12.01.2008 0

Editorial: Bailout Fatigue

  • On: 12/10/2008 10:04:23
  • In: Economy
  • The latest bailout buzz finds that the White House and Congressional negotiators are near a deal to provide the Big Three automakers with some $15 billion in emergency “loans,” which if the companies fail to become profitable, will never be paid back as they fall into bankruptcy. Predictably, the latest bailout package has followed precisely the same general pattern as has every other in “2008: The Year of the Bailout.” Call it “Bailout Fatigue.” And the trick is for the opposition to interdict the seamless tautology that has brought the nation to brink of financial ruin.

    First comes the trial balloon. The press publishes the rumor that this or that industry will be crawling to Congress on its knees for a bailout. This, of course, is likely done at the behest of the company seeking the bailout, the politicians shilling for it, or both. This gives time for the idea to work its way into the public consciousness, and hopefully—as far as the shills are concerned—nobody notices, or at least nobody objects.

    Then, like prophecy, the rumored failure eventually culminates in actual failure. Bear Sterns was rumored to fail before its assets were sold to JP Morgan with a discount loan from the Fed. Fannie and Freddie were foretold to fail before Congress bailed them out with the Foreclosure “Prevention” Act, only to be bailed out yet again when the Treasury came back to place the GSE’s under conservatorship. The entire global financial system was rumored to be on the brink of collapse prior to the $700 billion Troubled Asset “Relief” Program was passed. And so too were the Big Three automakers rumored to be in trouble before, sure enough, they were testifying in front of Congress about why they too were worthy of federal assistance.

    Of course, not a one of these trial balloons, nor the actual presentation of the bailouts, has yet been met with anything even slightly resembling enthusiastic public support. Which is probably not the strategy anyway. The public presentation—the trial balloon, and then the hearings, the public statements, the staging of new business “plans”, the debate on editorial pages—is really all a ploy to create the illusion of public input. In fact, the people have been dead-set against every single one of these programs by Big Government. And every single one of them has passed in one form or another, whether it be by the unelected Federal Reserve, or by Treasury, or by the elected elite in Congress.

    The real goal of the bailout artists is to wear everyone—the people, the press, the opposition—down. Eventually, the thinking goes, folks will stop paying attention to the monotonous din. They’ll let down their guard ever so slightly. The opposition will become fatigued with writing and speaking against the same action every day. Then, the amount of news items creating a negative perception of the bailout begin to die down. At this stage, just 53 percent of the American people are opposed to Big Three bailouts.

    And that’s why it is so vital to keep pumping out the same opposition copy day after tiring day. Eternal vigilance is the price of liberty.

    Legislators’ inclination is to vote for this sort of thing. So, while the public shell game has been ensuing, legislators behind-the-scenes sweeten the deal with earmarks or tax incentives or whatever it takes so that the opposition eventually embraces it. Thus, political cover is provided to the majority so they are not left holding the bailout bag alone. It is then publicly billed a “bi-partisan” effort. And Republicans become mere mirror images of those they were elected to oppose.

    The fact is: The auto bailout bill will not pass without Republican support. They have the power, through principled opposition, to put a stop to this never-ending avalanche of bailouts. But they have to hang together, or they will most assuredly hang separately politically. There is nothing for Republicans to gain politically by voting yes anyway. And to make matter worse, it won’t work to save companies that would otherwise go into bankruptcy—which ironically would help them to be saved by severing all of their Big Labor contracts.

    The simple truth is that the Democratic majority can pass the bailout if they want it bad enough. They do not need any Republican votes in reality. The majority will not pass the auto bailout if they have to face the political consequences of the bailout’s inevitable failure alone. That’s why Republicans need to stand firm and fight off the Hard Left’s wholly contrived bailout fatigue. And that’s also why the nation’s press needs to continue paying the vigilant price of liberty.

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