Gratitude and Bailouts

Tibor R. Machan

Business Week reports--in the July 13 & 20, 2009, issue, on page 22--that Assistant Professor Randle Raggio of Louisiana State University has written, for the Harvard Business Review, a case study of "whether bailout recipients should say thanks." This kind of exercise is a puzzle.

Exactly how a case study can determine the answer to the question being posed is unclear. Perhaps expressing such "gratitude" is but a possible exercise in public relations for it has nothing to do with a genuine show of gratitude. So if by "should" is meant, "will be welcome by some taxpayers," I suppose the exercise makes some sense.

What does not make any sense at all is to consider the gesture a show of genuine gratitude since the taxpayers didn't dig into their own resources and provide the bailout of their own free will, not by a long shot. What most but not taxpayers did is to tolerate having taxes be used for this purpose. (Remember that many of them took part in "tea parties" to show their disapproval.)

Even if one were to believe the lie that taxes are something that citizens choose to pay, on the question of what ought to be done with the taxes they have very little say. At best they have a way of indicating, after the fact, whether what Congress and other political bodies do with the money they extort from citizens is spent in acceptable ways, without much protest. Sure, they can vote members of Congress out of office. But this doesn't happen a lot because those in Congress do a lot besides distribute the loot they collect from the citizenry--often they take other people's money and bring it home to their constituents. And much of what they do is far more visible than their activity of wealth redistribution tends to be. Voting for someone by no means implies agreement with how tax funds are being spent. It may mean merely that this candidate was the least offensive of those running. Or that those who found something wrong with the candidate's voting record just didn't have the time and energy to wage an effective campaign against the individual.

Even the idea that in a democracy legislators have the task to take the resources of the citizenry and spend it as they see fit is highly dubious. Yes, a lot of people think that democracy allows this but that is not a proper democracy at all. What democracy in a free society allows is to vote in those who will decide what laws need to be passed so as to advance the protection of the rights of the citizenry in novel situations--ones the framers could not anticipate. That is the proper scope of democracy in a free society. Anything else amounts to the usurpation of political power.

That said, even if one where to think that taxpayers had anything to do with the decision of how much bailout money ought to be handed out and who ought to receive it, showing them gratitude is disingenuous. Money not given by those who own it to those who want it cannot be given out of generosity. Such money is, plainly spoken, not given but taken. Thanking the taxpayer is like thanking a victim of mugging for the loot he or she taken in the mugging. No good is done that way. Those who received bailout money can only redeem themselves by returning it fast and with interest, but even that would amount not to gratitude but to an gesture of belated justice.

As to whether giving expression of "gratitude" for bailout money Congress handed out makes sense, at best members of Congress might be thanked, although that would be odd, too, since it isn't their money they gave! The bottom line is that the entire exercise of taking the citizenry's resources and handing it out at Congress' discretion ought to be illegitimate in a free society. But I guess such a message isn't going to see the light of day in the pages of the Harvard Business Review, certainly not be an assistant--very likely untenured--professor. By now such prominent publications around the country, let alone the globe, are fully in cahoots with the system that pays no attention whatsoever to the idea that other people's resources aren't Congress's to distribute but their own.