Cost of government rises when local newspaper closes, study finds | Hacker News Reader

Cost of government rises when local newspaper closes, study finds

theguardian.com

125 pointssantix41 comments

OK, so they found that "the spread or yield of newly issued local municipal bonds increased" after local papers closed. But from the title, I was expecting some actual data on local government spending. But no, it's all based on borrowing costs. The stuff about local papers having acted as watchdog agents is just interpretation.

Here's the abstract of the study cited in the article:

> Local newspapers hold their governments accountable. We examine the effect of local newspaper closures on public finance for local governments. Following a newspaper closure, we find municipal borrowing costs increase by 5 to 11 basis points in the long run. Identification tests illustrate that these results are not being driven by deteriorating local economic conditions. The loss of monitoring that results from newspaper closures is associated with increased government inefficiencies, including higher likelihoods of costly advance refundings and negotiated issues, and higher government wages, employees, and tax revenues.

Borrowing costs obviously are (part of) government spending.

But, more importantly, the idea is to use the market as a sort of proxy, or research instrument: it's the best known structure to judge the financial future of various entities, including governments. Borrowing costs, in an efficient market, perfectly represent society's consensus opinion on those cities' financial future.

While it's possible that markets aren't perfect in pricing these bonds, they are almost certainly better at it than any single research team could ever hope to be.

Until they aren't anyway. Look at the AAA rated junk mortgage backed securities. Or Theranos - due diligence from a biology processor making money on the side could have told you that not all blood is sourced equal and the statistical minimum sizes to be able to detect certain components of low concentration accurately. Attempting to screen blood noninvasively would be more possible and that is a far harder problem that would call for several chained breakthroughs. Forget a research team - one person could beat the market without so much as cracking a book!

A perfect market requires perfect knowledge which in addition to requiring science fiction predictive abilities would have very weird implications given causality issues. Like loans being marginal in rates or not granted (if you know ahead of time they will be good for it is guaranteed profit and everyone with capital could give a small but net winning offer). If they knew they would lose nobody would give a lossy loan.

The stock market would be bizarrely illiquid or obsolete as funding is already guaranteed. Few would sell for what they see as a worse investment. Being able to tell if loaning five billion to an eccentric scientist would pay off or not.

Interesting hypotheticals aside it is important to remember that while good at managing supply and demand usually the market is not an oracle nor a god. Going against what everyone thinks is worthless is one way to strike it rich.

Yeah. I'd take a lot of convincing that they hadn't just failed to specify adequate identification tests, since local newspaper closures and raised municipal borrowing costs are both clearly and obviously linked to local economic conditions, and the potential linkage between municipal bond rates and local newspaper scrutiny far more questionable.

The article links to the paper, where this is the number one concern they address. They seem to have a bunch of different ways of slicing the data to prove their effect, e.g. pairing demographically similar districts, looking at newspaper shutdowns likely induced by Craigslist, looking at number of newspapers in a district, looking at distance of political center to economic center. I don't know if this is a complete list of things that economists would look at, so I don't know if they're cherry-picking good ways to slice the data, but they have 47 pages of trying to convince you it's right if you want to dig that deep :)

There could obviously be other explanations, e.g. markets thinking that less information rich environments are just riskier because they won't know what's going on, but they seem to have been fairly thorough in establishing the link between newspapers closing and bond rates increasing.

Yes, they do lots of checking. But still, I don't see anything clear beyond the association of newspaper shutdowns and increasing bond rates. Nothing about mechanism except speculative argument. This is very much like epidemiology. And the literature is loaded with retrospective studies that found correlations which turned out to reflect selection bias and/or confounding. You really need prospective studies with carefully matched controls.

I worked for a media company that had their hands in print, radio and TV. The community based news papers had way higher profit margins than the large news papers.

Maybe I’m confused, but what’s the connection between the profit margin of newspapers and the linked article?

Without profitability they cannot survive. The industry as a whole is in decline. People are not as willing to pay for content and ad revenue is not as profitable. But, more importantly, ad revenue also makes what little content is left more susceptible to manipulation vs actually reporting the facts. Compared to how many of these news outlets used to be, many of the local ones today are complete garbage. Lots of poorly written, if it bleeds it leads types of articles etc..

> Without profitability they cannot survive.

clearly, but again, what is the link to the original statement?

It was a random side note about how community news papers were more profitable than the ones that cover larger areas. The community ones also report on city goverment stuff, so losing one would just be a loss of another information outlet.

There's a phenomenal article that hits on this point: The Bad News About the News [1] It's by Robert Kaiser, a 50 year veteran editor and reporter of the Washington Post that decided to retire shortly following Bezos' purchase of the company. I hate giving cliff notes of it since it's such a well written piece that should really be consumed as a whole, so don't take this post as cliff notes - but as some related asides.

One important point is that in the past the media had an effective monopoly on information and that basically gave them a never ending faucet of money. The internet has changed all of this. Newspapers, or the media in general today, operate on thin to nonexistent margins. When times are good it's much easier to focus on things like journalistic integrity and quality. In the golden era of the media, monopolized as it was, could enjoy the luxury of having relatively little concern about how their readers would, for instance, react to their reporting. There was no need to pander to fashionable views or condemn unfashionable views. They could write as they saw with their guiding beacon being little more than the story itself.

There's a fine quote in the article from another individual, "By undermining the economic basis of professional reporting and by fragmenting the public, [the digital revolution] has weakened the ability of the press to act as an effective agent of public accountability. If we take seriously the idea that an independent press serves an essential democratic function, its institutional distress may weaken democracy itself. And that is the danger that confronts us."

Now the media is driven to compete against social media, and other media outlets who have 0 concern for anything other than feeding their own buzz. And social media, contrary to promises of uniting society and people, has instead fragmented people into ever more radically divided groups. And this is now reflected in the media as people have hovered to sources that primarily just confirm their own biases and tell them what they want to hear.

One thing I will say as a counter to this all is that, peculiarly enough, even establishments that are supposed to be above monetary concerns have gone downhill. For instance the BBC was at one time the pinnacle of impartial reporting, yet they now are falling into the same trappings of partisanship, bias, and sensationalism that plagues the rest of the media in spite of the fact that (to my knowledge) they have 0 financial mandates. As I check the front page of that site this very moment (with a cleared cache) two of the top 5 displayed headlines are: "A world outraged over crispy chicken" and "How a YouTube beef shook the vegan world.". ...

[1] - http://csweb.brookings.edu/content/research/essays/2014/bad-...

BBC has most likely never been non partisan though. It's just the stance it used to take was too close to the so-called neutral one, which isn't actually neutral.

No way to disagree about sensationnalism though.

BBC has massive financial issues. In 2005 the license fee was £183.46 (in today's money). It's now £147. That's a 20% cut in revenue in the last 13 years. In addition to that, funding for World Service and Monitoring has been moved to the license fee too.

If you're accessing from abroad you're the product -- the website is selling space to advertise to you.

This is the front page I see in the UK: https://i.imgur.com/EAADNgI.png

Top headline is Korea/US Then next is Migrants, G7, Grenfell, and a trooping the colour change The the sidebar is Entertainment, Crime, Sport, Entertainment, Entertainment, Crime, Technology

Internationally things like outbrain infect the BBC site, but we don't get that in the UK where we pay for it

I am ready to join any venture in creating local news. I am a capable writer with above average capability and means for generating local content. I have applied to every local paper in my area and have never once received a call/email back. I won't stop trying, but if anyone here is attempting a project even remotely pointed in the direction of local,online-or-paper news, i'd appreciate your consideration. I'm happy to start at minimum wage. I just want to write news in my spare time.

You will probably get further by writing a story and then sending that story to local papers, rather than sending applications.

If you're more interested in distribution than payment, Google is trying to build a tool for the general public to write news stories, get them published and indexed and surfaced to people: https://posts.google.com/bulletin/share

Cool concept. If it comes to my city, i am totally doing it.

We have the internet reach the community you love to write about online.

Love is rarely a part of what i have to write about... 40.72455679, -74.18459239

well then, lets start a quick wordpress and self publish

https://mutinit.com

We are looking for people just like you!

I appreciate the link, but i am looking for a job, part time at that, not starting a company (i'm already a partner in a small business). How does your business help me become a staff writer?

It would only be helpful if you would want to start your own publication, not join an existing one!

Have you considered starting your own?

Yeah actually. I'm currently working through my undergrad. I was a staff writer at the university until i was fired for... it is a long story. Regardless, i have toyed with the idea of doing an underground newspaper. Do you think your platform would be helpful in that regard?

100%. We should stay in touch

Probably true, but just an opportunity for someone to produce something local and not paper based. Most products are designed for mass markets, it'd be great to see something work for a large group of smaller community in the way newspapers did in the past. Also i wonder if this is in part due to the fact that online news is more easily manipulated and therefore corruption is easier to get away with.

Nextdoor.com is used for this in my neighborhood. Lots of people debating local issues, local news stations posting relevant news, people buying and selling stuff (like the classifieds in a newspaper), local real estate etc.

I think that sounds close to what you're describing.

Google's Bulletin is hyperlocal, https://searchengineland.com/google-bulletin-hyperlocal-news...

The article specifically addressed your suggestion. It said people had been suggesting that ever since community papers declined, but there's been no replacement.

It's still good to look for a replacement, but I think you may be being a bit blasé about it.

I never said it would be easy, and i certainly don’t have a solution. Having worked very closely with old school media companies, being acquired by one, and trying to contribute to the issues...yeah, maybe I’m just exhausted by the problem, but i stand by staying it’s a big opportunity when someone finally gets it right.

There was "patch.com". But now it just seems to be a scraper of news sites.

I kind of read the headline as, ‘pay the guardian a subscription fee or we’ll aggravate, and amplify, stories that make society feel more scared and under attack from forces that can only be resolved with less freedoms and more tax payer spending’.

Perhaps the guardian should lobby to make non payment of ‘subscription’ a criminal offence and benefit from the same protections over competition that are awarded the bbc news.

That makes no sense. The Guardian is not a local newspaper, it wouldn't benefit from higher taxes, and you don't need a subscription to read the BBC news.

I try to put as much information into a small amount text so it’s quick for you to read. I don’t need to write a 20 page essay to convince you. But I’ll give you a few points. The guardian is just another lobby with its own hopes and fears, but trying to convert all its readers to a subscription model, and it will use any click bait title and print any fud it can to convince you of the virtues of the subscription model. The bbc license fee, is illegal in England not to pay. The terms and conditions on license fee renewal cover all forms of media distribution and ways you might consume bbc content. And it’s illegal to reprint those terms and conditions in any other media format available so I can’t copy and paste it here for you. 50 percent of the criminals that pass through a British councils court houses, are there for non payment of bbc license fee. I get this info from my local paper public notices section. The bbc license fee creates a unlevel playing field for all other media organisations which who have media business models similar to the many media types the bbc produces. Bbc gets its money for free, many people, especially poor, receive criminal convictions for not paying it, it creates an anti competitive environment for competing media organisations, it’s lawyers are the best. At least local news outlets can print all the court cases it wins, if it’s still legal to. I heard that recently many more criminal convictions, let alone suspect investigations, are now subject to gag orders. This is England

Ok so...

There's no "BBC fee". Theres a TV Licence fee.

You don't need to pay it if you don't own a tv. Or you own a tv hooked up to a playstation. There's also many other (legal) reasons to not pay for it.

There's no such thing as a "british council court house". There's magistrates court, where non-payment of the license fee might end up at.

"50 percent of the criminals that pass through a British councils court houses, are there for non payment of bbc license fee" is a ridiculous statement. It's closer to 1 in 10, a fact you could have discovered by a simple google search. You can find a related article here: https://fullfact.org/news/do-tv-licence-offences-account-one...

A criminal conviction for non payment of the tv license fee will not show up in most checks, and you don't have to disclose it.

Every single thing you typed above is either completely incorrect, or specifically misleading.

So 10 percent of criminal convictions are bbc license fee related, and many don’t show up in searches or make it far enough to be statutorily documented. I’m really sorry I wrote the British court house thing, you see, I don’t need to speak the queens english, or write within the constraints of proper journalist standards to convey an idea in a small text field on a public forum. Unless of course the law has changed, and the system needs justify its existence with more examples victimless petty crime. Did you understand my concept of what the bbc license fee protects.

The naming of the license as ‘TV license’ is extremely, deliberately and specifically misleading.

You don't need to speak good English to convince people on this forum, but you do need to be able to back up your ideas with evidence. I do have sympathy with arguments against the BBC license fee and subscription models, but the fact that you pull exaggerated figures from the top of your head to support your arguments does very little for you.

You just broke the law of my second disagreer. It’s ‘TV license’, not ‘BBC license’, seems you're no better than me or perhaps been a little misinformed by its naming, just like just about everybody, except those who read and understood it’s terms and conditions.

I call the tv licence, the communications license, but in order to maintain a little obfuscation if it’s real purpose to the general public, you could name it the ‘BCC License’ - British Compulsory Communications License. Where You would have no right to communicate unless you ticked the box, right before payment, that shows you understood the t&cs.

You can use almost all media and communications services without paying the license fee, including browsing the internet (even the BBC news website!), watching catch-up TV (except BBC iPlayer) and using a TV to play computer games, watch DVDs or listen to digital radio.

You only need to pay the license fee if you watch live television or, more recently, BBC iPlayer. I know this because I went for many years without paying the fee, legally and guilt-free.

I’m sorry but there is no get out clause in today’s modern society when it comes to paying the tv license fee, unless your over 65 or registered unemployed. The magistrate is going to need full access to your private communications to find any evidence of you flouting the tv licensing laws so they can decide if you are guilty or not. Sending someone around to your house at night to look through your window and see what that strange flashing glow is, is just too old fashioned.

You can get out of paying the license fee by not watching live television or BBC iPlayer. I know a lot of people that do this without any problems.

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