Bailouts: Unfortunately, a Federal Government Tradition
I don’t usually use this forum to rant, but the auto bailout got me to thinking about past bailouts (I’m old enough to remember the absurd creation of Amtrak and the scandal-plagued bailout of Lockheed.)
EVERY time a huge American industry starts to go down, there are calls – often successful – for the government to step in and save the strategic, historic, imperative, too-big-to-fail, etc., industry. For the record, that is why the Department of Agriculture exists at all. It was not considered necessary until the 1880’s when industrialization and urbanization started the (still continuing) migration of people and jobs from farm to city. Two useful facts: 1) U. S. agriculture is still an incredible food-producing machine accounting for billions in exports…we just do it with 2-3% of the population instead of 50-60% of the population as in the 19th century. 2) In fact, the U. S. Department of Agriculture now employs roughly one person for every 9-10 farmers in America! George Will once pointed out that we are approaching perfection: every farmer will soon have his/her own personal representative at the Department of Agriculture.
Fast forward to the 1960’s and ’70’s and you see the same thing: Railroads were rapidly going under and this industry was considered not only strategic but a critical part of our history and way of life. Voila! We got Amtrak and Conrail.
Past Bailouts:
Why, by the way, are all the former bailout companies’ logos in baby blue? Is that some secret codicil of bailout agreements with the U. S. government? Our does it simply reflect the emotional state of the talented graphic designers left behind at these formerly bankrupt companies? GM, obviously, was quite prepared in advance, yet another demonstration of their incredibly perspicacious management and long-term outlook:
If I ever return to the dictionary business, I will make certain that the entry for “sinkhole” includes “Amtrak” as the primary definition. I have good friends in Southern California and I know some people there do, indeed, commute by Amtrak up and down the California Coast. My San Diego friends: Don’t let the voters of Michigan learn this – they will use it as an example of how their tax dollars are being used to subsidize YOUR lifestyle, so, in fairness, why shouldn’t YOU be taxed to subsidize THEIRS??? Perhaps by bailing out GM and Chrysler.
NOW…let’s fast forward to 2058. I really do expect the following news report fifty years from now:
“Malia Obama, daughter of the late President and long-time Senator from the State of Illinois, rose in the Senate today to defend the planned bailout of Google and Microsoft. ‘Software and Search are the very foundations of the great American economy. In fact, it is not too much to say that this country was built on the backs of the very hardworking people over the decades who did so much to build our Software and Search industries. At this critical time in our nation’s history, we simply cannot afford the layoffs – and emotional pain – that would occur if we let these two great, historic companies enter bankruptcy proceedings. Moreover, I firmly believe that, given time to adjust and reorganize, Google and Microsoft will make the hard choices and strategic moves necessary to compete in the new world of nano-sized PC implants in the ear and move away from their long-term reliance on old technologies such as the internet and voice recognition. While I would, in normal situations, oppose bailouts of greedy corporations and their overpaid management, at this very important time, I must encourage all my respected colleagues to vote in favor of the $45 trillion appropriation as a bridge loan to Google and Microsoft.’”
