The New York Times recently published an article mentioning the failures of the government’s Paycheck Protection Program (PPP), a COVID-relief program meant to keep businesses afloat and people employed. The article noted that the PPP was not distributed fairly, with the lion’s share of funds going to White-owned businesses, while minorities got less. Coupled with the widely acknowledged fact that the COVID-relief programs benefited large companies far more than smaller ones, and we come to the reality that the relief programs were mostly a forced redistribution of wealth upwards — the lower classes and minorities were taxed, and those taxes went to fund megacorporations, the wealthy, and Whites. A program with stated intentions of keeping “Main Street” alive not only drained it of capital, but then gave that capital to its business competitors, while racial minorities yet again were forced to shore up racial inequality through taxation. In this way, racial and economic inequality is reinforced under the guise of protecting the people.
Some might argue that the government needs to be held accountable, in order to ensure that the bailouts are used properly. But that assumes that bailouts are currently being used improperly. Given numerous historical examples (such as the 2008-9 bailouts), it seems to be that the intention of bailouts is, in fact, to redistribute money from the masses to the elites, in which case scrapping bailouts altogether is the better choice. Letting businesses fail and oligarchs go bankrupt — or in other words, letting the free market do its job — will do more for economic and racial equality than any government program.
If bailouts were ended, many businesses would fail. This is a good thing. When a large business fails, space is created in its market for smaller businesses to enter and compete. New business methods and products can enter the market, and more agile companies can try their luck. Business failures rejuvenate markets and create new opportunities. Similarly, when stock markets fail, real estate markets crash, and so on, poorer members of society can start buying assets cheaply. In doing so, they can start climbing the socioeconomic ladder.
Bailouts reverse this process. A bailout not only reinforces incumbents, it does so by stripping the masses and small businesses of capital, a one-two punch that enforces inequality. When stock and housing prices are artificially boosted by government intervention, when taxes are levied on the masses to bailout oligarchs and megacorporations — most of whom don’t even pay taxes themselves — inequality is hardened. Even worse, the state picks and chooses which members of society are looted, a burden which almost always falls most heavily on minorities and other oppressed groups, reinforcing racial inequality and stoking tensions among peoples. Ending bailouts and other similar programs, and letting businesses succeed and fail as the free market decides, would lead to more economic dynamism and less economic inequality. It would allow minorities, who have had their resources stolen for generations, to finally keep their money and climb the socioeconomic ladder. And it would go a long way to eliminating the government’s role in the economy.