I have blogged against the bailout a couple of times, and I have not changed my position. I do, however, understand the inevitability of it.
Nevertheless, I note with disappointment the announcement from the White House today that the federal government will in fact bail out the "Detroit 3" automakers, via TARP.
I hope it works - I really do. But when you do something like this, which is so totally against any kind of sound economic and fiscal practice, you shouldn't expect some sort of miracle. What you should expect is resounding failure, followed by more government intervention (especially since the next time around it will be the Obama administration that will be in charge), and more failure. And more government intervention. And...well, you get the idea.
Just as the laws of physics determine that when you drop an object it must fall to the ground (Wile E. Coyote notwithstanding), so the true laws of economics (as differentiated from Keynesian economics) determine that when a company is too inefficient, mismanaged, in debt, producing a product that is no longer wanted, or any combination thereof, it must fail and be liquidated. Newer, better, stronger, more responsive, and more profitable companies will be the result, and will absorb the displaced workers. But of course, we can't have that in this country, now can we?
What we really want, according to the latest election, is nice-sounding slogans and European Socialism. Gee, that's working out real well for them, isn't it?
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