Roger’s Rules

The real cost of the Great Bailout of 2008-2009

How much will the Great Bailout of 2008-2009 cost? Think a moment before answering. Remember to include all the liabilities. The total cost will be measured not only in dollars and cents–many, many, dollars–but also in a large freedom tax as our duly elected representatives and their army of bureaucrats set about illustrating the old adage that he who pays the piper calls the tune.

How much will all that cost? Forget about the likely new taxes, fees, and other levies. For the moment, just try to tot up the moral cost of our new culture of regulation and bureaucratic intrusiveness. Just how expensive do you reckon this orgy of government largess will be?

No one really knows. But there are troubling signs that it is going to be far more expensive than anyone (anyone outside the government, anyway) bargained for. The government shovels a few billion dollars your way. In exchange, they get a seat or two on your board and can start bringing the whole menu of politically correct “diversity” initiatives to bear on your enterprise.

In “After Bailout, Get Out,” Dick Morris has some sound recommendations for minimizing seller’s remorse in the age of the government bailout. “Congress,” he notes, “has a historic opportunity to demonstrate its preference for the free enterprise system over socialism.” Will Congress seize the opportunity and demonstrate 1) its allegiance to free-market principles, 2) its responsibility to the taxpayers, and 3) its wisdom in policing its own tendency to hubristic overreach?

While you try to calculate those odds, listen to Morris’s thoughtful suggestions on how the Bailout might proceed without doing irreparable harm to our economy and our moral fiber:

Congress should give Obama these funds, weapons in the war against the depression, but ought to attach an amendment prohibiting the federal government from using the leverage the funds give it — and any equity it may acquire in these companies as a result of these funds — to influence corporate lending, hiring, management or other practices.

The federal fire department has come to the rescue of these burning companies in the midst of their economic conflagration. The question now is whether the firefighters will go home. Or will they stay on to live in the house they have just saved from the flames, even evicting the homeowners? Will the feds now say, in effect, “We saved you, now we own you”?

That, of course, is the danger. “Hanging in the balance,” Morris observes, “will be whether the United States continues to follow free-market economics or chooses to emulate the no-growth, government-dominated economies that prevail in Western Europe. Will we cash in our capitalist system for a socialist democracy?”

At the moment, no one knows really knows what the answer to that question is. How we answer it will affect the affect not only the economic but also the political and characterological prospects of America for decades.