400 North Capitol Street, NW
Washington, DC 20001
- Toll Free 1.888.564.6273
- Local 202.783.3870
After bailing out Wall Street, the White House has set the dangerous precedent that it is prudent to bail out entire industries. Billions of taxpayer dollars will be handed over to GM and Chrysler in exchange for a promise that the Detroit Three become profitable soon.
President Bush admitted to abandoning limited government principles when he announced the bailout this morning, “If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy and liquidation for the automakers.” Small government conservatives believe that the government has no place in picking winners or losers in the market place, and it also has no role in bailing out losers. This process takes money from productive companies and industries and rewards failing enterprises at the expense of more productive sectors of the economy.
With the Detroit Three bailout it is also clear that taxpayers were sold a bill of goods, as the TARP has become bailout piggy bank for failing businesses in ways never intended in the spirit of the original legislation.
Using TARP funds to bailout the auto industry also raises additional questions about the constitutionality of the Emergency Economic Stabilization Act (EESA) that created the TARP program. Granting sweeping new discretionary authority and power to the Treasury Secretary with little oversight or input from Congress may violate the nondelegation principle adopted by the Founders as one of the most fundamental safeguards against tyranny. This momentous change in the relationship between government and market forces advanced by the EESA are more rightly deliberated and approved by Congress; they should not and cannot be delegated to unelected officials in the executive branch.
FreedomWorks activists made their opposition known by calling and emailing Capitol Hill and the White House. FreedomWorks members sent over 104,000 emails in an overwhelming response. Taxpayers are clearly fed up with the bailout nation.
FreedomWorks President Matt Kibbe commented:
“At some point we need to ask, who will bail out the American taxpayer?”
“To be a free market conservative means believing in limited government values in good times and in bad. Recessions are part of the economic cycle when overextended and uncompetitive companies get punished and resources are reallocated to the most productive parts of the economy. Bailing out failed enterprises only serves to burden the productive sectors of the economy and prolongs the inevitable.“
“Propping up zombie automakers will only institutionalize failure. Our economic malaise is leading us to a Japanese--style lost decade of economic stagnation. The short-term bailout will lead to long-term government management and interference in the economy. Political decisions will trump business decisions.”
“It is ironic that companies that just years ago were complaining about government over-regulation are now begging to the government to save them from their own poor management decisions.”
“Too big to fail means too big to bail out. With Washington sinking in an ocean of red ink, we are leaving the next generation a staggering bill to pay for our inability to live within our means. This is definitely not fiscally conservative policy.”