Another lesson ignored
How many examples of beneficial government intervention are required before anti-government zealots in Congress -- itself a strange situation -- will admit that targeted economic stimulus programs can work wonders?
This week we learned that the federal government has decided to sell roughly $18 billion in shares of stock in American International Group -- securing a minimum profit of $12.4 billion for U.S. taxpayers. The once moribund financial giant appeared on corporate death's door at the nadir of the economic meltdown a few years ago, before the government provided billions in a bailout rescue.
The sale of stock by the U.S. Treasury Department reduced our share in the company from 53.4 percent during the crisis to 21.5 percent today, officials said. The shares are now valued at $32.50, but a few years ago they were considered almost worthless as AIG tottered.
This financial news comes as General Motors and Chrysler continue comebacks from the fiscal edge after benefiting from billions in federal stimulus funding, much of which has been paid back to the government.
Never mind the obvious success stories here -- and the government's role in those turnarounds; think of the thousands of people who work for those companies and of the thousands more who stood at the brink of ruin if those companies had folded.
The loss of AIG would have greatly exacerbated the financial crisis and sunk the economy even lower, and the collapse of the U.S. automakers would have caused a massive tsunami effect throughout hundreds of related industries around the country.
And yet, Republican presidential nominee Mitt Romney pointedly opposed the automaker bailout at the time, though he has backed away from that statement since. He was far from alone in expressing such reflexive anti-government drivel, which long ago reached absurd levels in political campaigns at every level of government. Today, it is closing in on cult status in some quarters.
If those politicians are incapable of learning that yes, government sometimes is the answer -- sometimes the only impartial, practical answer -- then voters should stop listening to their overheated pronouncements.
Mr. Romney and many others were dead wrong in these two cases, and the consequences for the country if their bogus advice had been followed would have been disastrous. Their views have been exposed, once again, as driven more by political philosophy than observation of the actual realities of everyday economies. And they are firmly rooted in the pre-industrial past.
The key factor about government is that, whatever its flaws, it is something we all have a say in, and can work to reform as necessary. Not so when it comes to huge conglomerates that can even more drastically affect our lives -- and do so on a daily basis when allowed to put profit ahead of all else.
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