If pandering is the politicians’pastime, then we owe a special debt of gratitude to those who resist this seemingly irresistible force. Today, UK Prime Minister Boris Johnson confirmed that he refused to extenda £150 million government bailout to preventThomas Cook, the world’s oldest travel agency, from going bankrupt.

Moreover, the prime minister explained his actions in both economic and moral terms.

“It is perfectly true that a request was made to the government for a subvention of about £150 million​,” or $187 million U.S.,saidPM Johnson during a flight to the UN General Assembly early Monday morning.

“Clearly, that is a lot of taxpayers’ money,” he continued, adding that bailing out the pany “sets up … a moral hazard in the case of future mercial difficulties panies face.”

National leaders need to find ways businesses “can protect themselves from such bankruptcies in [the] future” and put systems in place to “make sure [they] don’t in the e to thetaxpayerfor help.”

Johnson has faced significantbacklashfrom Labour Party and union leaders, who say he should have saved pany’s 9,000 UK jobs.

“To just stand to one side and watch this number of jobs go” is not “wise government,” saidJohn McDonnell. The Labour Party Shadow Chancellor, who calls himself a “Marxist,” accused Johnson of “ideological bias.”

Others have wondered why, if previous governments could bail out banks during the financial crisis, Johnson would not do the same for the 178-year-old pany. But their objections prove Johnson’s point.

A “moral hazard” creates an incentive for pany to take risks, because it will not bear the full consequences of its poor decisions. Bailouts on either side of the Atlantic encourage CEOs to take high-stakes gambles with their shareholders’ money. If the risk pays off, pany stands to make windfall profits, shared through higher dividend checks. But if it fails, the government will stabilize pany’s bottom line with an infusion of taxpayers’ dollars.

Crony capitalism has single-handedly soured an entire generation on “capitalism” – and rightly so. The knowledge that taxpayers will bailout large corporations lets panies “socialize the losses and privatize the gains,”saidJoseph Stiglitz, a harsh critic of capitalism and winner of the Nobel Prize in economics. Occupy Wall Street protesters – and average Americans – oftenasked, “Where’s my bailout?” Today’s socialist leaders ask, if the government picks winners and losers, why does it always pick Wall Street over Main Street?

Forcing taxpayers to foot the bill for failed corporate decisions presents other problems, to be sure. The government has no constitutional authority to use federal money to prop up a private corporation. Bailouts reward bad behavior by shielding people from the consequences of their own actions. Because bailouts only go panies deemed “too big to fail,” they favor large corporations over their small and petitors. Politicians reward politically panies – connections often forged with political donations. This creates a fiscal cycle that expropriates taxpayers’ dollars from private individuals, gives them to large (and poorly run) businesses, then helps re-elect the politicians who initiatied the process. This is a cozy relationship for two of the three parties.

But the biggest drawback of government bailouts is incalculable: It is the impact moral hazards have on future behavior.

Some have criticized Boris Johnson for not giving Thomas Cook£150 million, because the airline’s collapse left approximately 150,000 UK citizensstrandedabroad, and the government will pay an estimated£100 million to bring them home.“The government’s ‘do nothing’ attitude has left workers and customers high and dry while landing taxpayers with a bill of hundreds of millions of pounds,” said Len McCluskey, general secretary of the UK-based union Unite.

Why, critics ask, did Johnson not “save” pany, rather than pay nearly as much money in airfare? A little infusion may have kept pany solvent until it could bebought outby the Chinese conglomerate Fosun International, they argue.

But the £100 million is a one-time cost. Thomas Cook posted a £1.5 billion loss in May and has hemorrhaged money for years, meaning this bailout would not have been the last. Worse, it would have set the precedent that any pany of sufficient size could turn to the government during financial downturns and expect to continue business-as-usual.

By panies to engage in bad – and sometimes morally questionable – business decisions, the government would e an ethical partaker in those decisions. Moral guides say someone who provokes another person to sinsharesin that person’s guilt.

But in the case of endless corporate crashes and bailouts, the situation is more akin to a scapegoat. It is innocent taxpayers who pay the price for others’ iniquity.

Lee. This photo has been cropped.CC BY 2.0.)