corporate welfare

Milton Friedman once said his greatest fear about the 1979 bailout of Chrysler by the U.S. federal government was not that it would fail, but that it would succeed. Friedman didn’t mean he was wrong to oppose it. What concerned him was how Chrysler’s rescue (approved by the U.S. Congress in late 1979 and signed into law by President Jimmy Carter in 1980) might lead some to draw the wrong conclusion: the notion that such actions save jobs, among other illusions.

When the federal and Ontario governments transferred $14.5 billion in taxpayer cash to GM and Chrysler in 2009, they likely did so with the best of intentions—to preserve jobs, though no doubt southern Ontario votes also figured heavily into the equation. But in a recent analysis from Dennis DesRosier, the automotive analyst noticed that employment in the Canadian automotive sector, despite the bailout and economic recovery, continues to fall.