I haven't followed everything that has been said about the proposed bail-out of the major American automobile manufacturers, and I don't know whether the principal point that I'm going to make below has been much noticed.<\/p>
It is quite natural for people to hold that, if the manufacturers are given a major infusion of financial capital, then they should surrender some control<\/em> to the creditors; that if<\/em> the manufacturers are given a bail-out by Congress, then Congress ought to be able to impose some changes in practices and in policies, to ensure that tax-payers are in some way repaid<\/em>.<\/p> But ownership is no more or less than a right of control, and to the extent that control is transferred, ownership is surrendered. What we are then discussing, however we might put it, is nationalization<\/em>, albeït perhaps only partial nationalization, whether it is called this or not.<\/p> Once the automobile industry is nationalized, management of that industry becomes another government programme, with a large bloc of voters fairly directly dependent upon that programme for their incomes. A sizeable portion of this bloc will insist upon indefinite guarantees concering employment and income. The industry would likely become another Because the political<\/em> significance of a transfer programme is positively correlated with its direct economic benefits to recipients, the stronger are the initial<\/em> guarantees of employment and of income, the more powerful will be the abiding<\/em> political effect of the programme. The Republican insistance that a bail-out provide for Meanwhile, the White House discussion of doing an end-run to provide a bail-out from other funds may be an attempt to head-off later action by Congress when the Democrats assume the more sizeable majorities from the last elections. Giving money to the manufacturers with fewer strings attached puts less of a programme in place.<\/p>","protected":false},"excerpt":{"rendered":"I haven't followed everything that has been said about the proposed bail-out of the major American automobile manufacturers, and I don't know whether the principal point that I'm going to make below has been much noticed. It is quite natural for people to hold that, if the manufacturers are given a major infusion of financial […]","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"footnotes":""},"categories":[6,36,9,104,4],"tags":[471,470,150,468,469],"class_list":["post-1077","post","type-post","status-publish","format-standard","hentry","category-commentary","category-economics","category-ideology-philosophy","category-news","category-public","tag-automobile-industry","tag-nationalization","tag-socialism","tag-subsidies","tag-transfer-programmes"],"_links":{"self":[{"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=\/wp\/v2\/posts\/1077","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1077"}],"version-history":[{"count":0,"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=\/wp\/v2\/posts\/1077\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1077"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1077"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.oeconomist.com\/blogs\/daniel\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1077"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}third rail<\/q> of the political system, virtually untouchable unless it is to expand the benefits received by the beneficiaries. Further, conceptualizing what amounts to a transfer<\/em> programme (
welfare<\/q>) as a manufacturing<\/em> programme will consume additional<\/em> resources, which really ought to go into other projects. It would literally<\/em> be more efficient to pay some or all of the automobile workers to stay home than to pay them to make some or all of the vehicles that they would make; but, by golly, the illusion<\/em> of productivity will trump the reälity of waste<\/em>.<\/p>
swift wage cuts<\/q> probably speaks to some awareness that the bloc of voters in-question would more naturally align with the Democratic Party.<\/p>