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The American Principles Project is a 501(c)(3) organization dedicated to preserving and propagating the fundamental principles on which our country was founded - universal principles, embracing the notion that we are all, "created equal, endowed by our Creator with certain unalienable rights, and among these are life, liberty, and the pursuit of happiness."
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Through our efforts, we hope to return our nation to an understanding that governance via these timeless principles will only strengthen us as a country. Continue reading:
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APP Founder
Robert P. George, J.D., D.Phil., McCormick Professor of Jurisprudence at Princeton University, is one of America's foremost scholars in the fields of constitutional law, ethics, and political philosophy.
Dr. George has won numerous awards for his academic and civic work, including the Presidential Citizens Medal. He has served on the President's Council on Bioethics and as a presidential appointee to the United States Commission on Civil Rights. He is a former Judicial Fellow at the Supreme Court of the United States, where he received the Justice Tom C. Clark Award.
| The Case Against Government Bailouts |
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| Written by Michael Bauman |
| Tuesday, 30 June 2009 13:47 |
 The government does not bail out anyone. Taxpayers do. The government just decides to which corporations they want to redistribute our money. Because I know better than does anyone else in the world what I want and need from the marketplace in exchange for my money; because I am the person most well-informed about my own needs, resources and values; and because I, therefore, can do the best job of investing my money effectively for my own highest good; I want to decide where my money goes. I want every individual to decide where his or her money goes. If it goes where each one thinks it does them the best service, the aggregate result will be better than if some government bureaucrat decided on everyone else's behalf where it ought to go. Bureaucratic decisions of this sort necessarily have to be under-informed. Because no bureaucrat can know the needs, resources and values of any given taxpayer as well as does that taxpayer himself or herself, and because no bureaucrat, and no collection of bureaucrats, can possibly have access to all the information needed to invest most effectively for the benefit of any one taxpayer that taxpayer's money, then that money ought to be left to the taxpayer to invest. And if a bureaucrat cannot do for even one taxpayer all the good the taxpayer can do alone, then much less can a bureaucrat acquire, understand, and properly apply the necessary pieces of information needed to invest with maximum benefit for each of the millions of American taxpayers the many hundreds of billions of dollars they contribute. What turns out to be less than the best for each taxpayer individually will not magically become the best for all when taken as a whole. Millions of individual shortfalls do not constitute a benefit simply because you throw those shortfalls all together. Piling shortfall upon shortfall millions of times is no way to make or to define progress. A hundred million losses do not constitute a gain. Because of the crippling limitations and burdens that inescapably attend the radically impaired knowledge possessed by all bureaucrats and all bureaucracies when it comes to serving the best interests of the citizens, bureaucratic decisions can only be more harmful to the whole than the decisions the citizens make for themselves before the redistributionists get their hands on the citizens' money. Government bureaucrats and leftist interventionists cannot solve the current economic crisis. It has no political solution -- absolutely none. But the bureaucrats and interventionists who cannot solve this problem can make it worse, and have already proved it again this time around. They are incapable of understanding either their impotence or their ignorance. For decades, they repeatedly have come face-to-face with those ugly and embarrassing facts about themselves and our economy, but without benefit. Let the people themselves do what needs to be done; let them select the winners and losers; let the chips fall where they may. But as long as we think the solution is found in Washington, no solution will be found, and no repair will be forthcoming. But we live in an age when even the Republican candidates think that the state is omnicompetent. The greatest miscalculation in the McCain candidacy was his decision to suspend his campaign and go to Washington until a solution was found. That solution was pathetically ill-conceived, and turned out to be no solution at all. McCain's decision was both economically and politically foolish in the extreme. He should have said that he'd never go to Washington for such a purpose because the solution to this challenge will never be found in Washington. It will be found with the American people making their own decisions, or it will not be found at all. He should have vowed to spend his time and energy with the American people and not with his fellow politicos. But that's not who he is. John McCain confused playing a role with having a principle. He is a self-proclaimed maverick, and mavericks sometimes do good things. But "maverick" is not a political or economic principle. Striding through the demands of political life and public service by being a maverick is not the same as working your way through the demands of political life and public service as a person of Burkean prudence. I do not mean to rail against John McCain. I hold the man in highest esteem, as well one ought. He deserves it. But I do say that his views are economically under-informed and therefore counterproductive. He was more right than perhaps he realized when he said that he doesn't understand the marketplace. We Republicans nominated him, and although he was clearly more correct than Obama on virtually every issue, nominating him was not a sign of our prudence, insight or principle. Nor do I mean to sound hostile to the state. But I do mean to say that the nation is better served when the state sticks to things for which it is competent. I do not think that economic intervention is normally one of them. I am indeed an ardent and committed supporter of government -- good government -- but I think that in the marketplace the government is normally not much good. I mean only to say that I want the people to sort things out for themselves. That includes deciding which corporations live and which ones die. Corporations work for the people. If they do not serve the people well, they will not survive. Nor should they. But I want the people, not the government, to pick the corporate winners and losers. They will do so with unintended collective prudence, with what Adam Smith called "the invisible hand," if the government does not intervene to skew the marketplace and its verdicts by giving sweetheart deals and bailouts to government favorites. Even though the government insists otherwise, it cannot rescue capital by means of bailouts because government has nothing to work with except what the taxpayers give it. When government grants bailouts, it is not "rescuing capital." It is simply reallocating and redistributing taxpayer capital. "Rescuing" and "redistributing" are not the same. Redistributing is all the government can do, and redistributing does not work. Put differently, in recent weeks government has wasted many, many billions of taxpayer dollars, poured that capital down the drain, and with no appreciable progress to show for it. The system is still not liquid. Credit is still frozen. Nothing is rescued -- not credit, not capital. Had the taxpayers themselves spent those hundreds of billions of dollars in their own privately best way, the economy would now be far better off than it is. Government caused the problem we face, and in trying to solve the problem it caused, it made that problem far, far worse. You cannot -- you absolutely cannot -- find a solution by looking to Washington. The DC politicos are so backwards on the point that some of them actually say this problem was caused by deregulation, as if we needed more government involvement, not less. Government intervention is at the root of this crisis, not at the root of its cure. How did government cause this problem? (1) By putting economically foolish incentives and regulations in front of lending institutions, thus inducing them to grant mortgages to folks whose financial resources could not reasonably be expected to sustain them, (2) by encouraging those financially under-qualified folks to take on mortgages beyond their financial reach -- with disastrous personal and public consequences, and (3) by trying to fix the crisis it created with even more idiotic policy interventions, like massive bailouts in the wake of the crisis those countless mortgage failures caused. The arrogant ignorance of bureaucrats, the monetary fine-tuning of state financiers, and the personal aspirations of politicians seeking votes cannot put this crisis behind us. They put this crisis before us. Rather than changing the mortgage rules for minority borrowers -- as if racial or ethnic background were an economic qualification -- government do-gooders should have stayed out of the mortgage business from the beginning, and declined to follow up their initial failure with another. Had they done so, we would be better off all around. Michael Bauman is Professor of Theology and Culture at Hillsdale College, and Scholar in Residence for Summit Semester. He holds a Ph.D. from Fordham University. Copyright: Michael Bauman. |
| Last Updated on Tuesday, 07 July 2009 12:37 |
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