June 16, 2010

Unholy alliance proposal #573: FinReg and journalism

Inspired by a blog entry today by Ezra Klein's research intern and today's Dilbert cartoon, I had a crazy thought for addressing both the decline of commercial journalism and Wall Street lapses: is there a way to give solid journalism a revenue source that also forces more transparency/responsibility on Wall Street? One idea for better responsibility on Wall Street is the transactions tax proposal, which was the focus of the blog entry by Klein's research aide. But I'm afraid that's probably too sensible, since it penalizes financial churning, and thus it's not politically viable.

But there's a way to replace the revenue stream of classified ads, the one that CraigsList stole, and we can use current practice and history as a guide: require that certain forms of financial transactions by institutional parties have public notice in electronic form in venues with substantial readership. Public-notice requirements are common for all sorts of legal purposes, and there is a very long history of printers' reliance on such revenue streams. Okay, in Ben Franklin's case it was because he became the printer for the colonial government of Pennsylvania (e.g., Franklin's printing of this text of a speech). But we continue to require both public agencies and private parties to pay for a public notice of some transactions and other items of public interest. Sometimes these are in daily newspapers, sometimes in local legal periodicals designed almost entirely to capture the revenues.

The key here is to require the non-password-requiring electronic publication of an appropriate set of transaction records in places with substantial traffic. There is absolutely no guarantee that today's professional journalist sites will capture revenue by gathering substantial traffic, and I suspect if such a requirement were in place today and if it weren't a walled garden, Facebook would suddenly capture a large chunk of the potential revenue. But it's a way to use an existing model of public notice requirements to replace some of the revenue stream that's disappeared in the past 10 years.

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Posted in History on June 16, 2010 1:04 PM | Submit