Oldspapers and the Crisis of the Establishment

Recently by Gary North: Jaime Escalante: Master Teacher, Envious System

“Freedom of the press is guaranteed only to those who own one.”

~ A. J. Liebling

“People everywhere confuse what they read in newspapers with news.”

~ A. J. Liebling

Liebling had it right. He died in 1963. He would have enjoyed what has taken place in journalism since the advent of the World Wide Web’s Navigator browser in late 1994. The Web began to take off in 1995. I started my first site in 1996.

Anyone with a Web connection can set up a blog for free on Blogger or WordPress. He can then move on to a separately controlled, hosted Web site for a few dollars a month.

If he is really lucky, he can get a President impeached. Matt Drudge did.

The gatekeepers stand at the gates, guarding who goes in and what goes out. But the walls have gaping holes in them, if they still stand at all. This has never happened before in world history.

As a result, the world’s social order will change. We cannot see clearly what it will look like in 20 years or 50 years, but the changes inaugurated by the printing press in one century, 1450—1550, offer good examples of what will happen. The pace of change is much faster today.


Almost no one under age 35 subscribes to a daily newspaper in the United States. This is a widely known fact. It has been known for over a decade.

It is clear to all that newspapers must switch to the Web in order to survive. They must also find a business model that enables them to show a profit. So far, no major daily urban newspaper has made this transition. The losses on the Web editions are so great that they must be sustained by the print editions. It is highly unlikely that any of them will make the shift successfully. The loss of paid subscribers is now too rapid.

In the fall of 2009, Bloomberg published a report on the decline of paid subscriptions to print editions over the past year. For 379 newspapers, the decline was 11%.

If we apply the “law of 70” — 70 divided by 11 — we find that these newspapers will have only half their paid subscribers in another 6.3 years. Of course, they won’t all decline at the same rate. Probably half of them will go bankrupt before then. It may be more than half.

Here is the poster child of on-line paid subscription newspapers. A family paid $650 million to buy Newsday, the Long Island newspaper. The paper paid an additional $4 million to create an on-line edition in which readers would pay $5 a week. Total number of subscribers who did this: 35.

The New York Times has announced that it will begin charging frequent visitors to view its contents, beginning in 2011. It is aimed at visitors who are loyal to the Times. Yes, the paper really said this.

This strategy will not work. Loyalty is great, but it works in the newspaper industry only when it’s free of charge. As soon as there is a fee, loyalty ends. The decision-makers at the Times are living in a fantasy world. They are desperate, like mammoths in the La Brea tar pits. They are thrashing around, trying to make a pay-to-read on-line model work. It won’t work.

Printed daily newspapers are doomed. On-line daily paid-subscription newspapers are also doomed. Conclusion: the Establishment is about to lose one of its three major instruments for shaping public opinion: newspapers, the TV networks, and the tax-funded schools.


I have not subscribed to a print edition of a daily newspaper for a dozen years. I used to subscribe to The Wall Street Journal and The New York Times. That was a long time ago.

Those two outlets are the mouthpieces for the two sides of the Punch & Judy show that we call politics. Their editorial pages are where Left-wing Keynesians and Right-wing Keynesians debate about how large the Federal deficit should be.

You have never read an editorial in the WSJ on the need for reducing the Federal debt to zero, while simultaneously removing all legal authority of the Federal Reserve System to act as an enforcement agency of the U.S. government, i.e., advocating the complete privatization of the FED. That is what Andrew Jackson did: reduced the Federal debt to zero for the first and last time, and also privatized the Second Bank of the United States, which then went bankrupt. So, it can be done. But no agency of Establishment opinion thinks that the Federal debt should ever be zero, nor does it suggest that central banking is an enormous scam.

The Right and the Left are agreed on central banking. This goes back to 1848: the anonymously published Manifesto of the Communist Party, wherein Marx and Engels recommended the creation of a central bank as one of the ten steps to socialize a society.

In a puppet show, you never see the person or persons whose hands are inside the puppets, or whose hands control the strings of the marionettes. That would spoil the show.

The children know the puppets are not real. So do the parents. But the show is entertaining.

The national puppet shows that entertain us politically are not widely perceived as puppet shows. So, the entertainers who control the strings can charge a lot more to the public. The public really does think that the show must go on. The level of taxation borne by the victims, the level of national government indebtedness, and the rate of monetary expansion all point to the grand success of the illusion.

The threat to the entertainers is that the public will begin to perceive that there are hands inside the puppets and above the strings on the marionettes.

This process of realization has begun.

I realized less than a week ago that The Atlanta Journal-Constitution has been appearing on my driveway every morning. I had thought it was one of those throwaway Thrifty Nickel-type papers. My wife had subscribed temporarily.

I picked up Monday’s issue. The paper is an emaciated version of what I had known as a newspaper a dozen years ago. It is not so wide. It has 32 pages. Yet it serves a metropolitan region of over 5 million people.

The paper is filled with day-old national and international stories, plus local stories of little interest to me.

The stories are written or re-written by local reporters. There may be some good ones on the staff. I do not intend to find out by reading the paper, front to back, for a month. If I am going to read articles by unknown journalists, I will read the first or second stories on Google News. Why? Because those are the stories that millions of people read. I can get the Establishment’s slant on the story.

I used to clip the NYT and the WSJ. I had to tape each one to a sheet of paper. I filed them in one of a dozen 4-drawer filing cabinets. I hoped I could recall the search terms. (For years, I could. Not now.) These were newspapers of record. But why physically clip a newspaper today? I can use Evernote to do this digitally. I can clip a paragraph or an entire article. I add search words. They are now permanent additions to my files. If my computer dies, so what? Evernote is on-line.

There is now no newspaper of record. The Times had its crucial annual index. Now there is Google. I can find thousands of entries on a topic. I am not limited to the slant provided by the Times.

The Times is steadily hemorrhaging financially. It will eventually go under. I figure that this will happen by 2020. All the news that’s fit to print will no longer be printed by the Times.


Recently, I completed Part 1 of a projected 2-part DVD series on the history of the American conservative movement. I introduced it by making a statement. I said that the historian has three primary tasks:

1. Follow the confession.2. Follow the money.3. Follow the media.

The confession of any movement is its statement of faith. What do its members believe to be true about five topics: God, man, law, causation, and the future?

The money question is obvious. How does the movement fund itself?

The media question should be obvious: How does a movement get its message to the public? Rarely in any textbook is there a detailed discussion about how members of a movement communicated. A textbook in American history will discuss the Committees of Correspondence, 1773—76, or the Abolitionist movement, 1830—60. That is because these movements won on the battlefield. The winners write the textbooks. But, even here, there is rarely any discussion of those successful operations that depended on a conspiracy to win. The winners write a very different story, emphasizing the power of democracy to achieve good. The losers find that their version of a story does not reach the general public. It does not get into the textbooks.

Following the media is a huge task. It means reading a few supposedly representative samples of hundreds of newspapers. After 1820, the number of papers got so large that the historical record ends. You cannot access all of them on microcard or on-line.

Within 50 years, this will no longer be true. All of the world’s newspapers will be on-line, from start to finish. Then search engines will ferret out opinions and reports. This will change the way the stories are presented. This may take only 25 years. Local newspapers will be scanned in. Local high school students could do this as a project, year by year. Or maybe Google will pay for it.

Once the papers are on-line, the ability of Establishment historians to prevent “amateurs” from telling new versions of old official stories will end.

Meanwhile, newspapers are dying. Their ability to shape public opinion may be gone today. This has happened in less than 15 years. The magnitude of what this represents has not been faced by the Establishments.


Pundits are salaried opinion-makers who have shaped the opinions of intellectuals for a century. They have readers because they are on the payrolls of newspapers.

The Times attempted to convert their pundits into an income stream in 2005. The paper began charging readers to read these pundits. That experiment lasted for exactly two years. Then the company abandoned it.

These experts — mostly Left-wing Keynesians — sit at their keyboards and crank out the daily quota of ideas. I do the same myself. But these people are salaried. I am not. These people are hired to communicate the latest opinions of the Establishment. I am not. They are supposed to influence the opinions of decision-makers and their advisors. In the past, they have done this. But the cozy little arrangement is being smashed by the Web. There are too many opinions out there. The voters can find out what they want to know through social media and Google searches. There are now millions of well-informed voters who do not read the opinions of the pundits, except to ridicule them.


The oligopoly is breaking down because the media have opened up.

When the purchase price of a press is essentially the cost of a person’s time, the competition increases. There is no way to control the flow of information.

Think of the family that shelled out $650 million for Newsday. Think of Rupert Murdoch, who bought the London Times, and now is planning to impose a subscription for the on-line version. He didn’t get the memo. It must have been sent digitally.

The era of Establishment control over the flow of ideas is ending. That era rested on the high cost of entry. Now anyone can enter. The mammoths are in the tar pits, with their huge buildings, huge staffs, and huge debts.

One man in an apartment got a President impeached. Rupert Murdoch should have seen what was coming.

April 7, 2010

Gary North [send him mail] is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 20-volume series, An Economic Commentary on the Bible.

Copyright © 2010 Gary North