Sirotablog: Taxpayer Bailouts and a Real Ownership Society

David Sirota has an excellent post on the almost unnoticed news that a bankruptcy judge will allow US Airways to default on its pension obligation. But this will give the government an ownership stake in the company (Gee remember when Greenspan advocated for the Bush tax cuts because he didn't think that government should own public companies if they accumulated too much of a surplus and needed to dump some of it in the stock market).

Sirotablog: Taxpayer Bailouts and a Real Ownership Society:

"There is a good case to be made that some of these industries that we are bailing out are essential to the American economy. That's all well and good - but it doesn't negate the fact that politicians need to start treating taxpayer money as if it is as valuable as any other kind of money. No private investor or bank would agree to take their cash and just give it to companies because they felt bad for them. They would give it to companies and demand something in return. That's what our government needs to be doing. It's the same principle behind legislation, for instance, that would require drug companies to sell medicines developed at taxpayer expense at a 'fair and reasonable' price. Taxpayers deserve returns on their investment. And to argue the opposite - that we should just hand over taxpayer cash to industries and ask nothing in return - is just plain silly.

If we are really interested in creating an 'ownership society' as President Bush says, then tying corporate welfare to ownership stakes is a great way to do that. Creating partial public ownership in industries that are relying heavily on public subsidies is not only the fair way to treat hard earned taxpayer money, but it is a way to start injecting some public control over corporations that too often abuse citizens with no restrictions. And with America's private pension system severely underfunded, this issue of bailouts and ownership is only going to get bigger in the coming months and years."