Wyatt Emmerich: On How Newspapers are Going Digital

Thomas Jefferson said, “Were it left to me to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate a moment to prefer the latter.”

A recent study conducted by the Columbia University Journalism Review underscores Jefferson’s sentiment. The study shows that when a newspaper closes, local government waste skyrockets.

The study reports: “We conducted a systematic study of newspaper closures and government borrowing costs in the United States, for the period ranging from 1996 to 2015. We identified newspaper closures using hand-collected newspaper data from the Editor and Publisher yearbooks. Newspaper closures were especially prevalent during that time period because of the rising popularity of online news outlets (which do not focus as strongly on local government issues) and online classified ad sites such as Craigslist (which, as part of the larger effect of the internet on local newspapers, significantly eroded newspaper advertising revenues). We then collected government borrowing cost data from the Mergent Municipal Securities Database and cross-referenced this information with the newspaper closure data.

“We found that local government borrowing costs significantly increased for counties that have experienced a newspaper closure compared to geographically adjacent counties with similar demographic and economic characteristics without newspaper closures. Our evidence indicates that a lack of local newspaper coverage has serious financial consequences for local governments, and that alternative news sources are not necessarily filling the gaps.”

Sweetheart financial deals with local governments have always been a notorious cesspool of graft. Millions of dollars in fees and financing costs are associated with various bonds issued by local governments. Without the watchful eye of the press, sweetheart deals go undetected and government financing costs skyrocket. That’s what the study found.

The study reports, “One challenge in this study was establishing a cause-and-effect relationship between newspaper closures and local government borrowing costs. (For example, depressed local economic conditions could drive both the closures and higher borrowing costs. We also examined government borrowing costs in a county that experienced a newspaper closure and a neighboring county with similar demographic and economic characteristics that still had its own newspaper operation. In this case, we found that borrowing costs only increase in the county that experienced the closure, but not for the neighboring county that did not experience a closure. Both approaches establish that there is a causal connection between newspaper closures and government borrowing costs.”

I am not surprised in the least by the study, nor would Thomas Jefferson. As our nation has lost half its professional journalists over the last 20 years, I have seen an enormous increase in government corruption.

The cost of this corruption is many more times the cost of subscriptions. Those who think they are saving money by reading free news online are deluding themselves. They will pay many more times over in the form of government corruption and waste.

How did this come to be? How can an affluent nation like the United States lose half its journalists?

The answer: The destructive creativity of capitalism. Although the free market ultimately improves our lives, there can be a lot of destruction and disruption along the way.

It’s not like newspaper publishers didn’t see the digital age coming. Newspapers have had websites for decades. What we didn’t see was two companies becoming monopolies and dominating 90 percent of the online revenue.

Facebook and Google produce zero original content. They pay no journalists to create content. Instead, they skim the content of newspapers and television stations for free and then repackage it through their software. They get all the benefit and none of the cost. It’s a beautiful profit model, but it is destroying journalism in our country.

France has a simple solution. They force Google and Facebook to make payments to traditional newsgathering organizations that produce original content with professional journalists. That’s not likely to happen here.

The Northside Sun tried to run Google Adworks. Google got all the money, we got peanuts. But during our Google experiment the Northside Sun miraculously began to appear all over Google News.

When we quit running Google ads, it was like the Sun ceased to exist. We never showed up on Google News or in searches. That’s how they exercise their monopoly. Facebook does the same.

Even more sinister, only Google and Facebook have the sheer size to collect and synthesize massive profiles on every American citizen. They sell that data to advertisers seeking to target ads to specific people. Big Brother has arrived.

Meanwhile, there is a race to the bottom in terms of content. There’s the endless drivel of Facebook chatter and sensationalist fake news designed to maximize eyeballs.

If that alone wasn’t enough, the FBI now calls digital ad fraud the second biggest illegal business after the drug trade. Who knows what’s a real eyeball and what’s a bot? The fraud is in the billions of dollars.

Meanwhile, our newspapers will hunker down and keep covering the city council and county board meetings as always. Over the last 150 years, we have survived two world wars and countless technological advancements. We’re still standing, waiting for the day people open their eyes and realize the value of original content produced by professional journalists.

Wyatt Emmerich is the president of Emmerich Newspapers, Inc. in Jackson.

Wyatt Emmerich: On How Newspapers are Going Digital

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