Government Bailouts Benefit Take From Many to Benefit the Privileged
By Seth Grossman, Political Columnist
??? In 1979, Democrat President Jimmy Carter and a Democrat-controlled Congress bailed out Chrysler Corporation by having U.S. taxpayers guarantee $1.5 billion of its debts.?? The loans got paid, and the taxpayers didn’t get stuck.?? But the Chrysler bailout was an absolute disaster.
??? Union workers in the auto industry demanded and got outrageous lifetime salaries, pensions, and benefits once they knew the government wouldn’t let their companies fail.?? The U.S. government subsidized gas guzzling SUV’s to keep American auto makers afloat.?? And Chrysler got sold to a German company anyway.
??? But the biggest damage done by the Chrysler bailout was the awful precedent it set.?? Every failing business owner (and his union employees) now feels as “entitled” to government help for his business as any senior feels “entitled” to social security.?? And they bankroll candidates of both parties to make sure they get it.
??? Now Republican President George Bush and Democrats from Obama on are ruining the dollar by paying a trillion (a thousand, thousand million) dollars to bail out Fannie Mae, Freddie Mac, AIG Insurance, Goldman Sachs and Merrill Lynch.?? The big shots of these companies (like our own Governor Jon Corzine) will keep all their profits and bonuses – the rest of us will get stuck with the losses.
??? The U.S. Constitution makes it just as illegal for the Federal government to subsidize, bail out, and control a failing business as to prop up a failing church or synagogue.?? The things the Federal government can do are quite clearly listed in Article I, Section 8, and nothing close is on that list.?? (The list of what the Federal government includes “regulating commerce among the several states”, coining money, delivering mail, granting patents and copyrights, defending the country with an army and navy, etc.)
??? Today it is fashionable to say that using taxpayer money to bail out private business is a form of “regulating commerce”.?? That is not true.?? But the clear purpose of that clause was to stop individual states like New Jersey from charging outrageously high tolls on roads and bridges going from one state to another.
??? Others say that the founders who wrote our Constitution were simple farmers who could not imagine the complexity of modern economic life.? The fact is that George Washington, John Hancock, John Adams and the others were very sophisticated businessmen who dealt with a complicated global economy.?? And they saw what happened when failing companies got special deals from the government.
??? The British East India Company was a private corporation, but its owners used bribes and gifts get sweetheart deals from the British government.?? Since 1600, the company made huge profits by having a monopoly on shipping cotton, silk, tea, and opium from India.?? But the Company made some big mistakes when George Washington and other American Revolutionaries were coming of age.
??? In 1757, the Company touched off an expensive rebellion in India, when it refused to pay local taxes.?? In 1760, it started an expensive war with French traders who tried to challenge its monopoly.?? When local farmers had nobody else to sell to, the Company cut the prices it paid local farmers, and jacked up the prices it charged them for supplies.?? This caused food shortages, and in 1770, one-third of the local population died of starvation in the Bengal Famine.?? When production and profits fell in 1771, the British East India Company imposed a brutal land tax.?? All these events were widely reported and well known in the American colonies.
??? But the Company still lost money.? To avoid bankruptcy, the British East India Company used its influence to get a bailout from the British Government called the Tea Act of 1773.?? The Tea Act forced Americans to pay a new tax on tea, and it gave the British East India Company a monopoly on shipping goods directly from India to America.?? This put American merchants like John Hancock at a great disadvantage.
??? But the Americans fought back.?? They destroyed the British East India tea as soon as it arrived.?? They dumped it into Boston Harbor in December, 1773.?? They burned it in Greenwich, New Jersey one year later.?? From 1775 to 1783, Americans fought and died to protect us from a corrupt government that ignored the “unalienable rights” of all citizens, to advance the business interests of an anointed few.?? Those Americans created a new government “of the people, by the people, and for the people” with “liberty and justice for all.”?? We are now destroying it.
For more information, visit www.libertyandprosperity.org or contact Somers Point attorney Seth Grossman at firstname.lastname@example.org?or 609-927-7333.??? Seth Grossman hosts a two way talk radio program every Saturday from 8am – 9am on WVLT Vineland, 92.1 FM.