Assuming that crucial public services should not be left entirely to market‐driven forces, American policymakers attempted to establish safeguards for news media. An examination of conflicting narratives within postwar policy debates suggests that the US evaded this path largely because of a concerted backlash—often in the form of red‐baiting—encouraged by threatened newspaper and broadcast industries. Many lessons, parallels, and forgotten antecedents for current American media policy can be drawn from the postwar 1940s. Thus, it is instructive to explore how these earlier debates were framed, particularly in response to what might be referred to as “market failure.” Given the worsening journalism crisis and other persistent media policy challenges, this analysis of market failure holds much contemporary relevance.