Latest Pajamas Media Column (’That Giant SUCKUP Sound in Washington’) Is Up
Subheadline:
The Seemingly Unlimited Cash Kitty Under Paulson (SUCKUP) is essentially deposing free-market capitalism. Where is the outrage?
It will appear Saturday morning at BizzyBlog (link won’t work until then) under the title “That Giant SUCKUP Sound.”
Linkback: The post refers to a mid-October exchange on CNBC that I commented on at the time about how Treasury Secretary Hank Paulson foisted money on the large banks — even ones that didn’t want the money and said they didn’t need it. Maybe it’s just me, but when a TV commentator talks nonchalantly (in fact, almost happily) about how a country’s Treasury Secretary “put a gun to their heads” to force them to do his bidding (figuratively, of course, but surely with a lot of consequences threatened), I think we’ve turned a dangerous corner.
Also: Roger Simon at PJM has a hard time with the Big 3 auto execs, whose companies’ already-approved loan guarantees are supposed to be for so-called “green” vehicles, flying to Washington on private jets to beg for operating capital. Personally, I’m not as troubled by the “green” hypocrisy as I am by the ugly spectacle of supposed captains of industry, whose companies have failed for at least 30 years to deal with their structural cost problems, putting their hands out to cover for, and perpetuate, those failures.
Related: Smaller scale, big lesson, and actually good historical-perspective journalism from the New York Times (bold is mine) –
British Leyland, a car company that went through £11 billion of inflation-adjusted British taxpayer money, or $16.5 billion, in the ’70s and ’80s before going out of business. All that is left of the company now are memories of cars like the Triumph, and a painful lesson in the limited effectiveness of bailouts.
“It’s all too evocative,” said Leon Brittan, a top official in the government of Margaret Thatcher, the free-market-minded prime minister who nevertheless backed the rescue. “I’m not telling the U.S. what to do, but the lessons of the British experience is don’t throw good money after bad. British Leyland carried on for a few more years, but they’re not there now, are they?”
More: Jim Lindgren at Volokh makes an Econ 101 point –
Making bad, uneconomic investments in failing industries does not, on balance, preserve jobs; it tends to destroy more jobs – and more good jobs – than it saves.
I ran across two interesting articles by John Lott, Jr.
The Democrat’s Recession
http://www.foxnews.com/story/0,2933,453086,00.html
More Benefits, More Unemployment
http://www.foxnews.com/story/0,2933,429744,00.html
Indeed, dozens of economic research papers predicted this outcome. When you extend or increase unemployment benefits, you extend unemployment. If you set a date certain for getting rid of benefits, people find jobs. You get more of what you subsidize and here we are subsidizing unemployment.
Very interesting premise acknowledged by Clinton adviser Larry Katz, longer unemployment benefits encourage not looking for job. This ties in with my premise that extending unemployment benefits encourages people to stay in economically depressed areas instead of moving out to better opportunties and that politicians are more interested in keeping voters than looking out for their best interests. http://conservablogs.com/publiusforum/2008/10/14/freedom-of-movement/
Comment by dscott — November 20, 2008 @ 2:17 pm