the "visable" hand of government subsidies.

My mom (and yea most of my posts are in responce to family members... seems like they are the only ones challenging me now a days) was most concerned with how we could get out of this bail-out crisis in the most humane way.

I responded with this letter...

oh... here I go...

Frankly. I think it's humane to let them die. But you already know that about me. People forget the secondary unseen effects. Milton Friedman called them the smoke stack on every regulation spreading a ring on effects from every policy. Bastiat rants about them as "the seen" and "the unseen" Anything that changes the natural course of human behavior (a policy) can never be alone in its effects after all if you stop someone or something from happening in it's course then it does something else and that makes something else in everyone/thing they encounter... the economy is fluid, nothing is isolated. The primary influence of anything is never alone. In fact if I were to define economics, and the system of, I would say that it is entirely a system of reactions and the study of how people/organizations react. The important lessons, similar to contemporary studies in physics, are that nothing can be distilled to a single source or a single cause or a single reason or a single result and value is never a zero sum game. Anything that would work to negate the previous sentence should be considered a gross underestimate of the world's complexity.

What about the people who won't get a chance in the economy because the fat American car companies won't move over? I'm sorry, bad decisions mean bad outcomes. This should never change except maybe for my own baby. One of my favorite analogies is that of an economist I recently heard speak. He said, we don't have ice delivered to our door do we? That industry failed and there was no question of bailing out all the people who knew no other in their life but to deliver ice to ones doorstep. Now we have refrigerators and the world is better because of it. If we bailed out the ice deliverer where would we be now? Maybe if it's your grandpa it's a different story, or maybe if it's the last endangered species, but if it's a company we can very rationally show consistently that there will be significantly more cost to society when old industries are saved by the "visible" hand of government subsidies. Do you seriously want to send a message to the American auto industry worker that it is ok to go on working in the auto industry? No. Dude. That industry is past its prime. I don't care if you don't want to, it's time to adapt. Would you please go get a job with that other company that really wants to make us a refrigerator right now?