Auto Bailout

[drscott]

Oh, good. No need to write about this, because someone has expressed my exact thoughts on how stupid it is. As we head toward a big-corporatist state where the feds take over and attempt to manage more and more businesses... more zombie companies, more subsidies for everyone! We'll all be rich and secure.

Comments

[tdjohnsn.livejournal.com]

I loved this video that Megan McArdle posted in response.

http://www.southparkstudios.com/clips/151040

[dr-scott.livejournal.com]

Heh. We really should watch more South Park.

[pklexton.livejournal.com]

Yes, even the statist Swedes said no to Saab.

[dr-scott.livejournal.com]

The Europeans are also not going along with the administration's call for global synchronized stimulus. It's interesting that the Social Democratic states Obama wants to emulate have smartened up about subsidizing declining industries and borrowing to reflate the bubble; you can cite as factors Germany's awful hyperinflation and the dreadful results of most "national champion" companies in Italy and France. Each EU nation also believes that their stimulus (borrowing to increase consumer spending) will mostly benefit others because of free trade (and they're right.)

[pklexton.livejournal.com]

Their view (which I am intrigued by) - or at least the official talking points they espouse, while reality is a bit different - is put in place a decent safety net and lay off the rest of the economy as much as possible. (Of course it's a tough balancing act not to make the safety net too comfortable to disincent people from productive endeavors.) This has the advantage of (i) more built in countercyclical spending, therefore less need for ad hoc stimulus and (ii) as long as people have a floor under them, less need to save specific jobs. At least that's the theory.

Btw the Cafe Hayek piece I thought was a bit on the snarky side as opposed to serious analysis. But we're all entitled to rant now and then.

[dr-scott.livejournal.com]

That's right -- their more extensive safety net should apply sufficient stimulus, and taxes are already high enough to be an obvious damper on activity so there's little wiggle room to increase them to cover even more spending.

I like the snark; we give politicians way too much respect, and they are able to use their positions to talk down to us without much feedback up.