By Christopher Coffey
Republican Political Consultant

Another week, another bailout debate.

I suspect, lurking in the background of the Detroit automaker issue, is a burning desire by some to use bailout money as a means to reacquaint America with industrial policy.

The American public flirted briefly with industrial policy in the 1990’s when it considered adopting Hillary Clinton’s health care plan.

Industrial policy is the belief that government officials are better equipped to direct business and consumer decisions than businesses and consumers.

The American public flirted briefly with industrial policy in the 1990’s when it considered adopting Hillary Clinton’s health care plan. Hillary wanted to give the government increased power over the health care industry, including the authority to limit the amount of health care that could be provided by doctors and consumed by patients. For instance, her initial proposal restricted the availability of mammograms. Such proposals were made in the name of fixing an ailing industry.

Industrial policy could come back to life during these bailout talks.

We should place little faith in the ability of lawyers, policy wonks and career politicians to build a better car

The Center for American Progress — the think tank headed by President-elect Obama’s transition chief John Podesta — is already putting out paper endorsing an automaker bailout, contingent, of course, on limitations to executive pay and the creation of green automobiles. In other words, it wants bailout money to come with a big string attached– increased government participation in the Detroit manufacturing process.

I don’t like pollution any more than the other person, and I do not need a gas-guzzler.

In fact, I drive a tiny car with a manual transmission. This is my preference and I have made a market decision based on this preference. The federal government should not make this decision for me.

Moreover, we should place little faith in the ability of lawyers, policy wonks and career politicians to build a better car, and there is no reason to think that people will rush to buy a Washington, D.C. mandate over an Asian or European competitor. The fear should be that the government will spend billions to satisfy political constituencies at the cost of turning U.S. auto manufacturing into a truly uncompetitive enterprise.

Perhaps this Democratic Congress and The White House will resist the seductive powers of industrial policy. After all, they claim they are for “change” (a word about which they often talk but seldom define). If Democrats do remain committed to old ideas, we must remember that government meddling in housing finance remains a root cause of current financial crisis, and direct interference in the manufacturing process has the potential of delivering even more economic pain.

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