- - Wednesday, April 6, 2011

I am happy that Smith-Corona went bankrupt and that Western Union was forced to abandon its old business practices. If the government had bailed out these companies, we’d still be banging out papers on manual typewriters and communicating by telegram. Instead, the typewriter has been relegated to museums (and perhaps a few Birkenstock-wearing, hipster screenwriters’ offices somewhere) and messaging is done over phones that are smarter than the people who keep bailing out failing companies.

Actually, I’m indifferent to the success or failure of either of these particular companies, but I champion the free market- a meritocracy - that allows more efficient and effective methods or companies to earn our business. That a major corporation such as Smith-Corona couldn’t marshal its enormous resources to stave off what some students like Bill Gates, Steve Jobs and Michael Dell could create in their dorm rooms and garages is fascinating but inconsequential to society. What’s important is that the best ideas prevailed no matter whose they were while, just as importantly, less effective ideas, no matter how good they were in an earlier era, were set aside. This is the precise mechanism by which a nation’s standard of living is improved.

Ironically, it’s the same politicians who talk the loudest about vague notions of change who want to stop this changeover to more effective methods and companies. Admittedly, it may be temporarily difficult for workers who once built fine typewriters to change, but unless Smith-Corona lets them go, how else will Dell find enough workers to build our computers? Surely we can agree that the workers are better off in a company that makes something we want rather than something we don’t. And we’re all better off typing with pixels rather than ink ribbons.

So who loses? The politicians who derive their power from picking winners and losers in their crony capitalist scheme. President Ronald Reagan, America’s greatest president, according to a recent Gallup poll, said: “[G]overnment’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

President Obama, who, according to the same poll, tied with “no opinion,” said: “Yes we can!” And spend he did.

Politicians started saying “too big to fail” when they should have said “too mismanaged to survive,” and their massive bailouts created no-lose scenarios for ineffective businesses to take wild risks. Why wouldn’t they? It’s heads they win, tails the taxpayers lose. Meanwhile, our nation’s limited resources are being artificially directed away from the next generation of entrepreneurs like Bill Gates, Steve Jobs and Michael Dell.

So what did we get in return for all those bailouts? After the Government Motors takeover, GM last month sold only 608 of their heavily subsidized electric Obamamobiles. In 2009, when Cash for Clunkers spent, according to the automotive website Edmunds.com, $24,000 per car sold - to destroy working cars and subsidize replacements - the auto industry recorded its worst sales numbers in 27 years. (In the interest of full disclosure, I should confess that I am the only doctor in America who drives a car that has been officially declared a clunker by his own cousin-in-chief, and it runs great.) And now, after the Fannie Mae and Freddie Mac bailouts, house sales and foreclosures are both moving in exactly the wrong directions.

Mr. Obama cleverly shifted his language from bailouts to “winning the future” with calls for still more spending, but these are, of course, two sides of the same coin. His lack of imagination traps him in the mistaken belief that new innovations flow from government largesse. With soaring rhetoric in his State of the Union Address, he spoke of Thomas Edison’s light bulb, the Wright Brothers’ airplane and even modern-day Google and Facebook and said, “Our government has provided cutting-edge scientists and inventors with the support that they need,” but it didn’t cross his teleprompter that none of the innovators he cited needed government welfare.

Think about it. When was the last time someone had to be bribed to buy an iPhone or a Ford F-series pickup or a Big Mac? Good products and services follow the “Field of Dreams” rule: If you build it, they will come. Meanwhile, every bailout, stimulus, targeted tax break, subsidy and even “protective” tariff are all forms of crony corporate welfare that are attempts to bribe you with your own money to buy whatever the government busybodies think you need. On the eve of a national ban on Edison’s incandescent wonder, big-government types who call themselves “pro-choice” don’t think you’re smart enough to choose even your own light bulb without them.

An epic collision course has now been set. The Obama administration’s big-government spenders just revealed that, last month alone, they spent an alarming eight times their incoming revenue. Now Rep. Paul Ryan, Wisconsin Republican and chairman of the House Budget Committee, and the Republicans have unveiled a new budget with $6 trillion in government spending cuts over the next decade to redirect those resources back to the private sector where they belong.

Government spending, with all its dismal results, crowds out private-sector spending where true innovation occurs and where real jobs are created. As we free the market, some companies will do well and others won’t, but this is how we redirect our limited resources to where they can be most effective, and that’s precisely how our standard of living improves. It also means that some of us will have to change how we do things. That may not be easy, but if generations before us had been afraid to change, we’d still be using the horse-drawn plow and Morse code. Are we lesser Americans than they?

Let’s start with this simple concept: Every business should pay its own bills. The free market won’t be free - and neither will we - until businesses are free to succeed and also free to fail.

Dr. Milton R. Wolf, a Washington Times columnist, is a board-certified diagnostic radiologist and President Obama’s cousin. He blogs at miltonwolf.com.