Is it Ethical to take Government Bailouts… Again and Again?

business_ethics_highlights_2At what point should we say that enough is enough? Companies sometimes seek government bailouts. And governments sometimes give them. And sometimes, maybe, that’s a good thing. It’s still debated (and debatable) whether the US government’s bailout of certain “too-big-to-fail” financial institutions back in 2009 was a good idea. If a company truly is essential to the public interest, and if they face a temporary setback that can be remedied by government assistance, there might be a good public-policy rationale for intervention. But what are we to say about a company that comes hat-in-hand to government, time after time? At some point, is it ethically wrong to ask for more? The story below is about Canadian airplane-maker Bombardier, and its current attempt to squeeze a big bunch of money out of the Canadian government taxpayer. >>>

LINK: Bombardier bailout just more of the same old (by Andrew Coyne for The National Post)

…All of this preparatory posturing is in the service of the fiction that when the money eventually pours out of the federal spigot, it will not be a bailout, or a subsidy, or some other discredited government practice from the past, but an honest-to-God “investment,” just like the kind that people who risk their own money make. The message: this government isn’t throwing money at a “loser” — it is backing a “winner.” A winner that can’t survive without government aid, can’t sell its planes for more than they cost to make and can’t pay a sufficient return to attract actual rather than pretend investment, based on an economic rather than a political bottom line……

What do you think?

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One comment

  1. The ethics of bailouts (also: tax breaks) may be similar to the ethics (or, at least, the law) of blackmail insofar as the latter is directional—it matters whether you offer to keep quiet for a fee (which is blackmail) or I offer you a fee to keep quiet (which isn’t blackmail). By the same token, it may be unethical for firms to seek bailouts but not unethical for firms to accept bailouts offered by political authorities.

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