Here's why newspapers are going out of business

In September of 2008 the Fort Worth Star-Telegram had a major layoff of employees and put up for sale satellite buildings and the headquarters building downtown. There are more layoffs coming in the editorial and financial areas. There are many reasons for this, and one of them can be seen in an article in the paper, dated February 10.

In the article, “Coalition blames deregulation for higher power costs in Texas,” Dave Montgomery reports that the Cities Aggregation Power Project issued an 82 page study of the impact of 10 years of deregulation in Texas, showing that “Texans paid prices below the national average in the years leading up to Senate Bill 7. Since the market opened, prices have climbed above the national average. Deregulation prices paid by Texas households have increased by a greater percentage than any other deregulated state with retail competition.”

In contrast, Montgomery quotes the Association of Electric Companies of Texas as saying, “The simple fact is that in most parts of the state, there are lower competitive prices today than when prices were regulated.” Further in the article, Montgomery calls these two diametrically opposite, contradictory statements “conflicting views.”

Elementary matters of fact are not conflicting views, as Montgomery says they are. Either the rates were lower before deregulation or they were not. The actual figures to back up either statement will show which one is true and which one is false. But Montgomery doesn’t report the actual story here, that one of these groups is wrong and the other is right. After you’ve read the article, you don’t know any more than you did before. There’s no research presented to show what actually happened. All you know is that two groups are making contradictory claims.

A few minutes on the internet at the Electric Power Monthly, put out by the Energy Information Administration, Washington, DC, listing state by state electricity rates shows that Texas pays on average 26% more than the adjacent states of New Mexico, Oklahoma and Louisiana, and that Texas pays 15% more than the average of all other states for its electricity. These figures are not “conflicting views.”

The above shows that if you want to know the truth of a matter and be presented with the facts to back them up, you’re not going to get them from the newspapers. All the article gave us was he-said, she-said quotes that are no more informative than if they hadn’t been reported. Wasting column inches on this kind of thing is one of the reasons the newspapers are going out of business.

It’s much like the situation in the early ’70s when the import of foreign cars was on the rise, and the executives at the Detroit automakers couldn’t understand why their sales were rapidly dropping off. All they had to do was look down the street out the window of their offices and they could have seen that the street was filled with a lot of foreign cars that weren’t there before. Never occurred to them to do that.

As can be seen from reading this article, if you want to know what really happened, you must go to the internet. The newspapers can’t be bothered with doing a little research that you and I can do in a few minutes. The newspapers have noticed that their business is really, really off a lot, but they haven’t noticed yet that it’s because we don’t need them.