11.12.2008

The coming serial bailouts

Congressional Democrats will soon pass a bill demanding taxpayer bailouts for the big three auto makers. Conservatives will rightly point out that it would be better to let them go bankrupt as the airlines regularly do, reduce their crushing pension and health care obligations, and then come back leaner and more efficient.

But wait, Democrats will say. You gave a trillion dollars to bail out the rich guys in bad banks on Wall Street. How can you not bail out little Joe the union worker? And they have a point. They have the moral high ground. That's what you get when you let corrupt, incompetent hacks like the Bush/Paulson gang run Republican policy. The Democrats who follow now have a license to throw unlimited amounts of money at their union backers or at anyone they please.

It won't stop with the auto industry. Plenty more industries are in trouble, and how can you let this industry fail if you bailed out that one? And how about the states? California's budget shortfall will only be about $20 billion this year. How can you make the home of the Golden Gate Bridge and Yosemite National Park cut workers when you threw more than six times that amount at AIG?

Where will this bring us? We will have European-style state-subsidized industries, with companies playing the role of welfare providers rather than efficient producers of goods or services. And the cost of keeping bad businesses running inefficiently will bankrupt the Treasury.

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