Bailouts: Further Down the Slippery Slope

David Brooks makes the case against an auto industry bailout more eloquently than I did:

A Detroit bailout would set a precedent for every single politically connected corporation in America. There already is a long line of lobbyists bidding for federal money. If Detroit gets money, then everyone would have a case. After all, are the employees of Circuit City or the newspaper industry inferior to the employees of Chrysler?

But the larger principle is over the nature of America’s political system. Is this country going to slide into progressive corporatism, a merger of corporate and federal power that will inevitably stifle competition, empower corporate and federal bureaucrats and protect entrenched interests? Or is the U.S. going to stick with its historic model: Helping workers weather the storms of a dynamic economy, but preserving the dynamism that is the core of the country’s success.

Now the states are getting into the act in seeking a federal bailout:

The idea is getting a strong bipartisan push from governors across the country, with California Republican Gov. Arnold Schwarzenegger and New York Democratic Gov. David Paterson among the chief proponents. Both are blaming Washington for their states’ mounting troubles. …

California Assembly Speaker Karen Bass said Congress should view states “as deserving of help as much as banks and automakers and everyone else in line for funds.” If Congress can give $700 billion to financial institutions, she asked: “Can we have $5 (billion) or $6 (billion)?”

Never mind $5 billion — a mere $5 million would have a profoundly positive effect on another deserving recipient. What I envision here is not exactly a bailout, but rather an innovative “pay-for-work” program…