The Perfect Recipe for a Disastrous Political Economy

Washington, Apr 22 - Republican Study Committee Chairman Tom Price (R-GA) issued the following statement after President Obama’s speech in New York City urging the passage of the Democrats’ financial legislation (a.k.a the Bailout Protection Act).

“Look past the President’s rhetoric, and you’ll find an ivory tower approach to regulating the economy being pushed by people with a startling lack of real world business experience,” said Chairman Price. “Officially labeling an institution as too-big-to-fail will give it an advantage over other companies when competing for investment capital and empower it to take bigger risks, just like Fannie Mae and Freddie Mac. Too-big-to-fail will become even bigger and more likely to fail, and the inevitable bailout that the Democrats’ plan allows will hit the American taxpayer even harder.

“The Democrats’ plan should really be known as the Bailout Protection Act. It gives unelected bureaucrats enormous latitude to cover the debt of private companies and step in with bailouts for just about any reason at all. The bailout rules will allow unions and politically favored creditors to get a better deal than regular folks who invested their hard-earned money. It’s the perfect recipe for a destructive political economy.

“This plan is a corruption of the rules of free-enterprise. It will prevent entrepreneurs and small businesses from getting access to the capital they so desperately need to expand and create jobs. With Washington picking winners and losers in this political economy, the only real winners will be the well-connected special interests who benefit from bailouts.

“The real choice is not between this ivory tower Bailout Protection Act or the status quo. House Republicans have a better solution. It comes down to a choice between more bailouts with smothering restrictions that prevent job creation or an end to the bailouts with strong consumer protections that don’t hurt small businesses’ access to job-creating investment capital. We are at a crossroads where checks and balances are needed here in Washington to stop the government takeover of virtually every aspect of the lives of Americans.” ###

Congressman Tom Price is Chairman of the Republican Study Committee (RSC). FOR IMMEDIATE RELEASE 4.22.2010