Contact FreedomWorks

400 North Capitol Street, NW
Suite 765
Washington, DC 20001

  • Toll Free 1.888.564.6273
  • Local 202.783.3870

Blog

    ". . . If It Stops Moving, Subsidize It"

    For anyone who believes in free-markets and limited government, President Obama’s “State of the Union” address not only failed to provide hope for a change of course, it instilled concern that the White House would pursue a more radical one. On Wednesday, FreedomWorks  began with a critique of the president's remarks from a conservative perspective, and, since then, promoters of free enterprise have joined them in parsing and criticizing the policies the president suggested.  Venture capitalist Bill Frezza wrote a representative essay for RealClearMarkets.com contrasting the state’s bureaucratic social planners with the private sector’s investors:

    [F]ederal bureaucrats believe that they have infinite time and money to get things right. I suppose they do since the government can't go out of business and the Fed can print up as much money as it pleases. But imagine how competitive our country would be if thousands of companies that failed and went out of business were still around, propped up with taxpayer dollars and a perpetual hunger to feed at the public trough.

    Actually, we know exactly what this looks like in the energy and transportation sectors. It looks like Amtrak, corn ethanol, and Government Motors. Has anyone bothered to add up all the taxpayer money that Amtrak has destroyed? Yet Obama is promising to bring high speed rail to 80% of Americans.

    Is there anyone who believes making ethanol out of corn is anything but an economic, environmental, and social disaster? Yet it remains the nation's largest alternative fuels program. As for GM, time will tell whether the auto industry bailout has made America more or less competitive. But if the Chevy Volt should end up as well loved by customers as the Edsel, does anyone believe that GM will incur the wrath of its political patrons by giving it a decent burial?

    As Frezza points out, the only reason that government props these industries up is because they are not strong enough to succeed based on market demand.  The government’s idea of progress is to nudge Americans toward purchases of transportation infrastructure they don’t need, energy sources they don’t trust and cars they don’t want. 

    The self-correcting mechanisms of the marketplace can be hard for some people in the short-term; if Amtrak or Government Motors could have survived after corporate restructuring without taking government subsidies, employees may have been laid off as a result.  But this is the logic of the free market: providing people with products and service they need is rewarded, but providing them with products and services they neither need nor desire leads to bankruptcy. 

    Perhaps President Obama’s pledge to “fund the Apollo projects of our time” is not particularly radical, given that unnecessary subsidies have persisted for years—and it has mattered very little which party was in power.  However, this philosophy is radically at odds with anyone who believes that freedom works and is concerned about its future.  In essence, President Obama not only pledged that the spendthrift federal government would be unaccountable to the American taxpayer, but that the government would no longer be the only unaccountable agent of civic society: Industries that would fail in the marketplace have a new patron.