The Corporate Welfare Disease is Spreading
With the unprecedented bailout of the finance industry, it’s only a matter of time before other corporate lobbyists come knocking on the federal door. As a matter of fact, the automotive and now retail industries are pushing for their own bailouts. Why not? The government is redistributing all of our money to corporations in finance, should they do the same for every other industry? The CEO of JC Penny’s certainly thinks so.
America’s woes stem from decades of misaligned resource allocation. Simply put, as a country we’ve turned into the world’s biggest deadbeats! We are a debtor nation, the likes of which is historically unprecedented.
The majority of America’s national income, Gross Domestic Product (GDP), is comprised of consumer spending. Given that we have had a prolonged current account deficit, this means that our spending has been subsidized partially by other country’s with surplus savings.
Of course retailers are going to want this fantasy to continue. Since they can no longer count on markets to enable consumers to borrow and spend, they are now begging Washington to force everyone to borrow and spend!
Let’s not be fooled by this nonsense. Reality, as measured by market behavior, is telling us we must stop borrowing, become less leveraged, and live within our means. Let’s not allow corporate lobbyists to take taxpayer money to continue unsustainable behavior.
Filed under: Current Events