Relying on the Government Leads to Failure

Yesterday, the Wall Street Journal reported (subs. req’d) that a Michigan plug-in hybrid delivery van start-up company, Bright Automotive Inc., will be shutting down because they couldn’t get a loan from the Department of Energy.

The company had asked for about $400 million in government loans, but cited onerous application requirements for their withdraw from the loan program. Without that money, the company couldn’t survive.

While it is always sad when a business goes under and Americans lose their jobs, we must remember why this happened: the company based its business model on the acquisition of federal funds, and without those funds, could not survive. It’s a lesson in government dependence and should be a rallying cry for less government and self-sufficiency.

Businesses cannot, and should not, rely on the government for their existence. We see this a lot in the energy industry; companies seek taxpayer subsidies to jumpstart their business, and then lobby the government relentlessly to continue those subsidies. They argue that if those taxpayer benefits cease, the company will fail and hundreds or thousands of jobs will be lost in a certain state or congressional district. It’s a woeful state of affairs for a country that prides itself on its entrepreneurial spirit.

Sadly, it is not uncommon in Washington, as it also applies to the current fight over transportation funding. As we wrote earlier in the week, local governments are having a hard time budgeting because they don’t know how much money they will receive from the government for highways, hydrangeas and high-speed rail.. This should be a red flag. If the local and state governments didn’t have to give transportation tax dollars (the 18.4 cent per gallon gasoline tax) to the federal government in the first place, they wouldn’t have to wait to get a portion (or in some cases, less than what they paid in) back.

Sitting around, waiting for Washington to fund your business or your local economy is incredibly haphazard, and we’re seeing those effects now. The solution is simple: get government out of the way!

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