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Press Release

For Immediate Release
Friday, November 14, 2008

Businessmen are Bad for Capitalism

CEOs and Government Assistance Stand in the Way of Economic Turnaround

"CEOs and government 'altruism' are standing in the way of effective economic turnaround," says Libertarian Party spokesperson Andrew Davis.

"Businessmen are bad for capitalism when they use the government as life support for failing ventures," explains Davis. "Instead of letting other companies absorb these failing businesses, CEOs and government bailouts have distorted the natural forces of capitalism and prevented the necessary—and effective—economic turnaround that only comes through an unfettered free market.  These bailouts do nothing but prolong the inevitable collapse of companies suffering from extreme mismanagement and poor investments."

"The Libertarian Party is adamantly opposed to any sort of bailout of American corporations who, through their own mismanagement, find themselves at the brink of failure," says Davis. "This includes Detroit auto manufacturers who have failed to keep up with trends in the automotive industry, locked themselves into destructive union contracts and have demonstrated a complete lack of initiative in automotive innovations that make their products enticing to consumers."

"Should the government bail-out Detroit, it will essentially create a white-collar soup kitchen for American corporations looking for a handout," Davis observes.

"There is no incentive for managerial reform when government provides a safety net for crooked CEOs," says Davis. "And taxpayers end up paying their million-dollar bonuses."

Davis says the solution is not more bailouts and more regulation, but "giving the natural forces of capitalism the time it takes to correct the mistakes of the past by letting failing companies be absorbed and reformed by bigger and stronger entities."   

"This, of course, is not without its share of hardships," Davis explains, "but it will be the most effective plan for long-term economic stability.  There are countless examples in American history where big corporations have faltered and failed, and were replaced by new businesses that became bigger and better.  Had government stepped in at the time, it would have only prolonged the misery."  

"We must not mistake this type of pro-government regulation as true capitalism," says Davis. "President Bush and members of Congress from both sides of the aisle have created a new economic vision of loss-free capitalism, which simply does not exist in reality.  The so-called fiscal conservatives have adopted a new philosophy of economic altruism that is based on corporate welfare and market regulation."

For more information on this issue, or to arrange a media interview, please call Libertarian Party Director of Communications Andrew Davis at (202) 731-0002.

The Libertarian Party is America's third largest political party, founded in 1971 as an alternative to the two main political parties.  You can find more information on the Libertarian Party by visiting www.LP.org. The Libertarian Party proudly stands for smaller government, lower taxes and more freedom.