I got a form letter today from the CEO of my insurance company, 21st Century, assuring me that although they were recently acquired by AIG, they were not receiving any funding from the federal bailout. I wrote back the following email. I know this sort of thing accomplishes nothing, but it does at least make me feel better.
Dear Mr. De Santis,
I received your email reassuring 21st Century Insurance clients that the company had not accessed or needed funds from the Federal Reserve to continue their operations. I am very gratified to hear this. I had been seriously contemplating dropping my 21st Century policy to protest AIG’s intertwinement with the federal government.
There is no excuse whatsoever for businesses to seek funds taken by force (i.e., through taxation or inflation) from the people of the United States, to shore up their own financial foundations. When they do so, they violate the private property rights and the individual liberties of free and innocent people, corrupt our political institutions, do lasting damage to our economy, and undermine the basic principle of our nation—which is that each person has the right to pursue his or her own happiness, and does not exist to create wealth for others to enjoy.
Our Constitution allows government to tax the people only for specified purposes. Propping up businesses that have made poor choices or suffered unanticipated financial losses is not among those purposes. The Constitution sets up a government to provide for the common welfare—not for the private welfare of those businesses politicians consider worthy of favors.
What’s more, a free and dynamic economy in which businesses reap the rewards for wise investments and pay the costs—including bankruptcy—for unwise investments, ensures the highest standard of living for consumers, and provides economic opportunity for hard working innovators. An economy in which the government intervenes to protect businesses that are supposedly “too big to fail” is, by contrast, one in which companies are encouraged undertake unwise risks, and are insulated from the consequences. Subsidizing irresponsibility only encourages irresponsibility. Meanwhile, such an economy offers small businesses less opportunity, because only large, established companies have the political influence necessary to persuade legislators that they are “too big to fail.” The policies of the current administration are thus not only unconstitutional and unwise, but profoundly unfair.
The greatest tragedy of the current economic crisis lies in the unwillingness of business leaders to stand up for themselves: for the principles of economic freedom that underlie our civic institutions as well as the very existence of their own businesses. Those companies that demand to be supported at taxpayer expense—depriving each of us of freedom of choice, clogging up the dynamic process of our economy, and violating the principles of our Constitution—are not “too big to fail.” Indeed, they profoundly deserve to fail. That AIG has collaborated in such efforts is a great shame.
I am therefore greatly relieved to hear that 21st Century—from which I have never received anything but the finest quality service—is not a part of such efforts. I hope very much that your company will never stoop to the tactics that less scrupulous businesses are now adopting.
Yours most sincerely,