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The Government Aid to Corporations

The recent economic recession has revealed the full extent, to which contemporary economic system is vulnerable to profound economic crises. In such a situation, the government aid to corporations emerges as a tool to prevent the deterioration of the economic situation. However, the government aid to corporations fails to protect the national economy and population from further economic crises. Therefore, the government aid to corporations becomes the support of the wealthy few at the public cost.

In fact, the so-called “public-private partnership” provides the public with little benefits but supports large corporations only. In such a situation, this partnership become predatory in relation to the public because large corporations attempt to maximize their benefits that puts them on the edge of bankruptcy. For instance, the recent economic recession started with the crisis in the household industry, which was provoked by speculations. The economic recession was aggravated by galloping oil prices, which was also the result of speculations from the part of large corporations. In this regard, many banks that lent money in abundance for purchase of houses faced the risk of bankruptcy. Obviously, this risk of bankruptcy is the result of their unreasonable pursuit of maximum profits and unwise lending policies. They failed to build effective policies and when they faced the risk of bankruptcy they look for the public funds being granted by the government. The same trend can be traced in relation to largest insurance corporations.

Obviously, the failure of large corporations was the result of their poor policies and the government and public should not take responsibility for this failure. In addition, large corporations would never share their profits with the public. They are just taxpayers as any average American citizen, who, by the way, cannot count for the government aid at the moment. Hence, the government aid to corporations is absolutely unfair.

References:

Cantor, E. (2009). “Commentary: Big risk in Obama’s economic stimulus plan”, CNN.com. Retrieved on March 3, 2009 from http://www.cnn.com/2009/POLITICS/01/16/cantor.stimulus/