Perhaps the shock to banking would be too great just now. I'm willing to be persuaded that intervention is necessary there. But the more I read about the auto industry, the less I am convinced.
People speak about this as if not bailing out Detroit means automobile production in America ends. That's not what failing to bailout Detroit means. Not intervening now would be these automakers would enter bankruptcy. And bankruptcy means the assets of these dinosaurs get reorganized: Someone else buys these companies, at a price the market sets, and runs them profitably, because of the price the market set.
Obviously, that change would not be painless. And I'm all for minimizing the pain where the pain is doing no good -- with workers, or others depending upon these industries. But I'm against interventions designed to minimize the pain where the pain would do good -- by radically changing how that industry is managed. The whole justification for insanely high executive compensation is, in part, so they can weather such storms. I don't see why the government should be in the business of building safety nets for the (relatively) well off.
I just don't get this amazing lack of sympathy for working people, or perhaps, the naivete at how politics actually works. Why a $700B bailout for bankers, which produce no obvious product, and not a $14B bridge loan for people that actually make automobiles? No particular reason. Oh, and the market shall provide. It's really a really remarkable sentiment in this day and age, a sort of tenured 'let them eat cake'.
... I really respect Lessig, I gave him $25 when he thought about running for Congress, and I think he's engaging in good faith here. That doesn't change the fact that I'm just kind of flabbergasted at liberals who casually throw out ideas that have really awful consequences, like a depression, and use casual discredited free market mantras as justifications while glossing over terrible terrible pain these ideas cause. And no, assistance to minimize the pain associated with economic dislocation is not part of the deal.
Here I am, a taxpayer among taxpayers grovelling in the miasma of the middle class and hoping like Hell that things will get better with the new Administration.
Then I listen to the heads of the Big 3 automobile manufacturers on C-Span as it was re-run last night, begging for 28 Billion Dollars from the lame duck Congress - with no plan, no reasonable means of payback and literally no respect for the folks like us who the expect to buy their gas-eating SUVs. And these guys, as was pointed out by just about every television news program, all flew into Washington DC on their individual private jets at a cost that would probably pay the health-care costs for workers at one of their factories.
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