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  http://kolehardfacts.blogspot.com/2008/12/automaker-bailout-...

  30 days ago in Kole Hard Facts of Life · Authority: 16

  Automaker Bailout Analysis In a word? WRONG! But, here's a piece of what I've been thinking, from Russell Roberts at Cafe Hayek: Why don't the Big Three save the money it takes to put together Congressional testimony and the time it takes for the people in charge to make the trip. Why don't they just take out ads in the Wall Street Journal and the New York Times outlining what they're going to do with the money. Then they can try this really novel idea. They can sell bonds and borrow the money. If the plans look good, people might lend them the money. If the plans are lousy, they won't get the money. This was the same advice I had for the funding of the then-proposed Lucas Oil Stadium. Alas. Friend Michael Jarrell relates the automaker-Congressional begging to child-parent interaction, and to a drug addict intervention. I doubt many of us would say yes to an alcoholic or drug addict when they asked for a fix, so why do politicians "have" to say yes when companies addicted to bad habits come begging for a fix from the "lender of last resort"? Excellent.

  • Author unknown

    Stuff I've Read Today

    http://incentives-matter.blogspot.com/2008/12/stuff-ive-read...
    35 days ago in Incentives Matter · Authority: 9

    WSJ on how Google is coping with the crisis.WSJ: nobody cares about Minnesota.WSJ on the once conceived $100 gold coin.WSJ on the Harvard Endowment losses.WSJ on ECB rate cuts.The Economist on American automakers.The Economist on the price of oil.The Economist: Chilean economy affected by drop in commodity prices.Mankiw on aggregate supply and aggregate demand.McArdle on the automakers.Boudreaux on the automakers.Roberts on the automakers.Perry on the lack of news on the increase in housing affordability.Perry on the surge in mortgage applications.

    • Author unknown

      Very reasonable takes on the Big 3

      http://uberpopperist.blogspot.com/2008/12/very-reasonable-ta...
      35 days ago in uberpopperist · No authority yet

      From Reason magazine.For another perspective, here's Michael Moore on the Big 3.From the inimitable Don Boudreaux:Editor, Toledo BladeDear Editor:Detroit auto executives advocate "government getting a stake in the auto companies that would allow taxpayers to share in future gains if they recover" ("GM exec: bankruptcy not an option for industry," Dec. 3).I remind these executives that each American is already perfectly free and able, with no action from government, to "get a stake" in these companies. Of course, few Americans now choose to do so – a fact that reflects the considered judgment of millions of people that these companies are unworthy recipients of investment funds. If millions of investors, spending their own funds, refuse to invest in GM, Ford, and Chrysler, why should Congress force them to make such investments? Why should we trust that Congress will make wiser investment decisions with other people's money than these people themselves make with their own money?Sincerely,Donald J. BoudreauxDon Boudreaux is the Chairman of the Department of Economics at George Mason University and a Business & Media Institute adviser.From matchless Russ Roberts:Why don't the Big Three save the money it takes to put together Congressional testimony and the time it takes for the people in charge to make the trip. Why don't they just take out ads in the Wall Street Journal and the New York Times outlining what they're going to do with the money. Then they can try this really novel idea. They can sell bonds and borrow the money. If the plans look good, people might lend them the money. If the plans are lousy, they won't get the money.Now I understand it's hard to borrow money when things don't look so good for your future. But that's why Congress shouldn't be lending them any money. Particularly because politicians don't have an incentive when they're spending other people's money to weigh, review, scour and so on with an eye toward the profitability of the plans.When people have lost faith in you because you've performed poorly, you have to pay a premium to get them to invest. That's a feature not a bug.The other thing I'd tell those execs: why don't you spend less time begging and more time trying to save your companies the old-fashioned way, by improving your product?

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