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Brooks Wilson's Economics Blog: Non-Profits are Morally Not Superior to For Profits

Monday, September 21, 2009

Non-Profits are Morally Not Superior to For Profits

Innovation has changed the way news is reported.  No longer do we need to wait for the evening news to learn of important events in our nation and community or the daily newspaper for more detailed information.  News is reported near instantaneously on the Internet.  Such innovation has challenged the survival of newspapers and many are failing.  President Obama game voice to aspects of the innovation that some find disconcerting (Michael O'Brien, The Hill, "Obama open to newspaper bailout bill"). 
Obama said that good journalism is "critical to the health of our democracy," but expressed concern toward growing tends in reporting -- especially on political blogs, from which a groundswell of support for his campaign emerged during the presidential election.

"I am concerned that if the direction of the news is all blogosphere, all opinions, with no serious fact-checking, no serious attempts to put stories in context, that what you will end up getting is people shouting at each other across the void but not a lot of mutual understanding," he said.
New legislation proposes allowing newspapers to form as tax exempt cooperatives that has at least drawn the president's interest.
Sen. Ben Cardin has introduced S. 673, the so-called "Newspaper Revitalization Act," that would give outlets tax deals if they were to restructure as 501(c)(3) corporations. That bill has so far attracted one cosponsor, Cardin's Maryland colleague Sen. Barbara Mikulski...

The president said he is "happy to look at" bills before Congress that would give struggling news organizations tax breaks if they were to restructure as nonprofit businesses.
The senators and the president miss two important points: profits provide great incentive to produce high quality, low cost products and for non-profit are not morally superior to for profits because they will either have incentives that imitate those of for profit firms or will not perform efficiently. 

1 comment:

  1. This might be taking this to seriously or even taking this new government policy to far, but I personally think it is ridiculous that the government wants to limit media. First off that is against our freedom of speech, and plus don’t they understand that by limiting what can be said will hurt our country economically? I mean pretty soon people won’t have enough time to get their opinions across and everything will start sounding the same. Also if politicians need any more proof that government interference in media is not good for an economy, look at North Korea, Burma, Turkmenistan, and Libya. These countries are so censored that it is ridiculous! Is America just going to make the same mistakes that these countries are making? I would think we would be smarter than that.