Right answer, wrong thinking

So Republican Senators Shelby and Kyl oppose a $25 billion loan to the Big 3 American car makers. Why? Says a man who knows nothing about the car industry, Mr. Shelby, "They're not building the right products. They've got good workers but I don't believe they've got good management. They don't innovate. They're a dinosaur in a sense." Of course, all of this is preposterous. The market (not the ignorant Mr. Shelby) determines whether or not GM builds the right products, and GM has been selling millions of its products every year. Obviously somebody thinks that GM builds the "right products." Regarding management, did GM's management just suddenly go sour? Hardly. They don't "innovate?" Every year GM produces more and different products and, again, sells millions of units all across the globe. Thus trashing the Big 3--a.k.a. argumentum ad hominem--is not a proper response to the question on the table: whether to bail these companies out or not.

So why should the government not give the Big 3 a $25 billion loan? For these two simple reasons: (1) Nothing in the Constitution allows the federal government to loan tax dollars to private companies; (2) The federal government--certainly including Senators Shelby and Kyl--is not competent to decide whether or not GM, Ford, and Chrysler should survive as independent companies. The government has no knowledge, insight, or wisdom by which it could arrive at a reasonable conclusion either way, for or against. Survival or failure are market events to be decided by the market alone.

Our two glorious senators should tell the truth: they are not allowed to loan tax dollars to private concerns, and they are not competent to impose their opinions on the market. In other words, the very question of a tax dollar-funded bailout should never have been considered by the government in the first place because by its very nature the government lacks both the authority and the competence to consider the issue.

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