Competitive Altruism. This article misses a key point that economists since Adam Smith have understood: “It is not from the benevolence of the butcher the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk to them of our own necessities, but of their advantages.”
VATs Mean Big Government “The income tax system we have today is a nightmarish combination of class warfare and corrupt loopholes. Adding a VAT does not undo any of the damage it imposes. All that happens is that politicians get more money to spend and a chance to auction off a new set of tax breaks to interest groups. That’s good for Washington, but bad for America.”
The Health Care Fight Got Tougher. The Blue Dogs have agreed in principle to a “public option” government-run health insurance provider, one that would “compete” with private sector plans.
Dependence on Government Grows. This is not good news. “The recession is driving the safety net of government benefits to a historic high, as one of every six dollars of Americans’ income is now coming in the form of a federal or state check or voucher.”
Are Progressives Losing Steam? Dana Milbank notes that “it’s more fun to be an opposition bomb-thrower than a palace guard.”
Is This Really a Separate Field of Study? “Harvard University will endow a visiting professorship in lesbian, gay, bisexual and transgender studies, a position that, it believes, will be the first endowed, named chair in the subject at an American college.”
The Man in Charge of GM. He is “a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry. Nor, for that matter, had he given much thought to what ailed an industry that had been in decline ever since he was born.…Mr. Deese’s role is unusual for someone who is neither a formally trained economist nor a business school graduate, and who never spent much time flipping through the endless studies about the future of the American and Japanese auto industries.”
After a planned GM bankruptcy, during which the company will seek to shed burdensome debts, the U.S. and Canadian governments will own 72.5 percent of the reorganized automaker. In addition, GM will owe the United States about $8 billion.
The United States could recover most of that investment by 2013, when, sources said, a Treasury projection shows the company would reach an equity value of $75 billion.
The government share, by then slightly diluted, would be worth about $46 billion. The $8 billion debt would have been repaid, and the government would have reaped billions in preferred-stock payments. Sources said the estimates are constantly being refined.
So government bureaucrats, who are spending other people’s money, are sanguine about the government “investment” in General Motors. By contrast, investors who are spending their own money are fleeing for the hills: the GM stock price has been in free-fall, closing the week at 75 cents a share. If the company’s recovery under nationalization were such a sure thing, wouldn’t the stock price be increasing, not decreasing?