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In this issue
Nov. 6, 2009
Rabbi Berel Wein: Choosing to hear
JWisdom.com Zero to 1/60th: How to Empower An Hour with Gavriel Aryeh Sande (7 minutes)
Caroline B. Glick The mullahs' big week
Suzanne Fields A Fallen Wall for Fallen Man
Nov. 5, 2009
The Kosher Gourmet: Three scrumptious -- but simple -- butternut squash dishes
JWisdom.com Hidden Hints: Unlocking Faith & Prayer with Rabbi Jay Yaacov Schwartz (10 minutes)
Nov. 4, 2009
Tom Hamburger and Kim Geiger: Should prayers be covered?
JWisdom.com When God played peacemaker With Rabbi Sroy Levitansky (5 minutes)
Nov. 3, 2009
Martin Peretz: Beware, Barack. Beware, Rahm. Beware, Axelrod
JWisdom.com Are you are closet idolater? With Sara Yoheved Rigler (10 minutes)
Nov. 2, 2009
Paul Greenberg: The Holocaust is now on Facebook
JWisdom.com Abraham's Strange Change With Rabbi Yitzchok Fingerer (5 minutes)
Oct. 30, 2009
Rabbi David Aaron: Secret to Immortality
Caroline B. Glick Silencing dissent in America
Oct. 29, 2009
Lini S. Kadaba: Do tactics avert flu or reduce humanity?
JWisdom.com We Must Revamp our Religious Vocabulary With Gavriel Aryeh Sanders ( 10 minutes)
Oct. 28, 2009
Rabbi Yonason Goldson: Atheists in Bubbleland
JWisdom.com Why what we wear impacts who we are With Rabbis Mordechai Becher, Menachem Golberger and Aliza Bulow ( 10 minutes)
Oct. 27, 2009
Paul Greenberg: The United Nations Is Outraged Again, Or: Department of Mideast Static
JWisdom.com The Science of Love With Rabbi Jonathan Rietti ( 7 minutes)
Oct. 26, 2009
The Jewish Ethicist by Rabbi Dr. Asher Meir: Damaging disclosures with a twist
JWisdom.com Wisdom and Wonks With Rabbi Eytan Feiner ( 7 minutes)
Oct. 23, 2009
Rabbi David Aaron: Are you ready for the ultimate pleasure?
JWisdom.com Watermark and oneness with Rabbi Sroy Levitansky ( 4 minutes)
Caroline B. Glick Stop using limited powers in a way that expands our enemies' advantages over us
Oct. 22, 2009
Steven Emerson: Terror Cases Share Desire to Kill Americans
JWisdom.com No More More Family Fights --- Really? By Sarah Chana Radcliffe ( 5 minutes)
Oct. 21, 2009
Tonya Alanez: Holocaust denier sues survivor, calling Auschwitz memoir 'vicious lies'
JWisdom.com Meditating Jewishly: A Panacea for Success by Sarah Yoheved Rigler ( 7 minutes)
Oct. 20, 2009
Dennis Prager: Obama and Dalai Lama: Why Israel Worries about U.S. President
JWisdom.com Abraham was not religious By Rabbi Yitzchok Fingerer ( 6 minutes)
Oct. 19, 2009
JWisdom.comWhy Good People Do Bad Things By Rabbi Eytan Feiner ( 7 minutes)
Oct. 16, 2009
Rabbi Yonason Goldson: The Perfect Number
JWisdom.com Hearing Voices By Rabbi Sroy Levitansky ( 5 minutes)
Caroline B. Glick How Turkey was lost
Oct. 15, 2009
Jeff Jacoby: Peace vs. the 'peace process'
JWisdom.com: Former MTV producer and stand-up comedian Rabbi Lawrence Hajioff: Taming a Control Freak (A VERY fast 15 minutes)
Oct. 29, 2003
Mortimer B. Zuckerman: Graffiti On History's Walls (MUST-READ!)

Jewish World Review Nov. 26, 2008 / 28 Mar-Cheshvan 5769

The Big Three should stand on their own feet

By John Stossel


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http://www.JewishWorldReview.com | Do the executives of the Big Three automobile manufacturers think we're stupid?


"The societal costs [of the loss of General Motors, Ford or Chrysler] would be catastrophic — three million jobs lost within the first year," said GM chief Rick Wagoner during last week's congressional hearing.


Fortunately, Congress didn't fall for it — yet. But next month or next year is another story. President-elect Obama is sympathetic to a bailout.


The auto heads tried to pin their problems on the general economic decline. They also said their companies have gone far in working to turn themselves around. "We have taken tough actions to cut costs, at the same time investing billions in fuel-efficient vehicles and new generations of advanced propulsion technologies," Wagoner wrote in The Wall Street Journal.


If so, why would that make the companies deserving of a bailout? The economic slowdown affects everyone. Why single out the carmakers?


And if GM and the others have done so much to raise productivity and improve their products, they would attract private capital. Investors are always looking for profitable ventures.


What Wagoner and his colleagues hope we'll overlook is Frederic Bastiat's lesson: Government intervention must not be judged only by the immediate and obvious consequences for the intended beneficiaries but also by the unseen effects on the rest of society. If the automakers get $25 billion from the capital markets because the federal government guarantees the loans, other businesses won't be able to borrow that money. Resources that go into making cars can't be used to make something else.


Why should politicians decide who gets those resources? It's not as though congressmen using government force are better than the decentralized voluntary market at spotting the most promising investments. Far from it. They will make their decisions on the basis of political considerations, such as who gave them contributions or might finance a get-out-the-vote drive in the next election.


Private investors, risking their own money, have an acute interest in separating the economic wheat from the chaff. Their income depends on finding ventures that would have the best prospects of pleasing consumers. We already know that Detroit's automakers have failed that test against Honda, Toyota, Nissan, Kia, Hyundai, BMW and Daimler.


"The future of the domestic auto business is critical to the health of the U.S. economy," Wagoner writes. But why should we believe that? Sure, America needs cars. But there is more than one way to "produce" a car. You can produce it directly, or you can produce it indirectly by making something else and trading it for a car. There's no shame in producing cars indirectly.


Anyway, the Big Three are not the only carmakers in the United States. Foreign automakers have factories in the United States that employ 113,000 American workers. Who cares if the cars have foreign names?


GM, Ford and Chrysler probably wouldn't even disappear without a bailout. Bankruptcy would most likely mean reorganization under court supervision, protection from creditors and revision of union contracts. The companies would finally do what they should have done years ago: shut down more plants, eliminate some dealerships and get rid of some union rules. It would be a good thing. The companies would come out leaner.


It's clear that Detroit would prefer to deal with congressmen than bankruptcy judges. Having Congress tell auto companies how to make cars and what to pay executives is offensive. But that's what will happen if politicians put up loan guarantees. A bailout would be a reverse Robin Hood story: robbing from the less wealthy to give to the more wealthy. As Daniel Mitchell of the Cato Institute writes, "[T]he corporate bureaucrats at the Big Three are among the very richest Americans. The UAW bosses make extravagant salaries as well, and even regular union workers make [more] than the average American". An economy in recession needs to cleanse itself of bad investments born of years of policy errors and managerial blunders. Keeping capital locked up in failing companies will slow the recovery and extend the hardship longer than necessary. Archives

Every weekday JewishWorldReview.com publishes what many in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.

JUST OUT FROM STOSSEL
Myths, Lies and Downright Stupidity: Get Out the Shovel --- Why Everything You Know Is Wrong  

Stossel mines his 20/20 segments for often engaging challenges to conventional wisdom, presenting a series of "myths" and then deploying an investigative journalism shovel to unearth "truth." This results in snappy debunkings of alarmism, witch-hunts, satanic ritual abuse prosecutions and marketing hokum like the irradiated-foods panic, homeopathic medicine and the notion that bottled water beats tap. Stossel's libertarian convictions make him particularly fond of exposes of government waste and regulatory fiascoes. Sales help fund JWR.



JWR contributor John Stossel is co-anchor of ABC News' "20/20." To comment, please click here.


© 2008, by JFS Productions, Inc. Distributed by Creators Syndicate, Inc.

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