Mader Blog

Apropos my previous post, I note that David Akin is highlighting the Conservative Government’s decision to subsidize a politically conservative regional news magazine. Says Akin:

This, of course, was the day after CBC announced about 800 layoffs because of a budget shortfall it hoped Canada’s government, on behalf of all taxpayers, might cover. For better or worse, CBC is not “Western Canada’s Conservative Voice.”

For the record, I oppose all bailouts as a matter of principle; to paraphrase that Swedish minister, the Canadian government should not be prepared to own car factories–or news rooms.

But given that bailouts are de rigeur at the moment, I don’t think Akin means to suggest that the newsmagazine should be categorically ineligible for a bailout; rather, his point is that there’s something incongruous, and politically troubling, about a Conservative government subsidizing a conservative newsmagazine while the CBC–widely perceived to be politically liberal–is shedding jobs. My question is: is this a fair point?

After all, the newsmagazine in question–and, presumably, most private media enterprises in Canada–confront this economic crisis from a very different starting place than does the national public broadcaster. In boom times, private enterprises receive (ideally) no public dollars, while in boom times, the public broadcaster receives hundreds and hundreds of millions of dollars.

When the boom times go bust, many private enterprises face the prospect of total economic failure. Government bailouts are justified on the theory that subsidized survival is better than failure. As noted, I generally dispute this premise–but it’s the prevailing one. But does a downturn affect the public broadcaster the same way? Unlike a private enterprise, the public broadcaster never turns a profit–even in boom times. (If it did, it wouldn’t need to be a public broadcaster; after all, the core justification for a public broadcaster is to ensure a medium for the dissemination of voices that would not otherwise be disseminated; and if those voices could be disseminated privately, the state would not need to fund and operate its own mechanism for dissemination.) So when boom times go bust, the public broadcaster doesn’t face the prospect of failure–unless the state itself threatens to fail. But if government revenues fall during a downturn, it seems natural that expenditures on the public broadcaster would fall in rough proportion, with corrections for the relative importance of a public broadcaster versus other government expenditures during a recession or depression.

To cut to the point: if a government bailout places a subsidized private media enterprise in the position it would have been in had there been no downturn, then it would be fair for the CBC to demand continued funding at pre-downturn levels. But if bailouts are designed only to prevent the absolute failure of private enterprises, and those enterprises must consolidate operations notwithstanding their bailouts, then it becomes hard to make the case that the CBC should be entitled to continue to operate as though there were no economic downturn.

So which is the case?