{"id":15137,"date":"2024-02-04T19:57:09","date_gmt":"2024-02-04T19:57:09","guid":{"rendered":"https:\/\/social.coldstreams.com\/?p=15137"},"modified":"2024-11-18T01:28:02","modified_gmt":"2024-11-18T01:28:02","slug":"media-media-claims-layoffs-are-due-to-market-failure","status":"publish","type":"post","link":"https:\/\/coldstreams.com\/social\/2024\/02\/04\/media-media-claims-layoffs-are-due-to-market-failure\/","title":{"rendered":"Media: Media claims layoffs are due to &#8220;market failure&#8221;"},"content":{"rendered":"\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"489\" height=\"258\" src=\"https:\/\/coldstreams.com\/social\/wp-content\/uploads\/image-38.png\" alt=\"\" class=\"wp-image-15138\"\/><\/figure>\n\n\n\n<p>Ryan McCarthy is a former editor of well-known media outlets: <a href=\"https:\/\/twitter.com\/mccarthyryanj\/status\/1753427394356978123\">Ryan McCarthy on X: &#8220;Why are so many layoffs happening in journalism right now, in very good economy, across so many different newsrooms? <strong>Industry insiders I spoke to are starting to use a really grim economic term: market failure.<\/strong> Why does this term matter? 1\/ https:\/\/t.co\/w2BZ1S3W2w&#8221; \/ X (twitter.com)<\/a><\/p>\n\n\n\n<p>More from the reposted tweet <a href=\"https:\/\/twitter.com\/jayrosen_nyu\/status\/1753896411366633921\">here<\/a>.<\/p>\n\n\n\n<p>He&#8217;s using the term &#8220;market failure&#8221; to mean the market is not delivering <em>the outcome that he wants.<\/em><\/p>\n\n\n\n<p>But that is not market failure. Examples of economic market failures:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>The <strong>rise of a monopoly<\/strong> which blocks economic efficiency<\/li>\n\n\n\n<li>The <strong>lack of incentives<\/strong> to prevent overuse of a resource. The example given <a href=\"https:\/\/en.wikipedia.org\/wiki\/Market_failure\">here <\/a>is a simple to understand illustration: if a lake is overfished, then there will be no fish in the future. The incentive then is to grab as much as you can, now, and the market pursues a path that leads to no fish, which is a market failure.<\/li>\n\n\n\n<li><strong>Externalities<\/strong>: you build a factory but don&#8217;t care about pollution because those &#8220;costs&#8221; are borne by other parties who have nothing to do with your factory.<\/li>\n\n\n\n<li><strong>Transaction costs<\/strong> (rather than the product\/service\/economic value) can skew our choices, which is the basis of Coase&#8217;s Theorem.<\/li>\n<\/ol>\n\n\n\n<p><strong><em>The media&#8217;s collapse is not a market failure but is a market success. Their business model is inefficient and is not delivering the products or services that consumers wish to have.<\/em><\/strong><\/p>\n\n\n\n<p>Trust in media: <a href=\"https:\/\/coldstreams.com\/social\/2023\/10\/19\/media-trust-in-media-ties-with-all-time-low\/\">Media: Trust in media ties with all time low \u2013 Social Panic (coldstreams.com)<\/a><\/p>\n\n\n\n<p>Market Failure definition: <a href=\"https:\/\/rasmusen.org\/g406\/chapters\/02-market-failure.pdf\">02-market-failure.pdf (rasmusen.org)<\/a>. The author of that, Prof. Eric Rasmusen, added a comment to the above Tweet pointing out that what Ryan McCarthy is describing is not a market failure.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Layoffs in the media are not a market failure (as journalists incorrectly allege) but a market success that drives inefficiencies out of the market.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,29],"tags":[],"class_list":["post-15137","post","type-post","status-publish","format-standard","hentry","category-business","category-media"],"_links":{"self":[{"href":"https:\/\/coldstreams.com\/social\/wp-json\/wp\/v2\/posts\/15137","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coldstreams.com\/social\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coldstreams.com\/social\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coldstreams.com\/social\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/coldstreams.com\/social\/wp-json\/wp\/v2\/comments?post=15137"}],"version-history":[{"count":0,"href":"https:\/\/coldstreams.com\/social\/wp-json\/wp\/v2\/posts\/15137\/revisions"}],"wp:attachment":[{"href":"https:\/\/coldstreams.com\/social\/wp-json\/wp\/v2\/media?parent=15137"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coldstreams.com\/social\/wp-json\/wp\/v2\/categories?post=15137"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coldstreams.com\/social\/wp-json\/wp\/v2\/tags?post=15137"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}