequence of the fact that the major news outlets are owned by large corporations, and derive much of their revenues from sales of advertising to large corporations. (Public broadcasting, as I will explain, is heavily influenced by these corporations, as well as by the government, and, as a consequence, displays the same bias towards official sources.)

Media outlets steer their journalists toward official stories because journalism that fails to assume this official slant often undermines corporate interests. Unofficial stories frequently disclose unflattering matters about corporate media owners, their corporate advertisers or about public policies which advantage them. Senior government officials and corporate officials, on the other hand, almost always offer accounts of events and policies, which reflect, or are at least consistent with, corporate preferences.

Thus, our journalism is predicated on a double standard, one for news that does not offend the powerful, and another for news the powerful might find objectionable. As former Washington Post national editor Ben Bagdikian has put it, reporting which contradicts accounts provided by official sources must achieve a higher level of drama and documentation.

Public broadcasting displays substantially the same official slant, first and foremost, because it is financed in important part by corporate advertisers and underwriters. That financing would substantially diminish were it to produce journalism that typically failed to respect corporate preferences. Second, the policymaking bodies of the various component parts of public broadcasting, e.g., local broadcast outlets and national programming and funding sources, typically are dominated by corporate officials or individuals with close ties thereto. Their policy and personnel decisions, therefore, generally reflect corporate preferences.

Democracy has not been well served by this official story journalism. Above all else, democracy requires a press that independently interrogates the powerful, measuring their words against their conduct, while measuring both against the public’s many and diverse interests and concerns. Where this scrutiny reveals the conduct of the powerful to be wanting, it provides impetus for the formation of groups and coalitions to reign in the powerful or to replace them.

Official story journalism, in contrast, typically produces a very different outcome. Since its standard practice is to unquestioningly credit the accounts of the powerful, it encourages public acquiescence to elite practices and policies, which otherwise might draw opposition instead. Indeed, precisely in those cases in which disclosure of all the material facts and the inclusion of nonofficial analyses most likely would elicit public resistance, official journalism inclines most to obfuscation and concealment.

This pattern was saliently displayed during the months preceding the US invasion of Iraq, when President Bush and other senior government officials repeatedly declared that Iraq’s leader, Saddam Hussein, was connected to the terrorists behind the 9/11 World Trade Center attacks – and the press typically repeated the claims without question. Conversely, when overwhelming evidence indicating the opposite to be the case was cited, almost invariably by persons lacking senior government or corporate status, the press usually ignored it.

As a result, approximately 50 percent of the public came to believe that Saddam Hussein was involved with the perpetrators of the 9/11 attacks. Press coverage of the administration’s other principal justification for the invasion, that Saddam Hussein possessed weapons of mass destruction, followed substantially the same logic and yielded substantially the same impact on public opinion.

Thus, the government’s flamboyantly baseless pretext, that invading Iraq amounted to defending America against terrorism, striking the enemy before the mushroom cloud formed over American soil, was rendered credible by the press. Similarly, most of the disastrous consequences of the invasion, including already tens of thousands of grievously wounded and disabled American soldiers (in addition to the thousands dead), approximately 600,0000 Iraqi civilians dead and a bill to American taxpayers which, according to Nobel Prize winning economist Joseph Stiglitz, will total three trillion dollars – roughly enough to operate all the public schools in the United States for four years – received little if any attention in the press.

The same slant to the powerful is displayed in press coverage of domestic affairs. For example, while there is compelling evidence that strong labor unions materially enhance the living standards of the majority of the population, the press usually portrays labor unions either as impediments or irrelevant to prosperity, the position typically propounded by large corporations. Similarly, America’s largest social welfare program, Social Security, which has been shown conclusively to be solvent and highly valuable to the large majority of the public, regularly is reported to be verging on bankruptcy and wasteful. Here, too, this image reflects the prevailing account emanating from corporate circles.

Of course, there are exceptions like journalists Juan Gonzales at The New York Daily News and Bill Moyers at PBS, whose practice is to challenge the self-representations of the powerful. Yet, these exceptions within the corporate press constitute a tiny, and relatively inconspicuous component of its total product. Similarly, there are several small, principally nonprofit, alternative media outlets, such as Mother Jones magazine, Pacifica Radio and Truthout, which also regularly challenge the self-representations of the powerful. Since these tiny alternative outlets lack any substantial corporate or government funding (their reliance on unofficial sources ensures this will remain the case), they operate on tiny budgets and, thereby, usually are invisible to most of the public.

In short, while the journalism of official stories is occasionally and generally unobtrusively punctuated by reporting based upon unofficial stories, the enormous predominance of the former means that the vast majority of the time, the press functions as a vehicle for transforming official stories into common knowledge. As advertisers know, it is the message that is repeated that elicits the purchase – or the vote.

Whatever label one attaches to this sort of journalism, it manifestly is not what the framers of the Constitution had in mind when they inserted the guarantee of press freedom. Neither, more importantly, is it what most of us wishing to strengthen journalism have in mind. Accordingly, in reviewing the various proposals to save journalism, we should be careful about what it is we actually would be saving.

Currently, the most widely discussed proposals for aiding journalism appear to be: 1) enacting a $200 federal income tax credit for newspaper subscribers, 2) allowing newspapers to qualify as tax-exempt nonprofits and 3) increasing government funding to reinvigorate public broadcasting.

Perhaps the strongest argument for subsidizing newspapers, either through a tax credit or granting them preferred income tax status, is that, given their central role covering of local affairs, were the newspapers to cease publication, most local news coverage likely would vanish. The chief problem with this idea is that newspaper coverage of local affairs is no less structured to legitimate the agendas of local elites than their coverage of national affairs is structured to legitimate the agendas of national elites. For example, local elites often coalesce behind public works projects such as taxpayer-financed stadiums for private sports franchises or encouraging home purchase over home rental. Local newspapers almost invariably cover these issues by relying on persons testifying to the wisdom of these corporate preferences. As in the case of national news, newspapers thereby typically serve to transform local official stories into the common knowledge of the local community.

If ensuring the powerful are held accountable is the reason government should intervene to save newspapers, we would be better off having them fail and – until and unless other funding arises – relying on alternative and volunteer news outlets. These institutions already exist in many areas and they undoubtedly would grow in the absence of the daily newspapers or a substitute. While they may not be and may not become large enough to report on all or even most of what needs to be covered, at least they would not be systematically skewing the public’s understanding to favor policies that often are the opposite of what they would endorse absent misleading reporting.

Additionally, supporting special subsidies or tax exemptions for daily newspapers, virtually all of which are Fortune 500 corporations, positions those of us seeking to promote independent journalism in dubious company. Specifically, it places us on the side of large corporations seeking special public assistance and against much of the broader public – precisely at time at which a considerable portion of that public is furious about the massive taxpayer subsidies which already have been provided to other large corporations. Since it is political force from the general public, and not from Fortune 500 corporations that will move us beyond the fog of official journalism, if that ever is to happen, advocating special government assistance for newspapers owners would seem to have us joining the wrong team.

Then, there is the proposal to increase funding for public broadcasting, which would eliminate or reduce the dependence of public broadcasting on corporate financing. This is a salutary objective. Furthermore, since public broadcasting enjoys substantial support from an influential segment of the public, i.e. those with higher education and income, increased government funding certainly is imaginable.

The problem is that even if corporate financing of public broadcasting was entirely ended, public broadcasting would remain subservient to corporate and government elites. The principal reason this is the case is that the individuals who sit on the boards and the executives at the helm of various public broadcasting outlets typically also are senior officers at large corporations or have close ties to such corporations. Thus, the journalists at public broadcasting, their employees, will continue to have the same incentive to slant toward official stories as their counterparts in the private news media.

In addition, the directors of the Corporation for Public Broadcasting, which distributes funds to the various public broadcasting outlets, are appointed by the president and approved by Congress. It is virtually certain that such persons will display the same inclination to require an official source slant in the journalism they finance at public broadcasting outlets that corporate underwriters and advertisers currently demand from public broadcasting outlets.

A publicly financed voucher system would suffer none of these infirmities. The voucher system denies discretion over the content of journalism to either government or large corporations as well as to foundations, churches, labor unions, and any other powerful institution. Instead, it vests that discretion in the individual members of the public, who read, listen to and watch the news. This empowerment of individual discretion is why the use of vouchers to distribute public resources has gained support from across the political spectrum, and for a variety of tasks, ranging from improving public schools to reducing the impact of private wealth on election outcomes.

Granting every adult a voucher of $200 annually, roughly the cost of an annual newspaper subscription, to direct to the news outlets of his or her choice would create a potential pool in excess of $40 billion per year to support independent journalism. Even if we make a conservative estimate and assume that only 10 percent of the funds made available by the voucher system would be used to support such independent journalism (as opposed, for example, to journalism concerning hobbies, celebrities or the prevailing official journalism), that would amount to over $4 billion annually.

One indicator of the magnitude of the impact of such funding is to contrast it with the current annual expenditures of two of the biggest players in the tiny world of independent media, Pacifica Radio and Mother Jones magazine. Pacifica operates on under $20 million annually to finance its radio stations in five markets, San Francisco, New York, Houston, Los Angeles and Washington DC, where altogether it attracts approximately 1,000,000 listeners. Mother Jones, which circulates about two hundred thousands copies nationally, and also maintains a substantial news web site, operates on approximately $10 million annually.

While solid data thereon are not readily available, rough extrapolation based on the size of these big players, of which there are only a handful, suggests that all independent news media (i.e. news outlets which do not slant towards official sources) in the US together likely operate on under $150,000,000 per year. The corporate press, in contrast, likely operates on more than $10 billion annually. This suggests the voucher system would increase the budget for independent journalism in the US by nearly 3,000 percent. (Concerns about cost do not undermine the case for the voucher; if its enactment accomplished nothing more than to prevent a single Iraq-type pretext war – total cost $3,000,000,000,000 according to Nobel Prize winning economist Joseph Stiglitz – every 75 to 100 years, the voucher system would pay for itself.)

As a result, many independent media outlets which currently are starved for funds would increase dramatically in size and visibility. A news outlet oriented to a national public, which obtained an audience of 5,000,000 (a modest assumption in light of the severely underfunded Pacifica currently attracting 1,000,000), and received only 20 percent of its audience’s vouchers would obtain $150,000,000 annually. It is highly plausible that several independent news outlets, either already existing or newly emerging, would attract audiences of several million.

Indeed, the level of opportunity for people to found new journalism outlets would explode. If a group of journalists could attract an audience of 50,000 persons who would delegate 20 percent of their voucher, perhaps to report on education, criminal justice, homelessness or environmental matters in a state or city, they would receive $2,000,000 annually, enough to sustain a number of journalists, and to fund their research.

Consider what this might mean in a city losing a major daily newspaper, such as Seattle, where scores of experienced journalists have lost their jobs. A few of these journalists are searching for funds, so far with little success, to continue operating as a nonprofit run by the journalists themselves. Were the voucher system enacted, if these journalists could attract only 4 percent of the value of the vouchers, that would be held by the nearly two million adults in Seattle’s metropolitan area, they would secure nearly $16,000,000 annually. This would be enough to pay the salary and expenses of scores of journalists and thereby produce considerable independent local and regional reporting.

Finally, the voucher system will lower the invidious social barrier, which currently limits who may work as a journalist. Today, working as a journalist almost always requires acquisition of a university degree (achieved by approximately 30 percent of the population) and often a graduate degree (attained by approximately 10 percent of the population). Access to university degrees is largely a product of family social economic status and of race, which often tracks social economic status. Thus, persons possessing university degrees disproportionately are socialized in the world of the relatively privileged, and thereby incline to interpret the world from that perspective.

However, possession of a university degree is neither a necessary nor sufficient condition for producing quality journalism. There undoubtedly are thousands of degreeless office workers, union organizers, sales clerks, baristas, janitors, truck drivers and firefighters, who could and would perform well as journalists, if given the opportunity, and the voucher system almost certainly will provide that opportunity. Undoubtedly, persons from the nonprivileged majority of society, and some from the privileged strata, often will find reporting by persons with these varied and unprivileged backgrounds and life situations that is more engaging, accurate and/or useful than other reporting, and they will spend at least some of their vouchers on such journalism.

Thus, news outlets will emerge in which members of the now effectively speechless majority outside of the upper economic strata, and disproportionately nonwhite racial backgrounds, would increasingly research, interpret and represent politics and society for an audience. This would increase further the vigor of the check exercised by journalism on the powerful; the interests and concerns against which their conduct was measured would grow to include those this silent majority itself has formulated.

In short, institution of the voucher system should yield an explosion in the number of diverse and well-staffed teams of journalists, which possess the resources, the inclination and the skill needed to produce stories that engagingly and fairly disclose what actually is being done by those in power, and what, in fact, the alternatives are. Despite their tiny budgets, independent outlets such as Pacifica Radio and The Progressive have raised the visibility of many abuses of government and/or corporate power enough to result in an ending or at least mitigation of those abuses. Were the strength of independent media to increase by the magnitude a voucher system would generate, the accountability of government and corporate elites to the rest of us likely would increase commensurately. The voucher system, therefore, would remedy both the business and professional failures from which American journalism currently suffers.

Finally, in contrast to many other attractive policy ideas, the voucher proposal is politically viable. It actually could become law. As noted, the value of voucher systems already is widely recognized by many across the political spectrum.

Specifically, a press voucher system would command a very powerful constituency, which could directly profit from its enactment. This potential constituency likely includes the staffs, subscribers and donors to the numerous unofficial source media outlets already operating. It also includes many, and perhaps most, of the (probably hundreds of thousands or more) publishers and readers of nonprofit newsletters and web sites produced by groups ranging from the Sierra Club, American Civil Liberties Union and National Rifle Association to the American Philatelic Society. It also is likely that many of the millions of persons, who currently donate money to public broadcasting affiliates, would support the voucher system.

These potential constituencies are influential ones for two reasons. First, the staffs of the various media outlets which likely would support the voucher are opinion makers. In other words, they already are engaged in producing matter which attracts an audience and which, at least to some extent, credits their pronouncements.

The second reason is that the audiences of these outlets are relatively influential. They consist of persons who disproportionately give money and/or time to advance their interests in journalism and/or public policy. It is likely, therefore, that they, to an above-average degree, would donate their time and/or money to support sympathetic political candidates or policies, such as the voucher, which advanced those same interests.

In fact, the constituency for the voucher system likely will include some of the outlets in which official stories now predominate, since it also could provide them a new revenue stream. As noted, their influence is enormous.

Of course, the enthusiasm from the corporate quarters controlling these outlets will be qualified. Empowering the public to determine which media outlets receive tens of billions of dollars of federal money – i.e. creating something which in reality approximated the proverbial marketplace of ideas – might directly disadvantage corporate news outlets. The reason is that more effective competition from independent news outlets would render the official slant of corporate news outlets more conspicuous. Yet, much of their current appeal rests on the credibility of their claim to objectivity and fairness. Thus, in making the marketplace of ideas more truly competitive, the voucher system probably would cause corporate outlets to lose audience or pressure them to change their behavior in order to avoid such loss. Neither alternative likely would be attractive to most operators of the corporate press.

Also, as mentioned, the increased strength of independent journalism likely would generate public pressure for government policies and programs which are far less indulgent of the preferences of the corporate and government elites than is now the case. With a strong independent press, the next Iraq-type pretext war might not be politically feasible. Similarly, instead of operating to systematically increase the gap between median and top wage-earners, as do current government policies, e.g., expanding the scope of intellectual property, giving public funds to private banks and obstructing the formation of labor unions, operation of a voucher financed press might result in political pressure yielding policies that reduce the gap.

The voucher system proposal, therefore, likely will enjoy both a strong constituency and a formidable opposition; its enactment is a realistic possibility, as is its defeat. Those are better prospects than are enjoyed by many other worthwhile policy proposals. That alone argues for a commitment to this one.

There is another reason to pursue the voucher proposal. Advocacy for the voucher necessarily entails exposure of a central and almost universally unaddressed flaw in American politics, that elites, largely through their control of the press, heavily influence the parameters of political discussion, and thereby of governmental action. Indeed, in facilitating the transformation of official stories into common sense, the press only not lends credence to otherwise questionable elite behavior, it also situates alternatives the public otherwise prefer beyond the boundaries of common sense.

Of course, appearing to stand beyond the boundaries of common sense heavily disadvantages progressive activists. It causes them to approach a public not merely uninformed about their ideas and proposals, but prejudiced against them.

Conversely, staying within the realm of officially defined common sense carries enormous advantages. In addition to avoiding the burden of overcoming an already prejudiced public, such positioning renders activists eligible for favorable press notice, which materially increases opportunities to consolidate and increase organizational membership, to obtain support from foundations and other contributors and to obtain direct access to policymakers, whose conduct they wish to affect. The official press slant thereby exerts a strong pressure for example, for nuclear disarmament activists to become nuclear arms control advocates, for anti-poverty activists to become advocates for assisting the impoverished and for environmentalists to focus on mitigating reckless environmental destruction, rather than preventing it.

Building a public awareness of the official slant of the press, therefore, would deflate its credibility, and, therefore, diminish its capacity to set the boundaries of reasonable political discourse. The opportunities for activists to pursue substantial social change, to truly change the world, would expand commensurately.

Thus, working to expose the official slant of the press that advocacy for the voucher proposal entails would constitute a very large first step toward moving us away from a society in which political decisions typically respect limits established by government and corporate elites, and toward a more wholesome and common sense decision-making process more responsive to the will of the majority arising from open public discussion. Enactment of the voucher system, and thereby the construction of a powerful and truly independent press could be the second such step.


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