Since government officials have imposed severe restrictions on economic activity, I’m sympathetic to the notion that businesses should be compensated.
But, as I warn in this CNBC interview, I have major concerns about big government and big business getting in bed together.
As is so often the case with interviews on live TV, there are many issues that didn’t get appropriate attention (either because there was too little time or because I failed to address a key point).
- A major risk of bailouts is that politicians will insist on having a say in how companies operate. Indeed, that’s what Christian Weller was calling for in the final part of the interview. I should have pointed out the huge economic downside of having government in the boardroom.
- There’s a rationale for short-run emergency legislation, but we should be very concerned that self-interested politicians and power-hungry bureaucracies will use the coronavirus crisis as an excuse to permanently expand their power and control over the economy’s productive sector.
P.S. I usually try to avoid making predictions (economists are lousy forecasters), but I feel confident in asserting that my friends on the left – once the coronavirus crisis has ended – will be complaining about big businesses having too much power.
I’m not against large companies, per se. But I don’t want bigger firms to gain an advantage over small companies by getting in bed with government.
If we want fair and honest competition, we need separation of business and state. No bailouts, no cronyism, no subsidies, and no favoritism.
That’s the part folks on the left don’t understand.
P.S. If you want more information on the economic damage caused by bailouts, watch this video and this video.
P.P.S. Speaking of videos, here’s some satire about the toys that politicians get for their children.
P.P.P.S. I wish this was satire, but American taxpayers are helping to underwrite cronyism in other countries.
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Image credit: Andy Withers | CC BY-NC-ND 2.0.
