We have seen the government aid given to financial institutions come with a lot of excess baggage and political influence (recall Citi’s controversial change of heart regarding their support of mortgage cramdowns). Government interaction in the marketplace has already begun to alter the natural flow and structure of things. But the latest bailout idea may be the most dangerous of all.

A idea being floated in Pennsylvania is to use state funding to prop up two failing newspapers. Philadelphia Media Holdings — the company which owns the Philadelphia Inquirer and the Philadelphia Daily News — is in default on its loans. Reports say their owner went “hat in hand” to PA Governor Ed Rendell looking for help: