Friday, December 19, 2008
Bush and the Bailout: The Politics of Betrayal
President Bush announced today that he is offering $17.4 billion in loans to Chrysler and GM because letting the automakers fall would send our economy into a "deeper and longer recession."
This girly-man move goes against a central pillar of western capitalism - creative destruction. The Austrian-school economist Joseph Schumpeter popularized and used the term to describe the process of transformation that accompanies radical innovation. In Schumpeter's vision of capitalism, innovative entry by entrepreneurs was the force that sustained long-term economic growth, even as it destroyed the value of established companies that enjoyed some degree of monopoly power.
I've always maintained a solemn respect for President Bush and the belief that history will judge him favorably, particularly his decisions involving the war and, more generally, the global war on terror. However, on probably one of the most important issues of his Presidency, he has decided to let the voices of his conservative base fall on deaf ears in order to prop up the uncompetitive U.S. automakers.
Essentially, he has folded like a cheap lawn chair, and my respect may fold alongwith.