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Bailouts Continue to Grow and Spread

Monday, January 19th, 2009
Posted in Education by Joel Gross

Government bailouts of many private companies has begun to smack of nationalization. Citigroup & Bank of America have received tens of billions of dollars and expect to receive much more. The government will end up owning significant chunks of each. Chrysler’s crappy finance arm just received a $1.5 billion to try to give better deals on leases for their awful automobiles. Even the porn industry has gotten in on the act, with major porn producers going to Congress to try to get money “for the American people’s most needed industry.”

America is quickly morphing into a socialist nation with many companies having significant government ownership. Economics 101 tells us that this will lead to even greater inefficiencies and will set up incentives for even more corruption. No longer does a company need to be better than it’s competitors, now it just has to be bigger to survive. Welcome to the Socialist States of America.