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I recently had an interesting conversation with my dad about the tanking economy and the government's recent rash of bailouts to corporations. We noted that economic growth, which is largely driven by home building and home sales, would never speed up if the government continues to subsidize and incentivize new home construction. There is no bottom to a market that is continually propped up by tax payer monies.

However, an even bigger thought occurred to me at the time.

The government has a proper role in relation to the marketplace. One part of that proper role is the provision of legal protection to those business entities whose days are numbered and who wish to enter into a state of bankruptcy, where they might portion out their dues without threat of legal action. This is an admirable function of government. It is just another branch of the defend and protect part of government.

Now consider the actions of those who approve governmental funds being applied to help companies to regain their footing. Now we are in much less savory territory. A government check always has strings attached, just like most private money. However, these strings are much more difficult to justify or define properly, because the money being used is money taken by taxation from people who the government is supposed to protect and serve. A conflict of interest immediately emerges because of the need to define who "deserves" government money.

When these two things are combined (i.e. bailouts and bankruptcy protection), a perfect storm of corruption immediately emerges. Now the government not only decides which companies should receive a check of tax payer money, but also how a company filing for legal protection of bankruptcy should be approached. GM is a prime example of this. The unions walked away with a killing while GM's secured creditors suffered. Solyndra is another great example, a failing energy company that raked in half a billion in government handouts.

We are well on our way down a slippery slope when we allow our government to not only pick the economic winners, but then also to manage their decline when they become no longer viable. The only reason for the existence of this sort of arrangement is corruption and power-hunger.