A true free market is one that allows businesses to fail. Part of creative destruction is allowing businesses that don't serve the needs of consumers to fail. In the short term, such losses can be painful, but they ultimately pave the way for better, future successes that are able to bring better goods to more people at lower costs.
Unfortunately, when politicians have the power to bail out companies with no repercussions, the market gets tainted with "crony capitalism." Politicians who have incentives to keep certain businesses alive use taxpayer money to artificially sustain a company with a bad product, inefficient model, or poor management. This creates a cycle of bad businesses supporting politicians, those politicians supporting those businesses, and ultimately benefiting each other while leaving taxpayers and consumers with the bill.
A sad example of such behavior comes with the news of the bankruptcy of Lordstown Motors. In the 2009 recession, Ohio gave General Motors a bailout of $60 million in order to create gas-efficient cars. Ultimately, G.M. tried to shut down the plant early with returns not coming in as expected, but the state pushed back, showing that shutting down the plant early would violate the agreement made when they bailed out the company. The plant traded hands and was sold, but finally the eventual owners of the plant, Lordstown, which had received investment from other companies that were propped up with taxpayer cash, declared bankruptcy with no final product being released.
It's a story full of mismanagement and waste, one that started all the way back with one government bailout. A few years and a lot of taxpayer money later, no promised electric vehicles were made. Had the free market been allowed to work, the pain in 2009 would have been felt, but it would have stopped much earlier and allowed something better to thrive. Instead, taxpayers were forced to foot the bill for a speculative investment that turned into a prolonged money pit.
