Barney Frank: The Bailout is Welfare

Congressman Barney Frank talked recently about the proposed bailout on 60 Minutes; when Leslie Stahl asked if he thought the Bailout would simply prop up failed companies, he provided an illuminating response:

“No. We’re not propping up companies. That’s your mistake,” he tells Stahl, who had asked him about taxpayer money going to prop up companies that had made bad decisions. “We’re propping up individuals. The world doesn’t consist of companies. The world is people. The country is people.” When Stahl points out that Frank is then talking about welfare, he responds, “Yeah, I’m for welfare. You’re not? Are you for letting people starve?” Some argued that bankruptcy was the way for Detroit to work out its troubles and reformulate their businesses. Frank is against that as well because it also hurts the individual. “There’s only one thing you can do in bankruptcy: break your word, break your deals,” says Frank. “It allows you to say to the small businesses who have been catering lunches for you…the workers, ‘Sorry, we’re not paying you,'” he tells Stahl [Emph Added].

Frank’s statement illustrates one of the major problems many people in the country have with the proposed bailout; there is much talk about helping people, but minimal informed thought on how the big three can use the bailout money to become competitive, profitable corporations again.  Ultimately, all three automakers will have to close plants, shed jobs, and renegotiate contracts, including with their labor force, if they are ever going to be competitive in the global economy.  And it is interesting to hear the Congressman criticize the bankruptcy process; Congress helped draft our current bankruptcy laws,  after all.    .   .

Of course, the President may just use the $700 billion bad bank slush fund anyway to bailout the automakers anyway, making this an academic argument.    .   .

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2 thoughts on “Barney Frank: The Bailout is Welfare

  1. I recently caught Barney Frank on CNBC and was happy to see how plainly he spoke (a rarity in someone in his position). It’s very difficult to keep perspective in these times perhaps because perspective has been twisted and tainted so often by the press and government.

    There’s a knee-jerk reaction that many middle-class Americans have regarding the use of ‘their money’ that I suspect is hinged on their paranoia of becoming lower class. I’m not educated enough on the issue, but seeing my parents embody the ‘regular guy’ approach used by personalities like Glen Beck is really depressing. It reflects a selfish view of the ‘ugly American’ that should not be reveled in. Surely we’re better than that… right?

    I hope we see more statements like Frank’s that break down what is really at stake here. Again, I’m not educated enough on the issue, but I like Frank’s approach in his responses on the poorly named ‘bailout.’

  2. Here is a response for J Lee. You state twice in your comments that you “are not educated” about these issues. From my perspective, your lack of education shows.

    Middle class Americans (actually ALL Americans) who don’t like these bailouts are being sensible. They respond negatively not because of a “knee-jerk” response, but because they have seen through history what bailouts DON’T accomplish. J.Lee, please do some research on the massive government spending programs instituted in the 1930’s (Roosevelt) and 1960’s (Johnson). They did not help the economy at all, but merely stagnated it. I don’t blame Middle class Americans one bit for disliking their money (in fact, J Lee, it will be their children’s and grandchildren’s money that will have to ultimately pay the bill for this) being taken from them by government mandate.

    Regarding Barney Frank’s comments, they are silly and hypocritical (coming from a liberal’s mouth). Yes, companies are made up of “people”, but there are thousands of “people” (i.e. companies) that go bankrupt every year. If Barney Frank is consistent (which of course he isn’t) the government should be bailing out every last one of them. But all the governments on earth don’t have the money to bail all of them out. What is wrong Barney, don’t you care if people starve?

    Frank misrepresents the case. He acts as if there are only two choices: Government mandated and enforced welfare, or starvation. There is another, and much better option. Free enterprise (which means the government getting out of the business of trying to be everybody’s wet nurse) and voluntary charity. Barack Obama said once that his proposed economic plans were not socialism, but “just being neighborly”. Sounds much like Barney Frank. But Barney and Barack, IT DOESN’T COUNT AS NEIGHBORLINESS IF THE GOVERNMENT FORCES AMERICANS TO SURRENDER THEIR MONEY UPON THREAT OF FINE OR IMPRISONMENT (which taxation really is). Christians, Muslims and Jews have been giving to charity (i.e. the poor who could potentially starve) for thousands of years, and they have shown incredible generosity. Hospitals have been built, orphanages established, food kitchens run, and so on. I urge you J. Lee to do get some education on these charitable organizations, they are too numerous to count. And the great thing is, the government is not compelling them to give. The government is not involved at all!

    Oh, by the way, Yahoo did a survey of the charitable habits of liberals and conservatives. It turns out that conservatives give about twice as much to charities than liberals do. So much for so-called liberal compassion. To Barney Frank I say, “Don’t you dare to accuse conservatives of not caring for the poor! Go first to your liberal friends and tell them to step up to the plate!”

    As so often happens, there is so much more about Barney Frank said that is incorrect, which misrepresents the facts. To J. Lee, I beg you as a friend, please don’t get fooled by nice-sounding euphemisms coming out of Barney Frank’s or Barack Obama’s mouths. Do some study. Educate yourself about these things. A great place to start is http://www.heritage.org.

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