There has been considerable discussion in the US this week about the financial health of newspaper publishers. Suffering fron significant advertising and circulation declines, the Newspaper Association of America told Congress yesterday that publishers may need government assistance. President Obama has bought into the discussion. Newspapers are covering this story widely, as you’d expect.
While I don’t live in the US, my view is that the government ought not bail out newspapers or other businesses in hard times unless they are prepared to do this across all business sectors. The cherry picking by governments for bail out funds over the years has led to inefficient industries. Look at the auto sector around the world. Look at banks even here in Australia and the support they received over the last year yet the massive profits they continue to report.
Small businesses, like newsagencies, are never on the bail out radar. We are too small and insignificant to be of interest yet we punch above our weight in terms of economic contribution.
So, my view is that governments should stop bailing out businesses, even newspapers if it comes to that. We are in the free market economy which big business wants after all.
it all depends how strong your connections and $$$ talks. ‘Corruption” is a harsh word in so called 1st class countries.
Unfortunately Mark the ramifications of not helping may far exceed the other option. It is the worker, the backbone of the company, who will suffer the most.
CEO’s and shareholders should take a hard look at each other before committing a workforce to the rubbish tip because of a shrinking market. I dont have a problem with government assistance in the short term, provided checks and measures are in place to recoup that assistance in later times.
Stimulus isn’t a bad thing when the economy gets out of control. However it should not be used to “bail” out the bad guys or used to try and crate “spending”. Most of the package should have gone to small business SME’s in the way of subsidized interest rates. After all it’s jobs that we need to maintain and not at reduced wages so that the worker gets something and that keeps the stats as employed and saves unemployment benefits. It just doesn’t work in the long term-Less money in the pocket with cause underconsumption and deleveraging.
I agree. Economic downturns are great for ridding the economy of innefficient businesses. Bail-outs can often counteract this, making it harder and slower for the economy to recover in the long term.
Banks can be a different situation hen taking into consideration the role they play in a country’s overall economic stabilty. However their needs to be long term accountability.