Corporate Bailouts - Duplicitous?

Canadian auto-parts manufacturers have asked the Canadian government for $1 billion in loans to help them through what Gerry Felchun of the Automotive Parts Manufacturers Association of Canada calls a "temporary but very serious financial crisis." The crisis in our manufacturing sector is self-evident to anyone who reads Canadian newspapers.

But such calls for bailouts are double-edged. If Canadian business leaders want citizens to trust them when they say the free market economy is in our best interest, and the most constructive way to organize an economy, they can't then flee to governments for loans or grants when those markets turn on them. It reinforces the lack of trust steadily building among Canadians and Americans.

Here is how the ever alert Jim Horton puts it::

"The prospect of diverse businesses running to the Federal trough while homeowners struggle with mortgage payments is making citizens cynical. And, it presents a public relations problem. That is, business supports free markets except when it doesn't.

There are good reasons for these companies to want into the loan program. The societal impact of their failure would be wide and deep. On the other hand, failure is part of free markets. Struggling citizens rightly ask if government is going to keep large businesses from falling, then why not me? This kind of thinking leads to ever-larger raids on government money. Where does it end?" 

McDonald's Online CSR Report

Trust Deficit in America