Bailouts, in general, are neither good nor popular.
The most recent legislation billed as a “stimulus” package was President Barack Obama’s 2009 raft of special interest giveaways and green energy boondoggles.
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It’s understandable, then, that a lot of conservatives are very wary of the proposed economic responses to the coronavirus crisis. And the odds are that, whatever Congress passes, it will end up — either because of the statute or the implementation — being filled with immense waste and cronyism.
No bank bailouts.
No auto bailouts.
No farm bailouts.
No leisure bailouts.No bailouts.
— Justin Amash (@justinamash) March 16, 2020
In order to steer policymakers away from waste, and in order to help conservatives consider why an economic rescue package might be appropriate, let me suggest a way of thinking of this aside from being a “bailout” or a “stimulus.”
Congress should pass a reparations package.
Think about it. Governments are forcing businesses to shut down and telling customers and employees to stay away from the ones that are open. Governments are cutting off trade and tourism. The U.S. government and state and local governments are directly harming businesses in pursuit of a higher good.
So, Washington ought to be talking about making it up to the businesses.
This isn’t like past bailouts, which rescued failed or failing businesses. It’s not simply that businesses are taking a huge hit despite having “done nothing wrong,” as President Trump puts it. Businesses fail without wrongdoing or serious errors all the time — that’s the free market, and it should be allowed to happen. We don’t and shouldn’t bail out businesses that fail just because market conditions fail.
Likewise, a coronavirus rescue package shouldn’t be a heavy-handed TARP-like effort to ward off systemic collapse. Again, it should be saying to businessmen, consumers, and employees: “Hey, sorry we had to shut you down and lay you off. Let us make it up to you.”
That principle should also guide policymakers. The money, as much as possible, should be aimed directly at those who either sacrificed for the public good or were sacrificed for the public good.
I understand that targeting the money might be time-consuming and complicated, and so, there’s a case for simply giving everyone money. But, to the degree that Congress or the administration decides how to spend money, it should be thought of as reparations for the economic harm inflicted by the shutdown.
