2009 may be remembered as the year the traditional newspaper died. Nearly every daily is experiencing sharp distribution losses as well as advertisement revenue losses. Many papers have shut down or are threatening to shut down. As this blog pointed out, much of the papers’ troubles are self inflicted. Most dailies are woefully biased towards the left and rely on the AP feed to do most of their work. They have made themselves ripe for replacement by TV and internet news, which are both more timely, compelling, and diverse news sources. Still, the daily’s biggest nemesis is Craig Newmark, founder of CraigsList, the online version of classified ads.

The reason Speaker Pelosi wants to silence talk radio and subsidize dailies is that the dailies, are left wing cheerleaders. For example, in Denver, the recent Tea Parties drew more protestors than did the DNC’s Code Pink, Recreate 68, or Tent City, by a ratio of 10 to 1. Still the left wing Denver Post afforded the fringe left wing groups far more coverage and gravitas.

Enter Newmark, a San Francisco liberal who based his web site on collectivist principles, eschewing most profit sources like advertisements. Despite being one of the most popular web sites, CraigsList manicures its anti-statist image with peace signs and an intentionally unsophisticated user interface. Newmark lauds the inherent liberty in making CraigsList is the leading venue for call girls. In short, CraigsList is a distillation of the San Francisco ethic.

And yet Craig Newmark is a sword in the hand of capitalism. Even though the dailies have had a decade of warning, they were unprepared for the fact that the average classified is both cheaper and more effective on CraigsList. Dailies had for decades charged excessive rates for an inch or two of classified print, all the while relying on AP feeds to do their work for them. CraigsList has long challenged that monopolistic pricing model, but has only recently reached a critical mass to destroy the dailies’ cash cow.

Adam Smith economics suggests that any product priced above its true cost will eventually face competition and be replaced. Just as AT&T used to charge $.25 per minute for long distance, only to be replaced by cell phones, the daily classified has been replaced by the often free CraigsList.

Mr. Newmark must be chagrined that his web based love-in is actually the demise of the left’s most reliable mouthpiece. Enter Pelosi, who wants to subsidize the dailies, even though all of their services are available elsewhere. Indeed, Washington has favored the dailies for some time. The McCain Feingold anti-free speech act specifically carves out an exception for newspapers. To Washington, it can be illegal to distribute political speech by leaflet, billboard, or letter, but if the paper is thin and the ink smudgy, all is forgiven.

Just when the cause of capitalism and individual freedom seemed lost, one of the left’s own proves that it is impossible to keep the free market down for long. Government subsidized monopolies eventually fail, even at the hand of San Francisco liberals. That is something to warm the heart as the American model of freedom enters its darkest days.