from Kevin Williamson at National Review, The Bailouts at Ten: I Told You So
Never mind the moral hazard, the rent-seeking, the cronyism and the favoritism, and all of the inevitable corruption that inevitably accompanies multibillion-dollar sweetheart deals between Big Business and Big Government. Set aside the ethical questions entirely and focus on the mechanics: Businesses such as GM get into trouble not because of one-time events in the wider economic environment, but because they are so weak as businesses that they cannot weather one-time events in the wider economic environment. GM’s sedan business is weak because GM’s sedans are weak: Virtually all of the best-selling sedans in the United States are made by Toyota, Honda, and Nissan. The lower and middle sections of the market are dominated by Asia, and the high end of the market by Europe: Mercedes, Audi, BMW. GM can’t compete with the Honda Civic at its price point or with the Audi A7 at its price point. Consumers like what they like, and they aren’t buying what GM is selling. It isn’t winning in the dino-juice-powered market, in the electric-car market, or in the hybrid market, either: GM is not exactly what you would call a nimble corporation.
Trump’s reaction is pure corporatism. Here is a few billion of taxpayers’ money. Behave as we wish or we will punish you. The availability of such largess encourages corporate stupidity and political corruption.
If a corporation is to big to fail (meaning we political types are unwilling to reap the furor of those who bear the costs of the failure), then it is too big to exist.
The trusts of the Gilded Age merged to avoid the destructiveness of competition. The trust busters of the Progressive Era didn’t buy it. But the the regulators later encouraged merger mania and rationalized away the reasons for busting the trusts and monopolies. Through lobbying and regulatory capture businesses now use the government to sidestep competition. This is consistent with the current crop of progressivism as Bernie Sanders frets that we have too many choices in underarm deodorants.
Pouring money into a problem without fixing the underlying problem accomplishes the political task of surviving an election cycle. The people who voted for this nonsense are long gone and no longer held to account.