Journalism down; government up


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The slow death of local news media is helping fuel the steady growth of government, according to a new study by academics at the Universities of Illinois at Chicago and Notre Dame.

After analyzing local newspaper shrinkage and government performance, business professors Dermot Murphy, Chang Lee and Pengjie Gao concluded that as newspapers shrink and their role in government oversight declines, local communities and states borrow more, spend more and grow their bureaucracies.

American conservatives have seemed at times almost giddy by the death of what is widely perceived as the “liberal media,” but the study would indicate that conservatives – or at least conservative fiscal values – are the biggest losers when media dies.

“Other papers have shown that the loss of a local newspaper leads to worsened political outcomes…and we illustrate that there are worsened financial outcomes as well,” the professors write. “In particular, we show that long-run municipal borrowing costs increase by as much as 11 basis points following a newspaper closure, and we utilize several identification tests to show that these results are not being driven by underlying
economic conditions in the region.

“We also show that government efficiency outcomes are substantially affected by newspaper closures. In particular, we find that government wage rates, government  employees per capita, tax dollars per capita, and the likelihoods of costly advance
refundings and negotiated sales all increase following a newspaper closure. From a finance perspective, our results suggest that local newspapers are important for the health of local capital markets.”

The paper was published as, the Social Science Research Network earlier this month. 

 A national overview

The researchers reported coming to their conclusions after identifying 1,596 newspapers serving 1,266 counties at some point between 1996 and 2015. Whittling that list down, they found 204 counties where journalistic horsepower had significantly declined or altogether disappeared.

Newspaper closures, they noted, are happening all over the country. There are more closures in the most populous states than the least populous states, they noted, but that is because there are, or were, more newspapers there from the beginning.

“Yet, we observe a sizable number of newspaper closures in states with lower population levels as well,” they wrote. “Lastly, the political orientation of a state also does not seem to affect the incidences of newspaper closures, in that newspaper closures tend to occur in both Democratic and Republican states.”

The loss of newspapers, however, costs taxpayers whether in red or blue states.

“The focus of this paper is on the long-run effect of newspaper closures on municipal finances,” they wrote, “particularly municipal bond yields.”

To discern what happened on the bond front, they looked at non-newspaper counties three years after the death of the local newspaper and found that “our results indicate that long-run municipal borrowing costs are higher following a newspaper closure.”

When they compared similar counties with higher borrowing costs and lower borrowing costs, the researchers could find no significant statistical differences in size, per capita income, population growth, employment growth or total wage growth.

That led them to conclude the local media’s watchdog role – even if the local media was a crappy  watchdog – has a significant effect on financial outcomes.

“Revenue bonds are commonly issued to finance local projects such as schools and hospitals, and are backed by the revenues generated by those projects. General obligation bonds, on the other hand, are typically used to finance public works projects such as roadways and parks, and are backed by local taxes and fees,” they write.

“Revenue bonds should be subject to greater scrutiny because of the free cash flows that these projects generate, and these bonds are rarely regulated by the state government. A local newspaper provides an ideal monitoring agent for these revenue-generating
projects, as mismanaged projects can be exposed by investigative reporters employed by the local newspaper. When a newspaper closes, this monitoring mechanism also ceases to exist, leading to a greater risk that the cash flows generated by these projects will be mismanaged. Thus, we hypothesize that the adverse effect of a newspaper closure on borrowing costs will be even greater for revenue bonds.

“Consistent with our hypothesis, we find that the effect is more pronounced for this subset of bonds. In particular, we find that, following a closure, the average secondary and offering yields increase by 9.9 basis points and 10.6 basis points, respectively.”

“Investigative” reporting

Though the authors of the study repeatedly underline the value of “investigative reporting,” it is apparent that they are talking about reporting in general. The biggest loss of newspaper reportage in most areas of the country these days has been in so-called beat reporters who cover local government day-in and day-out and in that way learn its minutiae.

The best of them – and there aren’t many good ones left – open a clear window into how local government is – or isn’t – working.

The Middle America authors of the study titled “Financing Dies in Darkness? The Impact of Newspaper Closures on Public Finance,” it should be noted, went to considerable lengths to identify reasons other than newspaper closures for local government ballooning in the absence of any oversight.

They couldn’t find any. They did, however, find some other correlations that should be of particular interests to Alaskans worried about statewide spending.

Citing a 2014 study by other researchers concluding “that the distance between a state’s economic and political centers is a useful measure of the quality of public governance and accountability in the state,”  the trio went looking for the statewide consequences of diminished news coverage.

“Governments face less scrutiny by citizens and the media when the distance between these (economic and political) centers is large, and Campante and Do (2014) show that the quality of governance is worse as a result,” they eventually wrote.

Alaska is the national leader in distance between economic and political centers. Juneau, the state capital, is 575 miles south of the Anchorage metropolitan Area, home to more than half the state’s population, and the economic center of the 49th state.

Given the current economic makeup of the state, Alaska having its capital in Juneau is comparable to the state of Massachusetts locating its capital in Cleveland, three states to the west.

The study found the data “supports our hypothesis that newspaper closures lead to worse public finance outcomes in states with low quality governance.”

The study defined “low quality governance” as that which occurs in “high isolation” states such as Alaska. The state has many times discussed moving the capital to somewhere in its urban underbelly, but with no results.

The study also pose a question particularly pertinent in these times:

“Do other forms of media fill the vacuum created by local newspaper closures?”

Saved by the internet?

The data, the authors confessed, is insufficient to allow a definitive conclusion, but it “might suggest some degree of substitutability between information obtained from local newspapers and online sources, the difference is also statistically insignificant. Thus, our results indicate that online sources do not provide a sufficient substitute
for the monitoring mechanism provided by local newspaper.”

At least at this time.

This could change, the authors admit. There is hope, they suggest, that online news sources could someday fulfill the watchdog void left by fading mainstream media, even if no one has as yet found the financial model to make online news work.

“In the long-run, perhaps an equilibrium will be reached in which these online-based organizations contract out work to local reporters and tailor their news to the local areas,” they write in the last lines of their study. “In 2009, former Baltimore Sun reporter and famous television producer David Simon stated the following: ‘The day I run into a Huffington Post reporter at a Baltimore Zoning Board hearing is the day that I will be confident that we’ve actually reached some sort of equilibrium.’ We concur, and our evidence suggests that economic growth at the county level will be better off in that equilibrium.”

The conclusion is the near perfect bookend to the quote from former President Thomas Jefferson, one of the country’s founding fathers, that prefaces the report:

“The functionaries of every government have propensities to command at will the liberty and property of their constituents. There is no safe deposit for these but with the people themselves, nor can they be safe with them without information. Where the press is free, and every man able to read, all is safe.”

The press is now free – or at least a lot of that press on the internet, but there are legitimate questions as to the substance of the stories that make it into the tubes and the significance given them by readers who have invested lifetimes in crediting the news on-paper – whether they liked it or not – with a certain stature.









40 replies »

  1. An important note was made in this article about Juneau being to far from the population center for good governance. I’m not certain if that’s a correct analysis. I do know it’s distance and remoteness makes it easy for our law makers to live in their own shielded world . Easily accessible to lobbyists and hard to access for the majority of common people. I would say that puts most of us at a disadvantage. Therefore possibly compromising the quality of our government.

  2. Bob Marley once said:
    “Never make a politician grant you a favor. They will always want to control you forever.” – Revolution
    Remember that regardless of which side of the “Aisle” you choose to sit as we are divided by design😉

  3. Tom walker and Bryan . You discus the disaster of media and information releases- studies polls – ect . inaccuracies that currently plague our nation and perhaps the word . You are probably both great people but inaccurate information and journalism has put you at odds as far as belief spectrum becouse there is so much misinformation floating around it confuses and divides people. It’s hard to get the real facts . Tom I promise you ,Bryan is closer to reality than you would think . But it’s nessasary to start all over at the beginning and study and proof read every iota of info since writing began to achieve a factual picture. Even then it’s very tough as the future can’t be predicted. At least you give a darn ! You are both good Americans! In this day and age when some people are so vicious it’s nessasary at times to keep some form of anonymity. To keep from being attacked even hunted down by questionable folks that don’t care for kindness or rule of law . What’s most important on this site is to recognize good concepts and ideas and not who It came from . If it’s garbage throw it out if it’s possible good info treasure it . That’s my opinion. As this site is for readers and thinkers . Obviously if this site became infected by “trolls “ I might have a different opinion. It hasn’t attracted many to my knowledge.

    • Ok.
      You should stick to one handle (Opinion or Truth).
      Otherwise you are starting to seem like a Troll.
      You can always use your real name as well (Unless the Irod boys won’t allow that.)

      • Steve ,You are obviously trolling me . Go use your online harassment on someone else . Or contribute to a quality discussion. Interested to hear your viable comments though. Thanks.

      • Was I lying about you using two handles on one story?
        Tom Walker also made a point to ask Bryan his real name…
        So, this is relative to this discussion.
        Why not just use your real name?
        Seems weird to me.

      • Steve what’s weird is your obsession with commentors personal information that is not part of the article. That’s private to them . Quit looking people up and twisting what you find and using it for personal attacks against them .Stick to the awesome articles at hand . Move on and drop it . I’m intrigued by what these articles are about and could care less who you are . So leave me alone .

      • Ramey,
        I am sorry you feel my questions regarding your “multiple handle etiquette” is a “personal attack”….
        Bryan did not suggest Tom was “attacking” him by asking his real name.
        The funny thing is that most of us here already know your two handles (hence, I already know your real name)…
        I will drop it….and you may do as you wish.
        And lastly, please enjoy the sunny afternoon😉

      • Steve, have you been watching the lunatic Dems during the Kavanaugh hearings? I mean Micheal Brown is a hero and Daryl Wilson is still in hiding. Get it now.

  4. Bryan, how bout signing your real name so we know which Republican you work for, or adhere to, or pledge allegiance to.

    • That is simple Tom, I pledge allegience to the Constitutional Republic. I do not identify with today’s Repuplican Party and I certainly do not subscribe to the anti-American communist Democrat Party. That is why I appreciate Trump. Not only is he brilliant but, he flogs both corrupt parties to include the lying media. It truly is a beautiful thing to watch. I mean Tom, you don’t actually believe what Obama, the Clinton’s, Mueller, Ryan, McConnell, Pelosi, or the media, etc. say do you? Those people wake-up lying. It is almost embarrassing talking to a Democrat these days. I am like, why aren’t they living in utopic Cuba?

      • I am no Dem or Rep. but your predictable screeds and frequent vituperative outbursts come straight from Hannity and Limbaugh which greatly reduces your cred. People blast Medred at times. But he at least, like Mr Yankee, has the balls to sign his own name.

      • Tom Walker, first off I cut my cable 4 years ago. I will also admit I have taken a “break” from politics since President Trump won, hence my rustiness. So, truth be told, I haven’t watched Hannity or listened to Rush in years.
        Also Tom, you would be wrong on all your assumptions.
        Listen, the truth comes from many sources. In the times we live in, people who deny facts, the truth, etc.. or don’t like what they read will call it “screed, trolling, vitriol, lies even, or ‘taken from Hannity or Rush'”. So what if anything is taken from Rush or Hannity? Does that make it less true? I mean, would you prefer if I quoted CNN? Just this week they have lied to cover their blatant lies. So Tom relax, realize both sides could be liars but, also realize one side is better at it and actually dangerous to a true America.
        Thanks Opinion 🙂

      • Of course my “screed” are predictable Tom. There is either right or wrong and it should be pretty obvious what is going on if one truly opens their eyes to reality.

    • Unconvinced. My point, meant constructively, to Bryan. Those with the most cred sign their full name and have original ideas clearly stated without resorting to attacking others. By the by, ugly anonymity is the hallmark of the social media.

      • Tom, not sure I was shopping around for or needing your validation. Besides, who was attacking others here? Not I. Debating most certainly, attacking doubtful. If you care to refute anything I say, by all means do so. I have no issue with that. Also, I could careless whether your name really is Tom Walker.

      • Tom,
        Well said.
        We were given a full name for a reason in this country.
        Use it and stand behind your success as well as your short falls.

  5. BTW: Seems like I haven’t seen anything in the ADN written by political journalist Nathaniel Herz for a few months. Did he move on to working for gubmint, pursuing the career track that you mention?

    • he’s at Alaska Public Media, which is sort of government. it was a major loss for ADN. Nat could be a little full of himself – many of us were as young reporters (I plead guilty) – but he has an inquisitive mind, a decent intellect and he’s not afraid to ask questions.

      • And Nat never turned off commenting for articles that were polarizing, unlike Tegan Hanlon (a thin-skinned, lazy reporter).

      • Craig,
        I have to agree on Alaska Public Media….
        For all of their “field work” their is little to no controversy in their statements.

  6. Medred, I’d stick to fish were I you. It makes it much harder to insert Obama, Bush or Trump into the comments section. Of course that subject will not stop the yapper’s but they might stay more on topic.

    BTW, nice essay. To me, I see lots of changes in many public things that are disturbing but for whatever reason appear unavoidable as much as they are unrelenting.

    • I tried to stay on topic here. Newspapers keeping the government checked I do believe.
      I gave links to the CAFR’s, financial monies most don’t know about.

      But you’re correct it’s easier to lob insults back and forth between each side. BTW the government loves it, that way you’re not paying attention to what they’re really up to..

      Any good bear tales…..I do love a good bear story. Maybe one involving a fish.

      • Zip,
        I thought of you this morning as a female reporter on NPR admitted she is a Democrat, but does not believe in most of the party’s Idelogogy…
        BTW, I am not a registered Democrat nor have I ever been….but I am probably going to vote for Mark Begich for governor.
        Not just for his party, but his common sense.

  7. Bill, not so fast. Go do a little more homework instead of the usual “Obama inherited” this or that. Did you get the part about doubling the National Debt with zero to show for it (anemic growth – “the goid days are behind us”).
    In sharp contrast to Reagan, Obama’s first major legislative initiative was the so-called stimulus, which increased future federal spending by nearly a trillion dollars, the most expensive legislation in history up till that point. We know now, as thinking people knew at the time, that this record shattering spending bill only stimulated government spending, deficits and debt. Contrary to official Democrat Keynesian witchcraft, you don’t promote economic recovery, growth and prosperity by borrowing a trillion dollars out of the economy to spend a trillion dollars back into it.

    But this was just a warm up for Obama’s Swedish socialism. Obama worked with Pelosi’s Democratic Congress to pass an additional, $410 billion, supplemental spending bill for fiscal year 2009, which was too much even for big spending President Bush, who had specifically rejected it in 2008. Next in 2009 came a $40 billion expansion in the SCHIP entitlement program, as if we didn’t already have way more than too much entitlement spending.

    But those were just the preliminaries for the biggest single spending bill in world history, Obamacare, enacted in March, 2010. That legislation is not yet even counted in Obama’s spending record so far because it mostly does not go into effect until 2014. But it is now scored by CBO as increasing federal spending by $1.6 trillion in the first 10 years alone, with trillions more to come in future years.

    After just one year of the Obama spending binge, federal spending had already rocketed to 25.2% of GDP, the highest in American history except for World War II. That compares to 20.8% in 2008, and an average of 19.6% during Bush’s two terms. The average during President Clinton’s two terms was 19.8%, and during the 60-plus years from World War II until 2008 — 19.7%. Obama’s own fiscal 2013 budget released in February projects the average during the entire 4 years of the Obama Administration to come in at 24.4% in just a few months. That budget shows federal spending increasing from $2.983 trillion in 2008 to an all time record $3.796 trillion in 2012, an increase of 27.3%.

    • Bryan, you obviously have never studied economics. That’s exactly what government should do after such a recession!!! The private sector had collapsed with huge numbers of businesses shutting their doors and people investing in gold, thinking it all would collapse.
      Government was the last resort and it worked, too. Some felt that the stimulus pkg. was too small and that’s possibly why the rebound was as anemic as it was.
      Anyway, you get the idea. That great recession was something that shook up everyone and caused (still causing) problems for many with the housing collapse. Of course we (with 20/20 vision now) can point fingers at all involved but the world was (at the time) looking at the collapse of the banking system. Serious stuff IMO!

      • Let me add, here that the stimulus pkg. was necessary but the “bailout of the banks” is debatable with many Republicans saying (now that we’ve recovered) that they wouldn’t do it again.

    • If the above links seem like a little too much, take them to a trusted accountant and have them explain. Surplus money everywhere in government.

      Ron Paul and now Rand Paul have been trying for many years to pass something in congress to have our federal reserve audited. They have been blocked from doing this at ever turn. Our federal reserve is not federal it is private and they do not want transparency to the people. Makes you wonder why.

      • Glad you mentioned federal reserve. From what I have studied it is a part of the reason our money is devalued over time in effect causing financial pain Therefore social pain and cultural mess . Could eventually cause our government to collapse. Been awhile since I read up on it but I believe there is a percentage of interest paid to them for providing our new money and helping with government bond loans ? This automatically causes money to become less valuable over time . Can’t remember details but I will read up on it later .

  8. I don’t think it is “Journalism down” as it is Journalism ignores. During the Obama years, the most goverenment spending years in our history, journalism remained silent. So, is this type of “Journalism Down” actually part of their most insideous form of reporting and that is to ignore?
    “Moreover, before Obama there had never been a deficit anywhere near $1 trillion. The highest previously was $458 billion, or less than half a trillion, in 2008. The federal deficit for the last budget adopted by a Republican controlled Congress was $161 billion for fiscal year 2007. But the budget deficits for Obama’s four years were reported in Obama’s own 2013 budget as $1.413 trillion for 2009, $1.293 trillion for 2010, $1.3 trillion for 2011, and $1.327 trillion for 2012, four years in a row of deficits of $1.3 trillion or more, the highest in world history.

    President Obama’s own 2013 budget shows that as a result federal debt held by the public will double during Obama’s four years as President. That means in just one term President Obama will have increased the national debt as much as all prior Presidents, from George Washington to George Bush, combined.”

    • Nice try there Bryan but remember that Obama inherited the problem from GWB with his huge expenditures for Iraq War as well as the issue of the Great Recession. Those deficits were “baked in!” And you can also look and see that we did very quickly recover (slowly but surely) from that Great Recession.
      By the way, a lot of Republicans were on board with the bailing out of the banks (including John McCain and our own Lisa) and many of them have been backtracking ever since-it’s quite a feat for a Republican capitalist to get behind such a bailout but that’s exactly what they did. That gives you an idea of just how spooked everyone was but the end result was that the taxpayers ended up bailing out big business, again.

    • OK Bryan, in today’s episode of ‘Let’s look at things objectively’, can you please tell me how much in the red Mr. Trump has run during his 1st year and 1/2?….. Probably not at a level that a real conservative would be proud of, huh?

      Extra credit assignment for Steve: How much has GDP growth increased under Mr. Trump’s ‘leadership’? Probably a lot higher than a liberal who champions Obama’s economic policies ever thought, huh?

      Today’s episode has been brought to you by the coalition for snarky-independently-minded-folks-who-are-sick-of-listening-to-chest-thumping-fact-cherry-pickin’-myopic-partisians…

      Well, I’m off to increase my personal GDP.

      Cheers, boys!

      • Bill, you do realize the Dems created the mortgage mess by forcing banks to offer loans to those that should have never had a mortgage in the first place? By forcing, I mean the ole wink, meaning, do it or else… I guess the moral of this story is to never lend your credit card to a Socialist.

      • Pure speculation, Bryan however there certainly was plenty of creative financing going around.
        That said, it really doesn’t make that much difference what/who caused the issue just as long as that Great Recession was not allowed to become another Great Depression. And, as far as I know, nobody went to jail over the mess-possible/probable that the reasons were many and varied enough to make it impossible to prosecute.

      • Jack,
        Increased GDP due to arms sales to the Middle East does not impress me, nor does the bomb dropped every 12 mins under Trump.
        We have soldier activity in 80 to 90 countries a day (even if it is training and Intel missions).
        We need a look at Pentagon spending to ever now if there is any National “profit”.
        A look at the rising deficit would tell me No.

    • Bill, we recovered inspite of Obama, not because of Obama. You remember the whole “you didn’t build that”? So, let me get this straight Bill – Obama takes the National Debt from $9.5 trillion to almost $20 trillion in 8yrs and all we have to show for it is an anemic 3% growth with the huckster saying “the good times are behind us, we’ll never see above 3% again” and he is right, under Socialism, we would not. With Trump less than 2yrs in office we see growth nearing 5%, strong housing market, record stock market, etc.. Oh, I know, it was all Obama’s good ecomonmic leadership right? After all, he went to Ha’vard didn’t he? So he says anyway.

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