Compassion is a fine emotion, right up to the point where it overwhelms your ability to think rationally. Our President has no end of compassion and in our foreign policy it has served him very well. On the domestic front it’s led him to mangle common sense in ways that, were common sense a dog, we would have turned him in to the ASPCA a long, long time ago.
Just yesterday, the President was considering something he called an “orderly bankrupcty”, where the federal government would limit itself to being a lender of very last resort and guaranteeing the warranties on cars made by GM and Chrysler. Aside from that, the companies would have to submit to bankruptcy proceedings like every other company in the same situation. That wasn’t a bad plan, actually, and it would have solved a couple big problems that could have made rebuilding a much more difficult proposition. Then, apparently, the President’s compassion kicked in.
While the option of placing Chrysler and GM into a prearranged bankruptcy has been considered, the administration decided that such a move would put Ford at a competitive disadvantage, the person said.
Well, okay. That’s actually true. It’s not fair to Ford, which planned ahead and guaranteed its own financing to get it through this rough patch. It would put them at a competitive disadvantage – a pretty healthy one that would essentially undo all the careful planning the company did do.
Alas, the President forgot to turn off the compassion spigot because today he authorized almost $18 billion in “loans” to GM and Chrysler. I’m not at all clear how this doesn’t put Ford as a competetive disadvantage. At least with GM and Chrysler in bankruptcy, Ford could position itself as a healthy alternative to the restructuring companies that didn’t require government backup for its warranties. Now, Ford can’t even do that. And it doesn’t have the luxury of being able to default, pretty much penalty-free, on government loans (seriously, do you expect that we’ll see a penny of that money repaid, ever? Does the federal government strike you as knowing two hoots about good business practices while it’s running a Ponzi Scheme all of its own?). Ford has private investors it’s going to owe and who will get payment, one way or another. GM and Chrysler now do not. That isn’t compassion. It’s tampering and if a private individual did it, we’d put him in jail.
The only reason that the President authorized those loans is to avoid the “pain” that GM and Chrysler’s employees might feel from layoffs and work slowdowns. Unfortunately, pain is a fact of life and no amount of government padding makes it go away. It just transfers that pain to other people – namely you and me. Conservatives understand that. We don’t like it, but we’re not so foolish as to believe that we can make things better by sending one person’s pain to someone else we believe in our arrogance should bear it. Pain transferred is not pain averted. It’ll wait and magnify until more people feel the pain that only a few needed to feel in the first place. The fallacy of government tinkering with the economy is that all that ever results from such tinkering is that a a minor hurt today becomes a major one tomorrow.
That’s why compassion should never replace rational thinking, no matter how many pouty faces the unions and auto execs make.
Tags: Conservatives, Government Bailouts, President George Bush
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