Over at Om Malik’s site, blogger Kevin Kelleher talks about the death of the Old Media: newspapers, magazines, etc. Kevin is wrong, as are a great many economist, financial analyst, or blogger. It isn’t newspapers that are going under.

As I said in the comments, it isn’t banks that are going under. It isn’t car manufacturers, or retail stores, or even individual households that are going under. No, it is one thing.

Overleveraged businesses and individuals who took a risk taking on heavy debt in hopes of future profits, and they failed. They took out a loan, put all their money on one bet on one craps table, rolled the dice, and they lost. It’s quite simple.

If a newspaper had grown slowly over the years, didn’t take out huge loans against assets and future profits, and actually stuck money away for a rainy day, they’d be in great shape today, even if they had to make some cuts during the economic correction. They wouldn’t be going under. It’s the debt that is killing these morons of industry.

The same is true of household bankruptcies, auto manufacturers, and anyone else putting their hand out to government. They borrowed money, they couldn’t pay their bills, so now they want to borrow more money? I think not. This is what happens when you borrow more than you can every afford to pay. THIS IS WHY DEBT IS BAD FOR BUSINESS.

If you own a business, SAVE. Yes, you’ll have some years where you watch your competitors build new buildings, hire new employees, add more technology, while you stagnate in growth. Eventually, though, all that growth will incur too much debt, and the business cycle of boom-bust will chew them up. You’ll be able to buy those nice buildings, hire their ex-employees, and maybe take over their tech infrastructure — for pennies on the dollar.

So don’t listen to the “sky is falling” routine, folks. It isn’t. It’s just companies who overborrowed, and they can’t pay their bills.

Let them fail. All of them.

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