The average pre-tax profit margin of newspapers was still 18.5 percent in 2007, but that compares to about 30 percent in the early years of the decade, according to the annual media survey conducted by the Project for Excellence in Journalism (PEJ).

What all these numbers do not convey, however, is a problem at least as serious as declining revenues. It is the crisis of morale in newsrooms. As a reporter abroad, I always mocked pundits who passed through my territory and wrote with confidence that “most people believe etc.” So my conclusion, based on scores of conversations and what I read, may be an exaggeration. But my distinct impression is that reporters, particularly at metropolitan newspapers in places such as Baltimore, Dallas, San Jose, Boston, and Hartford, are increasingly and understandably discouraged about what is happening around them.

The cutbacks, buyouts, and elimination of specialty beats are the cause, of course. The increasing emphasis on wire-service-style breaking news and snap judgments of the Web makes reporters wince. But the real problem is something deeper, I sense. It is a belief that no matter how good your work, how thoroughly reported and influential, it isn’t going to matter in protecting your newspaper. Because of the revenue declines and cutbacks, the mood of proprietors and managers, on the whole, is near panic. Outstanding work by their staffs, the newsroom has become convinced, isn’t going to make a difference in the outcome of their institution. The effort at morale-building in the stream of front office memos announcing departures, the cheerful exhortations to survivors to do great work, only adds to the cynicism that pervades.

News people are by nature skeptics, and given to grumbling. One of their missions is to find fault. Self-criticism in newsrooms is standard, and so is defensiveness when the criticism comes from outsiders. None of these characteristics are at issue. The problem is that the prevailing mood of a declining and deteriorating industry is so pervasive and so discouraging that it reinforces itself. “What’s the point?” is a debilitating attitude, and it is very difficult to reverse.

The opening line of the PEJ report on newspapers in 2007 summed it up this way: “Newspapers are still far from dead, but the language of obituaries is creeping in.” The energy and relative glamour of Web sites and the job opportunities they represent are an important off-setting trend. But as has been said countless times now by all who follow the field, commentary and opinion and the rise of the blogosphere are no substitute for real reporting, even if they are cheaper and faster to produce.

This is the prize season for newspapers, and the work being honored is an annual affirmation of the profound effect newspapers at their best have on the nation. Reporters do what no one else can in documenting wrongdoing and negligence. By definition, what they choose to write about is what becomes news and determines how the rest of us are informed. If advertising and circulation will not support reporting in the years ahead, other ways to do it will have to be found; think of publicly supported radio, no longer dependent on the federal government because of underwriting and individual contributors. 

The launch of ProPublica, the investigative project funded mainly by philanthropists Herb and Marion Sandler and led by Paul Steiger, is a start. So is Global News Enterprises, a Web start-up based in Boston that will have stringers around the world and has financing from people who seem to know what they are doing. According to PEJ, there are a variety of locally based startups emphasizing community news. The tradition of entrepreneurship in the news business is strong.

In the meantime though, the idea that newspapers are in inexorable decline really hurts. The people in the newsrooms and the constituencies they serve need to be persuaded that this crisis will end. A respected elected state official whose capitol newspaper has eliminated its environmental and legal beats, among others, asked me the other day whether newspapers will be around in ten years, with the underlying assumption of the question being that they will not be, at least not in their present form. The question is not really about the format—the paper they are printed on—but rather about the indispensable role they play in our society.

Peter Osnos is Senior Fellow for Media at The Century Foundation. Sign-up to receive Osnos’ columns weekly by email here. Read past columns here.