Rep. Henry Waxman trekked from Capitol Hill to Federal Trade Commission headquarters today to deliver a message to journalists and news consumers: All of you need to reach a consensus about working with the government in order to bail out the struggling news industry.

The California Democrat, who chairs the powerful House Energy and Commerce Committee, didn’t say it quite so bluntly, but his point was clear. “Government’s going to have to be involved, in one way or the other,” to save journalism from an ongoing “market failure” that will only worsen without intervention, Waxman said.

He spoke at the second day of an FTC workshop on how journalism can survive in the Internet era.

Waxman bemoaned the demise of newspapers across the country, including in Denver and Seattle, and warned that the troubling media trends will continue. “This recent depression in the media sector is not cyclical,” Waxman said. “It is structural.”

“Congress can’t impose a solution” to that structural problem, he said. But the government should partner with the media industry to ensure a sound future for journalism. Waxman praised the record of “independent” reporting in U.S. history and said it has implications for democracy.

“There needs to be a consensus within the media industry and the larger community it serves” before the government acts, Waxman said. “We have to figure out together how to preserve that kind of reporting.”

The morning session also featured media policy activists, public broadcasters and proponents of nonprofit journalism making the case for government funding of the media.

“Congress should adopt legislation that would provide substantial additional resources” to fund public-service media, said Mark MacCarthy, a communications professor in the culture and technology program at Georgetown University. He said Waxman “gave us the path to legislative success in that area.”

Several speakers likened government intervention in the media market to past instances of federal funding for publicly valuable services, such as public safety, education and libraries.

“As a civil society, we don’t trust the open market or the free market” to provide such valuable services, said Jon McTaggart, the senior vice president and chief operating officer of American Media Group, and neither should the media be allowed to suffer because of market forces.

MacCarthy also said government involvement in the arts, sciences and other fields is “traditional, mainstream and all-American. … This is not some weird, strange aberration and alien intrusion into our life. This is the way we do things in this country.”

Members of the audience raised concerns about how journalists could serve as independent and reliable government watchdogs if the government funds their work, but the panelists dismissed those concerns. Vivian Schiller, the president and CEO of National Public Radio, cited her own organization’s history of criticizing the government even though it is federally subsidized.

“No news organization worth its salt is going to accept money with conditions attached,” she said. “… If anything the opposite problem is true: ‘Oh, they’re funding us. Let’s look more deeply into them.'”

Josh Silver, the executive director of Free Press, acknowledged that there are liabilities to government-subsidized journalism but said the country has no choice but to move in that direction in order to halt “significant erosion of the Fourth Estate.”

Eric Newton, vice president of the journalism program at the Knight Foundation, called the idea that government has never been involved in media a “mythology. “It’s a bogus argument that just keeps us from doing the right thing,” he said.

Newton said the key is to maintain a “firewall” between that involvement and the production of content, just like the longstanding wall between advertising and editorial in commercial media.

The tone of today’s discussion stood in marked contrast to Tuesday’s speeches and panel discussions at the workshop. News Corp. Chairman Rupert Murdoch and other speakers said the government should stay out of the news business despite the industry’s ongoing woes.

“The prospect of the U.S. government getting involved in American journalism ought to be chilling for anyone interested in public speech,” Murdoch said. Instead, he urged the government to be less involved by abandoning the cross-ownership rule that prevents one company from owning newspapers and broadcast outlets within the same markets.

Jeff Jarvis, an analyst of emerging media who is no fan of Murdoch, agreed that government intervention is a bad idea. He admonished the FTC to stay off the media lawn or risk quashing the new media sprouts of grass that are growing on it.

UPDATE: Mark Tapscott, the editorial-page editor at the Washington Examiner, is outraged that many of his journalistic colleagues are determined to chase a “pot of government gold.”

“Firewalls can work in private businesses when management insists that they be respected,” Tapscott wrote, “but it’s different when government is involved because nobody can say no to power-happy federal bureaucrats armed with regulatory authority or litigious Justice Department attorneys packing subpoenas and make it stick.“