Conservatives Unite Against Bailouts
By Robert Romano
Yesterday, Americans for Limited Government President Bill Wilson, along with seventeen other conservative, limited government, and free market leaders, delivered an unyielding message to members Congress. It is an imperative message, and one that must become the clarion call of the opposition party during the next presidential administration: No more bailouts—especially not for the Big Three.
The fact is that it is time for some tough medicine for American businesses. This a recession, which so far as the history of economics goes, is not remarkable. During downturns, businesses will fail. In fact, it is during hard times that companies are often tested, and weaker brands will by virtue of marketplace dictates be forced to fold, or be sold. And it is no different with the Big Three. Should they fail, it will not mean the end of the American economy. It would simply mean the end of three businesses whose own indulgent behavior presaged their demise.
Lost in the public debate over bailing out the Big Three automakers is that these companies could be recapitalized with private investment. If only they were allowed under the lawfully-provided protection Chapter 11 bankruptcy offers to develop new business models that both adapt to current economic conditions and remove excesses, including the exorbitant union benefits the UAW has extracted from failed management of the companies.
In short, as the conservative leaders' letter states, the bailout represents “an unfair imposition upon the American people who are in no way responsible for, and should not face the consequences of, the profligate behavior of Big Three corporate and UAW union management.”
And it is this principle that the conservative movement, and in extension the Republican Party, must stand for, and draw a line in the sand over: The American taxpayer cannot afford to perpetually finance failure. Whether it be failed government policies or business models, adding to the national debt in order to finance loans today for programs and companies that might fail by year's end is simply asking too much.
Instead it is the interests of the American people to have an economy that can handle and absorb failure, because it is far outweighed by the innovation and ingenuity of the American entrepreneur. The same entrepreneur who invented the light bulb, the assembly line, the telephone, and television. And the same entrepreneur who, given the opportunity, can innovate the American auto industry and again make it competitive.
This formula for eventual success is quite simple: Congress only needs to do nothing. No more bailouts: It is time for Congress to let businesses know that they are on their own. Only then will they make decisions based upon their own survival, and not seek to perpetuate their own excesses at taxpayer expense.
Robert Romano is the Editor of ALG News Bureau.