A Level Playing Field VS. Subsidies

Two of the major roles of government in a free market economy are
1)  regulation - to ensure corporations meet ethical, professional, environmental standards and
2)  creating a level playing field - to open up competition.
Government subsidies are an obvious violation of the second role.  Free grants, low or no interest loans and share purchase plans funded by governments - all are examples of subsidies that give a competitive advantage to one company over all the other players in that economic sector.

Australian-based Quantas Airways, for example, recently asked the government for a U.S.  $2.7 billion unsecured loan to help bring the carrier back to profitability.  Without the loan, the company said it would have to cut 5,000 jobs.  Losing jobs in an already fragile market is a bitter pill for any government to swallow.  The easy answer - give taxpayer money to the ailing company and look like a hero (ignoring the fact that corporate handouts reduce available funds for social programs).   But in the case of Quantas, the Australian government took a more creative route.  Since the airline industry is a global business, the government opened the way for more foreign investment.  Now Quantas could find an international partner to take the risk and put up corporate capital instead of sapping money away from public services like health, education etc.  Of course, the red flag was immediately raised by the left.  OMG!  Australia's selling out to the multinationals!  - never telling the truth that foreign investments are subject to Australia's laws, courts and government regulations.

In North America, during the economic downturn in 2007-2008, both the American and Canadian governments bailed out part of their auto industries.  Companies like General Motors got a huge competitive advantage over self-reliant Ford and Toyota.  So much for a level playing field.  Chrysler Canada got a $2.9 billion bailout from taxpayers - still not fully repaid.  In 2013,  Chrysler demanded another $700 million or it threatened to take its plants elsewhere.  Both federal and provincial (Ontario) governments agreed to fund the request.  But in a surprise move this month, Chrysler announced its intention "to withdraw all requests for financial assistance"  and "fund out of its own resources whatever capital requirements the Canadian operations require".  Whether or not Chrysler had the ability to pay for its operations in the first place or they were just looking for a handout, is open to speculation.  But the more important issue is the government's reaction.  One would think the governments would have expressed relief at this sudden declaration of independence.  What a saving - now there was more money available for public services.  Curiously, both levels of government seemed disappointed.  Why?  Who knows?  Was it because they lost out on the subsidy game - governments fund ailing companies, take credit for saving or creating jobs and look like heroes at the next election.  An interesting scenario but don't forget the bottom line - it was all paid for by re-distribution of taxpayer money.