Bailout fever is catching, and while it’s hard to nail down exactly how hundreds of billions of your tax dollars will be spent, plenty of banks, insurance companies, and automakers are lining up for a handout from Capitol Hill. A new political arms race where Congressmen and Treasury officials decide winners and losers is underway. The prize: Your money giving bailout recipients an advantage over everyone else, ostensibly for the greater good.

When the free market decides which enterprises succeed and which fail, the result is a volatile economy in which consumers reward excellence and punish mediocrity. Businesses that innovate, retool, and respond to the need of their customers thrive and vice versa.

Chances are you have an Apple IMac, or IBM computer in your home but your old Smith Corona typewriter went to the dump years ago. Should the federal government have bailed out the typewriter industry during the rise of the PC? Couldn’t Smith Corona have made the same argument that bailout panhandlers in private jets and expensive suits make today?

The problem with that logic is that once the government uses tax dollars to prop up a failing business, it creates an environment where the prime motivator is no longer pleasing the consumer, but rather the politicians who distribute the cash. Unwittingly, this arrangement shifts the balance of economic power from the consumer to the government and unfairly benefits those with a talent for sucking up.

Forgive my cynicism, but what do you bet recipients of government bailouts will be extremely motivated to contribute to the re-election campaigns of congressmen who rescued them in their hour of fiscal need. Hmm…if I make a series of lousy financial decisions that drive me hopelessly in debt, could I make a generous contribution to the House Banking Chairman and get on the list of companies too big or too important to fail?

And no one seems to have thought about how helping one company affects their competitors. This week’s proposed $25 billion dollar bailout of the big three automakers may temporarily help the unionized workforce in Michigan, but it creates a disadvantage to automakers in Mississippi, Alabama, and Tennessee who have remained viable by keeping their overhead costs in check.

The embarrassing greed of CEO’s making millions while their companies go bankrupt strike an emotional chord with all of us. But Wall Street doesn’t corner the market on cigar chomping tycoons making back room deals to enrich themselves at the expense of others. Washington D.C. is just as bad, or worse, because it is supposed to be an honest referee. But when government officials anoint themselves to be financial king makers with taxpayer dollars, they become tangled in a hopeless conflict of interest.

Politicians aren’t suddenly infused with superhuman integrity on inauguration day. As a matter of fact, many of them compromised their integrity to get where they are. So the notion that governmental patrons will somehow be able to channel billions of dollars to select groups without being corrupted is ridiculous. Human nature is what it is, and the only way to prevent it from going out of control is through transparency and accountability.

Businesses longing for bailouts should be careful what they wish for. Uncle Sam may prove to be a fairly expensive business partner.



Craig Ziemba, is a military pilot who lives in Meridian. To have Craig speak at your event, contact him at craigziemba@aol.com.