ARC's 1st Law: As a "progressive" online discussion grows longer, the probability of a nefarious reference to Karl Rove approaches one

Tuesday, December 16, 2008

The Bailout & The Aristrocracy of Pull

All news these days points to the ever growing Aristocracy of Pull. Read this OpEd in the Pittsburgh Tribune-Review by Don Boudreaux. Here's an excerpt, but read the whole thing

Would you buy a new car from this company?
By Donald J. Boudreaux
Tuesday, December 16, 2008

Pay attention and you'll be impressed (or, rather, depressed) by how fast baseless claims for government intervention become accepted as monuments of wisdom and of incontrovertible truth.

A current example is the now-conventional wisdom that some "special" quality of GM, Ford and Chrysler make them deserving of a government bailout. That special quality is the fact that cars are long-term investments by consumers -- ones that require warranties, special servicing and parts available only from their original manufacturers.
Chapter 11 will remove the unsustainable debt, thus allowing the Big Three to return not only to efficient but also profitable operations. It will also send a signal that government will not coddle automakers, which will tell the world that these firms must survive by pleasing consumers rather than by genuflecting and pleading in the halls of government power.

A bailout, in contrast, will only sustain the problem, making Detroit's survival ever-more dependent upon the whims and fancies of politics.

Any consumer who doesn't want to buy a car from a shaky company would wisely avoid one living on the dole.

Personally, I can't get away from the simple fact that 2+2 really does equal 4. Some people truly believe that you can make things better by making this or that tweak in the system - always with the predictable result that government power will increase.

And, speaking of unsustainable, does anyone really think that the Federal Government has a sustainable business model?

I wish McCain would've lobbied against the TARP - I have no doubt that he would've increased his chances of winning on November 4th. But we know that McCain was always a Republican who thought that Washington could offer solutions to all of our ills.

It's a shame that we are so fearful of the short-term pain that we are willing to exacerbate the situation and let the wound fester and turn gangrenous.

The Big Three should be allowed to fail.. their current productive assets would be redeployed by people who are more proficient at using them.

As people complain about the level of lobbying, graft, corruption, and money that is involved in politics, I can only respond that it is that way because politics has become even more important to being successful. A free market would not require huge lobbying efforts because consumers - aka The People, aka The Market - would ensure that companies that cannot produce products or services that meet their customers' needs would go out of business.

If you hate corruption, lobbying, and influence peddling, there is an easy answer - reduce the size, scope, & power of government.

Your Co-Conspirator,
ARC: St Wendeler