Bankruptcy, Not Bailouts


America’s bailout economy started many administrations ago, but really went Big Time under President George W. Bush . . . and then went Enormity Time with President Barack Obama.

The Washington Post provides the latest in bailout news by noting an inter-departmental squabble:

The Special Inspector General for the Troubled Asset Relief Program said Treasury approved all 18 requests it received last year to raise pay for executives at American International Group Inc., General Motors Corp. and Ally Financial Inc. Of those requests, 14 were for $100,000 or more; the largest raise was $1 million.

Though this is all quite scandalous, don’t expect policies to change or heads to roll — barring a joint Tea Party/Occupy uprising. The nature of the modern “regulatory” state is clear: government bureaus are quickly captured by the industries they aim to regulate. It’s an old story. The revolving door between business and bureaucracy is as well-established as between journalism and politics.

So why do we have bailouts?

  1. They show that politicians are “doing something”;
  2. They mimic the welfare state logic of “helping the poor” (if, with caustic irony, by stuffing the wallets of the rich);
  3. They aggrandize the showy machinations of the legislative and executive branches at the expense of the branch of government designed to handle massive business failure, the courts.

Perhaps Americans shouldn’t have voted in either an MBA grad (Bush) or a constitutional lawyer (Obama). Maybe what the country needs is a bankruptcy lawyer in the White House.

This is Common Sense. I’m Paul Jacob.

7 Comments so far ↓

  1. Feb

    What the constitution and the country needs is a Libertarian in the White House.

  2. Feb

    Maybe we need a president who is not a lawyer.

  3. Feb

    I am old enough to recall the first major bailout- CHRYSLER–Lee Iaccoca took a salary of $1.00 per year; and gave the governments warrants.

    The co. turned around, and the government made (nowadays pocket change) millions.

    Now, the executives who ran the firms into the ground want more money. The lunatics are running the asylum

  4. Feb
    Mary E

    OK, What is the government really trying to do? We the people, if we choose wisely, can run a household budget on almost nothing if necessary. I know many who have been needing to do this. We had a tough year last year. No work. But with careful spending, planting a garden, and sharing food with friends, it all worked out ok. Why can’t the government use a real budget like the real world must do in tight times? We can’t just say give me more. They shouldn’t either.

  5. Feb

    Big government benefits big business. And vice versa. Only.

  6. Feb
    Brian Richard Allen

    …. constitutional lawyer: Obama ….

    Self-disbarred-for-cause “Constitutional ‘lawyer,'” Obama, is to the Constitution as was Jack the Ripper to throats.

  7. Feb
    Brian Richard Allen

    Erik says we maybe need a president who is not a lawyer ….

    Well, we got that already. With a wife who is also not a lawyer – both of them having self-disbarred-with-cause to dodge formal malpractice inquiries.

    But we got a not-a-lawyer who is also not a president. With a not-a-lawyer “spouse.”

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