Government bailouts send wrong message

Freedom Newspapers

The newspaper industry is struggling with Internet competition, declining circulation and a tough revenue picture, which is threatening the stability of the industry and harming the public’s ability to get important news and information.

And it’s hard to overestimate the importance of the news industry in ensuring that the electorate is well-enough informed to make wise decisions in the voting booth.

Therefore, we believe Congress should provide tens of billions of dollars in loans and subsidies to newspapers, in order to … .

Hold on. Stop dialing our publisher’s number, and take a deep breath. We are only kidding. As important as we believe the newspaper industry to be, it’s even more important that the government stays out of our business. Newspapers, which are slogging through a tough economic environment, would lose their independence — not to mention their entrepreneurial zeal — if the government were to come in and bail us out. And private companies must live or die with private funds. It’s unfair to take money wrested from citizens by force (taxes) and give it to other private individuals.

So, now substitute the term “newspaper industry” with “automobile industry.” The basic principle is the same, isn’t it? Why should taxpayers be forced to bail out U.S. carmakers, who are once again going hat-in-hand to Congress? This time the Big Three are seeking billions in assistance.

Frankly, there are many economic sectors in the doldrums right now. Unfortunately, the federal government has approved an unconscionable $700 billion bailout of the financial sector.

But almost everyone is hurting. Yes, the public needs automobiles, but there always will be someone to provide them. It makes no difference, from a public policy standpoint, whether General Motors, Ford or Chrysler provide the cars or whether Toyota, Honda or some yet-to-be-known Indian company makes them.

Small-business owners, manufacturers, retailers and companies of all types are having a tough time during this recession. But it’s philosophically wrong to rob Peter to pay Paul. The capitalistic system is based on the possibility of great successes and disastrous failures. It’s wrong to privatize profit and socialize risk, as the saying goes. The Big Three are victimized by a tough economy, for sure, but they also are struggling with many problems of their own making, such as the legacy costs that the corporate management and union leadership have foisted on the company. Why should the taxpayers bailout years of short-sighted decisions?

When taxpayers bail out any company, it sends the wrong signal. It encourages business owners to take unsustainable risks. Why not, if the government is there to cushion the blow? Furthermore, the U.S. government is deeply in debt. The public cannot afford such largess.

Some liberal writers are now even suggesting the feds nationalize GM. That would be a sure way to kill the company. Government planners cannot innovate and run companies. Socialism’s myriad failures proved that. The Big Three have struggled because they have operated too much like the government and too little like entrepreneurial enterprises that live or die based on consumer preferences.

And if automakers are bailed out, they will need to take their orders from the government, which always is a danger in a free society.

Congress needs to tell the automakers that it feels their pain, pat them on the back and send them back to Michigan empty-handed. Maybe once the executives are sure there are no subsidies coming they will get back to the business of making and selling world-class automobiles.