Chrysler deserves to be applauded this week for returning $7.6 billion in bailout cash it received during the economic crisis six years ahead of schedule. Yet some free-market-loving Americans fear the repayments could give policy makers an excuse to splurge on bailouts during the next crisis.
“I think the temptation is real. I am worried about this,” said Douglas Holtz-Eakin, former director of the Congressional Budget Office and a one-time economic adviser to Sen. John McCain.
“Some of it doesn’t sit well with me,” said Ernie Patrikis, a partner at White & Case and a former high-level official at AIG and the Federal Reserve Bank of New York. “What other industry do we think will be important in the future where there are a lot of jobs and votes that will cause the government to act? We should try as much as possible to eliminate the potential for that happening.”
The rescues of private companies also represent an expansion of corporate entitlements, much like the social entitlement programs like Medicare that provide important social benefits to many Americans but are weighing down the country’s bloated balance sheet.
“Businessmen [complain] about government and taxes, but will take the subsidies. It’s a fact of life,” said Holtz-Eakin.
To that point, Patrikis said he doesn’t believe there’s been a truly free market since 1900.
“There’s a hell of a lot of law and a hell of a lot of regulation. That’s not free market,” he said.