ACTION ITEM: More Bailouts As most Libertarians are aware, generally speaking the more government gets involved in a market, the more distorted it becomes. I think most of us assumed, after the passage of the so-called $1 trillion (depending on who's counting) bank bailout, other industries would soon start lining up at the federal trough.
Sure enough, the domestic automakers aren't going to let us down. I'm a car guy. In fact I could easily be described as an *American* car guy. But even to a car guy like me, a bailout is not what the automakers need. They really need to file for Chapter 11 bankruptcy, as George Will suggested today in a very well-reasoned article [free registration required to access]: http://www.washingtonpost.com/wp-dyn/content/article/2008/11/17/AR2008111703101.html It is likely that tomorrow (Wednesday), the US Senate will vote on a bailout package for GM, Ford, and Chrysler. It's worth a try to get the snowball stopped. If the feds give the automakers their wheelbarrow full of cash, you can bet even more supplicants will be trying to grab as take also. Please take five minutes right now to contact your Senators to ask them to vote against any bailout of the auto industry -- no matter the source of the funds (suggestions for funding a bailout have included setting aside some of the payola within TARP, or forgiving/restructuring existing debt, or making altogether new grants). http://www.senate.gov/general/contact_information/senators_cfm.cfm?State=VA The "Campaign for Liberty" recently sent out an alert about this legislation and included suggested text. Below is a modified version of their suggestion (fixed typos and made wording stronger). Of course, feel free to write from scratch. But in any case, if you want to participate, do it immediately. The wheels are turning in the Senate already. Tomorrow afternoon may be too late. [NOTE: I encourage you to cc: your message and any responses you receive to <[EMAIL PROTECTED]>.] Marc Montoni, Secretary Libertarian Party of Virginia ============================================================== ********************** Modified Letter Suggestion ********************** Dear Senator ____________________, I urge you to oppose any bailout of the auto industry, whether by taking existing funds from TARP, revising any previous loans, or making new grants. The auto industry is lobbying hard for taxpayer money when they should be entirely focused on restructuring their companies and recouping their losses. There is no guarantee that a government handout will have any positive effect, and that GM, Ford, and Chrysler will not be back in a few months asking for additional billions. Since a bailout will only delay the economic consequences of the Big 3's current predicaments, Congress should allow the market to work so that the fallout can be dealt with and overcome as quickly as possible. As George Will said in a column this week, "The answer? Do nothing that will delay bankrupt companies from filing for bankruptcy protection, so that improvident labor contracts can be unraveled, allowing the companies to try to devise plausible business models." So instead of handing out more of the taxpayers' money and moving further away from the free market ideas that made America great, I ask you to: 1.) Eliminate regulation. The auto industry is one of the most heavily-regulated industries. A bailout will generate additional regulation and additional costs. Removing red tape would free up resources for them to address their financial situations, save jobs, and produce better products to jump-start sales. 2.) Eliminate taxes. Cutting or eliminating corporate and capital gains taxes would give these and other companies immediate funds to improve their competitive position. Finding other taxes to eliminate would help even more. For example, eliminating the individual income tax would allow workers to keep the 20% of their income currently taken by the federal government. More money left in their hands strengthens their financial position and purchasing power during tough economic times. These two steps alone will save the industry far more in the long run than the numbers currently being proposed for the bailout. Additionally, because the Paulson TARP plan has abandoned its originally stated purpose of buying toxic assets, is not holding up its promises to be transparent, and has not been properly accountable to Congress, no further expenditures should be authorized until the Treasury Department presents a full accounting to Congress of how it has already disbursed TARP funds. The answers to our economic problems cannot be found in further government intervention. As your constituent, I urge you not to put my tax dollars on the line and to vote "no" on the auto industry bailout. Sincerely, <insert your name here> ============================================================== -- end -- ############################################################# Have an announcement you'd like to post? SCC members & many committee heads are all authorized to post; or you may send your announcements to the List Master: <mailto:[EMAIL PROTECTED]>. ################################################## Unsubscribe: Send an email to [EMAIL PROTECTED] with no subject and "Unsubscribe Announce" as the text. ############################################################# Libertarian Party of Virginia http://www.LPVA.com Phone: 703-715-6230
