Wednesday, May 11, 2005

Corporate Welfare?

When it comes to economic matters, I'm pretty conservative. I'm pro - Free Market: I think government regulation of business ought to be kept to a bare minimum, and that most taxation of business is foolish (because, in reality, businesses don't pay taxes, their customers do) and counterproductive.

But, on the other hand, I think businesses have certain duties and obligations towards their employees, their customers, and to society as a whole. Among them is the duty to honor their word and their obligations.

So I am appalled that a Federal bankrupcty judge has allowed United Airlines to simply abandon its pension plan (and in consequence, it's current and future pension benificiaries) and dump it off on the Federal Government, that is, on the taxpayers. Yes, I know that United has had problems - mostly caused by the blindness of its own management, and the avidity of its employees' unions - but how is it that the obligations of its underfunded pension plan are the government's responsibility?

Just as the owners of the company (the shareholders) are the ones who reap the benefits when a company does well, so too should the owners of the company bear the responsibility for meeting the company's obligations when things go badly. The rewards and the risks go together. For the company and its shareholders to have reaped their profits over the decades when United was profitable, and then to shift its obligations off onto the taxpayers when things go bad, is despicable.

How can anyone, especially conservatives, look at this and call it anything other than corporate welfare? How can one possibly square this sort of thing with free-market principles?