One line of thinking coming these days from the GOP and the so-called "traditional conservative movement" is the decision by many Republican members in Congress (and conservative pundits in the media) to oppose most or all future governmental intervention in the private sector, being proposed under the umbrella of the financial crisis, if and to the extent taxpayer money is being proposed to fund private companies.  The explanation for this opposition is the desire to adhere to a philosophy of favoring limited government and "free market" over governmental intervention and public-private partnerships for the common good.  Call it government investment, government subsidies, bail-outs or what-you-will, these people think that it is always wrong for government money to be used to fund any traditionally private enterprise, in part because it is always seen as wrong for government to dictate to the private sector how it should operate, and if government is supplying taxpayer money, that type of intervention is inevitable. 

For some, this means opposing all funding and all government influence over private companies, no matter what the circumstances.  For others, it means that some funding may be OK under extreme circumstances -- to avoid total collapse, perhaps -- but even in those cases, government should play a very limited (or no) role in how these companies (or financial sectors) are operated.  To anti-government movement conservatives, government playing a role in private operations is to be avoided at all costs -- actively discouraged (if not legally prohibited).  The philosophical roots of this perspective appears to come from the notion that private interests can do virtually everything government can do more efficiently, and that private companies are in the business of making money and can be relied upon to do what it takes to maximize profits and minimize inefficiency.  That this viewpoint ignores the reality of the decades of government subsidies in the internet, the telecomm industry, in biomedical research, technology and other financial sectors -- or for that matter the complete failure of the corporate world to manage its own business affairs -- is not surprising, but somewhat beside the point.  The folks always see government intervention as interfering with efficiency, a byproduct of political influence, and likely to promote the adoption of socially progressive policies that are anathema to the corporate world (like forcing greater compensation parity between senior management and the general workforce, or improving occupational safety at the expense of some additional costs, etc.)   This is a group that has never concerned itself with "root causes."

The political roots of the current trend are fairly obvious:  The GOP, facing a broadly based election defeat in which their approach to government was rejected by a wide majority, are trying to stake out a method of blaming the Democrats for any potential future fallout from this crisis, if the government funding that is now being implemented (and that is likely to continue to be implemented in the first year or two of an Obama administration) does not solve the problem, or causes other unanticipated problems along the way.  They can say "no" right now, despite the obvious magnitude of the problem and the corresponding need for governmental action, by claiming philosophical purity to a free market system, and an abiding concern for the taxpayers, and then score political points if it fails.  If massive governmental intervention works, the GOP will be hard pressed to take any of the political credit, no matter what, so there is little harm in staking out this space from the perspective of political strategy.  If the economy is slow to recover in the next two years, the conservatives who follow this approach believe that they will be well positioned to take political advantage of the situation, a situation from which they clearly don't deserve to score political points ever (since it represents the crowning achievement of failed GOP economic policies since 1980).  Given the dire need to intervene to minimize large scale human suffering, it may seem counterintuitive, but when ideologues can merge political ideology with political tactics, they generally cannot resist.  But it doesn't make it right -- and maybe it even adds fuel to a fire that will incinerate the GOP and the right wing political movement that started with Reagan before it is through playing out.  Only time will tell.

Needless to say, this line of thinking competely overlooks the critical difference between the type of government intervention that is taking place in the current financial crisis, and the type of government intervention that triggered the orthodox anti-government perspective that has come to dominate the GOP and the conservative movement since the 1980's.  In the current crisis, the corporate sector is coming to the government and asking for help -- in some cases, begging for help.  The taxpayers, and the Congress, did not ask for this opportunity to intervene.  In fact, the right-leaning corporate community first approached to the right-wing Bush administration, and asked for government subsidies almost unparalleled in scope in our history.  If a progressive had brought this out in the same way, the GOP and conservative outcry would have been deafening.  But it happened under their watch, so the reaction from teh GOP was much more muted.

By contrast, the regulatory expansion that took place from the mid-60's to the late 70's -- and which has been tapering off ever since, thanks to the strong deregulatory orientation of Reaganism and the current administration, the economic "centrism" of the Clinton era, and the media propagation of the myth that rampant regulatory abuse justified across-the-board deregulation, a myth that was related with almost religious intonations by the Chicago School of so-called "free market" capitalists, and its many followers in the media and in conservative economic and financial circles -- involved government intervention in largely unregulated industries, where regulation was needed (or perceived to be needed), in order to protect occupational safety, environmental protection, product safety, civil rights, etc., where the companies lacked a financial incentive to do so because the costs to be incurred to comply reduced profits and did nothing overt to increase corporate income.  In those cases, the governmental intervention involved was not proposed for the sake of a company's financial survival, but rather for some societal purpose that did not necessarily translate to the bottom line, so it was resisted (and in many cases actively challenged) by conservative economic forces and business interests (and lobbyists) as an inappropriate -- and in some cases unlawful -- intrusion of government into private business.  And now we are hearing some of the same voices expressing increasing discomfort with the expanded role of government is being asked to take in resolving this crisis, concern that the prescription for getting the economy back on track involves providing direct governmental subsidies, loans or loan guaranties to private businesses, with some say over how they would use the funds and operate going forward.

The huge difference in December 2008 is that it is the companies themselves -- traditional banks, investment banks, and auto manufacturers, to name just three (so far) -- all of which  traditionally oppose governmental intervention (or so we are told), who are the ones asking for handouts or investment.  This time, the largest companies in America are not asking to get government off their backs, they have come knocking on the government's door asking for large scale government funding and intervention.  They are unable to address their own problems (problems that are in many cases entirely of their own creation) through private sector solutions -- if they could, they wouldn't be asking for government assistance on such a huge scale -- and the only place left to turn is the federal treasury, the taxpayers who have been very hard hit by this crisis, the only source of liquidity that won't simply turn its back and say "no" because its interests transcend profits and extend the financial health of the nation as a whole.  It seems that the avenues for dealing with financial problems of this scale in the private sector -- Chapter 11 reorganization for example -- involve too much uncertainty, too high an administrative cost (cost which do nothing to promote the survival of the debtors being reorganized -- and in many cases, bleeds them dry until they are sold off in Chapter 7 liquidations), and bankruptcy offers too many attractive opportunities for well-funded foreign interests and other financial predators to make big bucks exploiting all of this financial turmoil, and to act in ways that promote their own narrow financial interests, at the expense of the companies being restructured (and their workers, investors, retirees and trade creditors, not to mention the greater societal good).  Bankruptcy and loan restructurings provide a much greater potential for the destruction of companies, lives and communities, at a much greater long term social cost to workers, retirees, communities and the economy as a whole (and to simply defer the problem until it is even bigger and requires even more nationalization and taxpayer funding).  So even some of the largest and proudest private companies in the nation have bit the bullet and come crawling to the government looking for financial help, that's how bad things have become under Bush's watch.

If a company came to a bank asking for a loan -- particularly a loan in the billions -- the loan would be underwritten very carefully, with the Borrower obliged to demonstrate its financial health, its capacity to repay the loan in full, and its capacity to provide collateral to secure repayment of the loan.  If it were approved, the Borrower would sign loan documents pledging security interests in all of its real and personal property, accounts receivable, intellectual property cash flow and other "assets", and obligating it to comply with a wide variety of different operating covenants concerning how it spends the money being loaned, how much it can borrow from other sources going forward, and otherwise concerning how it operates its business. In the private financial world, this process can (and does) include entering into loan and investment agreements which place limits on what the company can spend, including what it can pay out to its stockholders in dividends, and to senior management in compensation, before the loan is repaid or investment is repaid in full.

If such an investment were made in the form of equity, and not a loan, the investor would have less security for repayment, but in exchange, ot would have much greater day-to-day involvement in management of the business, in order to protect its equity investment (which is subordinate to third part lenders).  In other words, the equity investor can get wiped out if a bank which has loaned money to the Company is not repaid and forecloses.  As a result, the investor is given a much greater say in how the business is operated, including approval over most key business decisions, the requirement that the Company adopt and comply with a specific business plan, capital budget and operating budget, and the like.  Given the size of the investment the government is being asked to make here, and the weak financial condition of the companies that are asking it to make that investment, any prudent lender or equity investor making the same loan or investment would require considerable control over how the money being invested is spent, and how the company being invested in is to be operated, as an absolute condition to closing the loan or equity funding. 

There is absolutely no reason to treat taxpayer money that is invested or loaned by the government to a private company any differently from a loan or equity investment made by a bank or private investor to the same company -- quite the contrary.  As taxpayers, we are entitled to see to it that the companies in which we are being forced to invest (in order to save us from a more damaging economic collapse) are run in a manner that makes it likely that our investment will be repaid in full (and that the investment being made will achieve its intended effect).  The taxpayers are also entitled to some -- arguably, most -- of the "upside" that is achieved if these companies recover, since the money invested when a company is on the brink of disaster is usually entitled to the lion's share of the profit if the company turns around.  This emergency government funding is not a gift, or a no-strings grant, or an act of mercy.  It is an investment that we as a collective society are making to save companies that are on the brink of collapse and an economy that might also collapse if these measures are not taken.  The survival of these companies has been deemed essential for the national well-being -- either because letting them fail would be even more costly and socially devastating, or because the economy is simply too fragile to withstand another injury along these lines, so that letting it go unattended will lead to much too many adverse consequences.  Whatever the reasons -- even if this is corporate opportunism at its worst (i.e., a raping of the taxpayers brought on through the manipulation of a crisis by private interests looking to get cheap money from the government, that they get away with because  our senses have been dulled by the crisis (actually, especially if this is corporate opportunism at its worst) -- the taxpayers are entitled to be treated with the same contractual rights and "respect" that is given by these same companies to banks or equity investors when they seek loan money, or investment capital of a similar magnitude (especially in this type of situation).  Anything less that that, candidly, would be a breach of the government's fiduciary duty to protect its "depositors" -- the taxpayers -- and would constitute the antithesis of "conservative financial management."  And God forbid all of this government spending actually serves some broader social purpose, like forcing the auto industry to take steps what will have the effect of reducing global warming and reducing our dependence on foreign oil, right?  No, given the dire need for the funding, and viewed in the context of the shaky financial state of the companies involved (which makes this government intervention so completely essential, and has led these companies to ask for it with such desperation), the government should view the "financial instruments" it will be creating here as the equivalent of a loan or private investment, which is entitled to the same rights and privileges as any lender or investor would insist upon in a purely private, financial deal of similar scope.

That the movement conservatives do not see the difference between this governmental intervention and the other forms of regulatory oversight that they have historically viewed as objectionable governmental overstepping, or as unnecessary and uninvited intrusion into private business, speaks volumes to the backward looking and short sighted perspective of conservatives when it comes to financial matters (and the role of government in a financial crisis).  When deficits were completely unnecessary -- not needed to prevent a financial meltdown or national crisis, and capable of being eliminated through tax increases or reduced spending  -- the GOP gave us $500 Billion per annum (or more) in federal deficits that the children and grandchildren of the middle class will be stuck paying off in the future.  That deficit was created to fund an orgy of tax cuts for the ultra-rich (who could clearly have paid more in taxes without it being a problem) and an orgy of government funded corporate welfare paid to companies with insider political influence in the Bush administration (e.g., military-industrial complex, big oil, big pharma, etc.) and to fund a dishonest war that the administration lacked will and the basic responsibility to actually pay for through a call for sacrifice involving a meaningful war surtax that would have funded the entire cost of the war.  The deficits from 2001-2008 were totally unnecessary and irresponsible (in some sense, criminal), but the party in power -- the GOP -- supported them at every step of the way,  minimizing the effect they would have (structurally) on the economy, and lacking the will to either raise taxes on the wealthy or to cut federal spending as needed to stop the bleeding.  And now that we actually need massive government spending (funded either through deficit spending or tax increases on the wealthy) in order to avoid an even more devastating economic collapse (and an economic situation akin to the Great Depression in the 1930's), these same people are suddenly deficit hawks, protectors of the taxpayers and obstacles to getting anything done. 

Predictable?  Yes, absolutely predictable with this cast of characters.  Indeed, it is entirely consistent with past GOP practice, which is to talk a good game about the taxpayers and making government work better, but to act when the time comes in a manner that sees the only the interests of the wealthy as something worth protecting, and which undermines the government (and by extension the taxpayer) at every opportunity. 

Acceptable?  No, not by a long shot.  As a society, we can no longer afford to let the forces of deception and self-interest miss the critical point -- which is that this is not the government seeking to intervene in the private sector, but rather the private sector coming to the government and asking for financial help in order to survive, which justifies deviating from the principle that governmental intervention in the private sector is inherently undesirable and therefore to be resisted no matter what the circumstance -- and then have the corporate media let them get away with it.