I’ve been struck by how many pressure groups are doing everything they can to get their clients included in federal government bailouts following the coronavirus pandemic. They defy logic and reason while appealing to emotion, patriotism, naked self-interest (“Our people won’t vote for you unless you include them!”) and everything else they can think of.
The governors of America’s 50 states are far from the least guilty. Anyone would think they were helpless, unable to cope unless they got billions and billions more dollars from the federal government. In reality, of course, that’s not how America is governed. The states are supposed to be largely financially independent, standing on their own two feet, so to speak. Many smaller, weaker state economies are supported by annual federal government payouts, because some contribute more to the central government in taxes than they receive in services, or don’t have enough of a tax base to be economically self-sufficient. Nevertheless, in general terms the states are supposed to “cut their coat according to their cloth”, and not spend money they don’t have. One of the reasons so many state budgets are wasteful and filled with pork is that they already receive too much money from the central government. It’s a huge drag on our national economy.
Many states, having played the prodigal son and “wasted their substance in riotous living” (politically speaking), are now demanding that the federal government hand over every penny they say they need to fight the coronavirus pandemic. Governor Cuomo of New York is probably the poster child for such greed. He’s demanding five or six times more money than the current bailout package sets aside for New York state – despite the fact that this will inevitably deprive other states of what they need. There’s only so much available, after all. This isn’t a bottomless cornucopia that can never be exhausted. He’s also demanding many times more ventilators than the state has been promised – despite his administration having decided back in 2015 to forgo the purchase of 15,000 ventilators, after “determining that the expense was too much and there would be insufficient staff to man the machines even if there were an outbreak“. If New York wouldn’t spend its own money to meet its needs, why should the rest of us spend ours? And why should the federal government be responsible for all pandemic-related expenses anyway, when the states have their own budgets and their own expenditure priorities? They need to step up to the plate themselves.
Our Founding Fathers set strict limits on what the federal government’s responsibilities would be, and how it should spend national revenues. Those limits have been honored far more in the breach than in the observance for many decades, if not centuries, so that central government has become a leviathan dominating this country – precisely what the Fathers feared. This current crisis is further eroding what the constitution dictates. In one sense, it’s hard to argue against that, because the need is so great: but in another sense, it’s extraordinarily dangerous, because it gives central government yet more leverage and control over the states, and over the lives of individual Americans. That’s antithetical to liberty, to put it mildly. Remember the late President Ford’s prescient warning: “A government big enough to give you everything you want is a government big enough to take from you everything you have.” I fear greatly that we may find that out the hard way in the not too distant future, if the socialist wet dreams of so many of our aspiring politicians come to fruition.
The corporate world is no better. Industry pressure groups and their lobbyists are frantically trying to make sure that their losses are paid for by the US taxpayer, rather than out of their profits. That’s equally unconscionable, IMHO. The list of groups holding out their hands for a bailout is almost unbelievable: airlines and casinos, private jet operators, even cruise lines – the same cruise lines that register themselves in foreign countries to evade strict US maritime safety standards, to say nothing of avoiding paying taxes in the USA! As Skift notes:
While about half of the cruise industry’s roughly 30 million yearly passengers are American, few of them realize that once they leave a U.S. port and territorial waters, they are no longer protected by the country in which they live or booked the ticket. Health, safety, labor, and other issues on board are governed by flag states — usually countries like Panama, Malta, and Bermuda — which have less resources and regulatory might than the U.S.
Critics have said for years that this structure means cruise ships have lax health and safety attitudes when compared to other industries, like aviation, and that labor practices on board — crew commonly work seven days a week, for months at a time — are in grave need of reform.
There’s more at the link.
I see no reason whatsoever why the cruise shipping sector, legally based outside the USA and exempt from most US taxes, should be bailed out by the US taxpayer. Let them see to their own needs, or approach the governments of those countries in which they’re headquartered and/or in which their vessels are registered.
Finally, let’s remember that the entire bailout package is going to be financed by deficit spending. This isn’t money we’ve got in the bank, just waiting to be used. No, it’s going to be added to the already incomprehensibly large national debt, which will one day have to be repaid. The larger the bailout, the greater that debt will become and the more difficult impossible it will become to pay it off. That should worry every American taxpayer. The politicians who put together the bailout package aren’t going to pay for it. No, the cost of this bailout is going to be shuffled off onto our shoulders. That’s a very scary thought – and a very good reason to limit the bailout to true essentials, and minimize the pork barrel spending it will inevitably contain (because politicians can’t help themselves, and are fundamentally untrustworthy).
Lobbyists, with very different priorities, are having a field day.
The prospect of a bailout of a scale without precedent has set off a rush to the fiscal trough, with businesses enduring undeniable dislocation jostling with more opportunistic interests to ensure they get a share … While the halls of the Capitol are eerily quiet, lobbyists are burning up the phone lines and flooding email inboxes trying to capitalize on the stimulus bills moving quickly through Congress.
. . .
The conditions for a lobbying blitz are ideal. Concerns about costs and deficit spending largely have been moved to the back burner. The process is being rushed, with legislation being written in private and rushed toward votes without much scrutiny of the fine print. Both parties are under intense pressure to deliver for key constituencies.
“The only industry that hasn’t been slowed down by the virus is the lobbying industry,” said Representative Ro Khanna, Democrat of California.
Again, more at the link.
I wonder if we could include a provision in the bailout forbidding companies that receive funds from it to hire lobbyists to pressure Congress for more funding or legislative favors? I’d vote for that in a heartbeat!