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Pass the Buck on This One
11.18.08 | Permalink | Comments Off

Harvard economist Martin Feldstein explains the benefits of Chapter 11 for the auto industry:
The Big Three pay much higher wages than production workers are paid in the nonunion auto firms and in the general economy. And the health-care costs of current workers and retired union members are an enormous additional burden. The simplest solution is [...]
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The Democratic Assault On Democracy
11.16.08 | Permalink | Comments Off

In the post-election analysis, a lot of people are saying that the Republicans lost because they drifted away from their core principles. But oddly enough, right now the Democrats are engaging in assaults on something even more fundamental to their own nature — the very democratic process itself. Three examples come to mind.
First, we have [...]
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American Leyland
11.14.08 | Permalink | Comments Off

The US motor industry seems about to fail. Credit insurers are now withdrawing their support as the firms burn through cash, with faltering sales and outstretched hand for charity. But, with their size, their number of jobs and their Main Street history, these car firms have been deemed too important to fail.

If the Democrats do decide to rescue the US car industry via a bail-out, they will rationalise and reorder. Perhaps they will even wish to intervene as to which models and which research should be undertaken. Think of the opportunity for renewables…renewing jobs, renewing pork, renewing votes. By the end of this process, it is doubtful if there will be any US car industry at all. Congress will have undertaken a wonderful role in clearing out the undergrowth for more efficient rivals and Detroit will go the way of Morris, Austin and the Triumph marques.
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An update on the bailout
11.12.08 | Permalink | Comments Off

Gordon Tullock is a smart man: When the government said it would spend $700 billion to rescue the nation’s financial industry, it seemed to be an ocean of money. But after one of the biggest lobbying free-for-alls in memory, it…
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Understanding Fiscal Policy During the Great Depression
11.10.08 | Permalink | Comments Off

My little spat with with Rauchway regarding unemployment during the Great Depression draws in Paul Krugman. Krugman doesn’t respond to any of my arguments but he does give us the old line that fiscal policy didn’t fail during the Great…