May Rfc Rest In Peace

 

Randall Rothenberg's article, "An RFC for Today" (January), was disturbing, to say the least. Felix Rohatyn's proposal should have little appeal for believers in competition and private markets.

As the article points out, the current interest in a new Reconstruction Finance Corp. or a U.S. version of Japan's Ministry of International Trade and Industry (MITI) is not really new. The 1980 version of this proposal was dubbed "reindustrialization." The Director of the Center for the Study of American Business, Dr. Murray L. Weidenbaum, offered some observations on this suggestion in a center publication entitled, A New Industrial Policy for the United States? that bear repeating:

Some would like to bring back the old Reconstruction Finance Corporation, forgetting the scandals and many charges of favoritism that led to its demise. But, in retrospect, it should not surprise us that arbitrary power to disperse federal largesse to selected companies was, in fact, used arbitrarily. If we are determined to develop a more orderly way of providing government assistance to companies and to specific sectors of the econonmy, we have to realize that someone must decide which sectors "deserve" the assistance from government. There is no doubt in my mind that this path, albeit unwittingly, leads to a major expansion of government power over the private sector of the economy. Those who are fond of citing the Japanese example might do well to consider the sadder experiences of Great Britain.