I actually don’t have an opinion on everything. The financial bailout plan, for one thing. I still don’t understand securitized mortgages or securitized credit, although obviously bankers don’t either.
Even more confusing is the proposed automakers bailout. I would prefer not to see these major companies and major employers go out of business. ON the other hand, to do so would be to suffer the natural consequences of bad business decisions, and isn’t that how the free market supposedly works? Why should small businesses go bankrupt all the time without anyone lending them a helping hand, while huge corporations get government bailouts? The automakers are threatening that the sky will fall if they aren’t given a huge infusion of financial aid, but isn’t that the same fear mongering tactic the financial services industry used last month? The CEOs of the Big three automakers flew to DC to testify in their individual corporate jets;and just like the AIG executives who went on a hunting trip to England in between their big bailout checks, the high likelihood is that they will use any money they receive for their own benefit and will not make any changes in the way that they produce cars or do anything to improve the well being or job security of their employees.
Yet suppose the government bails out the automakers but imposes stringent requirements as to their operation? Wouldn’t that be equivalent to nationalizing the industry? That used to be referred to as Communism, but I guess its now the New Capitalism. Nationalized industries as a rule have failed because they remove any link between performance and payoff, totally destroying any incentive to do a good job.
So let me proposed the WEndy Gordon bailout plan. It’s just bare outlines, but I think those outlines are significant:’
1) this would be a government LOAN program. Just like a college loan, the money would need to be repaid over time.
2) any business–all sizes, all types–could apply
3) recipients would have to employ only US workers
4) all offices/manufacturing sites/whatever would need to be on US soil and all corporate money must remain in US banks
5) until the loan was completely repaid there would be limits on pay and benefits for all employees
6) every business must follow appropriate environmental guidelines
Any takers?