Corporations, the Government, and Accountability

03/18/2010 05:12 am ET | Updated May 25, 2011
  • Mike Lux Co-Founder, Democracy Partners

There has been a lot of public discussion lately about the federal government's role with private business. Banks, insurance companies, and car companies have all been bailed out. There may be deeper public involvement with the energy industry if a cap and trade bill passes. If health insurance is mandated and subsidized, billions of dollars will be going towards health insurance.

Conservative libertarians argue that all of this is bad, that any government subsidy of private business of any kind is wrong. Of course, conservative Republicans who claim to be libertarians still seem to be happy to subsidize farms in their home districts, military contractors still producing obsolete weapons systems, and oil companies who get subsides for drilling oil that they make billions of dollars of profit off of. I guess to these kinds of politicians, it's only big government if it's benefiting someone other than your constituents and campaign contributors.

For those of us who are not Ron Paul-style libertarians, though, there is no way for government not to have working relationships of various kinds with the private sector. The government needs to be hiring contractors to build/repair roads, bridges, schools, etc. Defense contractors are needed to supply weapons, ammo and uniforms. Companies are needed to build police and fire stations and supply the uniforms and equipment for the folks that work for them. And yes, in dysfunctional sectors of the economy like health care, finance, and energy (where the energy industry is dysfunctional enough to be destroying the planet), and especially when the economy is dysfunctional in general like it's been the last year, government has the duty to step in and play a bigger role.

What progressives would argue, though, is that when government and industry need to interact, industry needs to be accountable to certain rules and expectations the government sets up. Some examples come to mind:

  • When a contractor builds a school building, they have an obligation to build it safely so that it doesn't collapse on the children inside.

  • The weapons supplied to our police and military ought to work the vast majority of the time.

  • If you are an industry that constantly cheats people when they are sick, or sells products that regularly hurt people, the government should change the rules of the marketplace.

  • If you get bailed out and subsidized by the government like the Wall Street banks, and yet are showing no change in the problems that caused the crisis that forced the bailout in the first place, the rules need to be dramatically altered so that you can change your behavior and can't keep causing harm to the entire economic system.

    These are basic rules that seem fairly obvious to me, but apparently aren't to some people. When Hank Paulson last year said there should be no restrictions on what banks could do with the bailout money being handed to them, I was utterly astonished, but I guess that just seemed to be the way of the world to the Wall Street guys. When the big insurers wanted government to force everyone to buy their products, provide subsides to those who couldn't, but then were rebelling at the idea that they would have any serious competition, I was stunned that anyone (at least in my political party) was taking them seriously. But hey, I guess that makes me a radical leftist.

    This should be a basic rule, but apparently It needs to be a "new rule," as Bill Maher would put it: if government bails you out, subsidizes you, forces people to buy your product, or otherwise does business with you, we the people are owed some basic accountability on the other end of the deal. It should be painfully obvious, but apparently it isn't.