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Are All Libertarians Agreed That Bailing Out the Big Three Would Be a Bad Idea?
by Liberty and Power
It would seem that everyone who identifies as a libertarian is agreed that the proposed bailout of the Big Three is a bad idea. Given what has happened over the past eight years -- terrorism and rumors of terrorism, wars and rumors of wars, a major financial crisis and proposed and actual bailouts -- those who call themselves libertarian have taken one or other of pretty much every possible position on each of these issues. Is it noteworthy that libertarians finally face a question on which everyone is agreed on what government should / should not do. Or do they?
You don't care for Rudy. I'm glad we can agree on that one!
As to a second American depression, I don't see how propping up an inefficient, bloated sector in a highly competitive world economy can produce any long-term economic benefits. Why not let foreign auto plants buy up the parts companies at a discount and let them run them more efficiently? That might have happened to Chrysler during a previous recession had we not given them a bailout. Now....we are giving them another bailout.
Richard J Jensen -
12/15/2008
I do support the bailout in order to avoid The Second Great Depression. I think the depression will last several years before market forces produce a recovery, during which American will be very miserable and a lot poorer. (One reason: as the parts companies crash US auto production, including Toyota and Honda, will fall to zilch for several years and we will depend on $$$$ imports, with long waiting lists.) As for my politics, I've always admired McCain and never cared much for Rudy.
Utley's argument appears to be that government has nationalized money creation and has recently mismanaged it. Requiring the U.S. founded auto companies to fail due to government monetary mismanagement is a mistake. They should be bailed out by the government. However, it appears that mostly this is because allowing an economic collapse in general (Great Depression like drops in production and employment) would hurt the long run political prospects for capitalism.
I agree that permitting another Great Depression in the name of laissez faire is a mistake. But I believe that both in the Great Depression and today, the source of the problem is in the monetary system, and that any emergency government interventions should be centered there.
I still remain of the opinion that the ordinary operations of FDIC and the Federal Reserve (stepped up due to the size of the solvency problems in the banking system) would be adequate.
If there are libertarians who believe in going cold turkey on FDIC and the Fed now in the name of laissez fair (push that button now!,) then like Utley, I must dissent.
However, I oppose having the treasury buy up bad assets or invest in banks. I don't believe the Federal Reserve should be trying to save particular banks. Accomodating the increase in the demand for the base money it monopolizes, or, equivelently, in my view, adjusting its interest rate targets consistent with the changing natural interest rate-- should be its goal. I have no confidence that it can do this perfectly, or anything close to that.. but that is what it should be trying to do. Funneling funds to more risky investments or trying to preserve loan securitization.. that just doesn't seem right to me.
For those of those of us who continue to support free banking, it is important to consider how a free banking system might deal with a situation where a substantial part of the banking system is insolvent. Are special bankruptcy procedures approprate for banks?
But having the Treasury bailout large established manufactoring firms... No way.
The case against a car bailout is compelling from a libertarian perspective. After all, who in his right mind would buy a GM product, a Chrysler, or even a Ford? Let them all go under. We don't need a car czar.
And why would Paul Volcker want to ruin his stellar repuation ruling over an industry as competitive yet dysfunctional as the automobile industry? I mean it's one thing to run a funny money monopoly, but still another to preside over a bankrupt industry with all of its many serious problems, from high-priced union labor, to healthcare and other legacy costs, not to mention the headaches of continually innovating, meeting government fuel and other standards, and competing against world class car manuafacturers such as Toyota. Who needs that?
While the case against a car bailout is airtight from a libertarian perspective, I'm not sure about the cookie industry.
With the recent bankruptcy
of a venerable old line cookie firm, the cookie cutter-gauntlet has been thrown down. Distinguished Members, we cannot allow such a cookie stalwart as the Nabisco Company to get close to the brink, or even to the edge of the cookie package. Nabisco is just too big to fail.
It's positively un-American to be against cookies (except for the ones on your computer).
Without a cookie bailout, every five-year old in America will be rioting in the streets in scenes reminiscent of Newark and Watts in 1969. Think of the social costs that widespread riots would impose on neighborhoods across the country. Clearly, a cookie industry bailout is a cost-effective, indeed low dough way to forestall this potential crisis, a crisis I would add that might give a new depth of meaning to the term "ratchet effect."
The time has come to cast aside libertarian principle in this the cookie industry's hour of peril, and to rally to its defense. What this country needs is a good five cent cookie czar.
Do we have any nominations? A nominee must be a cookie expert, bear no cookie biases, and have no cookie biases. He must be an equal opportunity cookie conneseuir (and anyone who can spell that contemptible word is clearly unqualified).
The successful candidate (No. 5, or is it No. 7?--as opposed to Client No. 9, who specialized in perfuming another old profession) will head the Cookie Consumption Corps (CCC). (Who said the CCC was dead?)
He or she will preside over a cookie relief budget which is now being debated by the World's Greatest Deliberative Body, but which is rumored to be no less than $100 billion.
This is an awesome responsibility. Surely someone out there in L&P land is up to the task, and is prepared to Do What It Takes to see the cookie industry through these troubled times. Your country is counting on you. Not to mention cookie consumers and workers everywhere.
David T. Beito -
12/12/2008
Richard Jensen, who runs the c-net listserve for conservative and libertarian historians supports the bailout--though he strikes me as McCain/Rudy Republican rather than a libertarian. I agree that there seems to be a consensus on this. I wonder if it has something to do with the fact that a Democrat will be in charge of this bailout.
