The troubles at the Newseum, a museum in Washington that is about journalism and news, are the topic of a New York Times news article. The article quotes a former Newseum board member, Wayne Reynolds, who says the museum is having difficulty competing against the taxpayer-funded museums operated by the Smithsonian, which offer free admission:
Mr. Reynolds said he was a museum trustee for about a year before resigning in 2015. Among the reasons he cited for leaving: "Their unwillingness to change their direction."
Among his objections: the size of the admission fee, which he said was an obstacle to building attendance.
"It's the fact that they're charging $24 a person to go through a place," Mr. Reynolds said. "Every other place that they are competing against along the Mall is free."
Though the Newseum is listed as a popular attraction on TripAdvisor, attendance is still meager compared with other top museums in the area, many of which are federally funded. The National Air and Space Museum, for example, a division of the Smithsonian that charges no admission, has already taken in 5.8 million visitors this year, according to data reported through September.
The difficulty of competing with the federal government is easy to see when you have one privately owned nonprofit museum charging $24 admission across the street from a government museum that is free. But the museum business is hardly the only area where the government has taxpayer subsidized competition with private companies. In the letter and package delivery business, the post office (government) competes against FedEx and UPS (private). In health care, Medicaid competes with private insurance companies, and the Veterans Administration competes with private hospitals. In education, government-funded public schools compete with private and parochial schools. In the news business, government-funded NPR and PBS compete with private radio and television. In transportation, government-funded Amtrak competes with private bus companies and airlines.
Sometimes government ownership can be a disadvantage in these competitions; private firms can sometimes offer employment terms that make it easier to reward high-performing employees or get rid of poor performers, while government civil service rules and union contract terms can make it hard to do either. But when government spending in Washington is debated, the effects on private competitors is often ignored. Maybe some of the Newseum's problems are just the Newseum's own fault. But the museum's own problems are illuminating a phenomenon that the news media itself all too often ignores — the way government spending crowds out or hurts private or charitable enterprise. That doesn't mean government should entirely exit the museum or health care or transportation or education or news or letter and package delivery businesses. But it does mean that when Congress spends money on those things, lawmakers may want to consider the effects on competitors.