PUNISHING SUCCESS, REWARDING FAILURE: OUR NEW AMERICAN BAILOUT CULTURE

BY CINCINNATUS

Here we are again, though much sooner than I had originally predicted, contemplating yet another government bailout of the private sector. This time it’s the auto industry standing in the streets (or rather at a Congressional hearing table) with their hands out. And, given time and some sanctimonious grandstanding in Congress, they’re going to get their “injection of capital.” The line of destitute, needy corporations will shuffle along, and the next beggar will hold out their hand and promise not to use the money to buy booze.

This is a new dynamic in our American system; bailouts are now a legitimate federal function. While some of us will never get used to it, for our children it will be a well-established fact of life. Phrases like “too big to fail” will be accepted economic doctrine taught in the classroom. I find this development just another in a long line of face lifts that have rendered my country less recognizable. European-style liberalism continues its victory march through American streets while citizens watch from their front windows, apathetic.

Apathy is what led us here. For many, the principles of our founding are just a distant memory from civics class (if they were even taught civics). America is what they buy and drive and where they go to work, rather than an idea. The fact that their freedom is dying by inches doesn’t concern them; they elected people smarter than them to legislate their problems away, so let the people interested in government do the governing. Unfortunately this way of thinking isn't going to cut it anymore. Our national politics have become so polarized that eventually something’s gotta give. Either we break left or break right. And right now it looks like we’re hanging a louie.

In the interest of fomenting unrest among the citizenry over the direction their country is headed, let me expound upon a point or two. Does it strike anyone else as odd that it is liberalism that has relentlessly pressed the cause of progressive taxation and “soaking the rich”, yet suddenly they’ve become the biggest advocates for throwing taxpayer dollars at some of the wealthiest corporations in the country? What has changed? They do it because the corporations that come before Congress on their knees are failures. They have demonstrated irresponsible judgment and overextended themselves. They have either been beaten by their competition or ruined themselves, and now they need a way out. And because they have failed, and their failure supposedly poses a threat to the foundations of the American economy, a beneficent federal government is going to toss a few billion dollars at their feet and buy a stake in their company.

This is welfare. This is corporate welfare. We’re told there will be oversight. We’re told that these auto giants will have to demonstrate a successful business model in order to get the “capital infusion” (that presupposes that Congress would know a successful business model from a hole in the ground). But what if they don’t? They’re “too big to fail.” So even if they can’t promise the government that they won’t use the money to buy booze or drugs, the government will still dole it out and hope for the best. We’ll be right back here in another ten years when these industries, under government control, fail yet again.

Meanwhile, successful private enterprises are paying confiscatory taxes (soon to become all the more confiscatory) in the name of fairness, when what they’re really getting is punishment for their business acumen and success. And we’re not just talking about big oil here, we’re talking about small businesses, some hoping but unable to make the transition to a larger scale. Liberals are unwilling to acknowledge the virtues of any of these businesses, which provide gainful employment and benefits to American citizens and an embarrassment of riches to federal coffers, nor are they willing to acknowledge the consequences the high taxes levied against them have on their employees. Not, that is, until these businesses go belly up and the employees and tax revenues are suddenly in jeopardy. But hey, nobody does welfare like liberals, and when they see an opportunity to make a segment of society dependent upon the federal government like so many sweating, twitching drug addicts, they waste no time.

So here we are, America, indisputably punishing success and rewarding failure. What has happened to us? Nobody is too big to fail. Not GM, not AIG, not even the President of the United States. Am I unhappy that vast numbers of Americans would be left unemployed? Of course I am. But the answer is not to have our government buy these businesses out and subsidize their continued failure. They should declare bankruptcy and face stark economic reality like everyone else and learn from it. Change their management, re-evaluate the costs associated with their current retirement incentives, wages, etc. Their failure is not anyone else’s fault or responsibility. We should ensure that the damage to our overall economy is minimized and offer help to the employees that suffer as a result, but for government to step over that line is going too far.