Although
President George W. Bush succeeded with some of his policies, the
bailout of the Detroit Three is possibly his most significant mistake.
The recent damage he’s done to the Republican brand will take
leadership with a command focus to repair. The president’s mistake
could repeat the hardship Americans experienced the last time we went
down this path early in the last century.
Setting aside
President Bush’s successes on such fronts as protecting the homeland
against terrorists, his failures have been noteworthy. Some, such as
the federal response to Hurricane Katrina, came about because Mayor Ray
Nagin’s incompetence was surpassed only by that of Governor Kathleen
Blanco. Others, such as the nomination of Harriet Miers to the Supreme
Court, were entirely his fault.
But the past three months have
seen terrible decisions with long-term consequences. As markets
declined, President Bush signed onto massive government bailouts of
banks, then other financial institutions that started calling
themselves banks. Now, he’s agreed to give a massive bailout to three
American automakers that have stubbornly persisted in clinging to
failed business plans that leave them in the red, straggled into
insolvency by crippling union contracts.
To be fair to President
Bush, the bailout failure could not have happened without the
Democrat-controlled Congress, led by House Speaker Nancy Pelosi and
Senate Majority Leader Harry Reid. Even Senator John McCain had a hand
in this situation.
Polls showed voters were against the first
bailout 90-10 when it passed. Subsequent polls had voters opposed to it
75-22 on Election Day. Had Mr. McCain taken the conservative line
opposing these bailouts, and criticized Senator Barack Obama for
supporting the president’s plan, he would have finished stronger.
But
none of that excuses President Bush’s decision to give $17 billion of
taxpayer money to the Detroit Three, postponing their need to make
fundamental changes to their business models. This giveaway radically
expanded the reach of the federal government in a manner only seen in
socialist nations. Worse, he attached paltry, optional conditions to
that federal largesse, leaving the door open to the next administration
to waive those requirements completely and use the GOP for political
cover.
Out of all the options available to President Bush, he took the worst-possible course.
His
actions may not even be legal. Congress considered this bailout and
rejected it, while Mr. Bush’s treasury secretary publicly said that
using the original bailout funds for automakers would be unlawful
without congressional action. The legality of these actions cannot be
challenged unless the right party brings a lawsuit, but the fact that
ordinary taxpayers cannot bring a lawsuit against federal spending does
not change the fact that everyone agreed the first bailout could not be
extended to automakers. President Bush therefore usurped the
legislative function, doing something Congress refused to do.
The
federal government’s shoulders are not big enough to carry a $13
trillion economy. A system of limited government cannot control enough
of our economy to fully stave off the consequences of widespread
recklessness. Painful corrections are inevitable.
The parallels
to the 1920s and 1930s are remarkable. Republican President Calvin
Coolidge was a staunch conservative, presiding over the Roaring
Twenties. Republican President Herbert Hoover was a moderate who tried
major government intervention in the face of the economic downturn of
1929, with disastrous results. This then gave an excuse to incoming
Democrat President Franklin Roosevelt to radically expand the federal
government, spending untold sums in an effort to end the Great
Depression.
But those efforts failed miserably. They did nothing
to ameliorate the Great Depression, which instead got even worse in the
late 1930s after five years of FDR’s New Deal programs. It was only
World War II - the largest military conflict in world history - that
finally revived this nation’s economy.
We must learn from these
bitter lessons of history. Like Mr. Coolidge, President Ronald Reagan
was a conservative whose policies laid the foundation for long-term
economic growth. Like Mr. Hoover, President Bush is a moderate who is
trying to tackle an economic downturn with big-government intervention.
Enter President-elect Obama, promising to emulate Mr. Roosevelt with an
unprecedented, radical expansion of the federal government.
Only
Republicans offer the conservative principles that can address our
economic woes. Since our outgoing president has abandoned those
principles - and never adhered to some of them - the GOP must speak
with a different voice. The GOP must be the voice of reason before
America goes past the point of no return in trading a capitalist
economy for a socialist state.
Everyone who knows President Bush
will tell you he is an extraordinarily warm and pleasant person, and a
true gentleman. Contrary to the left’s portrayal of him, Mr. Bush is
full of compassion.
But that is not enough. Some industries need
change that government cannot provide. In a free market, company
mismanagement and union shortsightedness result in corporate
reorganization, not government involvement at the cost of countless
billions of dollars that only delays the inevitable.
The
Republican Party was once the champion of limited government and
economic freedom. President Bush’s recent actions have thoroughly
distorted that image. It will take strong leadership for the GOP to
reclaim its small government and free market reputation.
