Focus Point - Messing with the Private SectorCommentary by Pete du Pont
January 26, 2001
I'm Pete du Pont with the National Center for Policy Analysis. A recent Wall Street Journal story showed in awful detail what happens when the Federal Government sticks its nose into the private sector.
Two year ago, Clinton and the Congress created the Emergency Steel Guarantee loan program, giving a billion dollars in loan guarantees to steel companies -- supposedly to fight foreign competitors.
Predictably, the shaky companies won't be able to repay their loans on time. So taxpayers will have to bail them out. Worse, the loans have hurt healthy steel companies too.
So far, more than half a billion dollars has gone to seven of companies -- two now in chapter 11. By propping up these companies -- not, in truth, from foreign competitors but from stronger domestic ones -- the feds only added to the glut of steel on the market. That hurts the healthy companies by forcing prices down even further. Meanwhile, congress has already set aside millions to cover loans that shouldn't have been made in the first place, because congress has no business playing the market.
Those are my ideas, and at the NCPA we know ideas can change the world. I'm Pete du Pont, and I'll see you next time.